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Introduction

MOBIL OIL v VICTORIA:
CHAPTER III AND REPRESENTATIVE ACTIONS
A paper delivered to the 2003 UNSW Constitutional Law Conference organised by the Gilbert & Tobin Centre of Public Law with the support of the Australian Association of Introduction
In Mobil Oil Australia Pty Limited v Victoria [2002] HCA 27 (judgment delivered 26 June 2002), the plaintiff commenced an action in the High Court’s original jurisdiction seeking a declaration that the provisions of Part 4A of the Supreme Court Act 1986 (Vic), inserted in 2000, were beyond the legislative power of the Put simply, the provisions of Part 4A introduced a regime for commencing and resolving representative actions in the Victorian Supreme Court, not unlike those previously existing in Victorian procedure and almost identical to those passed in the federal sphere (Part IVA of the Federal Court of Australia Act 1976 (Cth)). In Mobil Oil, two grounds of invalidity were advanced: a. That the provisions exceeded the territorial limits on the legislative power of the State, arising under the Constitution or otherwise; and 1 S 13 of the Courts and Tribunals Legislation (Miscellaneous Amendments) Act 2000 (Vic) 2 Order 18A of the Supreme Court (General Civil Procedure) Rules 1996 (Vic) b. That the provisions were inconsistent with the requirements for the exercise of judicial power by the Supreme Court arising under Chapter III A majority of the High Court rejected both grounds of invalidity and held the Part 4A: The legislative framework
The important features of the regime for representative actions set out in Part 4A a. A person does not need to give his or her consent in order to be a group b. It is not necessary for the originating process to have, or specify the number of, group members: s 33H(3). Part 4A envisages group proceedings being conducted in which not all members of the group have been identified, and even proceedings in which the number of group c. Notice is required to be given to group members of the proceedings: s 33X. The notice is not to be personal notice unless the court is satisfied that it is reasonably practicable and not unduly expensive: s 33Y. It follows that it is possible some persons within the class of persons covered by the proceeding might remain unaware of the proceeding. d. A group member may “opt out” of a group proceeding, by notice in writing before a date fixed by the court for that purpose: s 33J. e. Because it is an “opt out” procedure rather than “opt in”, persons who do not respond to the court by written notice remain group members, as they 3 See summary by Gleeson CJ at [5] 4 As accepted by Gaudron, Gummow and Hayne JJ at [39] have not “opted out”. It follows that it is possible some persons unaware of the existence of the proceedings will remain group members. f. The limitation period in relation to each claim of a group member is suspended until the group member opts out or the proceeding is g. The court has the discretion to order that a person cease to be a group member, or not become a group member: s 33KA. That discretion arises when the court is of the opinion that either the person does not have a sufficient connection with Australia to justify inclusion as a group member or for any other reason it is just and expedient that the person not be a group member. This confirms that connection with Victoria is not a test for inclusion in the group and that the location of persons outside Victoria is not necessarily a barrier to their inclusion. h. The court has a discretionary power to order that the proceeding no longer continue as a representative proceeding under Part 4A: ss 33L, 33M, 33N. i. The court is given power to make directions when resolution of the common issues will not determine all claims, including the establishment of sub-groups (s 33Q), allowing an individual group member to participate (s 33R), the commencement of further proceedings (s 33S) and the substitution of another group member as lead plaintiff (s 33T). j. The judgment in a group proceeding may determine questions of law and fact, make a declaration of liability, and grant equitable relief, damages k. The judgment must identify the group members who will be affected by it, and binds all persons who are group members at the time the judgment is given: s 33ZB. It follows that it is possible for a person to be bound by an adverse judgment in a representative proceeding, despite remaining unaware of the existence of the proceeding but remaining a group member by virtue of not having opted out. In Femcare Limited v Bright, proceedings concerning the equivalent provisions of the Federal Court Act (Part IVA), Senior Counsel for Femcare, Mr Bret Walker, termed such a person an “ignorant passive loser”. That is a term to which I shall return. Summary of bases for invalidity
