Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board

Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board - [2007] HCA 23 - HCA 2007 case summary — Zoe

[17]

Part 9.2 (ss 1276‑1298) of Ch 9 of the Corporations Act is headed "Registration of auditors and liquidators". Prohibitions are imposed by s 532(1) and s 448B of the Corporations Act respectively upon persons acting as a liquidator, or as administrator of a company or deed of company arrangement. These prohibitions are backed by the offence provision in s 1311(1) and in Pt 9.6A provision is made[2] for the vesting of federal jurisdiction in respect of criminal matters arising under the Corporations Act.
A registered liquidator is relieved from the effect of the prohibitions imposed by s 532(1) and s 448B, but suspension or cancellation of registration by the Board reactivates those prohibitions. However, enforcement of a suspension or cancellation order made by the Board requires the exercise by a court of jurisdiction provided for in Pt 9.6A of the Corporations Act.
Section 1292 of the Corporations Act confers certain powers and functions on the Board. In particular, it is s 1292(2) which provides that, in the stipulated circumstances, the Board may by order cancel or suspend for a specified period the registration of a person as a liquidator. From decisions of the Board applications may be made under s 1317B for review by the Administrative Appeals Tribunal[3].
Thus, not only does the Board lack the power to enforce its decisions[4], they are not conclusive in the sense used in authorities such as Attorney-General (Cth) v Breckler[5] and Luton v Lessels[6]. Nor, as will appear, does the Board settle disputes about existing rights and duties.
Nevertheless, the appeals challenge the holding by the Federal Court that the power conferred on the Board by s 1292(2) does not involve the exercise of the judicial power of the Commonwealth and that s 1292(2) is not an ineffective attempt by the Parliament to confer such power on a body other than one of the courts identified in Ch III of the Constitution.
In a limited sense, it may be said that the exercise by the Board of its powers under s 1292(2) of cancellation and suspension affects the "status" of registered liquidators. But the invocation of that term does not necessarily lead to any particular answer to the questions of constitutional law raised in these appeals. In particular, and for reasons to be developed below, the Board does not adjudicate guilt or inflict punishment when acting under s 1292(2).
It should be noted immediately that the citation by the appellants of Rich v Australian Securities and Investments Commission[7] does not assist them. That case concerned a different field of discourse, namely, the application of the body of law concerning privileges against penalties and forfeitures to court proceedings under ss 206C and 206E of the Corporations Act for disqualification of directors, in the course of which the directors were ordered to give discovery of documents.

[18]

Something now should be said respecting the facts. Mr Vanda Russell Gould has been registered as a liquidator under the Corporations Act and its predecessors since 7 January 1983. On 15 July 2001, ASIC applied to the Board for an order suspending Mr Gould's registration. On 21 December 2004, the Board made various orders including an order that the registration of Mr Gould as a liquidator be suspended for a period of three months. The orders had been preceded by a written determination and supporting reasons published on 26 August 2004.
Mr Gould applied in this Court for prohibition against the Board and ASIC to prevent the taking of any further steps pursuant to the determination and the order. He also claimed a declaration that certain laws, in particular s 1292 of the Corporations Act, were invalid on the ground that the power to impose a penalty or otherwise punish a person is exclusively part of the judicial power of the Commonwealth and could not be exercised by the Board. The proceedings in this Court were remitted to the Federal Court and Black CJ directed that the Gould proceeding and the Albarran proceeding be dealt with by a Full Court.
Mr Richard Albarran has been registered as a liquidator under the Corporations Act and its immediate predecessor since 19 August 1999. On 6 January 2005, ASIC applied to the Board for an order that Mr Albarran's registration be cancelled. Before the application was heard by the Board, Mr Albarran applied to this Court for an order preventing the taking of any further steps in the ASIC application. This Court refused a stay of the ASIC application and the balance of the cause was remitted to the Federal Court. The Board proceeded to a determination on 23 December 2005. This was adverse to Mr Albarran and, on 3 May 2006, the Board ordered a nine months suspension of his registration.
On 21 March 2006, the Full Court heard argument in the Gould proceeding and the Albarran proceeding and, on 19 May 2006, published reasons in support of the conclusion that the exercise by the Board of power under s 1292(2) of the Corporations Act does not involve the exercise of the judicial power of the Commonwealth, with the consequence that each proceeding was to be dismissed with costs.

