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FEDERAL COURTS (STATE JURISDICTION) BILL 1999 (No. 55)

Second Reading

Mr PATMORE (Bass - Minister for Justice and Industrial Relations - 2R) - Mr Speaker, I move -

That the bill be now read the second time.

Mr Speaker, the Federal Courts (State Jurisdiction) Bill is introduced as a matter of urgency arising from the determination of the High Court that State parliaments cannot effectively confer State jurisdiction on Federal courts and that the Commonwealth Parliament is not able to consent to the conferral of State jurisdiction on Federal courts.

The main purposes of the bill are to provide that certain decisions of a Federal court in relation to State matters are taken to be judgments of the Supreme Court; to provide for the transfer to the Supreme Court of current proceedings in Federal courts in relation to State matters; and to enable State courts to deal with matters that arise under applied law schemes and that would otherwise have been dealt with by a Federal court.

On 17 June 1999 the High Court handed down its decisions in the matters Re Wakim; Ex parte McNally, Re Wakim; Ex parte Darvall, and Re Brown; Ex parte Amman, which considered the validity of certain provisions of the Commonwealth Corporations Act 1989 and the Commonwealth Jurisdiction of Courts (Cross-Vesting) Act 1987 that provide for the cross-vesting of jurisdiction between Federal, State and Territory courts.

The majority of the High Court determined that the vesting of State jurisdiction in Federal courts is ineffective. The effect of the court's decision is to invalidate decisions previously made by the Federal Court and the Family Court relying purely on cross-vesting arrangements and to prevent the further exercise of such jurisdiction by those Federal courts. The cross-vesting of jurisdiction between State and State, and State and Territory courts is not affected.

The High Court's decisions impact on the general cross-vesting scheme introduced by the Jurisdiction of Courts (Cross-Vesting) Act 1987 under which State and Federal courts have reciprocal jurisdiction. Also the jurisdiction of the Federal Court under the Corporations Law, which operates throughout Australia as State and Territory law, is reliant on cross-vesting arrangements. In addition, some other State laws, in general laws associated with Commonwealth-State cooperative schemes, apply certain Federal laws as State law and also confer jurisdiction on the Federal Court. These cooperative schemes include the agriculture and veterinary chemicals scheme, competition policy scheme, gas pipeline scheme and the National Crime Authority scheme.

The Federal Courts (State Jurisdiction) Bill primarily deals with decisions of Federal courts made under various schemes enacted under State laws which, following the High Court's determination, have been rendered ineffective. The existing schemes will continue to apply to the courts referred to in them, except Federal courts to the extent that the laws establishing the existing schemes are incapable of applying to Federal courts.

The bill has been prepared through the Standing Committee of Attorneys-General, in conjunction with the Special Committee of Solicitors-General and the Parliamentary Counsel's Committee, as a model which all States will follow.

The bill declares that the rights and liabilities under a current judgment of the Federal Court or Family Court, including current judgments of the full Federal Court or the Full Court of the Family Court of Australia., in the purported exercise of State jurisdiction, are the same as if it had been a valid judgment made by the Supreme Court. The bill specifically provides that such rights and liabilities are exercisable and enforceable as if they were rights and liabilities under judgments of the Supreme Court. Similarly, any acts or omissions in relation to such rights and liabilities are taken to have the same effect and consequences as if occurring under a judgment of the Supreme Court. The Supreme Court is also given power to vary or otherwise deal with any such rights and liabilities.

In addition, the bill provides a mechanism for the transfer to the Supreme Court of current proceedings in Federal courts relating to State matters where a Federal court determines that it has no jurisdiction to hear the State matters.

The bill makes consequential amendments to the Competition Policy Reform (Tasmania) Act 1996 arising from the High Court's determination that the Federal courts cannot exercise cross-vested State jurisdiction, as it is intended that State courts will now exercise jurisdiction under the Competition Code.

I commend the bill to the House.

Mrs SWAN (Lyons) - The Opposition will of course be supporting this legislation and I understand the need for its introduction today and the urgency with which the Government will naturally be viewing it because of course we know that there are likely to be consequences as a result of this High Court decision.

What I propose to do, Mr Attorney, is to incorporate several questions in this response that I make in order that you may be able to give me some answers by way of your reply and that may prevent any further need for us to move into Committee.

My understanding is that this is, as I think you have indicated, model legislation based on the legislation that has been drawn up by the Victorian Parliamentary Counsel as I understand it and that there has in fact been a committee of Solicitors-General and there has been indeed agreement by the Attorneys-General across all States so that they have been able to move to this legislation to address the problems that are inherent in the consequences of this High Court decision.