As outlined above, the two bases for invalidity of the provisions were: a. That the provisions exceeded the territorial limits on the legislative power of the State arising under the Constitution or otherwise; and b. That the provisions were inconsistent with the requirements for the exercise of judicial power by the Supreme Court arising under Chapter III The argument advanced by Mobil was, in short, that the application of Part 4A was not limited to group members who were resident in Victoria or otherwise connected with Victoria. There is no territorial limitation on the area of operation of the provisions in Part 4A other than s 33KA(2) where the court has a discretion in circumstances where a group member does not have a sufficient connection with Australia. Because of the possible detrimental effects on a person who remains unaware of the proceedings, and thereby remains a group member by virtue of not opting out, and is bound by any adverse judgment in the proceeding (ie an “ignorant passive loser”), it was argued that the legislative power of the State does not extend to the imposition of such consequences on persons who have no relevant connection with the State. It was variously argued that limitations exist on the legislative power of the States by virtue of their Constitutions, express and implied limitations arising from the Commonwealth Constitution, and from application of common law principles The argument in Mobil Oil in relation to inconsistency with Chapter III was necessarily put in two stages. That is because the argument necessarily required a connection to be made between a State court and Chapter III. The first stage of the argument was that, because of the manner of any proceedings conducted under Part 4A, any decision of the Supreme Court made in proceedings under that Part was not a judgment made in the exercise of judicial power (the “judicial power” point). The second stage of the argument was to make the connection between the State court and Chapter III. Initially this was made in argument in two ways, via the application of section 73 (the “section 73” point) and via an argument based on the High Court’s decision in Kable. Subsequently, the argument based on Kable was not pursued. Thus, Mobil submitted that the effect of Part 4A was that a judgment given in a representative proceeding under that Part would not be a judgment given in the exercise of judicial power, because of the manner in which the Supreme Court was required to act pursuant to Part 4A: notably the resolution of claims of group members who were unaware of the proceedings. From this premise, Mobil submitted that it was beyond the powers of a Parliament of a State to “treat as judgments” or as “decisions which purport to bind people as judgments of a court” decisions which are incapable of being the subject of an appeal to the High 7 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 8 As noted by Gaudron, Gummow and Hayne JJ at [67], and Kirby J at [79] 9 See the description provided by Gaudron, Gummow and Hayne JJ at [64]. 10 Ibid. Summary of judgments in the majority
Gleeson CJ
No connection with Victoria: Gleeson CJ rejected this argument, holding that Part 4A was within the powers of the State of Victoria: [9]-[10]. Implied limitation from the Constitution: Gleeson CJ held that it is not antithetical to the Constitution for legislation in one State to have legal consequences for persons or conduct in another State: [16]. Gleeson CJ held that s 73 does not require that State Supreme Courts determine controversies only in accordance with the proper exercise of judicial power: [20]. State courts can exercise non-judicial power: [20]. Further, Gleeson CJ held that the provisions of Part 4A are not repugnant to the exercise of judicial power: [21]. Limitations on the ability of group members to control the proceedings, or potentially being unaware of the existence of the proceedings, do not equate to such repugnancy: [22]. Gaudron, Gummow and Hayne JJ
No connection with Victoria: Their Honours held that the only requirement is that there be some “real connexion”, even a remote or general connexion, between the subject matter of the legislation and the State: [48]. The legislation was (and is) concerned with the Supreme Court of Victoria. The legislation did not seek to make the Supreme Court of Victoria a national court: [50]. Proceedings might still be brought in other courts: [50]. Further, the legislation did not alter the basis upon which State and federal courts exercise authority to decide personal actions, being the amenability of the defendant to the court’s process, citing John Pfeiffer Implied limitation from the Constitution: no relevant limitation arises from the federal structure that impacts upon the analysis based on choice of law rules: see Their Honours held that a decision made in proceedings under Part 4A, like representative proceedings of the traditional kind, is still a judgment made in the exercise of judicial power, regardless of the particular state of knowledge of those in the class: [65]. It follows that the exercise of power by the Supreme Court under Part 4A was not antithetical to the exercise of judicial power. Further, even if the premise had been accepted (which it was not), if an appeal to the High Court does not lie from an order of a Supreme Court, it does not mean that the State law is invalid, merely that s 73 is not engaged: [66]: “Indeed, to hold that the State law was invalid would amount to concluding that Ch III of the Constitution, or s 73 in particular, requires that State courts can exercise no power other than judicial power, a conclusion that has not been reached, and is not required by the Constitution.” No connection with Victoria: Kirby J was of the view that this particular case in fact involved parties and circumstances having many connections to Victoria: Implied limitation