Buckingham Gate International Pty Ltd v Australia New Zealand Banking Group Limited; MWW Baker Pty Ltd v Australia New Zealand Banking Group Limited; Jasorc Pty Ltd v Australia New Zealand Banking Group Limited; 300 Queen Street Plaza Pty Ltd v Australia New Zealand Bankin Group Limited; Klego Pty Ltd as Trustee for The Lamont Family Trust v Australila New Zealand Banking Group Limited; Klego Pty Ltd v Australia New Zealand Banking Group Limited - [2000] NSWSC 946 - NSWSC 2000 case summary

Supreme Court of NSW|2000-10-03|Before: Santow J

INTRODUCTION 1 Each of the proceedings noted above involves the issuance of a Statutory Demand by Australian and New Zealand Banking Group Limited ("the Bank"). The companies are five in number. While they appear to have different shareholdings, they have been associated at least to the extent of being guarantors, under a banking facility made available by the Bank. Such guarantees were the basis for each Statutory Demand being issued when the guarantees were called upon and not met. 2 The only basis upon which Mr Levick, the solicitor for the five companies has put for seeking to have the Statutory Demand set aside is a constitutional one. Notice has been given to the various Attorneys General who have declined to appear. 3 The constitutional basis is a generalised attack based on the proposition as put by Mr Levick that the Corporations Law depends for its validity upon the Commonwealth Constitution and that constitution is itself invalid or has become so prior to the enactment of the Corporations Law. 4 That invalidity of the Constitution is premised on a variation of the argument put, unsuccessfully, in Joose & Anor v ASIC [1998] HCA 77 before Hayne J. This was in relation to a series of unsuccessful applications to move proceedings into the High Court pursuant to s40 of the Judiciary Act 1903 (Cth). It was contended that there has been an unremedied "break in sovereignty" in Australia that was said to lead to the conclusion that some at least of the legislation apparently passed by the Parliament of the Commonwealth (or by one or more State Parliaments) is invalid. As Hayne J explained, Australia's sovereignty did evolve. But that evolution did not produce invalidity for legislation passed before full sovereignty was achieved, assuming that point were capable of identification. 5 Here the variant argument is put that at the time the Commonwealth Constitution was rendered applicable to the Commonwealth by Imperial Act of the Parliament in Westminster, it took the Commonwealth "to be a self-governing colony for the purposes of [the Commonwealth of Australia Constitution Act 1900]", doing so expressly by s8 of that Act. 6 Next it is said that at least by 1986, as recognised by the Australia Acts 1986 of the United Kingdom and Australia, Australia became fully sovereign. In particular various residual powers of the British Parliament to legislate for Australia were removed. 7 The final proposition is however fallacious. It is that the Constitution, being one for a self-governing colony, is somehow rendered a nullity by the change in sovereign character of the Commonwealth of Australia into a fully sovereign state. 8 It is also said that as the States come into existence only under the Australian Constitution and lacked existence beforehand, a proposition manifestly incorrect, the States were rendered incapable of passing legislation and in particular s7 of the Corporations (NSW) Act 1990. That legislation applies as a law of New South Wales the Corporations Law set out in s82 of the Corporations Act passed by the Commonwealth for the Australian Capital Territory under the Territories Power.

DISPOSAL OF CHALLENGE 9 There are a long series of cases which have been brought either by Mr Levick, or by counsel (Mr Fitzgibbon) instructed by him, which in various forms have unsuccessfully sought to challenge the unconstitutionality of legislation including the Corporations Law. The common feature of those challenges has been the unsuccessful attempt to find some fundamental deficiency in either the process of executive approval of legislation by the relevant Governor or Governor-General, as for example going to the validity of their appointment, or otherwise by reference to the Constitution and the changed sovereignty of the Commonwealth. For reference purposes I set those cases out below with the citations where reported; where indemnity cost orders were made against Mr Levick that is indicated by an asterisk.