[44]

In oral submissions, counsel for Mr Albarran sought to develop a determinative distinction for the constitutional purposes of these appeals between laws of domestic and general application. Counsel instanced the jurisdiction of university visitors in England and the position established by decisions including R v Lord President of the Privy Council; Ex parte Page[30]. In that case, Lord Browne-Wilkinson applied to the University of Hull what his Lordship said the common law for 300 years had recognised, namely, that the decision of the visitor on questions of law and fact was final and conclusive and not to be reviewed by the courts[31]. This, counsel now submitted, was an instance of "intramural" or domestic disciplinary arrangements which did not attract the exercise of judicial power, even by way of judicial review. However, the extent to which the English decisions respecting visitors to universities are applicable in Australasia, where educational structures differ, is unsettled[32]. In any event, members of the Board are officers of the Commonwealth and s 75(v) of the Constitution itself provides a measure of judicial review.
Counsel also referred to the public service regulatory scheme considered in R v White; Ex parte Byrnes[33]. However, the Court there did not rely on any distinction such as that now sought to be drawn; rather, as mentioned earlier in these reasons, the Court emphasised the differential outcome involved in disciplinary and criminal proceedings.
Counsel submitted that, whilst disciplinary arrangements in "domestic areas" such as those considered in Page and White do not engage the judicial power of the Commonwealth, the contrary is the case where (i) the rules in question are found in a law of "general application" and (ii) punishment is inflicted for breach of such a law. Section 1292 was found in a law of this character and punishment was said to have been inflicted.
To this, two things are to be said. First, upon the grounds given earlier in these reasons, no "punishment" in the sense of the authorities dealing with the judicial power of the Commonwealth has been inflicted by the determination and orders made by the Board. Secondly, the suggested discrimen which fixes upon laws of domestic and general application is obscure and, more fundamentally, does not provide an appropriate basis for the distinctions required when construing the phrase "the judicial power of the Commonwealth" in Ch III of the Constitution. Rather, as the Attorney-General submitted, the focus in the authorities is upon 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. Examples include Attorney-General (Cth) v Breckler[34] and Luton v Lessels[35].

[47]

The facts: Mr Albarran is a chartered accountant. He was first registered as a company liquidator in 1999 under statutory provisions continued under the Corporations Act[44] after that Act commenced in 2001. In January 2005, pursuant to s 1292(2) of the Corporations Act, the Australian Securities and Investments Commission ("ASIC") applied to the Board for orders cancelling Mr Albarran's registration as a liquidator[45].
Originally, ASIC pressed eight contentions against Mr Albarran. Only one (contention 1) was found by the Board to have been established. This alleged that Mr Albarran had participated in a contrived nominee arrangement, the essence of which was that identified persons were appointed to administer a company whilst, in effect, Mr Albarran or his firm performed the functions of administrator and received related payments. ASIC's allegation was that Mr Albarran and any member of his firm were precluded from accepting appointment as administrator because Mr Albarran's firm had a disqualifying conflict of interest. By inference, ASIC's contention was that Mr Albarran continued the arrangement complained of in order to circumvent the disqualification.
In December 2005, in respect of the first contention, the Board determined that Mr Albarran had "failed to fulfil his duties under s 1292(2)(d)(ii)" of the Corporations Act. The Board ordered that Mr Albarran's registration as a liquidator be suspended for nine months. Pending the outcome of these proceedings, the operation of that order has been stayed by the Administrative Appeals Tribunal ("the AAT")[46].
Mr Gould was likewise registered as a liquidator. He practised in that capacity, also pursuant to a registration deemed to subsist under the Corporations Act[47].
The application to the Board in Mr Gould's case was made by ASIC in July 2001. It alleged that he had failed, in a number of respects, to carry out or perform adequately and properly the duties or functions required by law of a registered liquidator.
The Board found that some, but not all, of ASIC's contentions against Mr Gould were established. It ordered that his registration as a liquidator be suspended for a period of three months from the coming into effect of its order. That order was also stayed by the AAT, pending the outcome of these proceedings.
The foregoing facts cut both ways. On the one hand, they illustrate the serious character of the orders of the Board and the impact that such orders would have, if sustained and given effect, upon the property of each of the appellants, in the sense of their respective entitlements to earn their professional livelihood during the period of suspension. If upheld, they would also impinge on the entitlements of the appellants to enjoy an unblemished reputation amongst chartered accountants and others as persons suitable to be appointed as liquidators of companies[48].
On the other hand, the facts illustrate the way in which the Board's functions are performed within the comprehensive legislative scheme established by the Corporations Act. It is that Act that now provides the legal authority ("registration") for persons to act as company liquidators and upholds the standards required of that office as an incident of registration. The Act does this, amongst other ways, by suspension of registration for a specified period for a proved failure to carry out or perform, adequately and properly, the duties or functions of the office. The provisions play an integral part in the maintenance of high standards in the governance of corporations in Australia and the administration of those corporations during winding up.
Other facts relevant to the appeals are set out in the reasons of Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ ("the joint reasons")[49]. None of the facts was contested in the appeals.
The legislation: The provisions of s 1292(2) of the Corporations Act are also set out in the joint reasons[50]. So too is a description of the provisions of s 203 of the ASIC Act, explaining the past and present requirements for the composition of the Board so that it includes persons with relevant accounting and business experience[51].
Self‑evidently, the object of constituting the Board in this way was to ensure that the body determining the contentions of ASIC, presented by its applications to the Board, could do so with full knowledge of ordinary practice and with sensitivity to proper professional standards. Inferentially, the object included the avoidance of the necessity to prove all the details of such practice and standards that might have been required in the case of a non‑expert generalist court.
Once again, provisions of this kind cut both ways. On the one hand, they ensure that the decision-maker is aware of any relevant practicalities that may arise in company liquidations, so that attention is not solely paid to the letter of the law. On the other hand, the common assumptions and expectations of specialists can sometimes demand standards not readily apparent to an untutored eye, informed only by a legislative text. Occasionally, they may be more demanding although not spelt out in a normative way.

