GYLES J
44 I have had the advantage of reading the judgment of Branson J in draft, which relieves me of the necessity to set out the context in which the issue arises. The case concerns the vexed question of what is judicial power for the purposes of Chapter III of the Constitution. There has been a plethora of cases on this question in this Court, and in the High Court, during the last decade. Over the years, many of the cases have involved an industrial setting. So does this. The judgment of Branson J demonstrates that, as with much in what might be called the industrial jurisdiction, the process in which the Court is involved pursuant to Pt IX Div 7A of the Workplace Relations Act 1996 (Cth) ("the Act") is not a traditional lis between parties or a close analogy with it. This, in itself, is not critical (Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 169 ALR 616 at 642-643 [105]-[107]). As Mason and Murphy JJ said in R v Joske; ex parte Shop Distributive & Allied Employees Association (1976) 135 CLR 194 at 216:
"It is no objection that the function entrusted to the Court is novel and that the Court cannot in exercising its discretion call in aid standards elaborated and refined in past decision …"
45 In Precision Data Holdings Ltd v Wills (1991) 173 CLR 167, the Court said (at 190-191) (omitting citations):
"In some situations, the fact that the object of the determination is to bring into existence by that determination a new set of rights and obligations is not an answer to the claim that the function is one which entails the exercise of judicial power. The Parliament can, if it chooses, legislate with respect to rights and obligations by vesting jurisdiction in courts to make orders creating those rights or imposing those liabilities. It is an expedient which is sometimes adopted when Parliament decides to confer upon a court or tribunal a discretionary authority to make orders which create rights or impose liabilities. This legislative technique and its consequences in terms of federal jurisdiction were discussed by Dixon J in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett. Leaving aside problems that might arise because of the subject-matter involved or because of some prescribed procedure not in keeping with the judicial process, where a discretionary authority is conferred upon a court and the discretionary authority is to be exercised according to legal principle or by reference to an objective standard or test prescribed by the legislature and not by reference to policy considerations or other matters not specified by the legislature, it will be possible to conclude that the determination by the court gives effect to rights and obligations for which the statute provides and that the determination constitutes an exercise of judicial power."
A recent example of this kind is the Proceeds of Crime Act 1987 (Cth) - see Director of Public Prosecutions v Toro-Martinez (1993) 33 NSWLR 82.
46 In my opinion, it is necessary to consider subdivision B of Div 7A in the context of the whole of the Division. Obtaining an order for a ballot is part of a process which the heading of the Division accurately describes as "withdrawal from amalgamated organisations". A ballot is an essential precondition to the successful process, but a successful process also requires orders pursuant to s 253ZP and perhaps s 253ZV. The fact that two (or perhaps three) applications to the Court need be made does not, in my opinion, detract from the necessity to see the process as a whole. I regard the analogy with applications to the Court in relation to schemes of arrangement under Corporations Law to be useful, and that process involves two applications to the Court - one to convene the meeting or meetings and the other to approve the scheme. Before examining the legislation more closely, I should mention some general considerations, and some of the authorities.
47 It may be immediately recognised that the functions which Div 7A gives to the Court might have been given to a non-judicial body - such as the Industrial Relations Commission as in the case of amalgamations (referred to by Branson J) - but this is by no means fatal to validity. It is now well established that some powers may only be exercised by courts because they are essentially judicial, there are some powers which may not be exercised by courts because they are essentially legislative or administrative, but there are other powers or functions with what has been called a "double aspect" in the sense that they can be seen as either judicial or administrative according to the way in which it is to be exercised:
"A function may take its character from that of the tribunal in which it is reposed. Thus, if a function is entrusted to a court, it may be inferred that it is to be exercised judicially; it is otherwise if a function be given to a non-judicial tribunal, for then there is ground for the inference that no exercise of judicial power is involved." (R v Hegarty; ex parte City of Salisbury (1981) 147 CLR 616 at 628)
Whilst this approach has been criticised (eg, whatever happened to boilermakers? Pt II, de Meyrick, (1995) 69 ALJ 189), it is solidly entrenched (see, for example, Precision Data Holdings Ltd v Wills (supra) at 188-189; and per Gummow J in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 136).
