Residual Assco Group Limited v Spalvins [2000] HCA 33 | Case summary

Residual Assco Group Limited v Spalvins [2000] HCA 33 | Case summary | Zoe

However, s 19 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") declares that the Federal Court "has such original jurisdiction as is vested in it by laws made by the Parliament." That grant of jurisdiction carries with it the power to determine whether any particular vesting of original jurisdiction was validly granted to it[3]. So too does s 39B(1A)(c) of the Judiciary Act which confers original jurisdiction on the Federal Court in any matter "arising under any laws made by the Parliament." Relevantly, s 9(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) ("the Commonwealth Cross-vesting Act") and s 56(2) of the Corporations Act 1989 (Cth) ("the Commonwealth Corporations Act") were the laws made by the Parliament which purported to vest jurisdiction in the Federal Court in respect of proceedings relating to State matters. The Federal Court therefore had jurisdiction under s 19 of the Federal Court Act and s 39B(1A)(c) of the Judiciary Act to determine whether the purported vesting under the Commonwealth Cross-vesting Act and the Commonwealth Corporations Act was valid. Accordingly, an order of the Federal Court falling within the definition of a "relevant order" in s 11 of the State Act was an order that the Federal Court had jurisdiction to make.
Similarly, s 31(1)(d) of the Family Law Act 1975 (Cth) ("the Family Law Act") conferred on the Family Court of Australia jurisdiction with respect to "matters ... with respect to which proceedings may be instituted in the Family Court under this Act or any other Act." That paragraph, therefore, gave the Family Court power to determine whether any particular vesting of original jurisdiction was validly granted to it[4]. By reason of s 31(1)(d), therefore, the Family Court had jurisdiction to determine whether the Commonwealth Cross-vesting Act and the Commonwealth Corporations Act validly vested jurisdiction in it.
It follows that any "relevant order" made by a federal court, as defined, was an order that was within the jurisdiction of that federal court. Because that is so, it is unnecessary in these proceedings to determine whether an order of a federal court, or of a court exercising federal jurisdiction, made without constitutional authority is a nullity and of no effect.
The question whether "relevant orders" made by a federal court, as defined, are nullities is rested on the premise that they are made without jurisdiction. If they are made within jurisdiction, no such question arises, whether at the threshold or otherwise.
In his reasons for judgment, Kirby J appears to take the view that the question whether a "relevant order" is made within jurisdiction raises the same issue as asking whether an order purporting to determine rights and liabilities pursuant to the cross-vesting legislation is made within jurisdiction. In his Honour's view, neither is made within jurisdiction and, thus, the question whether "relevant orders" are nullities is a threshold question. There is, however, a distinction between the two orders and between the two very different classes of jurisdiction exercised or purported to be exercised by the Federal Court and the Family Court. And there are two very different sources of constitutional authority for the orders involved. In our view, the reasons of his Honour do not take this distinction into account.
The first of those classes of jurisdiction and sources of authority is concerned with the validity of jurisdiction, that is to say, the authority to decide, in respect of the class of orders which s 11 of the State Act calls "relevant orders". Those orders, as we have pointed out, were or are made under the authority of s 19 of the Federal Court Act and s 39B(1A)(c) of the Judiciary Act in the case of the Federal Court and s 31(1)(d) of the Family Law Act in the case of the Family Court. The constitutional basis for those sections is ss 71, 76(ii) and 77(i) of the Constitution. No one suggested, nor could they rationally suggest, that s 19 of the Federal Court Act, s 39B(1A)(c) of the Judiciary Act or s 31(1)(d) of the Family Law Act was invalid.
Before the enactment of any cross-vesting legislation, those sections (other than s 39B(1A)(c) of the Judiciary Act[5]) gave the Federal Court and the Family Court jurisdiction to make orders dismissing proceedings on the ground that they were not within the jurisdiction of the court. It mattered not whether the basis of the proceedings was the common law or valid or invalid State or federal legislation. If the proceedings were not within the jurisdiction of the Federal Court or the Family Court, those courts had authority to make binding orders that the proceedings were not within their jurisdiction. Want of jurisdiction might arise from the fact that no federal law vested the jurisdiction in the court or because the Parliament had no constitutional power to make laws with respect to the subject matter which it had purported to vest in the federal court. Under s 19 of the Federal Court Act or s 31(1)(d) of the Family Law Act, the Federal Court and the Family Court had jurisdiction, for example, to dismiss for want of jurisdiction a petition to wind up a company under State legislation, or to dismiss an action for damages for a tort or breach of contract which was not within the accrued jurisdiction of the court. The enactment of the cross-vesting legislation did not affect the jurisdiction of those courts, as superior courts of record, to hold that they had no jurisdiction to make orders in proceedings commenced in those courts.
The orders that s 11 calls "relevant orders" were or are made in the exercise of the jurisdiction conferred by s 19 of the Federal Court Act, s 39B(1A)(c) of the Judiciary Act or s 31(1)(d) of the Family Law Act. Those orders are therefore valid orders. Their constitutional validity is in no way dependent on whether an order made in purported exercise of the jurisdiction conferred by the cross-vesting legislation was or was not a nullity. The "relevant orders" do not "lack a valid constitutional source".
The second of the classes of jurisdiction and sources of authority to which we have referred is concerned with the validity of the jurisdiction which the Commonwealth Cross-vesting Act and the Commonwealth Corporations Act purported to vest in the Federal Court and the Family Court to determine proceedings relating to State matters. It was that purported conferral of jurisdiction on the Federal Court and the Family Court which Re Wakim[6] held was invalidly conferred. There is not and never was a valid source of authority for orders made in the exercise of that purported conferral of jurisdiction. As a result, questions arise, and may have to be determined in the future, as to whether the orders made in the purported exercise of that invalidly conferred jurisdiction are nullities.