[48]

The basic requirement: The appellants' argument that orders of the kind made against them could not be made by a body such as the Board, but only by a Ch III court, involved the assertion that, in Australia, under federal legislation, some governmental functions can only be performed by "courts"[52].
In the past, this argument was advanced largely by reference to verbal analysis of the phrase "the judicial power of the Commonwealth" in s 71 of the Constitution. However, especially in more recent decades, with the expansion of the modern regulatory state, a verbal analysis would only take the decision-maker so far.
Given the rapid expansion of the number, type and variety of decisions that have to be made under federal legislation, often having deleterious consequences for natural or legal persons, it is necessary to have some concept of the decision-making functions that, of their character, are reserved to courts, so as to distinguish them from those that are not. To identify those functions, it may be useful, though not determinative, to have regard to considerations of history, analysis of typical judicial activities and an understanding of the reasons given by this Court in deciding such questions in the past.
The starting point for answering a challenge of the type brought by the appellants is a recollection of the fundamental purpose (or function) of this feature of the Australian Constitution and of the doctrine of the separation of powers that has been found within it[53]. Why is it inherent in the Constitution that "the judicial power of the Commonwealth" must only be vested in Ch III courts? Why must that power not be intermingled with judicial and non‑judicial functions[54]? Why is the performance of some functions consistent with the exercise of judicial power as well as the exercise of non‑judicial power so that they may, at the option of the Parliament, be exercised by a Ch III court or by an executive body or even by both alternatively or consecutively[55]?
The rationale of separation: To answer these questions, it is necessary to return to the purpose of this aspect of the separation of powers doctrine, as it appears from the text and structure of the Constitution and as it has been expounded by this Court. What is involved is not simply a matter of words. At the heart of the requirement is a notion of the type of governance established by the Constitution and a belief that such governance is best, or only, secured by keeping the Judicature, provided for in Ch III, separate from the other governmental powers in the nation.
The language of the Constitution alone might perhaps have permitted a less rigid separation of powers doctrine to emerge. Thus, the separate treatment of Ch III in the text of the Constitution might have been treated as nothing more than a convenient drafting device[56]. The importation of American rigidities might have been rejected as unsuitable to the Australian Constitution where the executive is intended to sit in Parliament, thereby making a strict separation of the three branches of government impossible[57]. Alternatively, any rigid theory might have been confined to this Court and held inapplicable to other Ch III courts because this Court alone is identified by name in s 71 of the Constitution and arguably has special needs for insulation from other governmental pressures or influences in order to discharge its vital federal role[58]. Perhaps the language of s 71 might have been construed as non‑exhaustive of the deployment of federal judicial power[59]. Or more "exceptions" might have been acknowledged to the exclusive vesting of federal judicial power in Ch III courts[60], so as to cast doubt on the principle of strictly separating "the judicial power of the Commonwealth".
Instead of taking any of the above approaches, this Court adopted a strict view. In part, this was done because of the perceived requirements of the language and structure of the Constitution. But that textual analysis has been reinforced by identified requirements of abiding constitutional principle.
The governing principle can be traced to concepts expounded in Alexander Hamilton's views[61] concerning the special need in a federation to have a branch of government, the judiciary, which was insulated from the other branches of government so as to be able to perform the functions essential to its purposes[62]. Hamilton considered the independence of the judiciary from the other arms of government essential to ensure impartial decision-making in those matters where, otherwise, there was a risk of encroachment and partiality in the administration of federal laws affecting such matters as the "life, liberty or property"[63] of those who are subject to such laws.
It is as well to recall the explanations for the functional separation, and guaranteed exclusivity, of Ch III courts when judging challenges like the present, arising in new legislative circumstances. Simply to apply passages from reasons in a few earlier cases by analogy or to pluck sentences and phrases from the opinions of our predecessors, is to risk losing one's constitutional bearings. Alternatively, it is to succumb, in effect, to a "vibes" approach to constitutional adjudication[64]. It may overlook the importance of the constitutional design as a protection for the "basic legal rights" secured by that design[65].
In upholding a rule of strictness expressed by this Court in this context[66], the Privy Council explained in 1957[67]:

