Attorney-General (NSW) v Commonwealth Savings Bank [1986] HCA 22; (1986) 160 CLR 315 (15 May 1986)

HIGH COURT OF AUSTRALIA

ATTORNEY-GENERAL (N.S.W.) v. COMMONWEALTH SAVINGS BANK [1986] HCA 22; (1986) 160 CLR 315

No. F.C. 86/021

Constitutional Law (Cth)

High Court of Australia

Mason(1), Wilson(1), Brennan(1), Deane(1) and Dawson(1) JJ.

CATCHWORDS

Constitutional Law (Cth) - High Court - Removal of causes involving interpretation of Constitution - "Matter" - Cause under appeal to State Court of Appeal - Whether capable of removal - Original action standing dismissed - Whether capable of removal - Whether matter involves interpretation of Constitution - The Constitution (63 & 64 Vict. c. 12), ss. 75, 76 - Judiciary Act 1903 (Cth), ss. 38(d), 40.

HEARING

1986, March 20; April 10; May 15. 15:5:1986

APPLICATION for removal of cause under the Judiciary Act 1903 (Cth), s. 40.

DECISION

MASON, WILSON, BRENNAN, DEANE AND DAWSON JJ.: The Attorney-General for New South Wales and the State Bank of New South Wales ("the State Bank") has each made separate application under s.40 of the Judiciary Act 1903 (Cth) for an order removing into this Court the whole of a cause pending in the Supreme Court of New South Wales between the State Bank and the Commonwealth Savings Bank of Australia ("the Savings Bank"). This cause began as an action between the State Bank as plaintiff and the Savings Bank as defendant in which the State Bank claimed that under the terms of a written agreement between the State of New South Wales, the Commissioners of the Government Savings Bank of New South Wales and the Savings Bank, dated 1 December 1931, it was entitled to be paid one half of the Savings Bank's annual profits in New South Wales. It claimed the sum of $15,860,665.67 for the period 1 July 1982 to 30 June 1983 and $30,357,202.52 for the period 1 July 1983 to 30 June 1984; an account of profits or, in the alternative, interest on these sums; damages and costs.

2. On an interlocutory application made by the Savings Bank, Clarke J. dismissed the action on the grounds that the Savings Bank was either the Commonwealth or a person being sued on behalf of the Commonwealth within the meaning of s.38(d) of the Judiciary Act and that the State Bank was the State of New South Wales or a person suing on behalf of the State within the meaning of s.38(d), so that, pursuant to that provision, the High Court had exclusive jurisdiction to entertain the proceedings.

3. The State Bank appealed from the order made by Clarke J. to the New South Wales Court of Appeal, seeking that the order be set aside and asking for a declaration that the Supreme Court had jurisdiction to entertain the action. The solicitor for the State Bank gave notices under s.78B of the Judiciary Act, drawing attention to the two grounds on which Clarke J. had based his decision. The solicitor for the State Bank later elaborated the contents of the notices by indicating that the issues raised by the appeal were:



"1. Whether the words 'on behalf of' when used in

relation to a State in s.38(d) of the

Judiciary Act, 1903 (Cth) ('the Act') have

the same meaning as when used in s.38(b) of

the Act and, if so, what is the meaning of

those words having regard to s.75(iv) of the

Constitution of the Commonwealth?

Australia is 'the Commonwealth, or any person

being sued on behalf of the Commonwealth'

within the meaning of s.38(d) of the Act?"

He went on to say that:

"... the second question/issue set out above

involves a reconsideration of Inglis and Anor -v-

Commonwealth Trading Bank of Australia [1969] HCA 44; (1969) 119

CLR 334, which can only be undertaken in the

High Court of Australia."

4. During the second day of the hearing in the Court of Appeal, Mr Handley Q.C. for the Savings Bank made it clear that the Savings Bank would be submitting, amongst other arguments, that the State Bank is engaged in State banking within the meaning of s.51(xiii) of the Constitution. The Court of Appeal then decided by majority (Kirby P. and Priestley J.A., with McHugh J.A. dissenting) that it would not proceed further unless and until it was satisfied that a notice under s.78B was given specifying the matter raised by Mr Handley's submission. The appeal was remitted to the President for mention with a view to relisting. On 11 March 1986, which was the day on which the members of the Court of Appeal delivered their reasons for their decision, the Attorney-General filed his notice of motion for an order for removal and on the day following the State Bank filed its notice of motion.