But those questions do not arise in the present case. That is because the "relevant orders" to which s 11 refers were not made in the exercise of invalidly conferred cross-vesting jurisdiction. "Relevant orders" are orders of federal courts that dismiss for want of jurisdiction proceedings relating to State matters. They are to be contrasted with orders by those courts dismissing or upholding on their merits proceedings relating to State matters brought under the crossvesting legislation. Orders of the latter kind were invalidly made because the jurisdiction to make them depended on invalid legislation. They were orders made or purported to be made in the exercise of State jurisdiction. They may or may not be nullities. But "relevant orders" are not orders that determine any State matter. On the contrary, those orders, when made by the Federal Court or the Family Court, assert that those courts have no jurisdiction - no authority - to decide proceedings relating to State matters. Those orders dispose of matters which arise in the exercise of validly conferred federal jurisdiction - the authority of a federal court to hear a proceeding relating to a State matter after this Court's decision in Re Wakim.
Because any "relevant order" within the meaning of s 11 was a valid order in no way dependent on the validity of or the jurisdiction conferred by the Commonwealth Cross-vesting Act or the Commonwealth Corporations Act, it is absolutely unnecessary, and almost certainly unfair to parties in other litigation, to determine whether other orders purporting to be made in the exercise of jurisdiction under those Acts are or are not nullities.

Section 11 of the State Act operates only with respect to first instance proceedings in the Federal Court (or Family Court) which have not been determined on the merits. In particular, it does not apply to cases in which an order has been made in the Federal Court purporting to adjudge the rights and liabilities of the parties finally and from which an appeal to the Full Court of the Federal Court has been instituted but not determined on the merits. Cases of this latter kind may be said to engage, or be capable of engaging, other provisions of the State Act but they do not engage s 11. The Full Court of the Federal Court (or Family Court) on appeal has jurisdiction to determine whether a proceeding at trial fell within the jurisdiction of the Court[7]. There would, therefore, be no occasion for the Full Court to order that the appeal before it should be dismissed, struck out, stayed, declared or otherwise decided or determined on the ground of want of jurisdiction. Accordingly, there would be no "relevant order" disposing of the appeal for want of jurisdiction of the Full Court (as opposed to a "relevant order" disposing of the proceeding at first instance).
Upon its proper construction, s 11 is not an interference with the procedures of a federal court, as defined. Whether or not other sections of the State Act, such as ss 6, 7, 8, 10 and 12, are wholly or partly invalid, s 11 operates independently of those sections. Because s 11 is valid, r 123A.05 is also valid.
The argument for the defendants would have it that, upon its proper construction, s 11 purports to effect through sub-s (3) a unilateral transfer to, or expropriation by, the Supreme Court of a proceeding in a federal court. If that was what s 11 did, it would be invalid for two reasons. The first is that Ch III of the Constitution forbids a State legislature to control or interfere with the procedures of a federal court[8]. The second is that s 11 would be inconsistent with the Federal Court Act and the Family Law Act because those Acts with their rulemaking procedures plainly intend to provide for what shall be the law concerning proceedings in those courts[9]. However, s 11 does not have the effect for which the defendants contend. It takes as an historical fact that a federal court has made an order dismissing, staying or otherwise dealing with a proceeding relating to a State matter in that court because the federal court had no jurisdiction to determine that proceeding. If that historical fact applies, s 11 authorises a party to the federal court proceeding to apply to commence a proceeding in the Supreme Court of South Australia and, for the purposes of any limitation law and for all other purposes, deems the Supreme Court proceeding to have been commenced on the day that the federal court proceeding was commenced in that court.
The strength of the defendants' argument derives from the use in s 11 of the terms "becomes" and "becoming", and of the term "proceeding" in a context that suggests that, by force of a s 11(2) order, a federal court proceeding becomes a proceeding in the Supreme Court. To a lesser extent, the argument derives force from the use of the term "treated as". When s 11(2) says that an order may be made that the "proceeding" be treated "as a proceeding in the Supreme Court", the "proceeding" that is so to be treated is the federal court proceeding. In this context the words "be treated as" are ambiguous. They may mean that, although commenced in the federal court, once an order under s 11(2) is made the federal court proceeding henceforth becomes a Supreme Court proceeding. But those words in s 11(2) may simply mean that, once an order is made, the Supreme Court will treat the matter involved in the federal court proceeding as a matter for it to determine. In other words, the Supreme Court will act as if the federal court proceeding had been commenced in the Supreme Court. It will determine the matter involved in the proceeding as it would determine a similar matter commenced in the Supreme Court.
The defendants contend, however, that s 11(3) makes it plain that the purpose of s 11 is to transfer the federal court proceeding into the Supreme Court. When s 11(3) declares that "the proceeding, despite the relevant order ... becomes, and must be recorded by the Supreme Court as, a proceeding in the Supreme Court", the "proceeding" first referred to is the federal court proceeding. The defendants contend, therefore, that what "becomes" a proceeding in the Supreme Court is the federal court proceeding. What point is there, it may be asked, in s 11(3) declaring that, despite the order dismissing or otherwise disposing of the federal court proceeding, it becomes a Supreme Court proceeding unless the purpose of the section is to give life back to the moribund proceeding in the federal court?
These arguments have much force. But they must give way to two other considerations. The first is the enactment of s 11(3)(b). The second is the evident purpose of s 11.
The enactment of s 11(3)(b) of the State Act is only consistent with the Supreme Court proceeding being a proceeding linked to, but operating independently of, the federal court proceeding. If the object and effect of s 11 was that, upon the making of an order under s 11(2), the federal court proceeding was transferred to the Supreme Court, there would be no need to make provision for the effect of a limitation law on the proceeding.