48 An authority which illuminates the present problem is R v Joske; ex parte Shop Distributive & Allied Employees Association (supra). At 209-211 Stephen J said:
"Section 171C first of all empowers the Industrial Court, on application made to it, to determine whether "an invalidity has occurred in the management or administration" of an organization or otherwise in specified ways related to its affairs; if so the Court may make such declaration as it thinks fit - subs (1). So far the power conferred is clearly judicial. Then under subs (2)(a) the Court may, if it determines that such an invalidity has occurred, "make such order as it thinks fit to rectify or cause to be rectified the invalidity, or to negative, modify or cause to be modified the consequences in law of the invalidity, or to validate any act, matter or thing rendered invalid by or as a result of the invalidity"; and before doing so must, under subs (2)(b), "satisfy itself that such an order would not do substantial injustice to the organization or to any member or creditor of the organization or to any person having dealings with the organization". It is upon these two quoted provisions that the prosecutors rely in contending that a grant of non-judicial power is involved.
Section 171D(1) empowers the Industrial Court to declare that a part of an organization has ceased to exist or to function effectively or that an office or position in an organization has become vacant, and that no effective means exists under the organization's rules to remedy this. Then subs (2) empowers the Court, having made such a declaration, to approve a scheme "for the taking of action by a collective body of the organization or of a branch of the organization or by an officer or officers of the organization or of a branch of the organization for the reconstitution of the branch or part of the branch, or of the collective body, or to enable it to function effectively, or for the filling of the office or position" (subs(2)) but it must first satisfy itself "that the order would not do substantial injustice to the organization or to any member of the organization" (subs (3)).
It is the power to rectify, modify or validate as the Court thinks fit, and the power to determine whether an organization has ceased "to function effectively" and, if so, to sanction a scheme to rectify the position, in each case qualified only by the provision as to substantial injustice, that are particularly seized upon by the prosecutors as revealing in these sections that other than judicial power has been conferred on the Court.
These provisions are concerned exclusively with the nature of the remedies open to the Court once it has adjudicated upon matters which have been initiated by a party and the determination of which is an eminently judicial function. The particular nature of an available remedy, at least when it is one not unfamiliar as part of the traditional equipment of courts of law or equity, can seldom be such as of itself to involve a court in a non-judicial function.
The power in s 171C(2) to relieve against what otherwise would be the invalidating effect of non-compliance with requirements of the law is a commonplace of our jurisprudence and can scarcely of itself involve any overstepping of the bounds of judicial power. To qualify, by reference to the avoidance of "substantial injustice", the exercise of the wide discretionary power conferred by the words "as it thinks fit" introduces a concept with which courts are familiar and which does nothing to suggest a non-judicial function. By directing attention to the effect of a proposed order upon all those likely to be affected by it the Court is required to have regard to all the circumstances of the case. What was said by members of this Court in Cominos v Cominos is sufficient to answer the present attack upon s 171C(2). I need do no more than refer to what was said in the joint judgment of McTiernan and Menzies JJ and in the judgments of Walsh J, of Gibbs J and of Mason J. My own reasons for judgment express views which I regard as applicable in large measure to the present case.
No different considerations appear to me to apply to s 171D; when the Court has made a declaration under subs (1) of that section a situation is disclosed in which some part of a registered organization has ceased to exist or has become moribund; the rules of the organization are found to provide no solution but some efficacious remedy is called for; the traditional response of the law in such a case has been to do very much what subs (2) provides for, to empower the Court to supervise a scheme for reconstitution of the defunct or moribund organization. In the fields of charitable trusts and of companies the same concept has been employed in exercise of power eminently judicial in character. It is said that the reference in s 171D(1) to an organization having ceased "to function effectively" invokes broad considerations of industrial policy such as are referred to in the recitation of the chief objects of the legislation in s 2 of the Act. I regard the reference to effective functioning as much more limited in scope; it is concerned with the performance, by the "part of the organization" which has been found wanting, of its function as such a part. Whether it is, in this sense, functioning effectively is a matter which is entirely within the scope of determination by the exercise of judicial functions. My general observations concerning s 171C apply equally to s 171D.
It is for the foregoing reasons that I reject the submission that either of these two sections involves the purported conferring of non-judicial power upon the Industrial Court. I would accordingly discharge the orders nisi applicable to these two proceedings.
