Litigation notes No. 15

Number 15
20 February 2008

This issue

Anti-terrorism control orders and the defence power

Disciplinary proceedings and judicial power

Acquisition of property: reduction in workers compensation

Prisoners voting in federal elections

Constitutional decisions in brief

ANTI-TERRORISM CONTROL ORDERS AND THE DEFENCE POWER

Simon Thornton

Simon Thornton Lawyer

For further information on this matter, please contact:
David Bennett QC
T 02 6253 7036 F 02 6253 7303
david.bennett@ags.gov.au

The High Court, by a 5:2 majority (Kirby and Hayne
JJ dissenting), upheld the validity of Div 104, subdiv
B, of the Criminal Code (Cth), which allows the making
of interim control orders to protect the public from
terrorist acts. The Court held that the provisions are
supported by the defence power1 (supplemented by the
external affairs power2 for some justices) and do not
infringe the separation of powers required under Ch III
of the Constitution. Gummow and Crennan JJ delivered
a joint judgment, and all the other justices delivered
separate judgments.

Thomas v Mowbray
High Court of Australia, 2 August 2007
[2007] HCA 33; (2007) 237 ALR 194

Background

Mr Thomas, the plaintiff, undertook paramilitary training
in the use of firearms and explosives in Afghanistan in
2001. Mr Thomas was convicted in the Supreme Court of Victoria
of terrorism-related offences. Subsequently, his convictions
were set aside and a new trial was ordered.

Mowbray FM (the first defendant and a federal magistrate)
made an interim control order in relation to Mr Thomas
under s 104.4 of the Criminal Code, on the ex parte application
of the Manager, Counter-Terrorism, Domestic, Australian
Federal Police (the second defendant). Among other things,
the order required Mr Thomas to remain at his home (or
another place notified to the police) between midnight
and 5 am each night and to report to police three times
a week; restricted his access to communication devices
(for example, he could have only one home phone, one mobile
phone, and one internet service provider); and prevented
him from leaving Australia without approval.

In seeking the interim control order, the second defendant
contended that, at the training camp in Afghanistan, Mr
Thomas received training from Al Qa'ida and saw and
heard Usama Bin Laden (the leader of Al Qa'ida) several
times; and that, after the Al Qa'ida terrorist attack
on 11 September 2001, Mr Thomas attempted to join the Taliban
forces fighting the USA in Afghanistan.

Mr Thomas was not present or represented at the interim
control order proceedings. The correctness of the contentions
made at that hearing could be challenged at the later hearing
required by the Criminal Code if the Australian Federal
Police were to seek confirmation of the interim control
order.

Mr Thomas brought these proceedings in the High Court
challenging the validity of the provisions in Div 104 of
the Criminal Code for control orders.

Interim control order provisions

Under s 104.4(1)(c) of the Criminal Code, a court may
make an interim control order only if it is satisfied,
on the balance of probabilities, either:

(i) that making the order would substantially assist
in preventing a terrorist act; or

(ii) that the person has provided training to, or received
training from, a listed terrorist organisation; …

Also, the court must be satisfied, on the balance of probabilities,
that each of the obligations, prohibitions and restrictions
to be imposed by the order is 'reasonably necessary' and 'reasonably
appropriate and adapted' for the purpose of protecting
the public from a terrorist act (s 104.4(1)(d)). 'Terrorist
act' has a lengthy definition ([44], [566]–[567]).
In outline, an action or threat of action is a terrorist
act if:

  • the action causes death or serious harm to people
    or property or creates a serious risk to the health or
    safety of the public or a section of it (and is not advocacy
    or protest not intended to cause serious harm or risk)
  • the action is done or the threat is made with the
    intention of advancing a political, religious or ideological
    cause
  • the action is done or the threat is made with the
    intention of coercing an Australian or foreign government
    or intimidating the public or a section of the public
    (of Australia or a foreign country).

Defence power

Putting judicial power issues aside, all justices except
Kirby J (see [220]–[268]) held that the interim control
order provisions were supported by the defence power ([6],
[132]–[148], [268], [444]), although Hayne J limited
his reasons to the facts of this case ([590], [611], [649];
see also 'External affairs power', below).
That is, the defence power supported legislation for the
protection of the public from a terrorist act.

The Court rejected arguments that the defence power was
restricted to:

  • defending against attacks by foreign nations or at
    least external threats ([6]–[7], [135]–[141],
    [250]–[251], [434]–[438], [583], [585], [611]),
    or
  • protection of the Commonwealth or the states as polities
    as distinct from the protection of people or property
    ([6]–[7], [142]–[143], [440]–[441],
    [588], [611]; cf [251]–[252]).

The relatively wide view of the defence power taken by
the Court is indicated by the following statement of Gleeson
CJ (at [7]):

The power to make laws with respect to the naval and
military defence of the Commonwealth and of the several
states, and the control of the forces to execute and
maintain the laws of the Commonwealth, is not limited
to defence against aggression from a foreign nation;
it is not limited to external threats; it is not confined
to waging war in a conventional sense of combat between
forces of nations; and it is not limited to protection
of bodies politic as distinct from the public, or sections
of the public.

Implied power to protect the nation

In some of the older cases such as Australian Communist
Party v Commonwealth (1951) 83 CLR 1, Burns v
Ransley (1949) 79 CLR 101, and R v Sharkey (1949)
79 CLR 121, it was recognised that there is an implied
power to protect the nation from subversion and attack.

Gummow and Crennan JJ, with Gleeson CJ agreeing, found
that (at least in this case) the defence power was sufficient
by itself to support the legislation without the need for
recourse to any implied power to protect the nation ([6],
[144]–[145]). Hayne, Callinan, and Heydon JJ also
took this approach ([407], [582], [650]). Kirby J held
that the provisions were not supported by this power ([233],
[268]).

External affairs power

Gummow and Crennan JJ said that the defence power might
not support the challenged provisions in their application
to terrorist acts or threats against foreign governments
or the public of a foreign country. However, they held
that, in those situations, the provisions were supported
by the external affairs power for two reasons ([149]–[153]).

First, the commission of terrorist acts is a matter affecting
Australia's relations with other countries ([151]–[152]).
Secondly, a law preventing terrorist acts intended to influence
by intimidation a foreign government or the public or a
section of the public of a foreign country is a law with
respect to a 'matter or thing' which lies outside
the geographical limits of Australia ([153]). Gleeson CJ
agreed with Gummow and Crennan JJ on the external affairs
power ([6], [9]).

Hayne, Callinan, and Heydon JJ each found it unnecessary
to consider the external affairs power ([407], [582], [650]).
Kirby J held the provisions were not supported by this
power ([269]–[294].

Reference from the states

Under s 51(xxxvii) of the Constitution, the parliament
of a state may refer a matter to the Commonwealth Parliament,
and the Commonwealth Parliament may then enact laws on
that matter extending to each state whose parliament referred
the matter or which afterwards adopts the law.

All of the states have referred certain powers to the
Commonwealth Parliament in relation to terrorist acts under
s 51(xxxvii) ([167]).

Again putting judicial power issues aside, Hayne J would
have held that the interim control order provisions were
supported by the reference power (apart from judicial power
issues), and Kirby J held that they were not ([455], [219]).
The remaining justices found it unnecessary to decide this
issue, although Callinan J expressed some reservations
([6], [154], [582], [601]–[608] [650].

Judicial power

Gleeson CJ and Gummow, Callinan, Heydon and Crennan JJ
found that the interim control order provisions did not:

  • confer non-judicial power on a federal court contrary
    to the separation of legislative, executive and judicial
    powers reflected in the Constitution, particularly Ch
    III, or
  • purport to authorise the exercise of judicial power
    by a federal court in a manner contrary to Ch III (which
    provides for the creation of federal courts and the conferral
    of federal jurisdiction on courts). (See [32], [126],
    [600], [651].)