5. The two applications for removal proceed on substantially the same grounds in the sense that each applicant submits that the proceedings in the Court of Appeal raise questions of interpretation of the Constitution, relating to s.51(xiii), 75(iii) and 75(iv). It will be convenient to consider these questions on the application of the Attorney-General because on that application we are bound to make an order for removal as of course if we consider that the cause involves the interpretation of the Constitution - see s.40(1) of the Judiciary Act. It is, however, important to note that the Attorney-General seeks removal of the appeal as the whole of the cause which is pending in the Court of Appeal, whereas the State Bank in seeking removal of the whole cause, means by its use of that expression the action in the Supreme Court, as well as the appeal, notwithstanding that the action stands dismissed at this stage of the litigation.

6. The State Bank's object in seeking removal of the whole cause in this sense needs some elucidation. The State Bank contends that, if the whole cause is removed, the action which has been commenced in the Supreme Court, even though it presently stands dismissed by the order of Clarke J., will attract the original jurisdiction of this Court under s.30 of the Judiciary Act. This, it is argued, would enable us to allow the appeal from Clarke J. instanter on the ground that the objections raised to the jurisdiction of the Supreme Court are irrelevant to the jurisdiction of this Court to entertain the action. We could then remit the action to the Supreme Court for hearing. By so doing, it is said that we would liberate the action from the jurisdictional complexities with which it is now beset because we would endow the Supreme Court with the original jurisdiction which this Court possesses to hear and determine such an action. We leave this view of the matter for later discussion.

7. The Savings Bank resists both applications for removal on the ground that s.40(1) of the Judiciary Act does not authorize removal of an appeal from a final judgment or order disposing of an action. It is not disputed that the order made by Clarke J. was such a judgment or order. The crux of the submission is that s.40(1), read together with s.42(2), authorizes removal only in cases in which the consequence of removal is that this Court's original jurisdiction will be engaged. The submission hinges on s.42(2) which provides:

" Where it appears to the High Court that the

High Court does not have original jurisdiction,

whether by virtue of sub-section (3) of section 40

or otherwise, in a cause or part of a cause that

has been removed into the High Court under section

40, the High Court shall proceed no further in the

cause or part of a cause but shall remit it to the

court from which it was removed."

The subsection proceeds on the assumption that the Court, when it exercises jurisdiction in a removed cause, exercises original jurisdiction only and that it does not exercise appellate jurisdiction at all. Then, so the argument runs, the High Court has no jurisdiction to entertain the appeal pending in the Court of Appeal because its determination would necessarily entail an exercise of this Court's appellate jurisdiction.

8. In ordinary circumstances the hearing and determination of an appeal is an exercise of appellate jurisdiction. However, a central element in the distinction which the Constitution draws between the original jurisdiction and the appellate jurisdiction of this Court is the inclusion in the original jurisdiction of the matters referred to in s.76(i). Section 76(i) specifically provides that the Parliament may make laws conferring original jurisdiction on the High Court "in any matter - (i) Arising under this Constitution, or involving its interpretation ... ".

9. For present purposes we do not need to discuss the word "matter" in s.76, for that task has been undertaken on many occasions in the past. It is sufficient to make the point that "matter" is wide enough to include any subject matter for determination in legal proceedings, whether the proceedings be proceedings at first instance or proceedings by way of an appeal. When s.76(i) is so understood, it enables the Parliament to confer original jurisdiction on the High Court in such a matter, not only when the matter is litigated in proceedings commenced in the High Court, but also when the matter arises in proceedings in some other court, whether the matter arises in proceedings at first instance or by way of appeal. Section 76(i) therefore empowers the Parliament to confer original jurisdiction on this Court in constitutional matters, to use a shorthand term, by removing them into this Court for determination from other courts where they are pending. By giving such a power to the Parliament, the Constitution enabled the Parliament to legislate so that important and urgent constitutional matters could conveniently be brought to this Court for resolution.

