. it was said that s.139ZQ(2) makes it clear that Parliament intends the Official Receiver to form the view that the payment was void against the trustee in bankruptcy and thus to decide questions of fact and law and to conclude that a person received a voidable preference;
. whether or not a payment is a voidable preference is a question arising in bankruptcy and only the courts listed in s.27 of the Act (the Federal Court of Australia, and the Supreme Courts of the States and the Northern Territory of Australia) have jurisdiction in bankruptcy. Section 31A which provides for the delegation of powers does not list the Official Receiver as a person to whom the Court's powers may be delegated;
. although judicial power may be delegated in a situation where a Court retains the power to review de novo, that is not the situation in respect of a decision to issue a notice under s.139ZQ. It was submitted that a hearing under s.139ZS is not a hearing de novo because that section restricts the Court's review power to a review of the facts and circumstances set out in the particular notice. It was also submitted that s.139ZQ(8), by characterising the amount referred to in the notice as being recoverable by the trustee as a debt by action in a court of competent jurisdiction means that there is no defence to such action.
. it was argued that Subdivision J extends the trustee's rights under s.122 of the Act and at the same time affects the rights of the payee to deny that s.122 applies. This was done, so it was said, by "converting" the trustee's right to make an application based on s.122, exercisable only in federal jurisdiction, to the right to sue for a debt in any Court having jurisdiction in a personal action. The trustee's rights were further extended by preventing the payee from putting the trustee to proof in any court except the Federal Court or a State or Territory Supreme Court which Court is restricted to the facts and circumstances set out in the notice;
. it was also submitted that s.139ZT provides for enforcement of the 139ZQ notice by criminal sanction and that in such criminal proceedings the defendant would not be able to avoid conviction by bringing into question the validity of the s.139ZQ notice.
Dr C.R. Staker who appeared as counsel for the Commonwealth, intervening, submitted that the purpose of Subdivision J was to provide an alternative administrative mechanism to avoid the need (as it has been referred to in some of the authorities) to obtain a declaration that s.122 applies to a particular transaction. It was said on behalf of the Commonwealth that the Subdivision does not empower the Official Receiver to determine, in any way legally binding on any other person, that the transaction is void but, rather, it is on the pre-existing assumption that the transaction is void, or voidable in effect, that the s.139ZQ notice can then be issued to have the effect of avoiding that voidable transaction. Dr Staker contended that this was not a situation where judicial power was being delegated and that the authorities dealing with such delegation were not in point. Pausing there, I would like to say something about that contention. It is quite true that in issue in the present matter is not a set of provisions whereby power vested in a court is delegated to officers of that court in the manner seen in, for example, Harris v. Caladine (1991) 172 CLR 84. However, in my view the determination of this matter is assisted by considering the approach taken in that case. It must be acknowledged that in Harris it was not disputed that the Family Court registrars were exercising some part of the judicial power vested in the judges of that court. The question was whether that degree of delegation was constitutionally valid. Here the issue is whether Parliament has purported to confer judicial power on the Official Receiver. Nevertheless the underlying question is, in my opinion, very similar. Given that so many functions are common to both the exercise of administrative and judicial power, the question is whether, in all the circumstances, what the particular functionary has been empowered to do can be characterised as the independent exercise by that person of the judicial power of the Commonwealth? (See Dawson J. in Harris at p.122). If so then the forbidden line, which is so hard to draw, has been crossed and whether the
power is delegated judicial power or not is not a conclusive factor. For that reason, as will become apparent below, I consider that the scope for judicial review (in its widest sense) of the Official Receiver's decision to issue the notice is a most relevant factor as it was in Harris where it seems, in my view, to have been the most relevant factor.
