Official Trustee in Bankruptcy v Nedlands Pty Ltd

REASONS FOR JUDGMENT 1 The present motion purports to expose yet another consequence for this Court of the decision of the High Court in Re Wakim; Ex parte McNally (1999) 163 ALR 270. 2 On 20 September 1994 the respondent company, Nedlands Proprietary Limited (In Liquidation) ("Nedlands"), was ordered to be wound up under the Corporations Law, by a Registrar of this Court. In so doing the Registrar acted under O 71 r 7 of the then Federal Court Rules that conferred on the Registrar the power to make such a winding up order. The rule itself, in allowing the powers of the Court to be exercised by a Registrar, had its statutory authorisation in s 35A of the Federal Court of Australia Act 1976 (Cth) ("the FC Act"). 3 In light of the decision in Wakim the Court did not have the power which, by its Rules, it attempted to confer on its Registrars. The point now sought to be raised is whether, there being an ineffective "delegation" to the Registrar in the instant case, the order purportedly made by him was simply a nullity. 4 The applicant to the motion, Philip Anthony Chisholm, was a director of Nedlands and is now the defendant in proceedings brought by it in the Supreme Court of South Australia subsequent to the winding up order. It is accepted by Mr Chisholm for present purposes that, if the winding up order had been made by a Judge of this Court, that order would have been voidable only notwithstanding the Court's lack of jurisdiction to make the order - and would be voidable because it was an order of a judge of a superior court of record: cf Robins v Incentive Dynamics Pty Ltd (1999) 91 FCR 423 at 429-430. However, it is said that, because the order was not made by a Judge of the Court but by a delegate who could not constitutionally be empowered to make the order, the Registrar could not make an order having any effect at all: R v Davison (1954) 90 CLR 353. 5 Needless to say the apparent simplicity of the issue sought to be raised is illusory given the arcane character of the bodies of law it attracts. In order to provide the setting for what follows I should first indicate the actual orders sought by Mr Chisholm, and then outline those provisions of the FC Act that have direct bearing on the matter. The Orders Sought 6 These are stated in the notice of motion to be: "1. That the Order for Winding Up made by this Honourable Court on 20 September 1994 in the within proceedings be vacated or set aside. 2. That, in the alternative, the Order for Winding up made by this Honourable Court on 20 September 1994 in the within proceedings be permanently stayed upon such conditions as this Honourable Court thinks fit. 3. That, further or in the alternative, a declaration be made that the Order for Winding Up made by this Honourable Court on 20 September 1994 in the within proceedings was made without jurisdiction. 4. Such further or other orders as this Honourable Court deems fit." 7 The fourth order has since been expanded upon to include, additionally or alternatively: "an order in the nature of certiorari quashing the order for winding up made by this Honourable Court on 20 September 1994." 8 I merely note in passing that the orders sought accept on their face that the winding up order was one made by the Court. The Federal Court of Australia Act 9 (i) The Federal Court is a creature of this Act; it is a superior court of record; and it consists of the Chief Justice and the Judges for the time being of the Court: FC Act, s 5. 10 (ii) The Court's jurisdiction is limited to that conferred or defined by the Parliament under s 75 - s 77 of the Constitution; FC Act, s 19; Judiciary Act 1903 (Cth), s 39B; and, though more uncertain in its scope, to that which arises by necessary implication as a necessary incident of the Court's creation and functioning as a court exercising the judicial power of the Commonwealth: see Re Colina; Ex parte Torney (1999) 166 ALR 545; Khatri v Price (1999) 166 ALR 380; Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd (1999) 33 ACSR 125. 11 (iii) By virtue of s 20 of the Act, the Court's original jurisdiction is exercised "by a single Judge" except "as otherwise provided by this Act or any other Act". Section 35A of the Act (allowing for delegation of powers of the Court to Registrars) is an example of the Act otherwise providing: see also FC Act, s 18AB. A provision such as s 20 is necessary to allow a single Judge (or for that matter a Registrar or Judicial Registrar where statute so provides: see Autistic Association of New South Wales v Dodson [1999] FCA 439) to exercise the jurisdiction vested in the Judges of the Court collectively: Bird v Free (1994) 126 ALR 475. Importantly, though - "when a single judge hears an application that invokes the jurisdiction of the Federal Court, he or she is not exercising an authority vested in him or her as an individual, but rather the authority which is vested in that judge and all the other judges of the court, as a group": Bird v Free at 479. 