10. It is not at all surprising that the Constitution provided that s.76(i) matters should form part of the Court's original jurisdiction. No doubt it was thought and, in the light of our experience to date, correctly thought, that major constitutional matters would commonly be determined in proceedings actually commenced in the original jurisdiction of the Court. It may also have been thought that the appellate jurisdiction of this Court should be confined to appeals in which the appellant invokes that jurisdiction and that it should not include appeals brought by an appellant to an intermediate appellate court for decision, even if they be removed into this Court for determination. Be this as it may, the jurisdiction which Parliament confers upon this Court under s.76(i) stands outside the appellate jurisdiction of this Court as delimited by s.73 of the Constitution. Of course Parliament cannot, by an exercise of its legislative power under s.76(i), affect the exercise of the appellate jurisdiction under s.73. When the Court hears and determines a constitutional question in an appeal under s.73, the Court exercises appellate jurisdiction. But this point does not touch the present case.

11. In conformity with this view of s.76(i), the Judiciary Act, since its inception in 1903, has conferred original jurisdiction on this Court in all matters arising under the Constitution or involving its interpretation. And, again since its inception, the Judiciary Act has facilitated the exercise of that original jurisdiction in constitutional matters pending in other courts by providing for their removal into this Court. Section 40(1), the provision with which we are immediately concerned, is in very much the same form as it was when originally enacted. Section 40A, which was introduced to bring about the automatic removal of causes in which inter se questions arose, is no longer with us. But it, like s.40(1), operated on the footing that the cause removed came to the Court for determination in its original jurisdiction. Section 41, before its amendment in 1976, when the removal provisions were substantially reformulated, specifically provided that upon removal "the High Court shall proceed ... as if the cause had been originally commenced" in this Court. Although this provision has no present counterpart, its omission does not and cannot erode the fundamental principle that this Court's jurisdiction under s.76(i) is original and not appellate. Support for the view which we have expressed may be found in George Hudson Ltd v. Australian Timber Workers' Union [1923] HCA 38; (1923) 32 CLR 413, at pp 429-431, per Isaacs J. (with whom Starke J. agreed) and in The Commonwealth v. Rhind [1966] HCA 83; (1966) 119 CLR 584, at p 596, per Barwick C.J. (with whom McTiernan J. agreed), p 602 per Taylor J. and p 610 per Owen J. The consequence is that s.42(2) of the Judiciary Act is not a bar to removal of the appeal now pending in the Court of Appeal.

12. Although the statutory definitions of "cause" and "suit" in s.2 of the Judiciary Act might tend to suggest at first glance that "cause" does not include a proceeding by way of appeal, the statutory definitions are inclusive. The word "cause" must be read in the light of the policy sought to be achieved by the removal provisions in enabling important and urgent constitutional questions to be brought to this Court for resolution, this Court being bound to make an order for removal as of course on an application by an Attorney- General. It would indeed be a surprising omission if constitutional questions involved in pending appeals were to stand outside the removal regime for which the statute provides. The judgments in the two decisions to which we have just referred accept that the word "cause" includes a pending appeal (George Hudson, at pp.430-431, 444-445; Rhind, at pp.595-596, 605).

13. The consequence is that s.40 makes provision for the removal of any extant judicial proceeding including an appeal. However, the section does not enable the Court to remove an original action which stands dismissed by a valid curial order unless and until that order is set aside on appeal or, where appropriate, by other process, such as a prerogative writ. So long as the order stands, there is in law no original action capable of being removed. Where an appeal is a full appeal, particularly a full appeal by way of re-hearing, removal of the appeal carries with it jurisdiction, in the event that the order appealed from is set aside, to make whatever orders the Court concludes ought to have been made, or ought to be made, in the original action. That notwithstanding, the order disposing of the original action remains in force unless and until proper grounds are shown to exist to warrant the making of a positive order setting it aside.