Deputy Commissioner of Taxation -v- Levick 168 ALR 383; * Levick -v- Deputy Commissioner of Taxation [2000] FCA 674 (23 May 2000); * McKewins Hairdressing and Beauty Supplies Pty Limited -v- Deputy Commissioner of Taxation [2000] HCA 27 (5 May 2000); Greer -v- Deputy Commissioner of Taxation, High Court of Australia S33/199 (26 April 2000); and Poonon -v- Deputy Commissioner of Taxation [1999] NSWSC 1121 (11 November 1999).

10 In several of these, where indicated, cost orders were made on an indemnity basis and upon Mr Levick. They do not appear to have dented his enthusiasm to produce yet again the same unsuccessful argument, or recognised variants. This is notwithstanding the common thread running through those cases, that there was no arguable case ever put in support of each challenge. 11 In an attempt perhaps to distinguish the present case from these others, Mr Levick sought to subpoena the secretary of the Commonwealth Department of Foreign Affairs and Dr Genevieve Ebbeck, General Counsel for the Commonwealth. No coherent reason was given for such a subpoena beyond the bald assertion that there has been some circular issue by the Department of Foreign Affairs touching upon matters in this case, an assertion neither substantiated nor contained in any affidavit. I declined to permit such a subpoena to be issued in the circumstances. 12 Mr Levick's challenge in the present case must fail. It presupposes that a constitution which speaks to one set of circumstances in terms of denotation is incapable of surviving a change in the circumstances it denotes. Yet it is a commonplace of constitutional interpretation that the circumstances which existed in 1901 when the Constitution was adopted have changed, in some cases radically. Take, for example, what is to-day denoted by the Post and Telegraph power compared to the more primitive modes in 1901. Or the example cited by Dawson J in Street v Queensland Bar Association (1989) 168 CLR 461, that trade marks have only recently come to include service marks yet the Constitution governs both. Thus as Dawson J said in Street at 537: "The essential meaning of the Constitution must remain the same, although with the passage of time its words must be applied to situations which were not envisaged at federation. Expressed in the technical language of the logician, the words have a fixed connotation but their denotation may differ from time to time. That is to say, the attributes which the words signify will not vary, but as time passes new and different things may be seen to possess those attributes sufficiently to justify the application of the words to them."

13 Those changes of denotation have self-evidently not invalidated the Constitution, or prevented its interpretation; they have engendered, naturally enough different views about what, in contemporary terms, the Constitution may mean. There is thus a contrast between that mode of interpretation termed originalist, and those who would admit of a changing constitutional content though still constrained by the language used and its connotation. 14 There has been no purported repeal of the Constitution and the substitution of an entirely new set of constitutional arrangements as occurred for example most recently in Hong Kong, when Hong Kong passed from British control to PRC sovereignty under a new constitution. 15 It follows, as Hayne J recognised in Joose (supra) at [11], [18], [19] and [21], that the evolving sovereignty of the Commonwealth has not affected the constitutionality of the Corporations Law. To suppose otherwise would depend upon the manifestly absurd proposition that the Constitution has as a result of such change itself been impliedly repealed. 16 Indeed even were the position otherwise, s7 of the Corporations (NSW) Act 1990 is itself an independent basis for upholding the Corporations Law. The effect of s7 is simply to adopt as a kind of dictionary or perhaps more appositely encyclopaedia, the content of s82 of the Corporations Act. Even were that Act unconstitutional it would not follow that the NSW State legislation whose content is so derived would fail in its constitutionality. Nor has the State of New South Wales ceased to exist, notwithstanding any evolving change in its sovereignty or that of the Commonwealth. Historically New South Wales existed as a state before the adoption of the Commonwealth Constitution. It did not, and does not, depend for its continued existence as a state, upon the Commonwealth Constitution. This is so, though its powers were radically affected by that Constitution.