12 (iv) Section 35A(1) designates those "powers of the Court" that may be exercised by a Registrar if the Court or a Judge so directs. These include "a power of the Court prescribed by Rules of Court": s 35A(1)(h). In the instant case the Registrar was purporting to exercise the power conferred by the then O 71 r 7 of the Rules. Section 35A makes express provision both for the independence of the Registrar when exercising delegated powers: s 35A(4); and for the review by the Court of an exercise of power by a Registrar: s 35A(5), (6). Subsections (5) and (6) are in the following terms: "(5) A party to proceedings in which a Registrar has exercised any of the powers of the Court under subsection (1) may, within the time prescribed by the Rules of Court, or within any further time allowed in accordance with the Rules of Court, apply to the Court to review that exercise of power. (6) The Court may, on application under subsection (5) or of its own motion, review an exercise of power by a Registrar pursuant to this section and may make such order or orders as it thinks fit with respect of the matter with respect to which the power was exercised." The burden of these provisions, as also that ensuring independence, is to satisfy the second of the conditions stipulated by Mason CJ and Deane J in Harris v Caladine (1991) 172 CLR 84 at 95 for the constitutional validity of a delegation of a part of the Court's jurisdiction, powers and functions: "the delegation must not be inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of their delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court." The consequential effect of the review provisions is to ensure that an order, though made by a Registrar, "can still be seen to be a decision of the Court": Trustees of the Franciscan Missionaries of Mary v Weir [2000] FCA 574 at [20]. 13 I would note that Mr Chisholm was not a party to the proceedings in which the winding up order was made. He could not, in consequence, make application to this Court under s 35A(5) for the review of the Registrar's order. A Preliminary Matter: Jurisdiction in the Present Matter 14 Consistent with the "first duty" of a court of limited jurisdiction to satisfy itself it has the jurisdiction an applicant purports to invoke: Federated Engine-Drivers and Firemen's Association of Australasia v Broken Hill Pty Co Ltd (1911) 12 CLR 398; I raised this issue with the parties to the present motion. 15 The motion is not without its curiosity. Mr Chisholm was not a party to the order (though as a director of Nedlands he was not a stranger to its effects: see Corporations Law, Ch 5, Part 5.4) and he is probably not, in form at least, seeking to attack the order collaterally in other proceedings: cf In re Bowling and Welby's Contract [1895] 1 Ch 663; Gould v Brown (1998) 193 CLR 346 at 463; on the distinction between "direct" and "collateral" attack see Moore, "Collateral Attack on Subject Matter Jurisdiction", (1981) 66 Cornell L Rev 534 at 536 esp fn 5; Restatement of Judgments, Second,Vol 2, pp 140-142. Nonetheless I am satisfied that Mr Chisholm, as a director and as defendant to proceedings brought by the company in liquidation, has a sufficient interest in the alleged invalidity of the order as would entitle him to invoke the jurisdiction of this Court to pass on that question. And I am satisfied in the distinctive circumstances that obtain here, where the order of the Court impugned is that made by a Registrar, that the Court has jurisdiction as part of its original and not appellate jurisdiction to determine whether what purports to be an order of the Court is, in reality, a nullity. That jurisdiction arises either as a necessary incident of the Court's exercise of the judicial power of the Commonwealth or as a statutory implication from, or else as an analogue of, its power under s 35A(6) to review on its own motion a Registrar's exercise of a delegated power: cf Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd, above, at 130-131. 16 While in the usual case the appropriate manner in which to challenge what purports to be an order of the Court in its original jurisdiction would be by way of an appeal under s 24 of the FC Act: Ah Yick v Lehmert (1905) 2 CLR 593 at 601; Robins v Incentive Dynamics Pty Ltd at 430; an order made in the exercise of a power delegated under s 35A seems not, relevantly, to be one that can attract the appellate jurisdiction of the Court, it not being one of the Court "constituted by a single Judge": FC Act, s 24(1)(a). The scheme of the s 35A review procedure itself, and the constitutional justification for its guaranteeing "recourse to a hearing and a determination by a judge": see Harris v Caladine at 95; both suggest that the proper place in which to question a Registrar's order is, in the first instance, before a Judge of the Court exercising its original jurisdiction. 