A limitation law operates on the commencement of a proceeding. If s 11 was intended to authorise a Supreme Court "take-over" of the federal court proceeding, the Supreme Court would be taking over or receiving proceedings already commenced. Any limitation law, whether applying directly under a law of the federal Parliament or through the agency of s 79 of the Judiciary Act[10], would apply as at the date that the federal court proceeding was commenced. There would be no need to declare, as s 11(3)(b) does, that, for the purpose of any limitation law, the proceeding "is taken to have been brought in the Supreme Court on the day on which" it commenced in the federal court. The enactment of s 11(3)(b) only makes sense if s 11 is dealing with a proceeding that is distinct and separate from the federal court proceeding that has been dismissed or otherwise disposed of. The purpose of s 11(3)(b) is to ensure that the proceeding which commences in the Supreme Court after a s 11(2) order is made is not defeated by a limitation law merely because the date of that order is after a relevant State limitation period had expired. If the proceeding was commenced in the federal court after a State limitation law had expired, s 11(3)(b) will not save it.
The purpose of s 11(3)(b) is a strong indicator that the purpose of s 11 is to enable a party to proceedings in a federal court relating to a State matter to bring new proceedings in the Supreme Court whenever the federal court has disposed of its proceedings on the basis that it had no jurisdiction to deal with them. That being so, the textual points upon which the defendants rely cannot prevail. In construing a statutory provision, we should always keep in mind what Learned Hand J said in Cabell v Markham[11]:

In April 1994 in the Federal Court of Australia ("the Federal Court") Residual Assco Group Limited ("the plaintiff") commenced proceedings against Mr Janis Spalvins and a number of other persons. The proceedings purported to invoke the jurisdiction of the Federal Court in respect of a "State matter"[23]. It is common ground that the only basis for the jurisdiction of the Federal Court in the proceedings was that purportedly given by the cross-vesting legislation[24]. Over a period of five years the Federal Court made various interlocutory orders. The last of these was made on 11 June 1999 when the plaintiff was granted leave to further amend its statement of claim. Six days later, in Re Wakim, this Court held that the provisions of the cross-vesting legislation purporting to vest State jurisdiction in federal courts, and of federal law purporting to consent to such vesting, were invalid under the Constitution.
In response to the decision in Re Wakim, legislation was enacted by each of the States of Australia in an attempt to palliate the potentially devastating blow dealt to litigants in federal courts[25]. Such legislation followed a substantially identical template. There are some minor differences[26]. There are no relevant differences in the section which is principally in issue in these proceedings[27].
It was common ground that, apart from the provisions of the cross-vesting legislation found to have been invalid, the plaintiff's claim would properly have been within the jurisdiction of the courts of South Australia, relevantly the Supreme Court of that State ("the Supreme Court"). In South Australia, the statute, the validity of which is now in question, is the State Act. Consequent upon the enactment of that Act, the Rules of the Supreme Court of South Australia were enlarged by the making of r 123A.05[28].
The State Act came into operation in August 1999. On 21 September 1999, in the Federal Court at Adelaide, O'Loughlin J purported to make an order by which the proceedings between the parties were "stayed". His Honour's order also granted liberty to apply and reserved costs. It was not suggested that, since that order was made, such liberty had been exercised, that costs had been ordered or that there had been any appeal against such order.
Shortly after this step in the Federal Court, the plaintiff, on 23 September 1999, applied to the Supreme Court. It sought an order under s 11 of the State Act. As eventually expressed, the order sought was that the proceedings "formerly known as Federal Court of Australia proceeding No SG 3036 of 1994 be treated as a proceeding in the Supreme Court".
In December 1999, the first three defendants ("the contesting defendants") applied for dismissal of the plaintiff's application for want of jurisdiction of the Supreme Court. They relied on a contention that the relevant provisions of the State Act and of r 123A.05 were constitutionally invalid. That aspect of the Supreme Court proceedings was thereafter removed into this Court. It gives rise to the stated case.
It is unnecessary to elaborate the inconvenience to parties, some of them individuals and some corporations and government bodies, caught up in the problem presented by the Re Wakim decision. The complexity of their predicaments depends, in part, on the stage which their purported proceedings in federal courts had reached when the decision in Re Wakim was given. Some, like the present parties, had not yet proceeded to trial. Others had secured a "judgment" of a primary judge. Some of those may have lodged an "appeal" within the relevant federal court. Of these, some may have completed the hearing of such "appeal" but not received the "judgment" in the appeal[29] while others may have received an appellate "judgment". Some, reliant on such "judgment", may have sought special leave to appeal to this Court.
The State Act, in terms common to the template, seeks to provide for the consequences of the constitutional invalidity found in Re Wakim at each of the succeeding stages at which the problem is presented to particular cases. The overall objective of the State Act is expressed in the long title to be:

In the present proceedings no "ineffective judgment"[30] had been delivered by a primary judge of the Federal Court, still less by a Full Court of that Court. Accordingly, at this stage, despite the loss of five years and the accumulation of costs expended on the aborted proceedings in the Federal Court, the plaintiff could theoretically have abandoned those proceedings, initiated entirely fresh proceedings in the Supreme Court and put the inconvenience and losses down to one of the unavoidable outcomes that sometimes attends constitutional adjudication in a federation. But at the point which the present proceedings had reached, there is frequently a difficulty resulting from the passage of time. This is the descent of a limitation bar applicable under State limitation legislation, either to put a party out of court or to confine that party's entitlements. In South Australia the applicable statute is the Limitation of Actions Act 1936 (SA).