Kirby J found the interim control order provisions invalid
on both of those grounds ([360]–[361], [371]). Hayne
J found the control order provisions invalid on the first
ground and therefore did not consider the second ground
([406], [517]–[518]).

Non-judicial power

The Court rejected Mr Thomas's argument that the
characteristics of control orders meant that the power
to make them was exclusively legislative or executive and
not judicial and so could not be conferred on a court.
According to Gleeson CJ (at [15]):

The power to restrict or interfere with a person's
liberty on the basis of what that person might do in
the future, rather than on the basis of a judicial determination
of what the person has done, which involves interfering
with legal rights, and creating new legal obligations,
rather than resolving a dispute about existing rights
and obligations, is in truth a power that has been, and
is, exercised by courts in a variety of circumstances.
It is not intrinsically a power that may be exercised
only legislatively, or only administratively.

In reaching this conclusion, the Court had regard to historical
and contemporary examples of powers exercised by courts
that were similar in some ways to the power to issue an
interim control order, including:

  • the power of justices of the peace to bind a person
    over to keep the peace (involving restrictions on liberty
    based on predictions of future risk) ([16], [79], [116]–[121],
    [595]; cf [334]–[338])
  • apprehended violence orders (involving restrictions
    on liberty based on predictions of future risk) ([16],
    [28], [79], [595]; cf [331], [337]–[338])
  • orders made in matrimonial causes, bankruptcy, probate,
    business regulation, and winding up companies (involving
    creation of new rights and obligations and/or application
    of broad standards) ([15]–[16], [22], [74]–[75],
    [119]; cf [331], [476]–[477])
  • sentencing (involving protection of the public and
    predictions) ([28], [109], [595])
  • bail (involving creation of new rights and obligations
    restricting liberty, or being temporary in nature) ([16],
    [520]; cf [331], [337]–[338]).

Also, the majority held that the broad criteria to be
applied by the court in making an interim control order
(such as 'substantially assist in preventing a terrorist
act' and 'reasonably necessary … for
the purpose of protecting the public from a terrorist act')
were not too vague and were capable of strictly judicial
application. A court can make inferences and predictions
about danger to the public in the context of terrorist
threats in the same way that it does in other contexts
such as sentencing and apprehended violence orders. The
criteria expressed adequate objective (legal) standards
for the exercise of the court's jurisdiction and
did not entail consideration of subjective and political
questions ([19]–[28], [71]–[76], [94]–[103],
[108]–[110], [596]).

As well, the restrictions that could be imposed by control
orders did not amount to 'detention in custody' for
the purposes of any principle that, exceptional cases aside, 'detention
in custody' can only be imposed by a court as an
incident of adjudging and punishing criminal guilt ([18],
[114]–[121]; cf [350]–[359]).

Several justices noted that a consequence of the plaintiff's
argument that a federal court cannot make an interim control
order may be that the executive can ([17], [592]; cf [349],
[506]–[513]). In that regard, Gleeson CJ said that
it would not advance the protection of human rights to
preclude the exercise of the power to make control orders 'independently,
impartially and judicially' (ie by a judge) (at [17]).
Similarly Callinan J said that risks to democracy and to
the freedoms of citizens are matters that the courts are
likely to have a higher consciousness of (at [599]).

Kirby and Hayne JJ both held that the power conferred
by Div 104 of the Criminal Code was non-judicial because
the legislation required the court to determine what is
reasonably necessary for the protection of the public from
a terrorist act and this was not an ascertainable test
or standard that could be applied by a court ([317]–[322],
[361], [406], [475]–[476], [502]–[504], [515]).
Rather, the court would be required to act non-judicially
and 'apply its own idiosyncratic notion as to what
is just' ([322], [516]).

This conclusion was reinforced by the fact that the legislation
operated exclusively by reference to a prediction of future
conduct, which might involve what third parties (including
the executive through police, security, and other agencies)
not subject to the order might do and which might not involve
unlawful conduct ([337]–[338], [357], [494]; cf [93]).

Manner of exercise of judicial power

Gummow and Crennan JJ accepted that 'legislation
which requires a court exercising federal jurisdiction
to depart to a significant degree from the methods and
standards which have characterised judicial activities
in the past may be repugnant to Ch III' (at [111]).
However, the Court rejected Mr Thomas's arguments
that the interim control order provisions authorised the
exercise of judicial power in a manner contrary to Ch III.

The Court said that the interim control order provisions
provided for or assumed all the usual indicia of the exercise
of judicial power (for example, evidence; legal representation;
cross-examination; a generally open hearing; and the application
of law to facts, argument and appeals) ([30], [55], [59],
[599]). There was nothing novel or impermissible about
an ex parte hearing (particularly where the matter is urgent),
as had occurred in this case ([30], [112], [598]). Further,
Parliament's selection of the balance of probabilities
as the applicable standard of proof was consistent with
Ch III ([113], [598]).

Gleeson CJ concluded (at [30]):3

The outcome of each case is to be determined on its
individual merits. There is nothing to suggest that the
issuing court is to act as a mere instrument of government
policy. On the contrary, the evident purpose of conferring
this function on a court is to submit control orders
to the judicial process, with its essential commitment
to impartiality and its focus on the justice of the individual
case. In particular, the requirements of s 104.4, which
include an obligation to take into account the impact
of the order on the subject's personal circumstances,
are plainly designed to avoid the kind of overkill that
is sometimes involved in administrative decision-making.
Giving attention to the particular circumstances of individual
cases is a characteristic that sometimes distinguishes
judicial from administrative action.

Mr Thomas also argued that Div 104 allowed the court to
disregard procedural fairness. The argument related to
provisions concerning the later confirmation hearing, which
had not yet occurred. The Court did not consider this argument
in any detail and instead confined its answers to the provisions
of Div 104 relating to interim control orders ([122]–[125];
see also [6], [62]).

In dissent, Kirby J held that, if Div 104 did confer judicial
power, the manner of its exercise was contrary to Ch III
because of the ex parte nature of interim control order
hearings; the uniform procedure for the hearings that minimises
the rights of the subject of the order; the withholding
of certain evidence from the subject; and the lack of an
alternative system of providing the evidence to him or
her ([364]–[371]).

AGS (David Lewis and David Bennett from the Constitutional
Litigation Unit) acted for the Commonwealth, with the Commonwealth
Solicitor-General David Bennett AO QC, AGS Chief General
Counsel Henry Burmester AO QC, AGS Chief Counsel Litigation
Tom Howe, Stephen Donaghue and Gim Del Villar as counsel.
AGS (Declan Roche and Simon Thornton) also acted for the
second defendant, with AGS Chief Counsel Litigation, Tom
Howe, as counsel.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/HCA/2007/33.html

Notes

  1. Constitution, s 51(vi). The defence power empowers
    the Parliament to make laws with respect to 'the
    naval and military defence of the Commonwealth and of
    the several States, and the control of the forces to
    execute and maintain the laws of the Commonwealth'.
  2. The Constitution, s 51(xxix), empowers the Parliament
    to make laws with respect to external affairs.
  3. See also Gummow and Crennan JJ at [59].

DISCIPLINARY PROCEEDINGS AND JUDICIAL POWER

Susie Brown

Susie Brown Senior Lawyer
T 02 6253 7132
F 02 6253 7303
susie.brown@ags.gov.au

Andrew Buckland

Andrew Buckland Senior Executive Lawyer
T 02 6253 7024
F 02 6253 7303
andrew.buckland@ags.gov.au

In two decisions the High Court has unanimously upheld
the validity of Commonwealth laws conferring power on
administrative bodies to take disciplinary action against
company directors and liquidators. Validity was upheld
on the basis that the provisions did not confer judicial
power on the bodies contrary to the separation of powers
mandated by Ch III of the Constitution.