Dr Staker further submitted that if a recipient of a s.139ZQ notice disputes that the impugned transaction is void, the person is not bound by the notice in any way because in proceedings under s.139ZS of the Act the Court may determine whether Subdivision J is applicable. In particular, he submitted that the Court may determine whether the recipient of the notice has received money or property as a result of a transaction that is void against the trustee under Division 3. For that purpose, so it was submitted, the Court may investigate and determine the correctness of the facts and circumstances stated in the notice, and whether any defence to the liability asserted in the notice arises out of additional facts proved by the applicant. In support of that proposition reliance was placed on the decision of Olney J. in Re Lucera; Ex parte the Official Trustee in Bankruptcy v. Lucera and the Registrar of Titles (unreported, Judgment No. 715 of 1994, 5 October 1994) and Einfeld J. in Re McInnes; Ex parte McInnes v. Official Receiver (unreported, Judgment No. 882 of 1994, 18 November 1994). In Re Lucera at p.11, Olney J. made the following observations:
"... it would seem to be the case that whatever the words is satisfied that this Subdivision does not apply to the person on the basis of the alleged facts and circumstances set out in the notice' mean, a person to whom a notice has been given may challenge the statement of facts and circumstances for the purpose of an application to set the notice aside. If this is not the case a notice based upon a wholly erroneous statement of facts which at its face value may lead to a conclusion that the person has received money or property as a result of a transaction that is void under Division 3, would have no recourse either against an action based on the notice pursuant to s.139ZQ(8), or against a prosecution pursuant to s.139ZT(1). In the absence of clear words to that effect it cannot be thought that Parliament would have intended such consequences." In that case Olney J. followed the course of allowing the trustee to adduce further evidence directed to proving the facts asserted in his notice. His Honour held that a necessary consequence of that was that the recipient of the notice or indeed the bankrupt, should be able to challenge the evidence so adduced. It is interesting and useful to note that Olney J. considered that if s.139ZS(1) were not sufficient authority for setting aside the notice in that case then s.30 of the Act would provide such authority. In Re McInnes at pp.42-43 Einfeld J. expressed considerable doubts upon observations concerning s.139ZS said to have been made by Wilcox J. in Re Pearson; Ex parte Wansley [1993] 46 FCR 55 at p.60 and by Gummow J. in Re Fiorino; Ex parte Woodgate [unreported 14 April 1994, Judgment No. 181 of 1994 at p.23]. Einfeld J. construed those observations as being to the effect that s.139ZS does not appear to permit a notice to be set aside on the basis that the alleged facts are found not to be true, or that additional facts are found that alter the conclusion to be drawn from the alleged facts. However, it was not necessary in that case for his Honour to decide the matter because the notices in Re McInnes were held to "fail in any event". This was because the notices did not indicate that the recipients had received property to the value claimed. With all due respect to Einfeld J., my reading of Re Fiorinofails to disclose any suggestion by Gummow J. to the above effect. Gummow J. dealt with the Subdivision J point in the last four pages of his reasons for judgment. Counsel for the trustee in that case did not seek to defend the notice and it was set aside. In Re Pearson the situation was that Wilcox J. raised the questions to which Einfeld J. referred but did not suggest any answer, possibly because his Honour did not have to decide it. I respectfully share the doubts which Einfeld J. expressed in Re McInnes and the views expressed by Olney J. in Re Lucera. In my opinion, when an application is made to the Court under s.139ZS the applicant may challenge the statement (in the Official Receiver's notice) of facts and circumstances, for the purposes of having the notice set aside. The use of the word "alleged" in the phrase "the basis of the alleged facts and circumstances", in my opinion, supports such a construction. There is nothing in the relevant Explanatory Memorandum or in the second reading speech in the Senate which suggests the contrary. Furthermore, as I have endeavoured to point out above, the power to issue the notice is conditioned not upon the Official Receiver's opinion or satisfaction that the transaction is void against the trustee but upon the existence of certain circumstances in which a person has received money or property as a result of a transaction that is void against the trustee. The Official Receiver's power is "dependent upon the existence of a jurisdictional fact" [The Queen v. Coldham; Ex parte Australian Workers' Union (1983) 153 CLR 415 at p.427] and must be subject to challenge in circumstances where the supposed existence of that fact is relied upon; cf. The Queen v. Marks; Ex parte Australian Building Construction Employees Builders Labourers' Federation (1981) 147 CLR 471 at p.489. It is necessary to reach a conclusion on this point because the extent to which a s.139ZQ notice may be challenged has a bearing (as will be seen below) on the question