It was to this potential injustice that the provisions of s 11 of the State Act were addressed. The plaintiff argued that all that was involved in its case was the validity of s 11 of the State Act. It contended that the section was little more than a procedural one designed to ensure, in the terms of the heading to the section, that "[c]ertain proceedings may be treated as proceedings in [the] Supreme Court". The sole substantive provision in s 11 was one protecting a party from any limitation bar under State law. This, it was submitted, was wholly within the power of the State Parliament. In the events that had occurred, it was scarcely surprising that it should have been enacted.
The contesting defendants submitted that s 11 was constitutionally invalid. Moreover, they also sought to obtain answers to the questions reserved addressed to the validity of ss 6, 7, 8 and 10 of the State Act upon the basis that s 11 was merely one provision of integrated and interdependent legislation purporting to repair the fallout from the post-Wakim invalidity of proceedings in federal courts and the "relevant orders"[31] and "ineffective judgments"[32] to which such proceedings had given rise.
The applicable provisions of the State Act, and of the rule of the Supreme Court in question, are set out in the joint reasons. I will not repeat them. Given the stage which these proceedings have reached, it is unnecessary, in my view, to detail the provisions of other sections of the State Act. However, I will need to refer to those provisions in dealing later with the contesting defendants' argument that, for constitutional purposes, s 11 cannot be viewed in isolation nor severed but must stand or fall as part of an Act purporting to afford a comprehensive response to Re Wakim at every stage of proceedings reached in federal courts, reliant on the cross-vesting legislation.

A "preliminary" or "lurking" question: In order to reinforce the foregoing submissions, the contesting defendants advanced the argument that, notwithstanding the decision of this Court in Re Wakim, the proceedings in the Federal Court, and orders of that Court, were not void ab initio. Specifically, they were not nullities by reason of the constitutional defect revealed in that decision. Instead, the orders were merely voidable. That is, they remained binding on the parties to them until a valid order was made by the Federal Court disposing of the proceedings, as by an order dismissing them for want of jurisdiction or, perhaps, one permanently staying them on that ground.
In this respect, the contesting defendants found themselves in energetic agreement with the submissions of the plaintiff[38]. The submissions of the Commonwealth and most of the States[39] intervening were to like effect. This forensic alliance was forged because, for their purposes, the contesting defendants needed to demonstrate an impermissible or inconsistent intrusion of State law into the operation of federal law, namely the Federal Court Act. They therefore needed to show the continuing applicability of federal law to the parties' proceedings, notably to the relevant order of the Federal Court, notwithstanding the decision in Re Wakim exposing the fundamental flaw found in the jurisdiction of the Federal Court under the cross-vesting legislation.
On the other hand, two of the intervening States[40] presented arguments which, if accepted, would be fatal to the foregoing submissions so far as s 11 of the State Act is concerned. Those States submitted that, once the decision and order of this Court in Re Wakim established the constitutional invalidity of the provisions of the cross-vesting legislation which purported to vest jurisdiction in State matters in the Federal Court, that Court was wholly deprived of jurisdiction in the matter. The statutory provisions grounding such jurisdiction were invalid from the beginning (ab initio). All orders made in purported reliance upon the cross-vesting legislation were also invalid ab initio. The proceedings in the Federal Court were shown to have been fundamentally misconceived. The Federal Court Act, conforming to this constitutional understanding, would be read to invalidate any purported exercise whatsoever by the Federal Court of jurisdiction with respect to the matter.
If the latter argument were correct, there would be no possibility of an unconstitutional invasion by the State Act of the federal Judicature for there was not, and, in the eye of the law, never had been, any valid proceeding within that Judicature. Nor was there any inconsistency for the purposes of s 109 of the Constitution. In so far as it had formerly been thought that the Federal Court Act attached legal consequences to the proceedings commenced in that Court pursuant to the cross-vesting legislation, this was now shown to have been erroneous. Because the vesting of jurisdiction was constitutionally invalid, the Federal Court Act never applied to the proceedings. Thus, by reference to the historical fact of proceedings purportedly begun in, or relevant orders purportedly made by, the Federal Court, a State parliament could, without any constitutional inhibition, enact as it wished for the subsequent management of State proceedings in a "State matter"[41] before the State Supreme Court.
If the latter contentions are accepted, the submissions of the contesting defendants about s 11 of the State Act are revealed as completely misconceived. In this sense, the issue of the validity of the proceedings in the Federal Court, and of "relevant orders" of that Court[42], presents a threshold question. It is one potentially determinative of the first question reserved. On this basis, it is not, in my view, a point "[l]urking in the background of the present case"[43]. On the contrary, logically, it arises at the very beginning. It is usually necessary to determine whether there is a problem before purporting to give an answer to it.
Reliance on legislation - "source" and "stream": The issue presented by this last-mentioned argument cannot be avoided, in my view, by invoking powers given to the Federal Court (or the Family Court of Australia) by federal legislation[44]. If the argument for nullification is correct, the stream (of such legislation) cannot rise above the source (the Constitution)[45]. If the federal law purportedly conferring jurisdiction (including the claimed jurisdiction of a federal court to determine its own jurisdiction) is found, upon analysis, to lack a valid constitutional source, the argument would have it that, logically, the law and all that follows from it do not have, and never had, constitutional validity. It is a legal nullity.
The other members of the Court consider that the arguments of nullification of the "relevant order" can be avoided in this matter by relying on the distinction that the plaintiff's proceedings in the Federal Court, seeking the "relevant order", invoked only s 19 of the Federal Court Act and s 39B(1A)(c) of the Judiciary Act 1903 (Cth)[46] and involved no reliance on the cross-vesting legislation struck down in Re Wakim[47]. I hesitate to expound in a different way the consequences of the Re Wakim decision, given that I profoundly disagree with it[48]. Dixon J once acknowledged that the "meaning and implications" of reasoning, the correctness of which a judge denied, was "as a rule" better left to those responsible for that reasoning than to one who had dissented from it[49]. However, at the heart of Re Wakim was surely the notion of the exclusiveness of the federal Judicature and its constitutional immunity from invasion by matters wholly within State jurisdiction, except as the Constitution expressly permits.