from the Constitution: Kirby J held that mere amenability of the defendant to process in Victoria was not necessarily sufficient in the face of geographical limitations on the legislative power of the State implied by the Constitution (at [102]-[107]), so that service of the court’s process upon a party before the court pursuant to federal legislation could not repair the flaw of any exceeding of constitutional limitations: [121]. However, Kirby J held that there was no actual inconsistency between different State laws: [130]. Kirby J held that a judgment or order made in a group proceeding is still a judgment or order within the meaning of s 73 (and thereby an exercise of judicial power): [83]. However, his Honour was of the view that that did not mean there was no basis for arguing, in a proper case, that an ignorant passive loser (my term) was denied “due process” as required by Chapter III: [89]. However, Kirby J held that (if it had not been an exercise of judicial power) an attempt to impose on a Supreme Court the function of power of giving a judgment or order, within the ordinary meaning of those terms, that is not susceptible to appeal to the High Court may well breach s 73: [84]-[87]. Commentary on the High Court’s decision
A number of important propositions and considerations arise from the High Court’s decision, and from the various facets of the different judgments published Connection between subject matter of legislation and the State Gaudron, Gummow and Hayne JJ confirmed that the relevant test for validity of State legislation was that it will be “held valid if there is any real connexion – even a remote or general connexion – between the subject matter of the legislation and the State”, citing Pearce v Florenca. Their Honours noted that this test 12 At [48] 13 (1976) 135 CLR 507 at 518 per Gibbs J had twice been adopted in unanimous judgments of the Court “and should be Gleeson CJ similarly pointed out that, when considering the requirement that there be a “relevant territorial connection” between the law and the State, the test of relevance is “to be applied liberally, and even a remote or general connection Gaudron, Gummow and Hayne JJ noted that some questions may remain about the resolution of conflict if two States make inconsistent laws. Certainly, some questions do remain in this regard. There is authority to the effect that the starting proposition is that neither federal nor State governments can destroy the other nor curtail in any substantial manner the exercise of the other’s powers or obviously interfere with one another’s operations. To the extent that authority merely expands upon the principle of State’s implied immunities to an application between States (rather than just between the Commonwealth and a State or States), the authority seems well founded. Gleeson CJ observed as much in Mobil Oil: “Commonwealth legislative power, in its application to the States, is qualified by the principle that prohibits both the imposition on the States of special burdens and disabilities and the enactment of laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments. That principle is 14 Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 9 and Port MacDonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340 at 369-373 15 At [48] 16 At [9] 17 At [48], citing Port MacDonnell (1989) 168 CLR 340 at 374 and State Authorities Superannuation Board Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 285-286 18 See Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 74 per Starke J; see also Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 214 per Mason J (note that Mason J thought the reference to “operations” might be too broad). In State Authorities Superannuation Board Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 288, McHugh and Gummow JJ observed: “Whether such a doctrine applies as between the States need not detain us.” 19 See generally Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 20 At [15] founded upon an implication which also has significance in relation to an exercise of State’s legislative power which destroys or weakens the legislative authority of another State or its capacity to function as a government.” (footnotes omitted) Whether it also follows from that principle that one State cannot legislate in a way that impacts upon the legislative authority of another State is not clear, although McHugh J appeared to say as much in Re Residential Tenancies Tribunal (NSW); ex parte Defence Housing Authority: “Within their respective domains, the polities that make up a federation are regarded as sovereign. Because that is so, it is a necessary implication of the document that creates the federation that no polity in that federation can legislate for another. Federalism is concerned with the allocation of legislative power, and it is a natural and, to my mind, necessary implication of a federation that no polity can legislate in a way that destroys or weakens the legislative authority of another polity within that federation.” Any strict application of the implied immunities doctrine between the States would be confined to circumstances where legislation of one State impacted upon the existence, powers or operations of another State, rather than upon persons merely resident in the State or property located in the State. As to the latter, there is merit in the