Visnic v Australian Securities and Investments Commission
High Court of Australia, 24 May 2007
[2007] HCA 24; (2007) 234 ALR 413

Background

Mr Visnic was a director of 14 companies that had been
wound up. A liquidator had lodged a report with the Australian
Securities and Investments Commission (ASIC) under s 533(1)
of the Corporations Act 2001 (Cth) about the inability
of each corporation to pay its debts. ASIC subsequently
exercised its power under s 206F of the Corporations Act
to disqualify Mr Visnic from managing a corporation for
a period of five years.

Mr Visnic challenged the constitutional validity of s
206F on the basis that it involved an impermissible conferral
of the judicial power of the Commonwealth on ASIC, contrary
to Ch III of the Constitution. Chapter III requires that
Commonwealth judicial power be exercised by courts and
not by administrative bodies such as ASIC. The matter was
heard together with Albarran v Members of the Companies
Auditors and Liquidators Disciplinary Board and Gould
v Magarey, which raised similar constitutional issues
(see below at p 9).

Decision

All members of the Court upheld the validity of s 206F
of the Corporations Act. Gleeson CJ and Gummow, Hayne,
Callinan, Heydon and Crennan JJ delivered a joint judgment.
Kirby J delivered a separate judgment.

Joint judgment

The joint judgment identified the central issue as being
whether s 206F purported to confer on ASIC a function or
power that was exclusively judicial. If it did,
s 206F would be invalid, as ASIC was not a court for the
purposes of Ch III of the Constitution ([10]).

However, their Honours accepted the Commonwealth Attorney-General's
submission that ASIC was not exercising judicial power
under s 206F. Section 206F conferred on ASIC 'a power
to be exercised for the purpose of maintaining professional
standards in the public interest' and there was 'nothing
inherently judicial in such a power' (at [11]).

Mr Visnic's main argument was that the power conferred
on ASIC under s 206F was, at least in some respects, the
same as the powers conferred on courts to disqualify directors
under ss 206C, 206D and 206E of the Corporations Act. He
argued that it was not permissible for the Commonwealth
Parliament to confer the same power on both a court and
an administrative body.

The joint judgment rejected this argument. It was inconsistent
with earlier High Court authority, R v Quinn; Ex parte
Consolidated Foods Corp (1977) 138 CLR 1, which upheld
the validity of a provision concurrently conferring a power
on the High Court and the Registrar of Trade Marks to remove
trademarks from the register.

In any event, the statutory criteria for the exercise
of the power by ASIC and by the courts differ to a significant
degree. In particular, ASIC may have regard to the public
interest in a disqualification, whereas there is no reference
to the public interest in the sections conferring a disqualification
power on the courts. Their Honours held that the following
passage from Precision Data Holdings Ltd v Wills (1991)
173 CLR 167 was determinative of this case (at [14]–[15]):

… where, as here, the function of making orders
creating new rights and obligations is reposed in a tribunal
which is not a court and considerations of policy have
an important part to play in the determination to be
made by the tribunal, there is no acceptable foundation
for the contention that the tribunal … is entrusted
with the exercise of judicial power.

Here, ASIC was empowered to determine, for the future,
that a person not manage corporations by reference to criteria
including the public interest. A power to create rights
by reference to criteria of this kind is not characteristic
of judicial power. Judicial power involves the determination
of existing rights by reference to judicially ascertainable
standards.

Their Honours also observed that, although ASIC may examine
the conduct of the person in relation to the management
of any corporation, it does not determine whether the person
is guilty of any offence (which would be an exclusively
judicial function). Rather, although ASIC may take into
account whether a director has breached provisions of the
Corporations Act, this is only a step in concluding whether
he or she should be disqualified.

Judgment of Kirby J

Kirby J concluded that s 206F conferred on ASIC an administrative
power and not a power that could only be vested in a court
under Ch III of the Constitution. However, in upholding
validity, Kirby J warned (at [40]–[42]) about the
potential for the 'chameleon principle' (that
powers that are not inherently judicial or inherently non-judicial
take their character according to whether they are conferred
on a court or on an administrative body) to destroy the
objectives of the constitutional separation of powers.
His Honour expressed his conclusion narrowly ([46]) as
resting on a combination of:

  • the disciplinary character of ASIC's power under
    s 206F
  • the distinction between that power and the more open-ended
    powers conferred by the Corporations Act on the courts
  • the fact that ASIC's decision is not, by itself,
    conclusive or enforceable, but forms a basis, where necessary,
    for rights and liabilities to be enforced
    by a court
  • the fact that ASIC's powers could not fairly
    be characterised as determining 'basic legal rights' of
    the kind that must always be reserved to a Ch III court.

AGS (Susie Brown and Andrew Buckland from the Constitutional
Litigation Unit) acted for the Commonwealth Attorney-General,
who intervened to support the validity of s 206F, with
AGS Chief General Counsel Henry Burmester AO QC and Guy
Aitken from AGS as counsel.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/HCA/2007/24.html

Albarran v Members of the Companies Auditors and Liquidators
Disciplinary Board and Gould v Magarey
High Court of Australia, 24 May 2007
[2007] HCA 23; (2007) 234 ALR 618

Background

Mr Albarran and Mr Gould (the appellants) were both registered
liquidators. ASIC made applications to the Companies Auditors
and Liquidators Disciplinary Board (the Board) under s
1292(2) of the Corporations Act 2001 (Cth) to suspend
Mr Gould's registration and to cancel Mr Albarran's
registration. Section 1292(2) empowers the Board to cancel
or suspend registration on grounds which include that the
person has failed to carry out or perform adequately and
properly any duties or functions required by an Australian
law to be carried out or performed by a registered liquidator.

The Board determined that this ground had been made out
in each case and that Mr Albarran's registration
should be suspended for nine months and Mr Gould's
registration should be suspended for three months.

The appellants challenged the validity of s 1292(2) on
the basis that it involved an impermissible conferral of
the judicial power of the Commonwealth on the Board, an
administrative body, contrary to Ch III of the Constitution.
The Full Court of the Federal Court upheld validity. The
appellants appealed that decision.

Decision

All members of the Court upheld the validity of s 1292(2)
of the Corporations Act. Gleeson CJ and Gummow, Hayne,
Callinan, Heydon and Crennan JJ delivered a joint judgment.
Kirby J delivered a separate judgment.

Joint judgment

The joint judgment referred to a general description of
judicial power as the power engaged in 'determining
a dispute inter partes as to the existence of a right or
obligation in law and in applying the law to the facts
as determined' (at [16]). Their Honours held that
the power conferred on the Board by s 1292(2) did not involve
the exercise of judicial power in particular because the
Board did not settle disputes about existing rights or
liabilities.

  • The Board's determination under s 1292(2) did
    not involve an adjudication of criminal guilt or impose
    punishment for an offence, which would be an exercise
    of judicial power. The joint judgment endorsed the distinction
    drawn in previous cases between disciplinary proceedings
    and criminal proceedings. In disciplinary proceedings, 'no
    offence was specified and no declaration of guilt made' (at
    [17]) and so they did not engage judicial power. The
    Board was a body representative of the commercial and
    accounting communities with the function of deciding
    whether a liquidator had 'adequately and properly' carried
    out duties, which was to 'import notions of judgment
    by reference to professional standards rather than pure
    questions of law' (at [24]). It was not to the
    point that the Board's determination had 'an
    adverse and stigmatising consequence' (at [15]).
  • More generally, the purpose of the Board's inquiry
    under s 1292(2) was not the 'ascertainment or enforcement
    of any existing right or liability' (at [25]) but
    an assessment of whether a person's skill and integrity
    were such that they should not remain registered. Their
    Honours observed (at [28]):

    The Attorney-General correctly submits that, to the
    extent that with respect to Mr Gould and Mr Albarran
    the Board was required to form an opinion as to existing
    rights, that was no more than a step necessary to its
    ultimate conclusion. This was whether, in terms of
    par (d)(ii) of s 1292(2), the performance of duties
    or functions required by Australian law had been carried
    out or performed 'adequately and properly'.