But I did just want to make some remarks about the inception of the Federal court system and, as we have seen, this is consequent I suppose on the construction of the Federal court system and also perhaps the movement that we are now making at an increasing pace into the uniform law area and I expect that we all see the need for that to occur in what is a rapidly changing environment and a rapidly changing economy which seems to be drawing together a great number of these threads and making uniformity something that is of ever-increasing importance. So I simply note that the Federal court system was originally created because the various State courts all went about the process of interpretation of various laws and gave different interpretations to those same issues which meant we had a great series of decisions around the Commonwealth all with slightly varying responses to the same issue which of course would lead to all sorts of consequences when we are trying to describe a system that might be of use to the whole nation. We have seen the Attorney-General or the former Attorney-General move to enact or approach the Federal Government with regard to de facto provisions, with regard to the Family Court hearings so that matters that were pertinent to a de facto arrangement and the breakdown of a marriage for example could be dealt with within one court system.

I think there have been any number of remarks made on the practicality of having such issues dealt with within one court rather than having jurisdictional arguments undertaken within that court system in order to decide where the matter ought to be heard. That of course as we realise is not only costly but frustrating and in a matter that is of a family court nature it can lead to all sorts of aggravations where people are desirous of getting a hearing and a decision as soon as they possibly can. All sorts of emotional problems of necessity occur when the situation between the parties is aggrieved as a result of any kind of breakdown in a relationship, so we can see practicalities in the need for cross-vesting and once again in Corporations Law there would no doubt be business people who would be saying precisely the same thing: that it is a practical matter to have all matters addressed within the Federal Court itself so that any variety of issues can be dealt with and a corporate matter can be quickly addressed and got out of the way. Once again we would see that there would be the possibility of huge costs coming from a jurisdictional battle that may occur as a result of a fragmentation of the issues that were before that particular court.

So we understand the reasons for the appearance of a Federal court system. We also understand that that is ever likely to be of use to us as we move to a more national approach to the economy and all sorts of matters that attend to that particular issue and of course in recent times we have seen COAG look at things such as competition policy and the national electricity market, all of those matters that now appear to be issues upon which we are taking a national approach and of course the Federal court system has the ability to give some uniformity to the way we approach those matters.

It is therefore obviously important that this judgment is dealt with because it will have implications with regard to the delivery of uniform laws and whether in fact we can do that and whether we should be doing it. So of course this is an important matter.

I do thank you for the briefing I received from Mr Maloney, he was helpful in addressing the broad issues that were inherent in this bill. I note that he indicated to me right at the beginning of this cross-vesting bill there were opinions passed by academics indicating that there was a constitutional problem. We saw several decisions, and you have already indicated those decisions to the House here today, the first of them of course being decided 3:3, with the balance then ensuring that the original opinion stood. That particular decision of the High Court in Gould and Brown in February 1998 upheld that they were valid, or the cross-vesting schemes were in fact valid but, as I say, at the same time there was quite considerable debate going on as to whether the schemes that were inherent under this were in fact constitutional.

Then, as the Attorney has already cited, there was a further challenge in the High Court, in fact four challenges to the schemes in Re Wakim; Ex parte McNally and another; and Re Wakim; Ex parte Darvall; and Re Brown; Ex parte Amman, and Spinks and Prentice. That resulted in a 6:1 judgment in favour of the invalidity of the cross-vesting schemes.

Mr Patmore - On which Keneally was very scathing.

Mrs SWAN - I understand that, and I wish to just place on the record some indication of the words that he used because I think they are quite pertinent to what we are dealing with.

Of course, as had been indicated to me, there was quite a change in the membership of the High Court during those intervening years, and that of course changed the opinion that came from their honours. As a result we have a different decision. But I think the Chief Justice, His Honour Justice Gleason, made comment that at the end it was a constitutional matter, that it would require an amendment to Part 3 of the Constitution in order to enable the cross-vesting schemes to be constitutional and to be valid. As has been noted, the likelihood of constitutional amendments occurring are few and far to be seen, nonetheless I note that he did make the comment here, and I quote: 'The inability of the Federal courts to exercise cross-vested State jurisdiction in the matter provided for under the present legislation simply shows another deficiency in the system' - he means, I believe, the Federal court system - 'I do not think it can be seriously doubted that if Australia is to have a system of Federal courts, the public interest requires that these courts should have jurisdiction to deal with all existing controversies between litigants in those courts'.

However, the judiciary has no power to amend or modernise the Constitution to give effect to what the judges think is in the public interest, as we know, so notwithstanding his belief that it was necessary to have or is necessary to have such a system, he simply says that until we address this by constitutional amendment, he could not judge in favour of their validity. Of course, as we know, five other justices believed that too was the case.