proposition that legislation impacting upon property located in another State does not, without more, offend “in the necessary sense the interests This application of the doctrine based on State’s implied immunities is, it is suggested, consistent with the majority judgment in Mobil Oil, where their Honours noted the problem of conflict between two inconsistent State laws, but their Honours clearly reject any strict proposition that a geographical limitation exists merely to ensure the States are able to co-exist in the federation. However, clearly Kirby J was of the view that the federal construct of the 21 (1997) 190 CLR 410 at 451 22 State Authorities Superannuation Board Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 288 per McHugh and Gummow JJ 23 Gaudron, Gummow and Hayne JJ at [48] 24 At [57] Constitution requires implied geographical limitations on the legislative powers of the States. It is not clear whether this is said to be limited to the legislative authority of another State, or is meant to apply more broadly. Just where the line is remains unclear. However, at least for Gleeson CJ, we can “Mobil submits that an implication from federalism prohibits State legislation which, if given extra-territorial effect, would affect the relationship between another State or a Territory and its residents or would determine the legal consequences of actions in another State or Territory. That proposition is far too broad. There is nothing either uncommon, or antithetical to the federal structure, about legislation of one State that has legal consequences for persons or conduct in another State or Territory. … The idea that all transactions and relationships giving rise to legal consequences can be located ‘in’ one particular State or Territory is unrealistic. … Different considerations might arise, for example, if the New South Wales Parliament, adopting a policy hostile to group proceedings, or class actions, set out to prevent residents of New South Wales from participating in litigation of that find. But no such problem arises here.” It follows that a majority of the Court seems to have accepted that no Constitutionally-implied geographical limitation exists that would apply in relation to legislation in one State having an effect on persons on conduct in Exercising judicial power under Chapter III The majority of the High Court judges held that the provisions of Part 4A are not repugnant to the exercise of judicial power, so that an order resulting from proceedings conducted under Part 4A, like representative proceedings of the traditional kind, was still a judgment made in the exercise of judicial power. 25 Kirby J at [102]-[123] 26 At [16] 27 Gleeson CJ at [21] 28 Gaudron, Gummow and Hayne JJ at [65]; Kirby J at [83] In so doing, their Honours appear to have rejected the argument that a proper exercise of judicial power is dependent upon the persons affected by the proceeding having control, knowledge or even an awareness of the existence of the proceedings. Gleeson CJ said that limitations on the ability of group members to control the proceedings, or potentially being unaware of the existence of the proceedings, did not equate to repugnancy with judicial power. Gaudron, Gummow and Hayne JJ held that a judgment under Part 4A was an exercise of judicial power, regardless of the particular state of knowledge of those in the class, or whether group members actively pursued the prosecution of a group First, and most obviously, the decision confirms that legislation such as Part 4A of the Victorian Act does not involve an exercise of power that is other than Secondly, and following on from the first observation, the decision confirms that an order made in representative proceedings that finally binds the members of the class involved, regardless of their particular state of knowledge of the proceeding, is a judgment made in the exercise of judicial power. That means that awareness of the proceedings, or of the existence of some actual controversy, is not a necessary condition for the proper exercise of judicial power. Or, putting it in the negative, a judicial decision that determines the rights of persons unaware of their existence is not repugnant to the exercise of judicial Thirdly, that approach is entirely consistent with the decision of the Full Federal Court in Femcare Limited v Bright. In Femcare, the Full Court dismissed an application that the federal equivalent of Part 4A of the Victorian Act, being Part 29 Gleeson CJ at [22] 30 Gaudron, Gummow and Hayne JJ at [65] 31 cf. at [64] 32 Gleeson CJ at [21] 33 (2000) 172 ALR 713 per Black CJ, Sackville and Emmett JJ IVA of the Federal Court of Australia Act, was invalid as offending against Chapter III. Femcare had there argued that the effect of the notice provision in Part IVA of the Federal Court Act (section 33Y, particularly sub-section (5)) was that a group member may not receive actual notice of the proceedings, and that any judgment purporting to bind such an ignorant group member who had not opted out (pursuant to section 33ZB) would be contrary to proper “judicial process” and hence not a proper exercise of judicial power under Chapter III, as well as amounting to the absence of a “matter”. The Full Court rejected each of the various ways in which that argument was put. Although the application for special leave to appeal to the High Court