[53]

Liyanage was an extreme case. It was judged to be akin to taking judicial power "out of the hands of the judges"[70]. However, the Privy Council's warning was that the erosion of the "judicial power" and its "usurpation" by the other branches of government infringed the basic constitutional design of Ceylon because it undermined the assignment of the "judicial power" to a special class of public officials, namely the judges, who operate in a particular and public way, with guaranteed protection against interference and retaliation. They are the officials who are protected by tenure, remuneration, appellate and other procedures of review, as well as by convention and long tradition, against the power, influence, opinions and potential partiality of other public office‑holders, operating in the other branches of government.
The essential reason behind the separation of powers doctrine as it applies to the judiciary is as true today as it was when the Privy Council's words were written. What was said in respect of the Constitution of Ceylon applies with equal or even greater force in respect of the Australian Commonwealth because our Constitution is older and, in respect of the judicial branch, was consciously modelled on that of the United States of America. If anything, the growth of the modern regulatory state[71], 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.
However, the difficulty remains one of distinguishing the functions that may only be vested in Ch III courts from those that need not be. Like the Privy Council in Liyanage[72], this Court has found it impossible to identify in a universally applicable formula exactly "where the line is to be drawn"[73]. Yet saying that each case must be decided only on its own facts, or resolving challenges such as the present only by factual analogies with past decisions involving different legislation, risks performing this Court's function in a constitutional vacuum and in an unconvincing and unsatisfying way.
Desirability of predictable criteria: Criticism of this Court's decisions on the issue of principle presented by these appeals suggests that they have lacked a coherent doctrine[74]; deployed criteria that are difficult to predict[75]; and embraced overly fine distinctions[76] that cannot easily be traced to an identified principle or policy[77]. It is said that this has resulted in ad hoc determinations that lack a consistent rule.
The strongest criticism in this regard has been reserved for the so-called "chameleon"[78] principle of "innominate"[79] functions[80]. By this principle, it has been accepted that a parliamentary assignment of a particular function may, in certain instances[81], colour the constitutional characterisation of the exercise of that function. If it were left uncontrolled, this principle could have a tendency to subvert the constitutional separation of powers[82]. It could encourage the notion that, effectively, it is for the Parliament, and not the courts, to draw the constitutional line.
Yet, this has never been the way that I have understood the "chameleon" principle to apply[83]. In every case, it is for the courts (ultimately this Court) to characterise the federal law in question and to decide whether it involves the vesting of federal judicial power in an impermissible repository. If it does, by s 71 of the Constitution, such an assignment is invalid. The power in question must be vested in a Ch III court and not elsewhere.
The appellants were too prudent to call to notice the criticisms of this aspect of the Court's constitutional jurisprudence[84]. However, if it is the case that no exhaustive definition can be provided for the phrase "the judicial power of the Commonwealth"[85] and if future attempted definitions are likely to be no more successful or universal than those offered in the past[86], this does not mean that the issue is left entirely at large.
The Court's decisions afford a general description of what is involved in "judicial power"[87]. However, the phrase "the judicial power of the Commonwealth" in s 71 involves a narrowing of that notion because of other provisions in the constitutional text, most notably the requirement that there must be a "matter"[88] for every exercise of federal judicial power. This requirement, in turn, reserves that "power" to the determination of controversies by the application of legal norms. Under current doctrine, it excludes purely advisory or hypothetical decision-making by Ch III courts pursuant to federal legislation[89]. It also excludes participation by such courts (or by serving judges of federal courts) in the investigation of crime[90]. It forbids the provision of non-binding advice to the executive, effectively as part of executive government operations[91].
Identifying the functions that are alien to federal judicial power, which cannot be vested in a Ch III court by federal law, is simpler than identifying the functions that must be so vested. Yet that is the issue ultimately presented by these appeals. So why did the appellants submit that the decision committed by the Corporations Act to the Board fell outside the "innominate" functions that might be performed, pursuant to federal law, by an executive body or by the judiciary or by both (as the Parliament, according to its decision, pleased)? Why did the appellants contend that the functions committed to the Board under s 1292(2) of the Corporations Act were, of their nature, required to be vested in a Ch III court?
The formal answer to these questions is that the appellants argued that vesting in a court was what was required by the Constitution because the powers appearing in s 1292(2) comprised part of "the judicial power of the Commonwealth". However, when pressed for further elaboration, the reasons offered by the appellants were that, on balance, by reference to considerations of history, practical effect, normative function and intended operation, the powers conferred by s 1292(2) were properly to be characterised as part of "the judicial power of the Commonwealth". They were powers that properly belonged to the Judicature alone. They were thus invalidly vested in the Board because it was not part of the Judicature. Its orders concerning the appellants' status as registered liquidators were therefore invalid. The appellants asked this Court to so declare and to relieve them of the Board's orders.