17 Having reached the above conclusion I should emphasise, nonetheless, that I am not in this proceeding exercising this Court's s 35A(6) power of review of the Registrar's decision. Though I have been invited by the applicant of my own motion to treat the matter as if it were such a review, such is a step I would not take for a variety of reasons. First, the time to apply for review of the order by a party to the proceedings in which the order was made has long since passed and by many years: see FC Act, s 35A(5); Rules, O 71 r 7(3). It is unlikely that a Court would extend time in such a case to make an application for such a review for quite obvious reasons that relate both to finality and to the reliance that may have since been placed upon the order itself. Secondly, the issue of review does not arise as a necessary one in some independent, collateral proceeding before me that would require my calling the order into question via a review. The present proceeding is in substance one for judicial review of the order of the Registrar and for the quite limited purpose of determining whether it was a nullity as made. It is on that basis that I deal with the matter. The Present Motion 18 The applicant's principal submission is founded on the decision of the High Court in R v Davison (1954) 90 CLR 353. In that case a sequestration order made by a Deputy Registrar in Bankruptcy was held to be void, the statutory provision conferring upon the Registrar the power to make this order being found to infringe Ch III of the Constitution for the reason that the Registrar was invested with a part of the judicial power of the Commonwealth. From this the applicant seeks to derive the proposition that where a person other than a Judge of this Court purports to make an order, but where the power or jurisdiction so to do cannot be conferred on that person, that order would be void ab initio. Reliance as well is placed on the propositions in the dissenting judgments of Brennan and Toohey JJ in Harris v Caladine (at 113 and at 141-142 respectively) that where an attempt to delegate an order-making power to a Registrar is invalid, any resultant order made by the Registrar is itself invalid. In Harris v Caladine, I would note, the constitutional impediment to the delegation discerned by the dissenting judges was, as in Davison's case, found in Chapter III. 19 It is important in my view to note that this matter is not one in which there has been an unconstitutional attempt to invest a person other than a Chapter III Judge with a part of the judicial power of the Commonwealth. As Davison's case illustrates any purported order made in consequence of such an attempt is a nullity - and is so irrespective of whether the legislature has deemed such orders to be orders of the Court in question. In other words, the order is itself constitutionally divorced from the very Court whose order it purports to be. 20 It is notable in this regard that in Davison's case, Dixon CJ and McTiernan J observed that (i) the Deputy Registrar concerned did not make his order "under the actual authority of the court or judge" (at 361); (ii) in light of the very distinctive provisions of the legislation in question, he was not an officer of the court (at 362-363); and (iii) the case was not one of a "court proceeding through its own officers or a judge acting by a deputy or delegate, subject either to confirmation or to recall of the order made" (at 364). 21 The present matter stands quite differently in each of the above respects. (i) The Registrar did in fact act under the actual authority of the Court - albeit the authorisation given by the Rules of Court was quite ineffectual to confer on the Registrar the jurisdiction he purported to exercise. (ii) The Registrar was, and is, an officer of the Court: FC Act, s 35. And (iii) he was acting pursuant to a scheme of delegation that made his orders subject to "recall" (review) by a judge. In a practical sense, the order made was not constitutionally divorced from this Court whose order it both purported and could be seen to be: Trustees of the Franciscan Missionaries of Mary v Weir at [20]. The vice in the order was rather that it was not one that fell within the original jurisdiction of the Court by whomsoever exercised - Judge or Registrar. 22 In light of the majority decision in Harris v Caladine, above, no challenge was made to the constitutionality of the scheme of delegation of powers to Registrars contained in s 35A of the FC Act; see also Cheesman v Waters (1997) 77 FCR 221. The case is not one in which a Registrar was constitutionally precluded from doing what a Judge was constitutionally able to do. Rather, with the preclusion affecting Judges and Registrars alike, the short issue is whether an order made by a Registrar when acting subject to the Court by virtue of s 35A, should be attributed a different consequence (ie voidness) from that attributed to an order of a Judge in a like matter (ie voidability) where in each case the Registrar or Judge is purporting erroneously to exercise the original jurisdiction of the Court. 