The joint judgment also observed that the Board lacked
the power to enforce its decisions, its decisions were
not 'conclusive' because 'enforcement
of a suspension or cancellation order made by the Board
requires the exercise by a court' of jurisdiction
in criminal matters arising under the Act, and the Board's
decisions were subject to merits review by the Administrative
Appeals Tribunal ([4]–[6]).

The joint judgment rejected an argument seeking to distinguish
disciplinary cases involving punishment for breach of a
law of general application (which, it was argued, included
s 1292(2) and would engage judicial power) and domestic
(or internal) disciplinary actions (which would not). Their
Honours held that this was not an appropriate basis on
which to distinguish between judicial and non-judicial
power under Ch III, for which the focus is 'the manner
in which and subject matter upon which the body purportedly
exercising judicial power operates and the purposes and
consequences of any decisions it makes' (at [35]).

Judgment of Kirby J

In separate reasons Kirby J reached similar conclusions.
His Honour addressed the underlying rationale for the separation
of powers, concluding (at [67]) that:

If anything, the growth of the modern regulatory state,
and of powerful and opinionated officials in the executive
government answerable to political ministers, has increased
and not diminished the importance of safeguarding this
separation.

His Honour again expressed caution about the application
of the 'chameleon principle' (at [70]–[72]).
However, in concluding that the 'functions vested
in the Board were not of such a character that they required
judicial performance', his Honour also said that '(s)tructured
in a slightly different way, similar functions might possibly
have been vested in a Ch III court' (at [101]).

AGS (Susie Brown and Andrew Buckland from the Constitutional
Litigation Unit) acted for the Commonwealth Attorney-General,
who intervened to support the validity of s 1292(2), with
AGS Chief General Counsel Henry Burmester AO QC and Kate
Eastman as counsel.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/HCA/2007/23.html

ACQUISITION OF PROPERTY: REDUCTION IN WORKERS COMPENSATION

Susie Brown

Susie Brown Senior Lawyer
T 02 6253 7132
F 02 6253 7303
susie.brown@ags.gov.au

David Bennett

David Bennett Deputy Government Solicitor
T 02 6253 7063
F 02 6253 7303
david.bennett@ags.gov.au

The High Court has decided that Northern Territory legislation
validly decreased a person's vested statutory entitlement
to workers compensation as it did not constitute an acquisition
of property contrary to s 50(1) of the Northern Territory
(Self-Government) Act 1978 (Cth) (the Self-Government
Act). The High Court's decision is relevant to the
application of s 51(xxxi) of the Constitution (acquisition
of property on just terms) to Commonwealth legislation
modifying or extinguishing statutory rights.

Attorney-General (NT) v Chaffey; Santos Limited v Chaffey
High Court of Australia, 2 August 2007
[2007] HCA 34; (2007) 237 ALR 373

Background

This case involved a challenge to the validity of amendments
to the Work Health Act (NT), which had the effect of decreasing
a person's vested statutory entitlement to workers
compensation. Mr Chaffey argued that the amendments were
invalid as they constituted an acquisition of property
contrary to s 50(1) of the Self-Government Act. Section
50(1) provides that the power of the Legislative Assembly
to make laws 'does not extend to the making of laws
with respect to the acquisition of property otherwise than
on just terms' and thereby limits the law-making
power of the Northern Territory Legislative Assembly in
terms similar to s 51(xxxi) of the Constitution. The High
Court proceeded on the basis that the principles to be
applied were the same as for s 51(xxxi).

Under the Work Health Act, the amount of compensation
to which an injured worker is entitled is calculated by
reference to the worker's 'remuneration'.
The Northern Territory Court of Appeal decided in 2004
that 'remuneration' included superannuation
contributions made by an employer. Amendments were made
to the Work Health Act to reverse the effect of the Court
of Appeal's decision by excluding employer superannuation
contributions from 'remuneration'. The amendments
had retrospective effect. Compensation payments for both
past and future periods were therefore to be calculated
on the basis that superannuation contributions were excluded.

Mr Chaffey sustained an injury in 2003, prior to the commencement
of the legislative amendments, for which Santos Ltd had
been paying him compensation under the Work Health Act.
The compensation payments had been calculated excluding
employer superannuation contributions. The effect of the
amendments was therefore to prevent him from recovering
additional compensation, calculated by reference to the
superannuation contributions, both prior to the amendments
and into the future.

The Full Court of the Northern Territory Supreme Court
held (by a 2:1 majority) that the amendments gave rise
to an acquisition of property without just terms and were
invalid. Both the Northern Territory Attorney-General and
Santos Ltd appealed to the High Court. The Commonwealth
Attorney-General intervened in the appeals to support validity.

Decision

The Court unanimously allowed the appeals and held the
amendments to the Work Health Act were valid. Gleeson CJ
and Gummow, Hayne, and Crennan JJ delivered a joint judgment.
Kirby, Callinan and Heydon JJ each delivered separate judgments.

Joint judgment

The joint judgment based its decision on the nature of
the 'property'–in this case, a statutory
right, to which s 50 of the Self-Government Act was said
to apply ([21]).
Central to their consideration was the construction of
s 53 of the Work Health Act–the provision that obliged
employers to make compensation payments to workers. That
obligation was expressed (in s 53) to be 'subject
to', and 'in accordance with', the relevant
part of the Act and as an obligation to provide 'such
compensation as is prescribed'.

Their Honours accepted the appellants' arguments
that these references were naturally construed as applying 'from
time to time' so that the method for calculating
the amount of compensation payable was not fixed at the
time of injury but 'was always subject to variation' (at
[18]). As the 'property' involved (the rights
to compensation under the Work Health Act) was liable to
variation by subsequent legislation, there was no 'acquisition' for
the purposes of s 50 of the Self-Government Act (at [30]).

The joint judgment made clear that 'the contingency
of subsequent legislative modification or extinguishment' does
not mean that all statutory rights and interests are withdrawn
from the protection of s 51(xxxi). The mining interests
considered in Newcrest Mining (WA) Ltd v Commonwealth (1997)
190 CLR 513 or the rights of copyright and patent owners
are examples of where s 51(xxxi) applies. However, in the
case of Pt V of the Work Health Act, their Honours said
that 'by express legislative stipulation in existence
at the time of the creation of the statutory "right",
its continued and fixed content depended upon the will
from time to time of the legislature which created that "right"' (at
[24]–[25]).

Their Honours noted that the Northern Territory Attorney-General
had accepted that an amendment might remove the content
of the right to compensation and therefore go beyond what
was contemplated by s 53, and that this would amount to
abolition of that right. But their Honours
said that it was unnecessary to consider that possibility
here (at [31]).

Separate judgments

The separate judgments of Kirby J, Callinan J and Heydon
J each agreed that, on the proper construction of the Work
Health Act, the right to compensation in s 53 was inherently
susceptible to variation and that therefore there was no
acquisition. However, the judgments gave more attention
to the overall statutory context. Callinan J emphasised
the nature of workers compensation as a 'unique form
of benefit', which is closely associated with working
conditions generally and may fluctuate as the economy fluctuates.
These considerations distinguished workers compensation
from other interests ([55]).

In construing s 53, Kirby J and Heydon J had regard to
the fact that, historically, workers compensation laws
have been subject to frequent and extensive amendment.
Therefore, it was unlikely that a person affected by workers
compensation legislation would expect that existing rights
would remain unaltered ([47], [60]). Also, the Work Health
Act reflects a particular balance between the interests
of worker, employers and insurers and the legislation contemplates
that that balance would be adjusted from time to time ([46],
[61]–[66]).

AGS (Susie Brown and David Bennett QC from the Constitutional
Litigation Unit) acted for the Commonwealth Attorney-General
who intervened, with Commonwealth Solicitor-General David
Bennett AO QC, Melissa Perry QC and Guy Aitken from AGS
as counsel.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/HCA/2007/34.html

PRISONERS VOTING IN FEDERAL ELECTIONS

David Bennett

David Bennett Deputy Government Solicitor
T 02 6253 7063
F 02 6253 7303
david.bennett@ags.gov.au

The High Court, by a 4:2 majority, has decided that
certain provisions of the Commonwealth Electoral Act
1918 (Cth) (the Act) which were enacted in 2006 are
invalid. The provisions prevented people from voting in
a federal election if, on election day, they were in full-time
imprisonment for an offence (the 2006 regime).