in Femcare was referred to the Full Court, and subsequently stood over pending resolution of other matters that arose at the interlocutory stage, that referral was made prior to the High Court’s decision in Mobil Oil. Despite holding that a judgment given under Part 4A was a judgment within the meaning of s 73, Kirby J held that that does not mean there is no basis for arguing, in a proper case, that the ignorant passive loser (my term) was denied “due process” as required by Chapter III, at [88]-[89]: “It is ordinarily desirable that, where invalidity of legislation is suggested, this Court should deal only with the constitutional arguments which the parties advance. There may, for example, be other unstated arguments, in respect of particular provisions of Pt 4A which later cases, and more promising factual circumstances, will present to be decided by reference to the provisions of Ch III of the Constitution. For example, I could envisage in a particular case that a party, originally unaware of the group proceedings commenced in the Supreme Court of a State (being a State other than that of the party’s residence), not conscious of joinder as a plaintiff, refused permission to opt out and subject to a judgment with which that party was discontented, wishing to proceed in the State of residence, might raise an argument that the implied requirements of due process in Ch III of the Constitution had not been observed.” (footnotes omitted) Of course, one can assume that Kirby J was not suggesting that such an argument could apply so as to invalidate the provisions as a whole. Rather, such an argument would appear to strike only at the scope of s 33ZB in its application to members of the class bound by a judgment in proceedings of which they remained unaware, such that they were denied due process. On one view it is difficult to see how that argument could remain to be considered in light of the views of the majority judges in Mobil Oil. In Mobil Oil, the argument concerning inconsistency with Chapter III was, it is true, based on judicial power, rather than judicial process or “due process”. Certainly, the High Court has demonstrated a readiness to accept the implication derived from Chapter III that judicial power must be exercised only in accordance with proper judicial process, or even the mutation of that implication into some sort of guarantee of “due process” (with all the baggage that expression carries from US constitutional law). Just how far that implication might be taken to protect procedural or even substantive rights remains to be seen. However, it is important that the High Court’s acceptance of that implication is derived from the very concept of judicial power. Therefore, it might be said that the argument that the “ignorant passive loser” is denied proper judicial process, or due process, and so the relevant legislation offends Chapter III and is invalid, is merely the corollary of the argument that a judgment in proceedings in respect of 34 Bass v Permanent Trustee Co Limited (1999) 198 CLR 334 at [56]; Harris v Caladine (1991) 172 CLR 84 at 150 per Gaudron J; Re Nolan; ex parte Young (1991) 172 CLR 460 at 496-497 per Gaudron J; Nicholas v The Queen (1998) 193 CLR 173 at 208-209 per Gaudron J. See also Leeth v The Commonwealth (1992) 174 CLR 455 at 487-490 per Deane and Toohey JJ, 501-503 per Gaudron J; Kruger v The Commonwealth (1997) 190 CLR 1 at 112-114 per Gaudron J; and Ebner v Official Trustee in Bankruptcy (2000) 75 ALJR 277 at 289-290 [79]-[82] and 295-296 [115]-[116]. 35 In Re Tracey; ex parte Ryan (1989) 166 CLR 518 at 580, Deane J stated that Chapter III is “the Constitution’s only general guarantee of due process”. 36 It is not yet clear whether judicial process within the meaning of Chapter III jurisprudence incorporates the minimum standards required by the Due Process Clause of the United States Constitution (the Fourteenth Amendment). 37 See, for example, Justice McHugh, Sir Maurice Byers Lecture to the NSW Bar Association, “Chapter III and Substantive Rights”, published in Bar News, NSW Bar Association, Summer 2001-2002. Perhaps the real question for the future is the extent to which substantive rights are capable of being protected under the notion of the proper exercise of judicial power or proper “judicial process”. such a person is not an exercise of judicial power. On the other hand, it is possible to concede that there is a difference between first arguing that ignorance means there is no controversy, so the resolution of the dispute is not an exercise of judicial power, and secondly arguing that, given a valid controversy and hence an exercise of judicial power, that power must be exercised in accordance with There does seem to remain this one aspect of the validity of Part 4A, as to whether the binding nature of s 33ZB can validly apply to a group member who remains an “ignorant passive loser”. However, accepting the question remains to be determined by the High Court, the Full Federal Court’s decision in Femcare provides a response to the question in It is well established that the expression “judgments, decrees, orders and sentences” in section 73 is to be understood as confined to decisions made in the exercise of judicial power. It is then, in one sense, obvious that s 73 does not require that State Supreme Courts determine controversies only in accordance with the proper exercise of judicial power, because State courts can validly exercise non-judicial power. A decision made by a State Supreme Court following an exercise of non-judicial power is not a “judgment, decree, order or sentence” within the meaning of section 73. It also follows that there is no appeal under s 73 from decisions of State Supreme Courts exercising power that is not judicial power: Mellifont v Attorney-General (Qld). So, an appeal to the High Court does not lie from a decision of a State Supreme Court following an exercise of non-judicial power because section 73 is simply 38 Gaudron, Gummow and Hayne JJ at [63]. So much must follow from the context of section 73 being within Chapter III itself, dealing with the judicial power of the Commonwealth. 