[54]

A functional approach: The parties involved in these appeals tackled the issues before this Court by way of a "functional analysis"[92] of the powers enlivened by s 1292(2) of the Corporations Act. In these proceedings, it would be difficult to undertake a sensible examination of the questions to be decided in any other way. Evaluating the criteria for the presence of "the judicial power of the Commonwealth" cannot be undertaken in a vacuum, divorced from considerations of constitutional principle and policy. It is necessary to have some conception of the "functions" of courts which particular criteria may suggest to be exclusive, or non-exclusive, to such bodies.
Both in his written and oral submissions, Mr Gould acknowledged that cases such as his case presented questions of degree[93]. The Court was therefore involved in the drawing of a "line". He submitted that, in the present instance, s 1292(2) fell on the wrong side of the line. He did not suggest that any feature of that sub‑section conclusively demonstrated that it involved an exercise of federal judicial power. Nor did he argue that the Board's functions lacked any features apt to the exercise of administrative, as distinct from judicial, power. He simply submitted that the combination of functions reposed in the Board disclosed an exercise of the judicial power of the Commonwealth which was therefore impermissibly assigned to the Board, a body other than a Ch III court.
It would not be correct to say that the "chameleon" principle was missing from the arguments of the parties. It was expressly acknowledged by Mr Gould. It was certainly relied on by the Commonwealth[94]. It is undesirable to attempt a checklist of criteria for the existence of federal judicial power which is divorced from a notion about the essential functions reserved to the exercise of that power[95]. A conception of those functions provides the glue that holds together particular characteristics, detected in past cases.
Having said this, what are the features of the power conferred by s 1292(2) relied on by the appellants to establish that those functions belonged exclusively to the federal judicial power and thus could not be vested in the Board?
Historical considerations: Mr Gould pointed out that company liquidators have existed in our legal tradition since the company law reforms in the United Kingdom in the mid-nineteenth century. Initially, The Joint Stock Companies Winding-up Act 1848 (UK) provided for the Master of the Court of Chancery to appoint a person or persons to be the official manager or managers of a company undergoing winding up[96]. The appointee or appointees were subject to judicial supervision and removal for cause. When, following The Joint Stock Companies Act 1856 (UK), provision was made for "liquidators" to be involved in the winding up of the affairs of a company and an "official liquidator" was appointed by the Court on a compulsory winding up, those officers also acted under the control and direction of the Court[97].
Of their nature, from the start, company liquidators had functions of high responsibility. They bore a fiduciary character and, in some respects, they were quasi-judicial. The appellants argued that, as a matter of history, the adjudication of the question of whether a liquidator should be removed from office in a particular winding up was traditionally reserved to, and determined by, a court. To the extent that it is relevant to examine considerations of history in deciding whether a function is, or is not, exclusively "judicial", the history of company liquidators, dating back to the origin of that office in our legal tradition, was said to support judicial and not administrative supervision.
Of course, history did not stand still when the Constitution was adopted. The regulation of corporations expanded greatly throughout the twentieth century. It did so out of a recognition of the growing role that corporations came to play in the economy of the nation and of the world[98]. Such recognition, partly in response to corporate failures and losses to shareholders, creditors, employees and others, produced much more detailed regulation of corporations before, but particularly after, the 1990s[99]. Nevertheless, the traditional relationship between liquidators and courts indicated (as the Commonwealth conceded) that the regulation and discipline of liquidators could, as in early history, have been assigned to a court. That left open the question whether it must be so assigned in order to conform to the Australian constitutional design.