whether that section confers part of the judicial power of the Commonwealth on the Official Receiver. In a situation where it is difficult, if not impossible, to frame an exclusive and exhaustive definition of the subject matter of a prohibition having a constitutional source, one must seek other forms of guidance. A traditional and very useful starting point is the classical statement of Griffith C.J. in Huddart, Parker & Co Pty Ltd v. Moorhead (1909) 8 CLR 330 at p.357 that: "The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action". In Brandy v. Human Rights and Equal Opportunity Commission (1995) 127 ALR 1 at pp.16-17 Deane, Dawson, Gaudron and McHugh JJ. observed: "Difficulty arises in attempting to formulate a comprehensive definition of judicial power not so much because it consists of a number of factors as because the combination is not always the same. It is hard to point to any essential or constant characteristic. Moreover, there are functions which, when performed by a Court, constitute the exercise of judicial power but, when performed by some other body, do not: R. v. Davison (1954) 90 CLR 353 at p.368. These difficulties were recognised by the Court in Precision Data Holdings Ltd v. Wills (1991) 173 CLR 167 at 188-9: The acknowledged difficulty, if not impossibility, of framing a definition of judicial power that is at once exclusive and exhaustive arises from the circumstance that many positive features which are essential to the exercise of the power are not by themselves conclusive of it. Thus, although the finding of facts and the making of value judgments, even the formation of an opinion as to the legal rights and obligations of parties, are common ingredients in the exercise of judicial power, they may also be elements in the exercise of administrative and legislative power.' "
One approach is to ascertain whether Subdivision J purports to confer any decision-making functions which are "exclusive and inalienable exercises of judicial power"; Mason CJ, Brennan and Toohey JJ. in Brandy at p.9 in referring to R. v. Davison (1954) 90 CLR 353 at pp.368-370.
In Davison the High Court held that the ascertainment of existing rights by the judicial determination of issues of fact or law falls exclusively within the judicial power of the Commonwealth. In Brandy the expression "judicial determination" was explained (again at p.9) as meaning:
"... an authoritative determination by means of the judicial method, that is, an enforceable decision reached by applying the relevant principles of law to the facts as found."
In Brandy sections 25ZAA, 25ZAB, 25ZAC and 25ZC of the Racial Discrimination Act 1975 (Cth) were held to be invalid. The principal reason for such a conclusion was that s.25ZAB purported to provide that a determination of the Human Rights and Equal Opportunity Commission, upon registration by the Registrar of the Federal Court of Australia (which registration was mandatory) took effect as if it were an order of the Federal Court. The registration and enforcement provisions of the Act and an associated provision were invalid because they purported to confer judicial power. It seems to me that factors of considerable significance in that decision were that:
. only the respondent was entitled to seek a review by the Federal Court;
. that review could not be described as a hearing de novo and
unless leave of the Court were given, "new evidence" was excluded; and
. a determination of the Commission was made binding, authoritative and enforceable.
In my view the resolution of the constitutional issue in the present matter also depends to a significant extent upon the nature of the review by the Federal Court which is provided in Subdivision J.
The question is - precisely how is the matter dealt with by Subdivision J? As Dixon CJ observed in Davison (at p.370):
"How a particular act or thing of this kind [a function or duty that is not necessarily of a judicial character but which may be performed judicially either because it is incidental to the exercise of judicial power or because it is a proper subject of its exercise] is treated by legislation may determine its character. If the legislature prescribes a judicial process, it may mean that an exercise of the judicial power is indispensable. It is at that point that the character of the proceeding or the thing to be done becomes all important."
and in Farbenfabriken Bayer AG v. Bayer Pharma Pty Ltd (1959) 101 CLR 652 at 659-660:-
"The decision of the Privy Council as well as of this Court in the case of the Shell Oil Company ... [references cited] is enough to show that words which might otherwise be sufficient to confer judicial power may be governed by the context as well as by the character of the body or person upon whom the power is conferred and may be construed as going no further than granting administrative power."
In the present matter, in my view, an important part of the context is the extent to which the Official Receiver's notice can be reviewed or put another way - how contestable is the notice? In particular how contestable is it before a completely independent body such as the Court? (see J. de Meyrick "Whatever Happened to
Boilermakers?" (1995) 69 ALJ 106 at p.199). At the core of the judicial power "... is the adjudication and conclusive settlement of a dispute between parties as to their rights and duties under the law": Zines, "The High Court and the Constitution" (3 ed) p.151.