39 Gleeson CJ at [20] 40 (1991) 173 CLR 289 at 300 per Mason CJ, Deane, Dawson, Gaudron and McHugh JJ; at 312 per Brennan J. See also Kable (1996) 189 CLR 51 at 142 per Gummow J not engaged, as Gaudron, Gummow and Hayne JJ (citing Holmes v Angwin) “So much follows from the cases in this Court, like Holmes v Angwin, in which it has been held that an appeal to this Court does not lie from a particular kind of decision of a State Supreme Court or a judge of a State Supreme Court. It has not been held in those cases that the law permitting the making of the decision was invalid. Rather, all that has been held is that s 73 is not engaged. Indeed, to hold that the State law was invalid would amount to concluding that Ch III of the Constitution, or s 73 in particular, requires that State courts can exercise no power other than judicial power, a conclusion that has not been reached, and is not required by the Constitution.” In Mobil Oil, then, the argument based on section 73 was rendered impotent by the very premise upon which it was based – an exercise of non-judicial power. The majority therefore held that the section 73 point collapsed. (6) “Whittling down” the High Court’s appellate jurisdiction Kirby J was not prepared to dismiss Mobil’s argument concerning s 73, drawing a distinction between a clear exercise of non-judicial power (when regard is had to the subject matter, as in Holmes v Angwin) and an exercise of power that purports to be judicial but is in fact not judicial because of the way in which it is exercised (ie the process). Kirby J noted that there is no power under the Constitution for the States to provide exceptions to appeals from the Supreme Court of a State to the High Court from a “judgment” or “order” of that court, “Given the centrality for the rule of law of the superintendence by this Court of the ‘judgments’ and ‘orders’ of the Supreme Courts of the States, 41 (1906) 4 CLR 297 42 Gaudron, Gummow and Hayne JJ at [66]. 43 In Holmes v Angwin (1906) 4 CLR 297, the High Court held that there was no appeal under s 73 from decisions made by judges of the Supreme Court of a State sitting as persona designata. In that case, the High Court held that a judge of the Supreme Court of Western Australia exercising functions under a Western Australian statute in relation to a disputed election was not exercising the jurisdiction of the Supreme Court, as the statute only authorised the judge to make a finding upon which Parliament might act rather than an order having effect of its own force. 44 Kirby J at [84]-[85] 45 At [86] as provided by the Constitution, I would not wish to indicate any concurrence in the whittling down of the obligatory jurisdiction of this Court based on that constitutional postulate. Holmes is a very flimsy foundation for such a large consequence. It is unnecessary to go to the second step of Mobil’s argument in this regard for the submission fails at the threshold.” His Honour was therefore concerned with the prospect that, through some backdoor route, the States might be able to avoid appeals to the High Court by ensuring that proceedings were determined via the exercise of non-judicial power. That is, notwithstanding that section 73 provides an absolute right of appeal from the Supreme Court of a State, not capable of being limited by State legislation, the determination of proceedings via the exercise of non-judicial power raises the risk of a State circumventing the substance of section 73. Section 73 specifies the appellate jurisdiction of the High Court as follows: “The High Court shall have jurisdiction, with such exceptions and subject to such regulations as the Parliament prescribes, to hear and determine appeals from all judgments, decrees, orders and sentences – Of any Justice or Justices exercising the original jurisdiction of the High Court: 46 Kirby J at [85] citing Griffith CJ in Holmes v Angwin (1906) 4 CLR 297 at 302. 