However, the legislative regime in force immediately before
the 2006 regime was held to be in force and valid. Under
that previous regime, prisoners 'serving a sentence
of 3 years or longer for an offence against the law of
the Commonwealth or of a State or Territory' were
not entitled to vote (the three year regime).

Therefore, the present position under the Act is that,
while some prisoners can vote in federal elections, prisoners
serving a sentence of three years or longer cannot do so.

Roach v Electoral Commissioner & Commonwealth
High Court of Australia, 26 September 2007
[2007] HCA 43; (2007) 239 ALR 1

Legislation and constitutional provisions

Under the 2006 regime, a 'person who is serving
a sentence of imprisonment for an offence against the law
of the Commonwealth or of a State or Territory is not entitled
to vote at any Senate election or House of Representatives
election' (s 93(8AA) of the Act). A person was serving
a 'sentence of imprisonment' only if 'the
person is in detention on a full-time basis for an offence
against a law of the Commonwealth or a State or Territory',
and 'that detention [was] attributable to the sentence
of imprisonment concerned' (s 4(1A) of the Act).

The Constitution provides, in part, that the Senate shall
be composed of senators for each state 'directly
chosen by the people of the State' (s 7). Similarly,
s 24 provides in part that the House of Representatives
shall be composed of members 'directly chosen by
the people of the Commonwealth'. In combination,
ss 30 and 51(xxxvi) of the Constitution empower the Parliament
to provide for the 'qualification of electors of
members of the House of Representatives'. By virtue
of s 8 of the Constitution, that qualification is also
the qualification for electors of senators.

Decision

Gleeson CJ, and, in a joint judgment, Gummow, Kirby and
Crennan JJ, held that the 2006 regime was invalid but that
the previous three year regime was still in force and valid.
In dissent, Hayne J and Heydon J held that the 2006 regime
was valid.

The 2006 regime

The majority justices held that the 2006 regime contravened
constitutional requirements. Gleeson CJ found the 2006
regime invalid because it did not meet the requirement
imposed by ss 7 and 24 of the Constitution that parliamentarians
be 'directly chosen by the people' (at [6]).
His Honour said that, by 'abandoning any attempt
to identify prisoners who have committed serious crimes
by reference to either the term of imprisonment imposed
or the maximum penalty for the offence', the Parliament
had broken 'the rational connection necessary to
reconcile the disenfranchisement with the constitutional
imperative of choice by the people' (at [24]).

Gummow, Kirby and Crennan JJ looked more generally to
the system of representative and responsible government
mandated by the Constitution, including limits arising
from ss 7 and 24 ([40], [43], [49]). They said that the
case concerned 'not the existence of an individual
right, but rather the extent of [a] limitation on legislative
power' ([86]). They found the 2006 regime invalid
because it was not reasonably appropriate and adapted,
or proportionate, to the maintenance of the constitutionally
prescribed system of representative government ([95]).

All of the majority justices noted the central importance
of the franchise or voting to citizenship and to the system
of representative government established by the Constitution
([7], [81], [83]). Also, the majority justices accepted
that the Constitution allows for changes in representative
government, particularly by allowing the Parliament considerable
scope to prescribe aspects of the form of representative
government ([4]–[6], [45], [77]). However, Gummow,
Kirby and Crennan JJ noted that, although the scope of
the franchise involves matters of legislative and political
choice, there is also a 'constitutional bedrock' ([82]).

Gleeson CJ said that, because of changed historical circumstances
including legislative history and its long-established
universal adult suffrage, the evolution in representative
government has now reached a stage where the words of ss
7 and 24 have become a constitutional protection of the
right to vote, although allowing exceptions ([7]). While
the Constitution leaves it to Parliament to define the
exceptions, 'its power to do so is not unconstrained' ([7]):

Because the franchise is critical to representative
government, and lies at the centre of our concept of
participation in the life of the community, and of citizenship,
disenfranchisement of any group of adult citizens on
a basis that does not constitute a substantial reason
for exclusion from such participation would not be consistent
with choice by the people.

Similarly, Gummow, Kirby and Crennan JJ said the question
is whether any legislative disqualification from voting
is for a 'substantial reason' ([85]).

Gleeson CJ concluded that exclusion from voting based
on the rationale that those imprisoned for serious criminal
offences should suffer a temporary suspension of their
connection with the community, both physically and through
participation by voting in the political process, was consistent
with the constitutional requirement of choice by the people
([19]). However, his Honour held that, at the level of
short-term prisoners (serving a sentence of six months
or less), the criterion for disenfranchisement (serving
a sentence of imprisonment) was 'arbitrary',
and there was no 'rational connection' between
the disenfranchisement and the constitutional imperative
of choice by the people ([23]–[24]). For such prisoners,
the fact of imprisonment may depend on factors such as
the availability of other sentencing options and on considerations
such as their personal situation or their location ([21]–[22]).

Gummow, Kirby and Crennan JJ said that a disqualification
from voting will be for a 'substantial reason' if
it is 'reasonably appropriate and adapted to serve
an end which is consistent or compatible with the maintenance
of the constitutionally prescribed system of representative
government' (at [85]). As they noted, this formulation
is similar to part of the test for determining whether
the implied freedom of political communication has been
infringed, as set out in Lange v Australian Broadcasting
Corporation (1997) 189 CLR 520 (at [86]). They also
observed that there is little difference between this formulation
and the notion of 'proportionality'–what
is disproportionate or arbitrary may not satisfy the formulation
(at [85]).

Gummow, Kirby and Crennan JJ referred to the history of
colonial franchise provisions and the drafting of the Constitution.
They particularly noted the disharmony between the 2006
regime and the less stringent provisions of s 44(ii) of
the Constitution, which disqualifies from being chosen
or sitting as a parliamentarian persons convicted and under
sentence or subject to be sentenced for an offence punishable
by imprisonment for one year or longer.

They concluded that the 2006 regime was not appropriate
and adapted (or proportionate) to the maintenance of representative
government as it cast the net of disqualification too wide
([95]). The 2006 regime operated 'without regard
to the nature of the offence committed, the length of the
term of imprisonment imposed, or the personal circumstances
of the offender' ([90]). It had 'no regard
to culpability' other than 'that which can
be attributed to prisoners in general as a section of society' ([90],
[93]). The notions of citizenship and membership of the
Australian body politic reflected in the franchise 'were
not extinguished by the mere fact of imprisonment' ([84]).

The three year regime

Gummow, Kirby and Crennan JJ held that both the provisions
of the amending Act that inserted s 93(8AA) and
related provisions and the provisions of that Act that repealed the
provisions of the previous three year regime were invalid
([97])–that is, there was no parliamentary 'intention' to
remove the old provisions independently of the adoption
of the new provisions and thereby leave a gap in the Act
([97]). The efficacy of the insertion of the new provisions
was a condition of the repeal of the old provisions ([97]).
The result was that, while the 2006 regime was invalid,
the three year regime effectively revived. Gleeson CJ agreed
([25]).

Gleeson CJ held that the three year regime was valid,
as that prevented from voting only those involved in serious
criminal offending ([19]).

Similarly, Gummow, Kirby and Crennan JJ held that the
three year regime was valid ([102]). Having regard to the
colonial history and the drafting history of the Constitution,
and the use of the length of the sentence as a criterion
of culpability, it could not be said that at federation
such a system was incompatible with the maintenance of
the prescribed system of representative government (or
disproportionate) ([102]).