CONCLUSION AND COSTS 17 It follows that the Constitutional challenges to the Statutory Demands so framed, have failed. 18 So far as costs are concerned, the Bank seeks indemnity costs against both the five companies and Mr Levick personally. This is as costs incurred "improperly or without reasonable cause" within Pt 52A r43 SCR, in putting what should have been appreciated as totally untenable arguments of a kind or varying form that had already been rejected in the series of cases to which I have referred. That, as known to Mr Levick, led in those cases, where indicated, to indemnity cost orders against him. 19 Part 52A r43 of SCR empowers the making of such orders after giving the solicitor the opportunity to be heard. Mr Levick added, when given that opportunity, that he was acting under instructions from his clients. However such instructions could not prevail over Mr Levick's duty to the Court. That includes a duty not to waste the Court's time with arguments that have self-evidently no prospects of success, more especially when the fate of analogous cases should have brought this home. Indeed there may come a time where the duty owed to the court, now both by client and legal adviser, may need to be reinforced by more effective sanctions. In fairness to other litigants, the court's time should not be wastefully occupied in dealing with untenable submissions, more especially when this has now occurred with the same legal adviser on repeated occasions undeterred by indemnity cost orders against him.

ORDERS 20 In each of the proceedings listed below, the Plaintiffs' Originating Process is dismissed with indemnity costs to be paid as a joint and several liability by the relevant Plaintiff in each case and Mr Levick as its solicitor:

3072/00 - Buckingham Gate International Pty Ltd v Australia New Zealand Banking Group Limited 3126/00 - MWW Baker Pty Ltd v Australia New Zealand Banking Group Limited 3233/00 - Jasorc Pty Ltd v Australia New Zealand Banking Group Limited 3235/00 - 300 Queen Street Plaza Pty Ltd v Australia New Zealand Banking Group Limited 3234/00 - Klego Pty Ltd as Trustee for The Lamont Family Trust v Australia New Zealand Banking Group Limited 3236/00 - Klego Pty Ltd v Australia New Zealand Banking Group Limited

Last Modified: 10/11/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Buckingham Gate International Pty Ltd v Australia New Zealand Banking Group Limited; MWW Baker Pty Ltd v Australia New Zealand Banking Group Limited; Jasorc Pty Ltd v Australia New Zealand Banking Group Limited; 300 Queen Street Plaza Pty Ltd v Australia New Zealand Bankin Group Limited; Klego Pty Ltd as Trustee for The Lamont Family Trust v Australila New Zealand Banking Group Limited; Klego Pty Ltd v Australia New Zealand Banking Group Limited [2000] NSWSC 946 revised - 10/10/2000 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 3072/00; 3126/00; 3233/00; 3235/00; 3234/00; 3236/00 HEARING DATE(S) : 3 October 2000 JUDGMENT DATE : 3 October 2000

COUNSEL : W Levick (Solicitor) (Plaintiffs) P Dowdy (Defendant) SOLICITORS : Wayne Levick & Associates (Plaintiffs) Coudert Brothers (Defendant) CATCHWORDS : CORPORATIONS LAW - Constitutionality - Not affected by evolving sovereignty of Commonwealth - Independent basis in s7 of Corporations (NSW) Act under State legislative power - NSW as a state did not cease to exist with change in its sovereignty - Indemnity cost orders against legal practitioner under Pt 52A r43 - Observations about repeated putting of variants of the same untenable submissions and the lack of deterrence in those cost orders. Australia Acts 1986 Commonwealth of Australia Constitution Act 1900, s8 LEGISLATION CITED : Corporations Act s82 Corporations (NSW) Act 1990, s7 Corporations Law Supreme Court Rules Pt 52A r43 Deputy Commissioner of Taxation -v- Levick 168 ALR 383; Greer -v- Deputy Commissioner of Taxation, High Court of Australia S33/199 (26 April 2000) Joose & Anor v ASIC [1998] HCA 77 CASES CITED : Levick -v- Deputy Commissioner of Taxation [2000] FCA 674 (23 May 2000); McKewins Hairdressing and Beauty Supplies Pty Limited -v- Deputy Commissioner of Taxation [2000] HCA 27 (5 May 2000); Poonon -v- Deputy Commissioner of Taxation [1999] NSWSC 1121 (11 November 1999). Street v Queensland Bar Association (1989) 168 CLR 461 DECISION : Application dismissed. Indemnity costs awarded.

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