47 The use of the term “Supreme” is not merely adjectival, but “is used in the Constitution to designate the Courts which at the time of the establishment of the Commonwealth were known by that name”: Parkin v James (1905) 2 CLR 315 at 330. Gummow J also stated in Kable (1996) 189 CLR 51 at 141-142: “The meaning of the term ‘Supreme Court’ in s 73 is to be determined in the process of construction of the Constitution and is not to be governed merely by legislation of the relevant State. It is, in this sense, a constitutional expression. The phrase identifies the highest court for the time being in the judicial hierarchy of the State and entrenches a right of appeal from that court to this Court.” It follows that the High Court’s appellate jurisdiction exists in relation to appeals from the Supreme Court at first instance: Parkin v James (1905) 2 CLR 315 at 339. No mention is made of appeals from appeal courts such as the NSW Court of Appeal. However, as appeals from an appeal court of the Supreme Court of a State exercise the jurisdiction of the Supreme Court, the High Court’s appellate jurisdiction applies equally to appeals from such courts. Further, of course, at a practical level, one would not get special leave to appeal to the High Court directly from a Supreme Court decision at first instance, because other rights of appeal would remain unutilised. Nonetheless, it would appear the Constitution contemplates that there is the ability to do so. 48 Kirby J at [85] citing Griffith CJ in Holmes v Angwin (1906) 4 CLR 297 at 302 Of any other federal court, or court exercising federal jurisdiction; or of the Supreme Court of any State, or of any other court of any State from which at the establishment of the Commonwealth an appeal lies to the Queen in Council: Of the Inter-State Commission, but as to questions of law only: and the judgment of the High Court in all such cases shall be final and conclusive. But no exception or regulation prescribed by the Parliament shall prevent the High Court from hearing and determining any appeal from the Supreme Court of a State in any matter in which at the establishment of the Commonwealth an appeal lies from such Supreme Court to the Queen in Council. Until the Parliament otherwise provides, the conditions of and restrictions on appeals to the Queen in Council from the Supreme Courts of the several States shall be applicable to appeals from them to the High Court.” Section 73 does not say in terms that a person affected by a judgment shall have the right to appeal to the High Court. It simply appears to say that the High Court shall have jurisdiction over any such appeal. So much was noted by Kirby J in However, the second paragraph of s 73 is important: “But no exception or regulation prescribed by the Parliament shall prevent the High Court from hearing and determining any appeal from the Supreme Court of a State in any matter in which at the establishment of the Commonwealth an appeal lies from such Supreme Court to the Queen in Council.” In Parkin v James, the High Court held: “An appeal to the High Court is, therefore, given from all judgments, decrees, orders and sentences of the Supreme Courts … [and] Parliament 49 Transcript 6 Feb 2002, p6 50 (1905) 2 CLR 315 at 330 had power to make exceptions from the right of appeal, and to prescribe regulations as to its exercise, subject to the condition that the power of this Court to hear and determine an appeal, in any matter in which an appeal then lay to the Sovereign in Council, should not be denied.” The High Court then in 1905 clearly indicated that the effect of s 73 was to provide for a right of appeal to the High Court (subject to the conditions then applicable to appeals to the Sovereign in Council). The position as at federation was that in all cases an appeal lay to the Sovereign in Council, but in all cases leave to appeal had to be obtained, either from the Court appealed from or from the Privy Council. It is to be noted that the words “in which … an appeal lies” in s 73 do not mean “an appeal lies as of right”, in the sense of without special The High Court therefore concluded that: “It is clear, therefore, that an appeal lies to this Court from every judgment of the Supreme Court of a State, unless it has been taken away or qualified by some exception or regulation made by the Parliament of the Commonwealth.” Not capable of being limited by State legislation The appellate jurisdiction given to the High Court is subject to “such exceptions … and such regulations as the Parliament prescribes”: s 73. Exceptions and regulations are found in the Judiciary Act 1903 and other federal Acts, including s 33 of the Federal Court of Australia Act 1976. The only Parliament that is authorised under s 73 to make exceptions to or regulations of the High Court’s appellate jurisdiction is the federal Parliament. A provision in a State Act that a decision of the Supreme Court of that State shall be “final and conclusive” is invalid to the extent to which it purports to preclude 51 Parkin v James (1905) 2 CLR 315 at 332 52 Ibid 53 Ibid at 334 the High Court having jurisdiction to hear an appeal from that Supreme Court: In that case, an argument was put on the following basis: “Section 73 of the Constitution merely gives this Court jurisdiction to hear appeals, but that applies only to cases where an appeal exists, whether of right or by special leave; it does not say that there shall be a right of appeal, where, by State law, there is none.” That argument was seemingly rejected by the High Court. States’ ability to restrict appeals from inferior courts to State Supreme Court Section 73, by its very words, applies only to State Supreme Courts and other State courts “from which at the establishment of the Commonwealth” an appeal lay to the Judicial Committee of the Privy Council. Thus, on its face, section 73 does not appear to restrict a State Parliament from enacting legislation to preclude appeals to or review by the Supreme Court of decisions of the inferior courts of However, McHugh J in Kable suggested that: “a State