The federal Judicature, as portrayed in Re Wakim, is a kind of judicial citadel. The drawbridge of Ch III is usually pulled up. No purely State judicial matter may lawfully enter except as the Constitution permits, in the case of appeals to this Court. If such entry is impudently attempted by ropes thrown to the citadel (as in this case) in the form of the cross-vesting legislation, the unwelcome entrant may not walk around freely, pretending entry via the drawbridge, using all the facilities of the citadel as if it were there by legal right. Cross-vesting was the plaintiff's sole mode of entry into the jurisdiction of the Federal Court. From first to last the character of its Federal Court proceeding was thereby stamped as a cross-vested matter. If the Constitution repels it, arguably, no legislation of the federal Parliament or of a State parliament or Territory legislature can confer on it the validity, for reasons of high principle, which the Constitution is said to deny. Given the course set by Re Wakim, this Court is bound to follow through its logic wherever it may lead, uncomfortable as that journey may sometimes be.

In support of reasoning of this kind, two considerations may be invoked. The first is concerned with the origins of the doctrine, relied on by the parties, that the orders of a superior court, made in excess of jurisdiction, are voidable and not void. That doctrine derives ultimately from the laws of England. According to some analysts[64], its foundation lay in the "general jurisdiction" enjoyed by the superior courts of that country which claimed the power to determine the limits of their own jurisdiction.
Federal courts, operating in Australia within the boundaries established by the Constitution, depend for their jurisdiction upon the existence of facts "which also mark the limits of the constitutional power to create the jurisdiction"[65]. In this sense, although such federal courts may be described as "superior courts of record" in the legislation constituting them[66], such legislation cannot render them, in law, courts of general jurisdiction. The only jurisdiction which such legislation can validly confer upon a federal court is that which derives from the Constitution. In this sense, a federal nation presents a problem different from that arising in the traditional superior courts of England.
Secondly, even if some circumstances might be imagined where a judgment of a federal court, founded ultimately upon a statute declared unconstitutional, may be binding (for example, as between the parties to it), such effectiveness could not be sustained where the statute in question was found to constitute a breach of a fundamental limitation on the exercise of federal legislative power or of a prohibition on such exercise established by the Constitution. Thus Sir Owen Dixon, in propounding a role for the de facto officers doctrine in the context of Australian constitutional law[67], did so on the footing that, like the doctrine of the voidable nature of the orders of superior courts, the de facto officers doctrine "operate[s] to curb the drastic logical implications of the traditional view that an unconstitutional statute is a complete nullity"[68]. Yet assuming this to be possible "there may be situations in which public inconvenience and the frustration of legitimate reliance" on an apparent but unconstitutional law "must give way to the retroactive invalidation of official acts in order to vindicate a constitutional boundary, or to guarantee a constitutional right"[69].
It is at this point that the fundamental basis of the ruling in Re Wakim must be remembered. No one disputed the convenience of the cross-vesting legislation. What moved the majority of this Court to declare that parts of it were unconstitutional was a belief that those parts involved an impermissible intrusion of State legislation and State judicial power into the federal Judicature established within Ch III of the Constitution[70]. It thus crossed a forbidden constitutional boundary. It interfered with the exercise of federal judicial power. To that extent it was prohibited by the Constitution. In part, this was because of the special importance assigned to the federal judiciary under the Constitution as an arbiter and umpire of constitutional disputes[71]. In such a context, the cross-vesting legislation, so far as it purported to confer State judicial power on federal courts, was enacted in breach of a fundamental limitation on the exercise of legislative power. That limitation governed both the Commonwealth and the States (and Territories). It therefore meant, so the argument was put, that "the orders which the Federal Court made in the exercise of powers invalidly conferred can never have had a valid operation. They cannot be rescued by the general doctrine that the orders of a superior court are at most voidable. The orders are void."[72]
Upon the basis of these arguments, if accepted, no purported "judgment" or "relevant order", or any other action of the Federal Court in pretended pursuance of the jurisdiction, purportedly conferred on that Court by the invalid parts of the cross-vesting legislation, had any constitutional efficacy whatsoever. No federal Act could validly confer such efficacy. No general doctrine of the common law imputed to a "superior court of record" or otherwise could do so in the face of the constitutional prohibition. There was thus no relevant jurisdiction of the Federal Court which the State Act impermissibly invaded. Nor was there any valid federal law with which the State Act was inconsistent in the constitutional sense. This being so, the contesting defendants' objection to s 11 of the State Act had no force. In enacting that Act, the State Parliament was entitled to disregard (save for any reference to the historical facts which it chose to make) the parties' mistaken venture into the Federal Court. There was no constitutional impediment to that Parliament's enacting a special limitation provision to cure any time difficulties that had arisen because of that unfortunate mistake.

Obviously the foregoing arguments have force. But they are rejected. This Court should not accept the contention that, by virtue of the constitutional defects found in Re Wakim, the "relevant orders" of the Federal Court, including those dismissing or permanently staying proceedings for want of jurisdiction in that Court, are null and void ab initio, to be treated in law as if they never existed.
The Constitution envisages the establishment of "courts", including this Court. Such courts will necessarily partake of the essential character traditionally belonging to "courts" in England but with an added function derived from the role of such courts to interpret and uphold the Constitution[73]. From the character of the "courts" envisaged in s 71 of the Constitution may be imputed a necessity, where there is any doubt (including a doubt arising under the Constitution), for such courts to satisfy themselves that they have jurisdiction[74]. It would be absurd if the ascertainment of a want of jurisdiction were then to deprive a federal court of the legal capacity to give effect to its conclusion, including where the absence of jurisdiction was based on a want of constitutional power or a perceived breach of a constitutional prohibition. Under our Constitution, these are precisely the circumstances in which the federal Judicature must speak with a clear and authoritative voice. If a federal court were silenced at such a moment, the scheme of the Constitution would be seriously wounded. The rule of law which the Constitution establishes would be undermined. This cannot be the meaning of the Constitution.