Further, the legislative development of representative
government since federation had not subsequently given
rise to any incompatibility ([102]). The three year regime
did 'distinguish between serious lawlessness and
less serious but still reprehensible conduct', and
this indicium of culpability and temporary unfitness to
participate in the electoral process was within the permissible
area of legislative choice ([82], [98], [102]). The three
year disqualification reflected the primacy of the electoral
cycle that the Constitution provides for ([102]).

Hayne and Heydon JJ (dissenting)

In dissent, Hayne J held that the 2006 regime was valid
and Heydon J agreed with him. Hayne J held that the phrase 'directly
chosen by the people' was an 'expression of
generality' and was not intended to impose a requirement
for universal adult suffrage without exceptions ([111]–[112],
[122]–[127]). He referred to the history of colonial
and state franchise provisions–particularly the NSW
provisions, which disqualified any person in prison under
any conviction ([134]–[138]).

Along with other state provisions, these NSW provisions
were picked up and applied by s 30 of the Constitution
for federal elections until the Parliament otherwise provided.
They therefore applied in New South Wales in the first
federal election. Accordingly, each House of the Parliament
was and is directly chosen by the people where persons
in prison under sentence are excluded from voting ([139]).

AGS (David Lewis, Thomas John and David Bennett QC from
the Constitutional Litigation Unit) acted for the Commonwealth,
with the Commonwealth Solicitor-General David Bennett AO
QC and Lisa De Ferrari as counsel. AGS (Ross McClure and
Alice Crowe) also acted for the Electoral Commissioner,
with Peter Hanks QC and Peter Gray as counsel.

Text of the decision is available at:
http://www.austlii.edu.au/au/cases/cth/HCA/2007/43.html

CONSTITUTIONAL DECISIONS IN BRIEF

Joint authors
David Bennett QC Deputy Government Solicitor
Andrew Buckland Senior Executive Lawyer

Time limit on applications to High Court for judicial
review of executive decisions

Bodruddaza v Minister for Immigration and Multicultural
Affairs
High Court of Australia, 18 April 2007
[2007] HCA 14; (2007) 234 ALR 114

The High Court unanimously held (Gleeson CJ, Gummow,
Kirby, Hayne, Heydon and Crennan JJ in a joint judgment,
and Callinan J generally agreeing) that s 486A of the Migration
Act 1958 (Cth), which imposed a maximum 84-day time
limit on applications to the High Court for judicial
review of 'migration decisions', was invalid.

The plaintiff was refused a student visa by a delegate
of the Minister. The plaintiff's agent missed by
one day the 21-day time limit under the Migration Act for
applying for review of the decision by the Migration Review
Tribunal. After the Tribunal held it did not have jurisdiction,
the plaintiff brought these proceedings in the original
jurisdiction of the High Court for judicial review of the
decision, asserting jurisdictional error. The High Court
application was made under s 75(v) of the Constitution,
which confers original jurisdiction on the High Court in
all matters 'in which a writ of Mandamus or prohibition
or an injunction is sought against an officer of the Commonwealth'.

However, the plaintiff had commenced the High Court action
outside the statutory time limit under s 486A of the Migration
Act for applications to the High Court. Section 486A required
that a High Court application be brought within 28 days
of actual notification of the decision and gave the Court
a discretion to extend that period by up to 56 days. If
a decision is constitutionally valid, s 486A denied to
the High Court jurisdiction to deal with the plaintiff's
application. The plaintiff challenged the validity of the
section.

The Court first addressed the proper construction of s
486A and held that it was directed to the competency of
applications to the Court and did not purport to 'validate' decisions
otherwise affected by jurisdictional error upon expiry
of the 84-day period ([27]–[30]).

In addressing the validity of s 486A, the joint judgment
referred to the 'high constitutional purposes' of
the remedies provided by s 75(v) ([37]). Section 75(v)
entrenches a minimum availability of judicial review to
ensure that the judicial power of the Commonwealth can
be engaged to enforce observance both of constitutional
limits on the exercise of Commonwealth executive and legislative
power and of 'the limits of the power conferred by
statute upon administrative decision-makers' (in
the latter case, in the sense of controlling jurisdictional
error). The jurisdiction protects both the position of
the states as parties to the federal compact and the interests
of people affected in ensuring that Commonwealth officers 'obey
the law and neither exceed nor neglect any jurisdiction
which the law confers on them'
([37], [46]).

The Commonwealth argued that s 486A was valid as a reasonable
regulation of the right to institute proceedings under
s 75(v) and that it did not operate to deprive the High
Court of part of its entrenched jurisdiction under s 75(v).
The Court left open the question of whether a fixed time
limit on the exercise of s 75(v) jurisdiction could ever
be valid ([53]). It was sufficient to conclude that the
particular restriction imposed by s 486A was inconsistent
with the position of s 75(v) in the constitutional structure
as explained. This was because, by fixing upon the time
of actual notification of the decision in question, s 486A
did 'not allow for the range of vitiating factors
which may affect administrative decision making' ([55]).

As a result, the time limit 'subverts the constitutional
purpose of the remedy provided by s 75(v)' ([58]).
So, for example, the time of notification of a decision
(on which the time limit in s 486A operated) 'may
be very different from the time when a person becomes aware
of the circumstances giving rise to a possible challenge
to the decision' ([56]) and would not allow for supervening
events which lead to a failure (without fault) to meet
the time limit, such as physical incapacitation of the
applicant ([57]).

In light of these examples and the characterisation of
the s 75(v) remedies as discretionary, the Court, although
not deciding that fixed time limits would always be invalid,
warned that 'any attempt to follow that path is bound
to encounter constitutional difficulties' ([59]).

The only remedies expressly provided for in s 75(v) are
mandamus, prohibition and injunction. This raised the issue
whether s 486A could validly apply insofar as the plaintiff
sought relief in the form of certiorari. The joint judgment
found it unnecessary to decide whether 'it would
be open to the Parliament to legislate to withdraw from
this Court any power to grant certiorari as the principal
relief in the original jurisdiction of the Court' ([62]).
This was because, in the present case, the remedy of certiorari
was ancillary to the principal relief (prohibition and
mandamus) included in s 75(v) that was sought by the plaintiff.
As it was necessary to grant certiorari so as effectively
to determine the 'matter' in respect of which
jurisdiction was conferred by s 75(v), s 486A could not
validly diminish the authority of the Court to grant certiorari
([62]–[64]). In contrast, Callinan J referred to
his judgment in Plaintiff S157/2002 v Commonwealth (2003)
211 CLR 476, in which he held that Parliament could legislate
to prevent the grant of certiorari against officers of
the Commonwealth ([80]).

Having ruled that s 486A did not prevent the exercise
of jurisdiction under s 75(v), the Court went on to consider
and dismiss the plaintiff's challenge to the delegate's
decision on the ground of jurisdictional error.

AGS (Andras Markus, and Graeme Hill and Andrew Buckland
from the Constitutional Litigation Unit) acted for the
Minister and for the Commonwealth Attorney-General who
intervened, with the Commonwealth Solicitor-General David
Bennett AO QC, and Geoffrey Kennett as counsel.

http://www.austlii.edu.au/au/cases/cth/HCA/2007/14.html

Validity of Norfolk Island electoral laws: section 122
of the Constitution

Bennett v Commonwealth
High Court of Australia, 27 April 2007
[2007] HCA 18, (2007) 235 ALR 1

The High Court unanimously held that the Norfolk
Island Amendment Act 2004 (Cth) (the NI Amendment
Act), which prescribes Australian citizenship as a
qualification to vote or stand for election for the
Norfolk Island Legislative Assembly, was valid under
s 122 of the Constitution. Gleeson CJ, Gummow, Hayne,
Heydon and Crennan JJ delivered a joint judgment. Kirby
J and Callinan J delivered separate judgments agreeing
with the orders of the joint judgment.