law that prevented a right of appeal to the Supreme Court from, or review of, a decision of an inferior State court, however described, would seem inconsistent with the principle expressed in s 73 and the integrated system of State and federal courts that covering clause 5 and Ch III envisages”. States’ ability to restrict appeals from State Supreme Court to the High Court via the The question then is to what extent section 73 could protect against an attempt by a State legislature to restrict appeals to the High Court via the exercise of non- 54 (1904) 1 CLR 497 at 498-499 55 Peterswald v Bartley (1904) 1 CLR 497 at 498 (record of argument) It must follow from the analysis above that section 73 does not require that all decisions of State Supreme Courts be appealable to the High Court, as Gleeson CJ But section 73 could well, in an extreme case, require that State legislation purporting to remove proceedings from being determined by an exercise of judicial power, and so negating the right to appeal to the High Court, was invalid. “The working of the Constitution requires and implies the continued existence of a system of State courts with a Supreme Court at the head of the State judicial system. … Furthermore, s 73 of the Constitution implies the continued existence of the State Supreme Courts by giving a right of appeal … The right of appeal from a State Supreme Court to this Court, conferred by that section, would be rendered nugatory if the Constitution permitted a State to abolish its Supreme Court. It necessarily follows, therefore, that the Constitution has withdrawn from each State the power to abolish its Supreme Courts or to leave its people without the protection of a judicial system. … … Without the continued existence of a right of appeal from the Supreme Court of each State to the High Court, it would be difficult, indeed probably impossible, to have the unified system of common law that the Constitution intended should govern the people of Australia. Moreover, although it is not necessary to decide the point in the present case, a State law that prevented a right of appeal to the Supreme Court from, or review of, a decision of an inferior State court, however described, would seem inconsistent with the principle expressed in s 73 and the integrated system of State and federal courts that covering clause 5 and Ch III envisages.” Further, Gummow J in Kable referred to section 73 and the consequential existence of “an integrated system of law” and noted that: 56 At [20] 57 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 109-114 58 Kable (1996) 189 CLR 51 at 139 “… it would not be open to the legislature of [a] State to abolish the Supreme Court and to vest the judicial power of the State in bodies from which there could be no ultimate appeal to this Court.” As Griffith CJ said in Holmes v Angwin: “[C]an a State legislature confer a new jurisdiction upon the Supreme Court subject to a similar limitation that there shall be no appeal from it to any outside jurisdiction? The answer to that question depends upon the Constitution. If the legislature merely conferred a new jurisdiction upon the Supreme Court, as intended by the Supreme Court Ordinance and contemplated by the Commonwealth Constitution, there might be considerable difficulty in saying that any words could deprive this Court of its jurisdiction to entertain an appeal from a decision made in the exercise of the new jurisdiction. It is necessary, therefore, to see what is the real effect and meaning of what the legislature has done in the present case. Did it merely create a new civil right to be administered by the Supreme Court with the ordinary incidents of litigation, including the consequent right of appeal, or did it in substance create a new and separate tribunal, consisting of a Judge of the Supreme Court as a persona designata?” But the question must be asked whether this is really a section 73 argument. If a State passed a law that all personal injury cases be heard without hearing from the plaintiff other than to establish injury, would a section 73 argument arise? Assuming that legislation breaches a Constitutional requirement of due process, the consequence would be that judicial power was purportedly being exercised other than in accordance with judicial process. It is accepted that if that power were being exercised by a Court exercising federal jurisdiction, or by a State court in a way that was incompatible with the requirements of a court exercising the judicial power of the Commonwealth (following Kable), that the State law would be invalid. But it would be invalid because there was not a proper exercise of judicial power, not by virtue of section 73. Section 73 does not advance that In my view, the section 73 argument is an attempt to find a way to apply the effect of Kable to all judicial power exercised by a State court. In my view it fails. Conclusion
With the passing of time, Mobil Oil may not be cited regularly. The decision itself is unlikely to stand as a watershed on Chapter III jurisprudence. However, in the meantime, the questions unanswered and possibilities left open will give constitutional lawyers something to think about.

Source: http://www.gtcentre.unsw.edu.au/sites/gtcentre.unsw.edu.au/files/mdocs/84_JeremyClarke.pdf

Doi:10.1016/j.psc.2008.03.013

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