The foregoing difficulty was realised by one of the proponents of nullification[75]. It was prepared to qualify the general proposition that a federal court's "relevant orders" were complete nullities by recognising that this Court would have to enjoy the jurisdiction ultimately to determine the limit of its own jurisdiction[76]. This qualification was justified by the inference that "[i]t is inherent in the rule of law itself that somewhere in any judicial system there must be a court which possesses jurisdiction to determine the limits of its own jurisdiction"[77]. However, neither in its language nor in its structure does Ch III of the Constitution give any textual foundation for drawing a distinction between the powers of this Court and of other federal courts in this respect. Illogicalities abound when courts are asked to take the doctrine of nullification to its extreme conclusion. Proponents of nullification are driven to accept that an appeal may be brought from an order found ultimately to have been void[78]. Yet, if this were the case, the question is immediately posed as to why a federal court may not validly, by a relevant order, give effect to a conclusion that it has no jurisdiction and thereby bring to an end a purported invocation of its jurisdiction that was sufficiently "valid" for the purpose of procuring such a disposition of it.
There is a textual indication that this is the way that Ch III of the Constitution was intended to operate. The "courts" referred to within that Chapter are clearly intended to be "courts" having the general characteristics long pertaining to the courts of England and certain special characteristics belonging to "courts" established in a federal context under Art III of the United States Constitution.
Chapter III of the Australian Constitution makes no explicit distinction between "superior" and "inferior" courts. The United States Constitution empowers the Congress to create courts that are styled "inferior Courts". However, this phrase has been interpreted to mean no more than "inferior" in the sense of subordinate to the Supreme Court of the United States[79]. At the time of federation in Australia, it was anticipated that the power of the Parliament to "[invest] any court of a State with federal jurisdiction" in s 77(iii) would remove the necessity to create "inferior" federal courts in Australia[80]. Certainly, federal courts have been created which are designated a "superior court of record". It must be assumed that this was done in order to attract to such courts the features that long pertained to such "superior courts"[81]. Nothing in Ch III of the Constitution forbids that course.
In England, it was settled, long before the Constitution was adopted, that a judgment or order of a superior court was valid and effective unless and until set aside[82]. Whilst it is true that this doctrine was developed without reference to a written or federal constitution, that fact is not crucial. Although the Royal Courts in England enjoyed "general jurisdiction", they were still limited by their different respective functions[83].
The principle, descriptive of the validity of the judgments and orders of superior courts in England, has been accepted by this Court and applied to the judgments and orders of federal superior courts in Australia[84]. It has been referred to on many occasions without apparent disapproval[85]. It is not inconsistent with the limited jurisdiction of federal courts established under the Constitution[86]. A challenge to the jurisdiction of a federal superior court may be made by way of appeal or by proceedings under s 75(v) of the Constitution. But the foundation for such challenge is usually the judgment or order complained of. The jurisdiction to determine the challenge does not evaporate with an ultimate conclusion that the judgment or order in question was made without constitutional authority[87].
The decisions of the United States Supreme Court have repeatedly upheld the proposition that[88]:

Therefore, textual and historical features of "courts" of the kind which Ch III of the Constitution envisages sustain the conclusion that, at least in the case of a court classified as a "superior court of record", judgments and orders made by it in disposing of proceedings found to lack jurisdiction for constitutional reasons are valid as between the parties until they are set aside. They are not complete nullities. They are not wholly void ab initio. Their constitutional validity in such circumstances derives from the fact that they are judgments and orders of "courts" created under the Constitution. By virtue of the Constitution, such courts are taken to have powers of judicial determination. To hold otherwise would be to deprive such "courts" of an essential function in a manner that would be incompatible with the constitutional text.
Whilst it is true that some remarks of McHugh J in Re Wakim[93] may be read to suggest that judgments and orders of a superior federal court, even of this Court, deprived of constitutional validity, are void not voidable, other remarks of his Honour appear to envisage that, notwithstanding such a constitutional flaw, courts may in some cases retain a discretion as to whether to extend time to allow a litigant to challenge an order when to exercise a discretion in favour of such a challenge would be unfair by reason of the lapse of time or intervening circumstances[94]. Once exceptions are allowed, they necessarily imply a limit on the full rigour of the constitutional nullification of judgments and orders of federal courts. Inevitably, they accept that, for some applications and in some circumstances, such judgments and orders, although made without constitutional authority, are nonetheless effective for particular and limited purposes.
If the reasons of the members of the majority of this Court in Re Wakim other than McHugh J are considered[95] it appears to be clear that absolute nullification of judgments and orders has been rejected. There, the Court declined to quash a winding up order notwithstanding that it was found to have been made without jurisdiction in the sense of constitutional authority. The Court took this position ostensibly to protect the rights and interests acquired by a liquidator and other third parties under the order. Such a decision cannot be reconciled with the doctrine of absolute nullification.
In addition to the foregoing considerations of authority, many arguments of legal principle and legal policy support the same conclusion. The maintenance of public confidence in the judgments and orders of federal courts argues strongly for accepting (at least between the parties and for the limited purposes indicated) that such judgments and orders, although made without jurisdiction, are binding until set aside or permanently stayed. In some cases, the rights of the parties may ostensibly have merged in a judgment or judicial order[96]. Pursuant to such judgment or order steps may have been taken affecting third parties. Years may have passed, which would make it grossly unfair, inconvenient or even impossible to attempt to restore the position of the parties affected as if the entire court proceedings had been a nullity. This would be a "recipe for chaos"[97]. Finality of litigation is a hypothesis upon which Ch III of the Constitution is founded[98]. The authority of this Court, including recent authority, upholds that principle[99].