Mason and Murphy JJ, having set out the effect of s 171C, said (at 215-8):
"It involves, so the argument runs, the conferment on the Court of functions which differ markedly from the ascertainment and declaration of existing rights, involving as they do, the making of determinations by reference to criteria not enunciated and the making of orders creating new rights. In addition, it is urged that the concept of "substantial injustice" is so vague as not to lend itself to an exercise of judicial power. These considerations, it seems to us, are not enough to bring us within reach of the conclusion which the prosecutors seek to attain. Many examples are to be found in the exercise of judicial power of orders which alter the rights of the parties or are the source of new rights. Likewise, there are countless instances of judicial discretions with no specification of the criteria by reference to which they are to be exercised - nevertheless they have been accepted as involving the exercise of judicial power (see Cominos v Cominos). It is no objection that the function entrusted to the Court is novel and that the Court cannot in exercising its discretion call in aid standards elaborated and refined in past decision; it is for the Court to develop and elaborate criteria regulating the discretion, having regard to the benefits which may be expected to flow from the making of an order under subs (2)(a) and the impact which such an order will have on the interests of persons who may be affected.
In the exercise of judicial power courts are called upon to decide whether particular transactions are invalid or unenforceable under the legislation relating to companies, money-lending and hire-purchase. Likewise they are frequently required to determine whether procedural steps taken in the course of legal proceedings have been validly or regularly taken. In each class of case the courts are empowered to relieve against invalidity, unenforceability or irregularity after having regard to any injustice, prejudice or hardship that may be caused by the making of such an order. This function, so it seems to us, is essentially an exercise of judicial power. Even if this were not so, the exercise of the power to grant relief must be regarded as incidental to the exercise of judicial power which is involved in the determination of the initial issue of invalidity, unenforceability or irregularity. For our part, we can perceive no real difference between these functions and the role thrust upon the Australian Industrial Court by s 171C. The exercise of the power given by s 171C(2), if not itself an exercise of judicial power (which in our opinion it is), is incidental to proceedings for a declaration of invalidity under subs (1) which involves the exercise of such power.
It is a significant consideration, as the judgments in Reg v Davison point out, that the function is entrusted to a court, at least in those cases in which the function cannot be clearly classified as administrative in character, and that it is the same as or essentially similar to functions which have hitherto been discharged by courts.
To our mind the present case should be distinguished from Reg v Spicer; Ex parte Australian Builders' Labourers' Federation in which s 140 of the Conciliation and Arbitration Act 1904-1956 was held invalid. Here the Court has a jurisdiction vested in it, exercisable on the application of a party; there the Court was given a power to act of its own motion. Here the jurisdiction conferred enables the Court to relieve against invalidity and its consequences, a function frequently undertaken by courts and not essentially dissimilar to that entrusted to courts under the companies, money-lending and hire-purchase legislation; there the power to disallow rules was a power which has been regarded as a non-judicial function.
True, it was said in that case that the discretion given by s 140 was not a judicial discretion but was based "wholly on industrial or administrative considerations" (per Dixon CJ) and involved "considerations of industrial policy" (per Taylor J). We do not regard these observations as indicating that the mere requirement that a court take into account considerations of industrial policy in exercising a discretion is of itself enough to stamp that discretion with the character of a non-judicial function. The observations were made in a context in which there were other grounds supporting the conclusion reached by the Court.
In the result it may be said of s 171C, as Barwick CJ said of s 143(2) of the Conciliation and Arbitration Act 1904-1973 in Reg v Joske; ex parte Australian Building Construction Employees and Builders' Labourers' Federation, that "The basis for the exercise of the discretion is specifically set out. It clearly partakes of judicial function: the weighing of the gravity of ascertained facts and decision upon the claims of justice."
Section 171D(1) enables the Court, on an application made by an organization, a member or any person having a sufficient interest in respect of it, to declare
"(a) a part of the organization …has ceased to exist or to function effectively and there are no effective means under the rules of the organization or branch by which it can be reconstituted or enabled to function effectively;
or
(b) an office or position in the organization or in a branch of the organization is vacant and there are no effective means under the rules of the organization or branch to fill the office or position,
…"
Sub-section (2) empowers the Court, once a declaration has been made, to "approve a scheme for the taking of action … for the reconstitution of the branch or part of the branch, or of the collective body, or to enable it to function effectively, or for the filling of the office or position". The Court, before making an order, must satisfy itself that the order would not do substantial injustice to the organization or to any member (subs (3)). An order or direction and any action taken in accordance with an order or direction has effect notwithstanding anything in the rules (subs (5)).
Much of what we have said in relation to s 171C has equal application to s 171D. There is to our mind nothing in the issues which s 171D(1) poses for decision that is alien to the exercise of judicial power. Such issues of fact as the question whether part of an organization has ceased to exist or to function effectively, whether there are effective means under the rules by which it can be reconstituted or enabled to function effectively, are issues of fact well suited to judicial determination. So also are the issues posed by par (b) of subs (1).