But, Mr Attorney, as you have already noted, Mr Justice Kirby did make comment with regard to the need for such a system and he was quite obviously regretful of the fact that this would see the end to what had been, in his view, a perfectly reasonable system of justice. I will quote here once again because I think it is a reasonable comment. Mr Justice Kirby did in fact sing the praises of the cross-vesting scheme, as I read it in the Australian just recently reported in an article by Bernard Lane. He says he is not making his judgment to uphold the system for that reason alone or for the reason that it is a rare exercise in cooperative federalism. He says: 'What can be more conducive to the national society of Australia than the provision of legislative consent to a scheme that ensures justice, efficiency and clarity in the nation's court system? This is something at the very heart of the nation's existence' - in his words.

It is quite obviously his view that we ought to have such a system so that we can in fact give a uniform and clear view of the laws that the nation now has when it looks at itself as a nation. So I just note his view with interest because it is something that no doubt we will hear more of as we proceed through the various competition policies, the gas pipeline policy, the Corporations Law arrangements; it is quite obvious that we are seeing a system that has problems because of the fact that the States are sovereign and as a result have had their own parliaments and their own court systems and then that has caused a difficulty within the Constitution. Nonetheless it is a very favourable scheme and I am hopeful that in due course we will find a way around it and there will be some hope that what seems to be a sane way of approaching uniform law and uniform judgment will find a way of, I suppose, encompassing a validity but as I have said before that obviously involves a constitutional amendment and in the meantime we have to go ahead and validate what we have before us.

Can I just simply indicate to you three concerns and they are these questions: can you give me an indication of how many cases we may have in the State at the moment that are affected by this High Court judgment? I do not want an absolutely specific indication but if I can get some broad indication of the number of matters that might be affected by this judgment.

Also because I understand it to be model legislation and you have already indicated that, does this legislation vary in any material way from the legislation that is being put in process in other jurisdictions? While I am aware that this legislation has been tabled in the New South Wales Parliament and has in fact been debated in the West Australian lower House, can you give me an indication of what other parliaments have in fact incorporated or debated the legislation?

Actually I suppose the only other one is a practical matter and that is I assume that because this has been something that has been slow in coming - there has been argument about the constitutional validity of this cross-vesting scheme for some time - there has been a movement I imagine away from the Federal court system with regard to for example Corporations Law. Have we seen that in this State? If we have, is that causing some sort of problem as far as the listings are concerned? Is it leading to any aggravation in the number of actions before the courts and is this likely to cause us further concern? You may be able to help me with that matter.

I think other than that, Mr Speaker, the Opposition is perfectly happy with the arrangements that are being made. We understand why that is so and we also understand the consequent amendments to the Competition Policy Reform Act and I think on that matter we simply support the bill.

Mr PATMORE (Bass - Minister for Justice and Industrial Relations) - Excuse me for a moment, I will upgrade my information.

Mrs Swan - Yes.

Mr PATMORE - I thank the House for its forbearance in relation to this. The answers were as I thought. I cannot give you an indication as to how many cases are affected but what we can say is that the bulk of them are civil matters under the Corporations Law. That is the bulk of cases we are talking about. That was the first question I asked when I was made aware of the judgment, 'How many cases are affected?', the answer was, 'We're not sure.' But basically civil under Corporations Law so I guess it is a matter of covering it and seeing.

In relation to the model, no, the model does not vary. I have been present at two meetings of attorneys-general in relation to this. It was on the agenda for both meetings, it was coming, people were aware or were able to be fairly clear on the legislation.

Stage in other States. The upper House in New South Wales is dealing with it today. Western Australia, it has been introduced into the upper House and will be dealt with soon. South Australia and Queensland will deal with it this month. Victoria is a problem in that it has adjourned and will not be coming back until September. That is basically there.

Your final point, I understand that there are no problems for listings. There will be a marginal increase but at the moment there have been no concerns. I have been seeking an appointment with the Chief Justice on other matters and I had hoped to discuss it with him then but I have had no feedback from the court as to the problems that may be involved. I understand that it is going to be dealt with in a reasonable fashion in Tasmania.

The only other point I wanted to talk on, Mr Speaker, is what you referred to at the outset, you spoke about the judgment. Look, what we have found, I believe, is as a result of a different philosophy of the bench. We have moved from an interventionist philosophy to the more conservative approach which you would expect from the Federal Government which has, I think, given us this unforeseen result. I think a more interventionist bench would have probably reconfirmed the previous decision but that is what has occurred, we have to deal with it and we hope that it will not be too big a burden. I do not think it is going to be but it is very messy - as you are well aware in your briefing, it has the potential to be very messy and I am just pleased that we have been able to know it was coming, be prepared and all States in Australia within months will be following us and will be in line.

Bill read the second time and taken through the remaining stages.