14. Accordingly, on the assumption that the pending appeal involves the interpretation of the Constitution, because the pending appeal, in contrast to the action, has not reached the stage of final judgment within the meaning of s.40(1), we can remove the appeal, but not the original action which was disposed of by the order made by Clarke J. Nothing that was said in George Hudson or Rhind is at odds with this view, though the judgments in both cases contain statements which reflect the language of that part of the old s.41 which directed the Court to proceed in a removed cause "as if the cause had been originally commenced in (the High Court) and as if the same proceedings had been taken in the cause in the High Court as had been taken therein in the Court of the State prior to its removal ... ". This direction was designed to regulate the course of proceedings in a removed cause, whether it be an action at first instance or on appeal, so that this Court was to proceed with a removed appeal as if it had been commenced in this Court. The comments made in the judgments in Rhind, especially in the judgment of Barwick C.J., must be understood in the light of the circumstance that the appeal there was taken, not from a final judgment in the action, but from a direction that judgment be entered for the defendant in an action in ejectment. In the opinion of the majority (pp.593-596, per Barwick C.J. (with whom McTiernan J. agreed); pp.600-601, per Taylor J; pp.609-610, per Owen J.) the effect of the Supreme Court Procedure Act 1900 (N.S.W.) and the General Rules of the Supreme Court was that the order made by the primary judge was not a judgment of the Supreme Court determining the issues in the action and that, upon the institution of an appeal within the time limited by the Rules, the appeal necessarily involved a re-hearing of the action before the Court of Appeal. It followed that although the proceeding before the Court of Appeal was in the form of an appeal, the Court was re-hearing the action. The relevant provisions of the Supreme Court Procedure Act have since been replaced by the Supreme Court Act 1970 (N.S.W.) and there is no suggestion that the procedural complexities which engaged the Court's attention in Rhind have any impact upon the present case. It is significant that Menzies J., who dissented in Rhind on the ground that a true appeal was before the Court of Appeal, held (at p.605) that the cause removed was the appeal, and that it was for this Court to proceed as if the appeal had been instituted in this Court from an order of the Supreme Court.

15. It goes without saying that, if the appeal is removed into this Court, it presents for determination the issues which have arisen and have not been determined by the Court of Appeal. In disposing of the appeal we could make the orders and declaration that Clarke J. should have made on the application which was before him in the event that we do not agree with his conclusion on jurisdiction. But we could not allow the appeal on the ground that, since this Court would have jurisdiction to entertain an action between the parties, the order of Clarke J. becomes irrelevant when the action is removed into this Court. The jurisdiction of this Court to entertain the action has not been invoked and the issue to be determined in the appeal to be removed into this Court is the Supreme Court's jurisdiction to entertain the action, not the jurisdiction of this Court to do so. The course proposed by the State Bank to remove the action, to allow the appeal instanter and to remit the matter to the Supreme Court cannot be adopted.

16. Having cleared the ground of the preliminary obstacles, we now turn to consider whether the pending appeal involves one or more of the three questions of constitutional interpretation on which the applicants rely. The earlier approach in this Court was that a matter involved the interpretation of the Constitution within the meaning of s.76(i) of the Constitution and s.40(1) of the Judiciary Act if the matter presents "necessarily and directly and not incidentally an issue upon its interpretation" (James v. South Australia [1927] HCA 32; (1927) 40 CLR 1, at p 40). A similar approach was adopted by the Court to the cognate question: when did an inter se question arise under s.40A of the same Act? The inter se question was held not to arise unless it appeared that judgment could not be pronounced in favour of one of the parties without a decision being given upon the inter se question (R. v. Maryborough Licensing Court; Ex parte Webster & Co. Ltd [1919] HCA 71; (1919) 27 CLR 249; O'Neill v. O'Connell [1945] HCA 54; [1946] HCA 59; (1946) 72 CLR 101, at p 116). This approach subsequently gave way to a more broadly based view that an inter se question arises as soon as it appears that the case can be resolved by deciding that question, even if it might ultimately prove possible, by answering other questions, to dispose of the case without determining the inter se question itself (see Lansell v. Lansell [1964] HCA 42; (1964) 110 CLR 353, at pp 357-358, and the cases there cited by Kitto J.; Moorgate Tobacco Co. Ltd v. Philip Morris Ltd [1980] HCA 32; (1980) 145 CLR 457, at pp 476-477). In Lansell Kitto J. noted (at p 358) that the purpose of s.40A was to supplement the provision made by s.74 of the Constitution in furtherance of the policy of reserving inter se questions for the consideration of the High Court. The necessity of clearly identifying at an early stage of proceedings the existence of federal jurisdiction is a powerful reason for adopting the same broad approach to s.76(i) and s.40(1) matters.