The principal point of attack made by the prosecutors was on the power given to the Court by subs (2) to approve a scheme. Yet this is a power which is associated with a jurisdiction to make a declaration under subs (1), a function which we have held to involve the exercise of judicial power. Whether a scheme will or is likely to (a) reconstitute a branch, part of a branch or a collective body, (b) enable any one or more of these entities to function effectively, (c) result in the filling of an office or position or (d) cause substantial injustice to the organization or any member are all issues which are susceptible to judicial determination in the exercise of judicial power, as indeed is the evaluation of the considerations which may be thought to be relevant to the making of an order granting or refusing approval. To the extent to which the argument is an attack on subs (3) it is sufficient for us to reiterate the observations which we have already made in connexion with s 171C(2)(b).
Section 171D(1) entrusts to the courts a function similar to that which courts have undertaken in confirming schemes of arrangement under the Companies Act. These schemes often reconstitute the capital structure of a company and readjust the rights of creditors and shareholders. The jurisdiction thereby exercised, it should be acknowledged, involves the exercise of judicial power. Consequently, it is our opinion that the jurisdiction conferred upon the court by s 171D is itself an exercise of judicial power."
Barwick CJ had said at 201:
"… an attack was made upon the constitutional validity of ss 171C and 171D of the Act. The submitted ground of invalidity was that the sections purported to confer non-judicial power on the Industrial Court. This ground should be rejected because the nature of the relief which the sections authorize is, in no sense, antithetic to the exercise of judicial power: indeed, on the contrary, it is of a kind which in other areas of the law courts are wont to give. I agree with my brother Stephen that the relief which a court is authorized to give consequentially upon its judicial determination of some situation can rarely, if ever, be denied the quality of an exercise of judicial power. I also agree with my brother that the authorized relief cannot, in any case, be regarded as of a non-judicial nature. I agree with his expressed reasons for that conclusion."
McTiernan J at 202 said:
"Such powers as those sections give to the Court are of a judicial nature or incidental to the exercise of judicial power."
49 The decision of the High Court in Re McJannet; ex parte Minister for Employment, Training and Industrial Relations (Q) (1995) 184 CLR 620, and the litigation which preceded it, is of interest. The case dealt with amalgamation. The background is sufficiently sketched by the following extract from the judgment of Brennan CJ, Deane and Dawson JJ at 637-8:
"The amalgamation day fixed under s 253Q(2) of the Industrial Relations Act 1988 (Cth) for the amalgamation of the ATAEA, the Australian Journalists' Association and Actors' Equity was 18 May 1992. On that day the amalgamation took effect and the amalgamating organisations became de-registered, their members becoming members of the amalgamated organisation, namely, the Alliance. Section 253R provides:
"(1) On the amalgamation day, all assets and liabilities of a de-registered organisation cease to be assets and liabilities of that organisation and become assets and liabilities of the amalgamated organisation.
(2) For all purposes and in all proceedings, an asset or liability of a de-registered organisation existing immediately before the amalgamation day is taken to have become an asset or liability of the amalgamated organisation on that day."
On 3 June 1992 the Federal Management Committee of the Alliance directed certain officers of "the Queensland Branch of the former Australian Theatrical and Amusement Association (registered in the Queensland system of industrial regulation as the Queensland Branch of the Australian Theatrical and Amusement Union of Employees)" to transfer the property of the ATAUE to the Alliance and to discontinue the proceedings in Queensland for its amalgamation with the AWUEQ.
Save for handing over some documents and other property which had admittedly belonged to the ATAEA, the officers of the ATAUE did not comply with the direction given by the Federal Management Committee of the Alliance. The Alliance and two individual applicants then sought relief of various kinds in the Federal Court, including a declaration that the Queensland branch of the ATAEA was one and the same as the ATAUE, a declaration that assets held in the name of the ATAUE were assets of the Alliance, a declaration that the amalgamation of the ATAUE and the AWUEQ was void and of no effect and a direction that the assets of the ATAUE be transferred to the Alliance. Relief was also sought against certain officers of the ATAUE.
The jurisdiction of the Federal Court was said to be based upon ss 253X and 253ZC of the Commonwealth Industrial Relations Act. Section 253X provides:
"(1) The amalgamated organisation must take such steps as are necessary to ensure that the amalgamation, and the operation of this Subdivision in relation to the amalgamation, are fully effective.