23 It is only if one focuses artificially on the invalidity of the subject matter of the delegation to the Registrar, rather than upon the setting in which the Registrar acted and the order was made, that a basis for such a difference can be contrived, and impermissibly so in my view. The Registrar, doubtless, had no actual power to make the order in question. Nonetheless in making it, he was purporting to exercise the original jurisdiction of the Court under a scheme of delegation that did not itself infringe the Constitution and which allowed for his decision in the very matter to be reviewed by a judge. The real vice in the order was no deficiency in the delegation as such. It was, as noted above, that the subject matter of the delegation did not fall within the original jurisdiction of the Court and as such could not have been exercised by a Judge under s 23 of the FC Act or by a Registrar under s 35A of the Act. 24 It remains accepted in this country that the orders of this Court are voidable not void if made without jurisdiction, the Court being a superior court of record even if one of limited jurisdiction: see Robins v Incentive Dynamics, above, at 429-430 and the cases referred to therein; see also Wright, Law of Federal Courts, 5th Ed, s 16. Where, as in the present case, the Registrar was purporting to exercise the Court's original jurisdiction subject to review by the Court and the order made purported to be one of the Court, I can see no reason for not giving like effect to that order as to an order made by a Judge acting without jurisdiction. Where the constitutional objection relates in substance to the jurisdiction purportedly exercised and not to the status and office of the person exercising it, then it is appropriate in my view to characterise the order by whomsoever made as an order of the Court and as such subject to the superior court of record rule. This conclusion is consistent with the intent of the FC Act as manifest in s 20, s 35 and s 35A of that Act. It is also consistent with the existence of the s 35A(5) review power itself: Trustees of the Franciscan Missionaries of Mary v Weir at [20]. As I indicated earlier in these reasons, the Registrar's order was, as made, amenable to review. It would seem anomalous that an order to wind up a company should be void or voidable depending upon whether a s 35A review took place. 25 I am, then, unable to accept the applicant's primary submission. I have referred to it as the "primary submission" as a variety of submissions, all converging on the same point of alleged invalidity, was made. Given the view I have taken, it is unnecessary to address them individually. 26 Distinctly, the applicant has submitted that if the order is merely voidable, it nonetheless can still be quashed by an order for certiorari. Though the applicant seeks to differentiate between a Judge of the Court acting as such (against whom the Court does not have jurisdiction under s 39B of the Judiciary Act 1903 to issue a writ of prohibition - hence certiorari - or an injunction: Bird v Free, above), and a Registrar for the purpose of identifying an individual against whom (as an "officer of the Commonwealth": see Judiciary Act 1903, s 39B(1)) a prerogative writ might be granted, the order sought to be quashed remains nonetheless an order of the Court itself made in the exercise of the original jurisdiction of the Court. 27 A Registrar, insofar as he or she is participating in the exercise of the authority of the Court subject to the s 35A review process, is in my view so exercising the authority vested in the Judges of the Court as a group as to preclude (at least to that extent) the issue by the Court itself of a prerogative writ against that Registrar. In such a case I do not consider that a relevant distinction can be drawn between a Judge of the Court as such: on which see Bird v Free, above; and a Registrar notwithstanding that, in terms of office held, the Registrar (no less than a Federal Court Judge: R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 263) is otherwise to be characterised as an "officer of the Commonwealth" by virtue of the provenance of his or her office: cf R v Anderson; Ex parte Bateman (1978) 21 ALR 56; Northern Territory of Australia v Lane (1995) 138 ALR 544. It is immaterial for this purpose that the Registrar has, in fact, acted without jurisdiction in the matter. 28 In the same way that a voidable order of a Judge of the Court is to be called into question in the Court by way of an appeal: cf in the case of the High Court in the exercise of its jurisdiction under s 75(v) of the Constitution: Re Wakim; Ex parte McNally, above; so also in my view is a Registrar's order to be called in question in the Court by way of review under s 35A of the FC Act and not otherwise. 29 In conclusion, then, I reject all of the applicant's submissions. The Registrar's order is voidable. I have not been addressed on what, if any, orders could or should be made in light of that conclusion. The applicant's avowed purpose has been to have the order declared void or else quashed. He has failed in this. 30 Accordingly I will dismiss the motion with costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.