17. The point which we have just made is of particular importance in a case in which the giving of judgment in favour of one of the parties depends upon the outcome of two or more issues of which only one involves a constitutional question. The problem is rather different when, as here, it is contended that the interpretation of a provision of the Constitution is relevant to the determination of a question of statutory interpretation, this question being the only issue for determination in the cause. Then, as it seems to us, the cause involves the interpretation of the Constitution if the interpretation of one or more of its provisions is "essential or relevant" to the question of statutory interpretation in the sense explained by Dixon C.J. in Nelungaloo Pty Ltd v. The Commonwealth (No. 4) [1953] HCA 87; (1953) 88 CLR 529, at pp 540-542. His Honour pointed out (at p 541) that "interpretation is one process in which all the relevant considerations are to be taken into account" and went on to say:

" ... the legal conclusion upon which the

plaintiff's first set of counts depends is capable

of being sustained only on grounds to which the

interpretation of s.51(xxxi.) is either essential

or relevant and cannot be denied except by

negativing the grounds to which the interpretation

of s.51(xxxi.) is essential or relevant."

18. Unlike Nelungaloo, there is here no question of the valid exercise of legislative power. However, the specific issues which have arisen in the Court of Appeal are: (1) whether the action by the State Bank is brought "by a State, or any person suing on behalf of a State" within the meaning of s.38(d) of the Judiciary Act and; (2) whether the action is against "the Commonwealth or any person being sued on behalf of the Commonwealth" within the meaning of the same provision. Because s.38(d) reflects the language of s.75(iii) and (iv) of the Constitution, the interpretation of these provisions of the Constitution is essential to a determination of the two issues stated above. It is impossible for a court to determine the meaning of the words "by a State, or any person suing on behalf of a State" in s.38(d) without having regard to the meaning of the expressions "a State" in s.75(iv) and "suing ... on behalf of" in s.75(iii) of the Constitution. Likewise, if we put to one side the decision of this Court in Inglis v. Commonwealth Trading Bank of Australia [1969] HCA 44; (1969) 119 CLR 334, we cannot conceive that it would be possible for a court to determine the meaning of the words "the Commonwealth or any person being sued on behalf of the Commonwealth" in s.38(d) without having regard to the meaning of the similar words in s.75(iii) of the Constitution. To state the matter in another and stronger way, a determination of the two specific issues will necessarily result in the Court placing an interpretation on s.75(iii) and (iv).

19. It follows from what we have already said that the interpretation of s.75(iii) and (iv) is essential or relevant to the determination of the issues in the present case. The existence of the decision in Inglis does not detract from this conclusion so far as concerns the second issue. Although the Court of Appeal is bound to follow Inglis, that fact does not deny that the question sought to be argued is one which answers the description in s.40(1). It would be otherwise if it could be said that the question was not raised bona fide. In Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362 and Crouch v. Commissioner for Railways (Qld) [1985] HCA 69; (1985) 59 ALJR 831; 62 ALR 1, Inglis was referred to without disapproval, but this leaves unimpaired the comment that the reasoning in Inglis does not make it clear whether the Commonwealth Trading Bank was held to be the Commonwealth or a person sued on behalf of the Commonwealth. It will ultimately be for the Court to determine whether it will reconsider the correctness of, or clarify, the decision. However, this circumstance does not deny that the two specific issues involve the determination of questions of constitutional interpretation.

20. The third matter relied upon by the applicants is the question whether the State Bank is engaged in State banking. The determination of that question certainly involves the interpretation of s.51(xiii) of the Constitution. The problem is to ascertain whether the determination of the question is essential or relevant to the interpretation of s.38(d). It is not a problem which we need to resolve because we have already concluded that the pending appeal involves two questions of interpretation of the Constitution. Having so concluded, we are bound to remove the appeal to this Court, there being no point in confining the removal to those two questions.

21. Although it is a matter of concern to us that removal will result in an abortive hearing in the Court of Appeal with a consequential waste of time and money, we have no discretion to refuse removal on the Attorney-General's application. The absence of a discretion to refuse removal tells against the exercise of a discretion, if any, in the circumstances to remit the appeal, once removed, back to the Court of Appeal for determination. In any event it seems likely that the parties would ultimately seek a determination of the appeal in this Court. For these reasons the matter will not be remitted to the Court of Appeal.

22. In the result we order that the appeal pending in the Court of Appeal be removed into this Court on the application of the Attorney-General and we make no order for removal on the application of the State Bank.

ORDER

Order that the cause pending in the Court of Appeal of the Supreme Court of New South Wales in proceedings CA No. 384 of 1985 be removed into this Court.

Costs of the application to be costs in the cause hereby removed.

Costs of the proceedings in the Court of Appeal reserved.

Application dismissed. No order as to costs.