It is therefore consonant with the Constitution to acknowledge in federal courts a residual power to dispose, by judgments or relevant orders, of misconceived proceedings found to be outside the jurisdiction of those courts, including on constitutional grounds. It is more consonant to accept the limited validity of such judgments and orders than to postulate a complete legal void which contradicts what such judgments and orders state on their face not only to the parties named in them but also to the public. When this Court holds legislation to be invalid by reason of the Constitution, it remains the case that the law in question is not, and never has been, a law[100]. But where in purported pursuance of that "law" apparent rights of parties have passed into judgment or become the subject of court orders, they take on a separate source of constitutional validity for limited purposes. It is one derived, principally, from Ch III of the Constitution and the powers incidental thereto. Such a measure of validity does not extend to enforcing such judgments or orders as if nothing had happened affecting their constitutional or statutory foundation. The validity is confined, relevantly, to having them set aside or otherwise disposed of for want of jurisdiction. Until that is done such judgments and orders may not be ignored by the parties to them as if they never existed[101]. To that extent, the extreme version of the doctrine of nullification is modified.
Given the limited validity which the foregoing analysis accords to the "relevant orders" of the Federal Court, so that steps may be taken to terminate the proceedings in that Court for want of jurisdiction, can it nevertheless be said that, for relevant constitutional and statutory purposes, a residuum of the proceedings remained in the Federal Court in a case such as the present? If this is the case, does that residuum forbid any State law (such as the State Act) from enacting a provision which intrudes into the federal Judicature, or purports to confer rights and impose obligations by reference to such proceedings, in a way that is incompatible with the exclusive prescription and regulation of the proceedings by federal law? To answer these questions it is necessary first to identify the meaning and effect of the State Act[102].

The argument of the contesting defendants was that s 11(3) of the State Act attempted to effect a unilateral transfer to, or expropriation by, the Supreme Court of a proceeding which, by the foregoing analysis, remains to a limited extent a proceeding in the Federal Court. In support of this contention, the argument relied upon the provision in s 11(3) that "the proceeding" (that is, the proceeding in the Federal Court) "becomes" a "proceeding in the Supreme Court"[103].
Whilst it might be conceded that provisions to the effect that a proceeding "must be recorded" by a Supreme Court[104] or "is taken to have been brought in" the Supreme Court and is to be recorded as such[105] could appear to be fictions addressed only to the Supreme Court, the opposite (so it was said) was the case because the word "becomes" had been used. That which "becomes" must be posited as still existing so as to be liable to change into that which it "becomes". In this sense, it was argued, the hypothesis of s 11(3) of the State Act was the continued existence of the Federal Court "proceeding" precisely so that it could "become" a proceeding in the Supreme Court. Yet, to the extent that the proceedings in the Federal Court maintained any residual existence, it was impermissible for State law to intrude into the federal Judicature[106]. It was inconsistent with the Federal Court Act for a State law to purport to do so.
In reinforcement of this argument, the contesting defendants referred to the choice by the State law of the Federal Court "proceeding" as the criterion of operation by which the State law took its effect. The State Act thus declared the rights and liabilities of parties by reference to "a proceeding in the federal court"[107]. Effectively (so it was put) it authorised the Supreme Court to "remove" the Federal Court proceeding into the Supreme Court. Once so removed, the State Act purported to continue such "proceeding" in the Supreme Court because it had "become" a proceeding in that Court by dint of State law. All of these steps were, according to the contesting defendants, incompatible with the exclusive regulation of the federal Judicature by federal law. Specifically, they were inconsistent with the applicable federal Act. Under the Constitution, the Federal Court Act, and it alone, governed all matters pertaining to "the proceeding" in the Federal Court, including "the proceeding" as determined by a "relevant order" to be invalid for want of jurisdiction.
Again, there is force in these arguments. In most constitutional puzzles of this kind the answer is not incontestable. It must be found by the exercise of judgment. A difficulty is presented to the validity of what is done by the reference to "the proceeding", that is, the proceeding in the Federal Court, by the use of the word "becomes"[108] and by the phrase "despite the relevant order"[109], all of which suggest the continued existence of the Federal Court proceedings despite its own order to the effect that the Court was without jurisdiction.
However, I do not consider that the foregoing construction of s 11 of the State Act represents the preferable one. Whatever may be the effectiveness of "judgments" and "relevant orders" in the Federal Court proceedings, they certainly existed as an historical fact. No constitutional invalidity of legislation or of the jurisdiction and powers of federal courts under such legislation obliges a pretence that the proceedings were "legally non-existent"[110]. The selection by s 11(3) of the factual existence of such proceedings does not involve any purported interference by State law in the effectiveness of the "relevant order" which the Federal Court has made. Such order continues to have such force and effect as the law attributes to it.
The reference to the Federal Court proceeding "becoming" a proceeding in the Supreme Court must be understood in the context in which that word is used. It is a context which repeatedly makes it clear that its purpose is mechanical. It does not involve alteration of the rights of the parties to the proceedings save in respect of relief from any limitation bar of the State that might otherwise have descended[111]. This apart, the reference to the proceeding "being treated as" and "being recorded as" a proceeding in the Supreme Court sufficiently indicates that a fiction has been adopted. It is a fiction intended to secure the administrative recording of new proceedings in the Supreme Court and, for limitation purposes, to deem proceedings so recorded to have been commenced at an earlier time. The fact that that earlier time is fixed by reference to the historical fact of the first recording of the proceeding in a federal court[112] speaks exclusively to the Supreme Court. It involves no intrusion in, or interference with, the earlier proceedings in a federal court.