(2) The Court may, on the application of an interested person, make such orders as it considers appropriate to ensure that subsection (1) is given effect to." (emphasis added)
Section 253ZC provides:
"(1) Where any difficulty arises in relation to the application of this Subdivision to a particular matter, the Court may, on the application of an interested person, make such order as it considers proper to resolve the difficulty. (emphasis added)
(2) An order made under subsection (1) has effect despite anything contained in this Act or in any other Commonwealth law or any State or Territory law."
50 For reasons which are not relevant to the present matter, their Honours held that the Federal Court had no jurisdiction to make the orders that it had under s 253X or under s 253ZC, and granted prohibition without considering the merits of the matter. Because of the way they approached the matter, Toohey, McHugh and Gummow JJ examined the sections more closely than the other members of the Court. At 657-9 their Honours said:
"The proper construction of s 253X will be assisted by consideration of its context, the other provisions of Subdiv F of Div 7 of Pt IX. Section 253R, the text of which has been set out earlier, achieves a transmission of title by operation of law by providing that, of its own force, on the amalgamation day the assets and liabilities of a de-registered organisation become assets and liabilities of the amalgamated organisation. That, however, is not to say that the transmission of title will be fully effective in a legal sense, without the taking of consequential steps. The statute recognises this by making further provision. This includes such matters as deeming to have been given any consent by a third party which is necessary to give effect to the subdivision in any particular respect (s 253W(3)), and obliging registrars of land title systems, the Australian Securities Commission and companies dealing with instruments of transfer of shares and debentures, and other such authorities, to give effect in the relevant registers to the change of title (ss 253Y, 253Z, 253ZA, 253ZB). In these situations, the registering authority is required by the legislation to act upon a certificate signed by an authorised person which states that the amalgamated organisation has, under Subdiv F, become the holder or owner of the asset in question. Further, it will be for the amalgamated organisation to seek to obtain payment, by legal process or otherwise, of moneys owing to it as successor to the de-registered organisation. Pending proceedings are to continue as if the amalgamated organisation were and always had been the de-registered organisation (s 253V).
The situation to which s 253X is directed thus is analogous to the duty imposed upon a new trustee to get in all the trust property. This duty includes an obligation to perfect title by, for example, notifying the debtor of assignment of a debt and securing registration as a shareholder.
It is by consideration of such matters that one may perceive the content of the expression "fully effective" in s 253X. The section imposes an obligation upon the amalgamated organisation to take steps which are necessary to ensure the full effectiveness of the amalgamation and the operation of Subdiv F in relation to it. That obligation is enforceable by the Federal Court against the amalgamated organisation on the application of "an interested person". The section illustrates the significance of the "double function" referred to by Dixon J in Ex parte Barrett. First, it deals with substantive liabilities and substantive legal relations by imposing upon the amalgamated organisation the requirement that it take the steps referred to in s 253X(1). That is a law made by Parliament.
The jurisdiction of the Federal Court is defined in the sense of s 77 of the Constitution by reference to matters arising under s 253X(1). But it is conditioned upon or requires an application of an interested person seeking orders appropriate to ensure that the amalgamated organisation takes the steps referred to in s 253X(1). Contrary to the conclusion reached by Black CJ and Gray J, the moving party may not be the amalgamated organisation for it is the body against which an order is sought. It may well be that a member of the amalgamated organisation, who seeks to have that body take the necessary steps to ensure that the amalgamation is fully effective, would be an interested person. It is not necessary for us to decide the point because in the present case the other condition for jurisdiction under s 253X was not met, namely that the order be against the amalgamated organisation. As we have explained, the amalgamated organisation is the Alliance, not the ATAUE and s 253X(1) could not, relevantly, impose any obligation upon the ATAUE.
We turn next to consider s 253ZC. This provision takes as what one might call the substantive element of the law the existence of what might properly be characterised as a "difficulty" which has "arisen" in a particular circumstance, namely "in relation to the application of [Subdiv F] to a particular matter". Jurisdiction is conferred in respect of an application made to the Federal Court by "an interested person". The remedy which may be given is that which the Court considers proper to resolve the difficulty. The section thus is cast in a form appropriate to include the case where the amalgamated organisation has encountered a difficulty in relation to the application of the subdivision in relation to a particular matter. An example would be performance by the relevant title authority of the obligations imposed by ss 253Y, 253Z, 253ZA or 253ZB. The order which the Court may make will have effect, by force of s 253ZC(2), despite anything contained in any other law of the Commonwealth or any State or Territory law.