The NI Amendment Act amended provisions of the Norfolk
Island Act 1979 governing elections for the Norfolk
Island Legislative Assembly. The amendments have the
effect that a person must be an Australian citizen in
order to stand for election to, or vote in elections
for, the Legislative Assembly. Nearly 20 per cent of
the members of the Norfolk Island community were not
Australian citizens.

The plaintiffs argued that the amendments were beyond
the Commonwealth's legislative power in s 122 of
the Constitution (under which the Parliament 'may
make laws for the government of any territory'),
including because of the historical circumstances of Norfolk
Island. It was argued that Parliament could not impose
an electoral qualification requirement that did not relate
to membership of the Norfolk Island community and that
a law providing for self-government of a territory must
provide for 'democratic representation'.

On 1 July 1914, Norfolk Island became a territory 'placed
by the Queen under the authority of and accepted by the
Commonwealth' within the meaning of s 122. In relation
to history, relevant to the first aspect of the plaintiffs' argument,
their submissions emphasised their view that Norfolk Island
had not thereby become a 'part of the Commonwealth' in
any relevant sense and was placed under the authority of
the Commonwealth on the footing that it had been, since
1856, a 'distinct and separate settlement'.

The High Court rejected the plaintiffs' arguments
and held that, in relation to the electoral provisions
in question, there was no relevant qualification on the
Commonwealth's legislative power under s 122 derived
from the historical circumstances of Norfolk Island or
its status as a territory. The joint judgment began by
emphasising that, consistent with past authority, the interpretation
of s 122 must take account of the generality of its language
which covers 'the entire legal situation' of
a territory.

That generality is explained by the circumstance that 'the
territories, dealt with compendiously and briefly in s
122 of the Constitution, have differed greatly in size,
population, and development' ([10]). There was no
basis under s 122 for treating Norfolk Island differently
from any other territory because of its peculiar historical
or social circumstances. The wisdom of an exercise of legislative
power under s 122 in relation to a particular territory
by reference to those circumstances was a political question
and there was no relevant limitation on constitutional
power. There was no constitutional necessity to establish
any form of self-government in a territory and no constitutional
prohibition against discriminating in territory electoral
laws on the basis of Australian citizenship. According
to the joint judgment:

Bearing in mind the diversity of territories, the Parliament,
if it decides to establish institutions of representative
government within a territory, is not bound to conform
to any particular model of representative government.
There is nothing in the Constitution, and there is nothing
inherent in the concept of representative government,
that requires the Parliament, if it chooses to legislate
for self-government, to enfranchise residents of Norfolk
Island who are not Australian citizens. (At [42].)

AGS (Iain Gentle, Graeme Hill and David Bennett QC from
the Constitutional Litigation Unit) acted for the Commonwealth,
with the Commonwealth Solicitor-General David Bennett AO
QC and Kate Eastman as counsel.

http://www.austlii.edu.au/au/cases/cth/HCA/2007/18.html

Application of state procedural laws to proceedings in
federal jurisdiction

Gordon v Tolcher
High Court of Australia, 15 December 2006
[2006] HCA 62, (2006) 231 ALR 582

This case again involved the High Court in considering
the application of state laws to proceedings in federal
jurisdiction. Where proceedings in a state court are
in federal jurisdiction because they involve a 'matter' under
ss 75 or 76 of the Constitution, state laws (including
procedural laws) cannot apply of their own force. Instead,
they will apply only if picked up by s 79 of the Judiciary
Act 1903 (Cth), which provides:

The laws of each State and Territory, including the
laws relating to procedure, evidence, and the competency
of witnesses, shall, except as otherwise provided
by the Constitution or the laws of the Commonwealth,
be binding on all Courts exercising federal jurisdiction
in that State or Territory in all cases to which they
are applicable. [Emphasis added.]

The particular issue here arose in the context of proceedings
in the New South Wales District Court, in which orders
were sought under s 588FF(1) of the Corporations Act
2001 (Cth) that the appellant repay the proceeds of
alleged 'voidable transactions' in a company
liquidation. The proceedings were therefore in federal
jurisdiction (s 76(ii) of the Constitution and s 1337E
of the Corporations Act).

Under s 588FF(3) of the Corporations Act, the proceedings
had to be commenced within a three-year period. Here, the
proceedings were commenced within that period by the filing
of a statement of liquidated claim, but the statement of
liquidated claim was not served on the defendant. By operation
of the Rules of the New South Wales District Court, after
a certain period of time had elapsed, the proceedings were
treated as dormant and 'taken to be dismissed'.

Subsequently, after the expiry of the three-year period
in s 588FF(3), the respondents sought orders from the District
Court 'which would have the effect of rescinding
the deemed dismissal' ([20]).

The question for decision was whether the provisions of
the New South Wales District Court Rules under which those
orders were sought after expiry of the three-year period
were not picked up and applied by s 79 of the Judiciary
Act to the proceedings in the District Court because s
588FF(3) of the Corporations Act 'otherwise provided'.

In a joint judgment (Gleeson CJ, Gummow, Hayne, Callinan
and Heydon JJ), the High Court concluded that s 588FF did
not 'otherwise provide' in relation to the
procedural rules in issue ([41]). Here, the time stipulation
in s 588FF(3) had been met when the application was filed.
Thereafter, s 588FF did not deal with the manner of exercise
of the federal jurisdiction to which it related but evinced
an intention that 'after the institution of an application
the procedural regulation of the conduct of a matter is
left for that particular State or territorial procedural
law which is to be picked up by s 79 of the Judiciary Act' ([32]).

AGS (Iain Gentle and David Bennett QC from the Constitutional
Litigation Unit) acted for the Commonwealth Attorney-General,
who intervened and put submissions supporting the result
upheld by the High Court. AGS Chief General Counsel Henry
Burmester AO QC and Graeme Hill appeared as counsel.

http://www.austlii.edu.au/au/cases/cth/HCA/2006/62.html

Judicial power and the Takeovers Panel

Attorney-General (Cth) v Alinta Limited
High Court of Australia, 13 December 2007
[2008] HCA 2

In Australian Pipeline Ltd v Alinta Ltd (2007)
240 ALR 294, the Full Court of the Federal Court held
that s 657A(2)(b) of the Corporations Act 2001 (Cth)
was invalid on the ground that it purported to confer
the judicial power of the Commonwealth on the Takeovers
Panel. The Takeovers Panel is established under the Corporations
Act as the body with the primary role in resolving takeover
disputes. The Commonwealth Attorney-General had intervened
in the Full Federal Court and appealed against its decision
to the High Court.

On 13 December 2007, the High Court announced its orders
unanimously reversing the decision of the Full Federal
Court and upholding the validity of s 657A(2)(b). The Court's
reasons were published on 31 January 2008 and will be the
subject of the next edition of Litigation Notes.

http://www.austlii.edu.au/au/cases/cth/HCA/2008/2.html

State insurance

Attorney-General (Vic) v Andrews
High Court of Australia, 21 March 2007
[2007] HCA 9; (2007) 233 ALR 389

The High Court held that a Commonwealth law providing
for a constitutional corporation to move from a compulsory
state-based workers compensation scheme to the Commonwealth
workers compensation scheme did not infringe the 'State
insurance' proviso in s 51(xiv) of the Constitution.

Optus Administration Pty Ltd (Optus) sought and was granted
a Commonwealth licence to operate as a self-insurer under
the Commonwealth workers compensation scheme contained
in the Safety, Rehabilitation and Compensation Act 1988 (Cth)
(SRC Act). Part VIII of the SRC Act, which is relevantly
supported by the corporations power (s 51(xx) of the Constitution),
provides that corporations licensed to operate as self-insurers
under that Act are not subject to any state or territory
laws 'relating to workers compensation'. As
a result, Optus was no longer subject to Victorian legislation
that imposed workers compensation liabilities on employers
in Victoria and required such employers to insure those
liabilities with the Victorian WorkCover Authority (VWA).