This impression, derived from an analysis of the language of s 11 of the State Act, is reinforced by two further textual considerations. The first is that each of the decisions of the federal court in question, defined to constitute a "relevant order", involves a decision of the applicable federal court that it has no jurisdiction because a matter is a "State matter"[113]. Moreover (as the joint reasons point out[114]) the very provisions that are made to afford relief in respect of State limitation law reinforce this interpretation. If "the proceedings" which "become" proceedings in the Supreme Court were the actual Federal Court proceedings, with all their incidents, these would include the limitation provisions applicable to such proceedings by force of federal law. Yet that is the opposite of what has been enacted.
It follows that the provision for the commencement of a new proceeding in the Supreme Court pursuant to s 11 of the State Act cannot be characterised as an impermissible interference by State law with, or intrusion into, the federal Judicature. Nor does it represent an inconsistent enactment by the State Parliament on a subject matter wholly dealt with by federal law. So far as the latter is concerned, by its "relevant order", the Federal Court has permanently stayed the "proceedings" for want of jurisdiction. Only in such a case does s 11 of the State Act have valid operation.
It is true that, under federal law, by leave[115], or by right[116], an appeal might be brought to the Full Court of the Federal Court in certain circumstances. However, that possibility does not suggest that the scheme of s 11 must fall. Where such an appeal was mounted from a "relevant order" (for example, where some basis for the jurisdiction of the Federal Court was propounded by an appellant other than the cross-vesting legislation) it must be envisaged that an order under the section would be refused in the Supreme Court[117]. Until any such appeal were disposed of, it can be safely assumed that the Supreme Court would decline to treat "the proceeding" as a proceeding before it. Clearly State legislation could not interfere with any right of appeal provided by the Federal Court Act. Section 11 of the State Act does not purport to do so. The State Act is careful to differentiate between a "relevant order" and an "ineffective judgment". Only the former is referred to in s 11. The latter is outside the scheme of that section.
There is one additional consideration which reinforces the foregoing construction of s 11 of the State Act. It is a consideration to which I referred in Re Wakim[118] and in other decisions since[119]. The Constitution envisages and permits the component parts of the Commonwealth to cooperate in a rational, harmonious and generally efficient way. In the circumstances brought about by the decision in Re Wakim, a serious problem was presented not just for the legislatures, governments and courts of the nation but also for litigants caught in the midst of proceedings that had been brought on the assumption that the cross-vesting legislation was constitutionally valid. When that assumption was ultimately found to have been erroneous, it was inevitable that governments and parliaments should attempt to lessen the inconvenience thereby occasioned. In the past, this Court has accepted legislative endeavours to respond to problems in some ways similar[120]. The State Act, and its equivalents in other States of Australia, are the product of the attempt in this instance. Unless forbidden by a constitutional prohibition or want of power, this Court should uphold the legislative amelioration contained in s 11.
Far from being a radical provision, intruding State law into the federal Judicature and enacting provisions incompatible with federal law, s 11 of the State Act has a modest and entirely limited function. It works no offence to the Constitution. On the contrary, in the circumstances that have occurred, it enacts a sensible and just arrangement of comparatively limited significance. I would reject the foregoing constitutional criticisms of s 11. Considered in isolation from the other provisions of the State Act, that section is a valid law.

The final question arises as to whether it is necessary or desirable to answer those questions reserved in the stated case which relate to the provisions of the State Act other than s 11. Detailed submissions of the parties and of the interveners were addressed to the validity of those provisions. They concern socalled "ineffective judgments" of the federal courts made on the basis of the invalid provisions of the cross-vesting legislation. These attempt, indirectly, to accord significance to the rights and liabilities of the parties as found in such "ineffective judgments". Clearly, the remaining questions raise important constitutional issues which will have to be determined by this Court.
On the face of things, the legal issue presented by the dispute between the present parties is confined to the validity of s 11. Although certain orders were apparently made by the Federal Court during the five years that the proceedings were purportedly before it, no "ineffective judgment", as that expression is defined in the State Act[121], was entered by the Federal Court. None is relied on. There is no reference in s 11 to an "ineffective judgment" of a federal court as there is in ss 6, 7, 8, 9 and 10. Such "ineffective judgments" arise at a stage of litigation later than that reached in the proceedings involving the present parties.
The questions presented by the treatment of "ineffective judgments" under the State Act are distinct. They are more difficult than those presented by s 11. The latter section has the procedural and time limitation consequences described. Nothing more. The provisions of s 11 could just as easily have been included as a new section, or Part, of the State limitation statute[122]. Even if all other provisions of the State Act were invalid, I see no reason why s 11 could not continue to operate according to its terms[123]. It would therefore be severable[124]. Although the Court does not have a valid delegation from the relevant parliament to perform "the legislative task of making a new law from the constitutionally unobjectionable parts of the old"[125], it is permissible in certain cases, where necessary, to read down the provisions of a statute by excising any invalid part, despite the fact that this may bring about a result different from, and more confined than, the statute taken as a whole as that parliament originally envisaged[126].
Because the problems presented by the State Act escalate at later stages of proceedings and because those problems are avoided where, as here, the proceedings are still at a comparatively early stage awaiting trial, there is no reason to grapple now with the other problems. They will return soon enough. This Court should confine its constitutional elaboration to those matters which must be decided to resolve the dispute between the present parties. In these proceedings that dispute is confined to the objection of the contesting defendants to the steps taken by the plaintiff and by the Supreme Court pursuant to s 11 of the State Act. Only the first question should therefore be answered.

Residual Assco Group Limited v Spalvins

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