I have already referred above to the fact that there is no provision that a s.139ZQ notice is conclusive. A hearing under s.139ZS is in my opinion a hearing de novo in which the Court may investigate and determine the correctness of the facts and circumstances stated in the notice and whether any defence to the liability asserted in the notice arises out of additional facts proved by the applicant. Furthermore, in my opinion, there are alternative means for challenging the notice. Olney J. in Re Lucera referred to s.30 of the Act as a source of such a power. For example, under s.30(1)(b) the Federal Court would have power in an appropriate case to make a declaration that the condition precedent to the operation of s.139ZQ had not been satisfied and also to grant an injunction restraining any further proceedings based upon a notice issued under that section.
In my opinion, s.139ZQ and its associated provisions are distinguishable from those before the High Court of Australia in Brandy.
I accept the Commonwealth's submission that a decision to issue such a notice could equally be challenged under the Administrative Decisions (Judicial Review) Act in proceedings which might result in the decision being set aside on various grounds, including error of law. In each of the above circumstances the Federal Court would be exercising original jurisdiction.
Another submission put by Dr Staker which I consider has merit is that the Official Receiver is not empowered to decide existing rights conclusively but to create new rights. Furthermore s.139ZQ(4) empowers the Official Receiver to revoke or amend the notice. For that discretion no guidelines are provided. Those matters tend to point against the power being of a judicial nature.
Dr Staker submitted that a presumption of the regularity of the notice would arise and that the notice could not be challenged "collaterally" either in civil proceedings under s.139ZQ(8) or criminal proceedings under s.139ZT. This argument was put on the basis that those proceedings might be brought in State Courts not vested with jurisdiction under the Act. In those circumstances, so it was said, a defendant would need to bring proceedings under s.139ZS. Although it is not, in my view, necessary for me to decide those issues, I very much doubt the correctness of those submissions, for which no authority was cited. In my opinion the defendant could raise defences based upon the invalidity of a s.139ZQ notice. The amount recoverable under s.139ZQ is defined as being "an amount payable by a person to the trustee under this section". If the circumstances referred to as conditioning the exercise of the power contained in 139ZQ do not exist, then the notice would be a nullity. There must be an amount payable before the statutorily-created debt comes into existence. Similarly if the factual circumstances which empower the official receiver to issue and serve the s.139ZQ notice did not exist then in terms of s.139ZT the notice is not a "notice under s.139ZQ" and this would, in my view, be a defence to proceedings brought under s.139ZT. Mr Hawkins submitted that if the debt recovery or criminal proceedings were heard in for example the Local Court of Western Australia or the District Court of Western Australia neither of those Courts would have jurisdiction to decide whether the s.139ZQ notice was a valid one. It was said that this would be to exercise jurisdiction in bankruptcy and s.27 of the Act confers that jurisdiction on this Court and the Supreme Court of the States and the Northern Territory only. As I have said above, it is not necessary for me to decide that issue and it was not fully argued. I have had regard to decisions such as Sky Channel Ltd v. Gray (Lee J. unreported 27 November 1992 Judgment No. 891 of 1992) and Putnin v. Jenka Pty Ltd (Full Court of the Supreme Court of Western Australia, unreported 21 March 1994 Judgment No. 940143). However, I am inclined to think that the answer lies in the application of s.15C(a) of the Acts Interpretation Act 1901 (Cth) and that courts dealing with such debt recovery or criminal proceedings would have jurisdiction to hear and determine all issues raised in such "matter" including the validity of the notice.
Conclusion
In my opinion, s.139ZQ does not provide for the exercise by the Official Receiver in Bankruptcy of the judicial power of the Commonwealth. His decision to issue a notice under that section and the statutory consequences which flow from the issue of such a notice do not, in my view, mean that the Official Receiver makes an authoritative determination by means of the judicial method. As outlined above, the degree to which that decision is open to review and challenge precludes the Official Receiver's function as being characterised as the exercise of judicial power.