Features of punishment: The appellants' central contention was that amongst the functions reserved exclusively to courts were those concerned with punishment: in other words, a determination of wrong-doing of a public nature[100], in consequence of which a sanction is imposed on a person to indicate the established wrong‑doing and to provide deterrence to others by virtue of the sanction in the particular case.
The Commonwealth accepted as "undoubtedly true" that "the adjudgment and punishment of criminal guilt under a law of the Commonwealth" was "exclusively judicial"[101]. However, the appellants contested any sharp distinction between the operation of criminal punishment and professional discipline. They submitted that the question of whether a particular order was punitive, so as to be reserved to a Ch III court, was not to be decided merely by reference to the nomenclature adopted by the Parliament. Thus, the proliferation of "civil penalties" would not necessarily escape the constitutional requirement that punishment of a public nature under federal law must be reserved to judicial determination and orders.
Nor did the appellants accept a strict dichotomy between "punitive" and "disciplinary" provisions. Although a law might answer to the description of "disciplinary", in the federal context, it might also involve the infliction of public punishment reserved to judicial determination and judgment. In support of this dual characterisation of disciplinary provisions, both appellants invoked what was said by five members of this Court in Rich v Australian Securities and Investments Commission[102]. Although expressed in a different legal context, the observations of the Court in that case are not to be denied. In truth, they are self-evident:

[56]

Adapting those words to the present context, the appellants submitted that the orders made by the Board in relation to each of them constituted a public punishment. The orders impinged substantially on their economic freedom, particularly their capacity to earn their livelihood. The orders also diminished their reputations[103]. In these circumstances, the appellants contended that a classification that characterised such orders as "non-punitive", simply because they were also disciplinary or regulatory, involved embracing a fiction that was inimical to the text and purposes of the Constitution.
Normative functions: Many of the appellants' arguments were addressed to the nature of the functions to be performed by the Board as expressed in s 1292(2). The appellants submitted that inclusion of the adverbs "adequately" and "properly" in par (d) of that sub‑section did not deprive the function of a normative legal content. Certainly, many functions vested in Ch III courts under federal legislation are expressed in similarly broad language. Such expressions as "fairly based" in the Patents Act 1990 (Cth)[104], "harsh, unjust or unreasonable" in the Industrial Relations Act 1988 (Cth)[105] and "reasonably related" in the Civil Aviation Act 1988 (Cth)[106] are just three recent instances that spring to mind.
Intended operation: Finally, the appellants argued, as they had to, that there was no particular need for a specialist body, including professional or business personnel, to discharge the functions assigned to the Board under s 1292(2) of the Corporations Act. The appellants pointed out that the words "fit and proper person" were familiar ones in the context of the ethics and competence of businesses, trades and professions[107]. They were well known to courts. The functions were proper to be discharged by courts.
So much may be granted. However, the question remains whether, when provided as criteria by federal law, particularly in conjunction with the reference in s 1292(2) to the performance of liquidators' duties "adequately and properly", the functions are such that they necessarily involve the exercise of "the judicial power of the Commonwealth" and thus must be vested only in Ch III courts. Or may such powers equally be deployed as the Parliament has here chosen to do?