Section 51(xiv) of the Constitution relevantly confers
power on the Commonwealth Parliament to legislate with
respect to 'insurance, other than State insurance …'.
In proceedings brought in the Federal Court, the Attorney-General
for Victoria and the VWA argued that Pt VIII of the SRC
Act invalidly infringed the 'State insurance' proviso
in s 51(xiv) by removing a licensed corporation such as
Optus from the state's workers compensation scheme,
including the requirement to insure with VWA. This argument
was rejected at first instance by Selway J. The Victorian
Attorney-General appealed to the Full Federal Court and
that appeal was then removed into the High Court.

In dismissing the appeal, the majority judgments took
two different approaches. Gleeson CJ focused directly on
the application of the 'State insurance' proviso
in s 51(xiv). State insurance, his Honour held, 'means
the business of insurance conducted by an insurer owned
or controlled by a State'. While the business conducted
by VWA was 'State insurance', Pt VIII of the
SRC Act did not seek to regulate the insurance business
conducted by VWA and did not prohibit or substantially
impair Victoria's capacity to conduct insurance business.
Gleeson CJ concluded that the proviso to s 51(xiv) does
not protect state legislation that establishes a state monopoly requiring
that insurance of a particular kind be taken out with a
state insurer.

The other majority judgment was that of Gummow, Hayne,
Heydon and Crennan JJ. Their Honours held that the direct
effect of Pt VIII of the SRC Act was to invalidate those
provisions of the Victorian legislation imposing workers
compensation liabilities on Optus. In doing so, Pt VIII
did not bear the character of a law with respect to insurance
or State insurance, notwithstanding that the effect of
Pt VIII was to relieve Optus of any liabilities that the
Victorian legislation would otherwise have required it
to insure with the VWA.

The minority justices (Kirby J and Callinan J) were critical
of the approach of both majority judgments and appear to
have concluded that a state monopoly of insurance business
is, in its operation as a monopoly, protected by the 'State
insurance' proviso in s 51(xiv).

AGS (Iain Gentle and Andrew Buckland from the Constitutional
Litigation Unit) acted for the Commonwealth Attorney-General
who intervened, with the Commonwealth Solicitor-General
David Bennett AO QC and Daniel Star as counsel. AGS (Craig
Rawson) also acted for the Minister for Employment and
Workplace Relations, with Daniel Star as counsel.

http://www.austlii.edu.au/au/cases/cth/HCA/2007/9.html

Validity of military tribunals that are not federal courts

White v Director of Military Prosecutions
High Court of Australia, 19 June 2007
[2007] HCA 29; (2007) 235 ALR 455

The High Court has unanimously confirmed that service
tribunals (that is, military tribunals) that are not
federal courts may try members of the Australian Defence
Force and impose punishment for at least some service
offences.

The Defence Force Discipline Act 1982 (Cth) established
a series of service tribunals, including courts martial
and defence force magistrates, to try 'service offences' created
by the Act. Some service offences are created by the Act
by reference to the ordinary criminal law applicable in
the Jervis Bay Territory. The plaintiff was charged with
several such offences. She challenged the jurisdiction
of a service tribunal to try her, on two grounds:

  • First, she argued that 'it is contrary to the
    Constitution, and beyond the power of the Parliament,
    to establish a system of military justice involving trial
    and punishment of service offences, being a form of Commonwealth-made
    criminal law, by tribunals operating outside of Ch III
    of the Constitution' ([2]). That was said to follow
    because, pursuant to s 71 of the Constitution, the only
    federal bodies that can exercise the 'judicial
    power of the Commonwealth' are federal courts created
    in accordance with Ch III, and the service tribunals
    were not established as Ch III federal courts.
  • Alternatively, she argued that service tribunals can
    only try 'exclusively disciplinary offences' which
    she defined to mean offences constituted by conduct that
    would not also amount to an offence under the general
    law.

The High Court unanimously rejected the plaintiff's
first argument, holding that, although service tribunals
exercise judicial power, it is not the judicial power of
the Commonwealth within the meaning of s 71 of the
Constitution. The reasons for this conclusion varied but
included the fact that it was supported by a line of earlier
High Court authority that the Court refused to overrule;
that there was a long history of service tribunals operating
outside of Ch III of the Constitution; and the nature of
the defence force as a disciplined force.

In relation to the plaintiff's second argument,
previous High Court decisions had given rise to three competing
views on the conduct that can be made a service offence
triable by a service tribunal. The plaintiff's second
argument was based on the view, primarily advanced by Deane
J in Re Tracey; Ex parte Ryan (1989) 166 CLR 518,
that service offences can validly be tried by a service
tribunal only if they are exclusively or essentially disciplinary
in nature.

Although, as the joint judgment of Gummow, Hayne and Crennan
JJ recognised, 'difficult questions may arise in
considering the significance for a particular case of that
overlap [between civilian and service offences]' ([76]),
a majority of the High Court (Kirby J dissenting) rejected
the argument that service tribunals can try only offences
constituted by conduct that would not amount to an offence
under the general law. As Gleeson CJ stated (citing Brennan
and Toohey JJ in Re Tracey) (at [21]):

… whether an offence is more properly to be regarded
as an offence against military discipline or a breach
of civil order will often depend, not upon the elements
of the offence, but upon the circumstances in which it
is committed.

However, because of a concession made by the plaintiff,
the majority justices did not need to decide what service
offences may validly be dealt with by a service tribunal
outside Ch III, and in particular did not decide between
what are known as the 'service status' and
the 'service connection' tests (see, for example,
Re Colonel Aird; Ex parte Alpert (2004) 220 CLR 308, discussed
in Litigation Notes No.
13
(29 November 2005)).

Following the hearing of this matter, the Act was amended
to replace courts martial and defence force magistrates
with the Australian Military Court (see Pt VII, Div 3 of
the Act). The Australian Military Court is also not a federal
court established under Ch III of the Constitution.

AGS (Andras Markus, and David Lewis and Andrew Buckland
from the Constitutional Litigation Unit) acted for the
Director of Military Prosecutions and the Commonwealth,
with the Commonwealth Solicitor-General David Bennett AO
QC, Tom Berkely and Stephen Lloyd as counsel.

http://www.austlii.edu.au/au/cases/cth/HCA/2007/29.html

About the authors

David Bennett QC leads the AGS constitutional
litigation practice. He has advised the Commonwealth
on constitutional law and policy issues for more than
20 years.

Andrew Buckland is the Senior Executive Lawyer
in charge of the AGS Constitutional Litigation Unit.
He has run a number of significant constitutional cases
in the High Court and advises on constitutional and federal
jurisdiction issues.

Susie Brown is a Senior Lawyer in AGS Office
of General Counsel and specialises in advising on constitutional
law, statutory interpretation, employment law and environmental
law.

Simon Thornton is a Lawyer who has recently
joined the AGS Constitutional Litigation Unit and has
a range of litigation and commercial experience.

AGS contacts

AGS has a team of lawyers specialising in constitutional
litigation.

For further information on the articles in this issue,
or on other constitutional litigation issues, please contact
David Bennett QC or Andrew Buckland.

David Bennett

David Bennett Deputy Government Solicitor
T 02 6253 7063
F 02 6253 7303
david.bennett@ags.gov.au

Andrew Buckland

Andrew Buckland Senior Executive Lawyer
T 02 6253 7024
F 02 6253 7303
andrew.buckland@ags.gov.au

For information on general litigation and dispute resolution
matters and services, please contact any of the lawyers
listed below.

Canberra
Jenny
Anderson

02 6253 7401

Sydney
Greg Kathner

02 9581 7568

Melbourne
Susan Pryde

03 9242 1426

Brisbane
Barry
Cosgrove

07 3360 5647

Perth
Graeme
Windsor

08 6268 1102

Adelaide/Darwin
Sarah Court

08 8205 4283

Hobart
Peter Bowen

03 6220 5474

ISSN 1329-458X (Print)
ISSN 2204-6542 (Online)

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The material in these notes is provided for general
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the purpose of a particular matter. Please contact
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of any of the material in these notes.