[60]

Irrespective of the early provisions for acting as a company liquidator in the United Kingdom and Australia, and their origins, once registration as an office-holder was introduced into statute law[109], such registration became a prerequisite to performing the duties. The entitlement to act as a liquidator was not at large. Appointment was not granted by a court ad hoc subject to the court's discipline and supervision[110]. Regulation of appointments was no longer discharged simply by the application of the general law of fiduciary duties[111]. The position comprised a statutory office, created by legislation ultimately applicable throughout Australia. Moreover, the appointment and retention of registration was subject to investigation as required. On proof of discreditable or incompetent performance, registered liquidators were subject to sanctions. Initially, those sanctions included admonishment or reprimand; requirement to pay the costs of an inquiry; requirement to give undertakings; imposition of a fine; suspension of registration for a period not exceeding one year; or cancellation of registration and removal of a name from the register[112].
When, in 1991, the Corporations Law came into operation, the State and Territory disciplinary boards were replaced by a single national board constituted under Pt 11 of the Australian Securities Commission Act 1989 (Cth). Registration remained a prerequisite to the lawful performance of the functions of a liquidator. The only change of substance introduced by the federal Act was the deletion of the power to impose fines or penalties. That deletion was continued in the present Corporations Act[113].
The history of the determination of earlier legal controversies, factually similar and apparently analogous to a later controversy, can sometimes be useful as indicating a function which, by the Constitution, is reserved, in the case of federal law, to the necessary exercise of the judicial power. Thus, the Commonwealth conceded that under federal law, the adjudication of criminal guilt; the determination of liability under the laws of contracts, tort and trusts[114]; the imposition of fines; and possibly the contested dissolution of a marriage would comprise a (non-exhaustive) list of functions reserved exclusively to Ch III courts[115]. In its submission, the powers conferred on the Board by s 1292(2) fell outside any of these "core", or historical, categories.
Considerations of the history of Australian companies legislation also tell against the appellants. Once the growth of the economy and its necessities suggested the need for a more systematic and detailed regulation of company liquidators by procedures involving registration (a proper matter for administration)[116], the establishment of professional disciplinary boards to supervise such registration became a logical and natural development. It might not have been the only way to provide discipline for company liquidators. No doubt courts might have been deployed. However, it offered advantages over the courts of cost saving, speed, flexibility and specialist knowledge. It also offered less publicity and less formality than court proceedings tend to entail. When the Board was established as a federal body, with disciplinary powers, considerations of history did not oblige a different institutional arrangement.
When other disciplinary legislation in the federal context accepted by this Court is remembered[117], the character of s 1292(2) may be even better understood. Whilst it is true, from the point of view of persons such as the appellants, that an order by the Board suspending their registration as a liquidator for a specified period would doubtless seem to be a kind of public punishment for past conduct judged by the Board to be in breach of the sub‑section, on analysis, that is not the true legal character and function of that order[118]. Legally and functionally, the purpose of the provision is to uphold the standards of registered liquidators; to ensure their compliance with an adequate and proper performance of the duties imposed on company liquidators; to protect company shareholders, creditors, officers and employees, and the public; and to uphold professional and business expectations in that regard. I agree with the analysis in the joint reasons both as to the function which the Board performs and as to the interpretation of s 1292(2)[119]. I also agree with what is said there concerning intramural or domestic disciplinary arrangements[120].
It follows that the Board is not engaged in the adjudication or determination of guilt, still less of criminal guilt, or in the imposition of punishment, as such. Nor, having regard to the broad terms of s 1292(2) and the composition of the Board, is it apt to say that the Board is engaged in the enforcement of existing legal rights and duties[121]. On the contrary, the broad language of the Board's remit invokes the exercise of statutory powers expressed in wide, and deliberately expansive, terms. Doubtless those terms were chosen in the knowledge that the Board, to which the evaluative determination and action was committed, was constituted so as to include members with particular backgrounds and experience, and was not confined to generalist judges. All of these considerations combine to support the rejection of the appellants' arguments that the functions of the Board were such that the Constitution required that they be vested in a Ch III court.
A functional check: When the foregoing conclusion is reached, it is appropriate to look back and to check it against the basic objective, reflected in the Constitution, of reserving the exercise of federal judicial power (properly understood) to Ch III courts. In R v Quinn; Ex parte Consolidated Foods Corporation, Jacobs J described the function to be served by this reservation in these terms[122]:

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