CTHHCA

Testro and Tait [1963] HCA 29

[1963] HCA 29

High Court of Australia|1963-07-01|Before: Owen JJ, O'Bryan J

View original source

At a glance

Source facts

Court

High Court of Australia

Decision date

1963-07-01

Before

Owen JJ, O'Bryan J

Source

Original judgment source is linked above.

Judgment (44 paragraphs)

[1]

High Court of Australia McTiernan, Kitto, Taylor, Menzies and Owen JJ. Testro and Tait [1963] HCA 29

[2]

ORDER Testro Bros. Pty. Ltd. v. Tait:Appeal dismissed with costs. Testro v. Tait:Special leave to appeal rescinded.

[3]

Each of these appeals is brought by special leave from an order made by O'Bryan J. in the Supreme Court refusing to grant an order nisi for a writ of prohibition or mandamus. If the appeals are successful the only order that could be made by this Court would be one setting aside the orders appealed from and in lieu thereof directing that orders nisi be made returnable before the Full Court of the Supreme Court which would then have to decide whether or not the orders nisi should be made absolute. The submissions made to O'Bryan J. raised arguable questions of law and, for this reason, we think his Honour should have granted the applications, but the grounds on which special leave to appeal was granted by this Court covered a much wider field and raised questions affecting the administration of the Companies Acts in all the States of the Commonwealth. The refusal by O'Bryan J. of the applications for orders nisi was based upon the fact he was of opinion that the matters raised were concluded against the appellants by the decision of the Full Court of the Supreme Court of Victoria in the case of Reg. v. Coppel; Ex parte Viney Industries Pty. Ltd. [3] . The correctness of that decision is now called in question as is its application, in any event, to the present cases and it was for these reasons that special leave to appeal was granted. In these circumstances it seems right that we should deal with the substantial matters that have been debated before us rather than take a course which would merely lead to unnecessary and undesirable delays.

[8]

The relevant provisions of the Act of 1958 are set out in detail in the Viney Industries Case [1] and it is unnecessary to restate them. Each of them has its counterpart in the Act of 1961. The question for decision was whether an investigation by an inspector appointed under a provision in the earlier Act which corresponded to s. 173 of the present Act was a proceeding in which the inspector was, to use the well known phrase of Atkin L. J. in R. v. Electricity Commissioners [2] , a person "having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially" [3] who was therefore bound to comply with the rules of natural justice and subject to control by the prerogative writs or whether such an investigation was administrative in its nature and not one required to be carried out by a process analogous to the judicial process, in which case the prerogative writs would not lie: Nakkuda Ali v. Jayaratne [4] . The learned judges of the Full Court rightly took the view that the answer depended upon the legislative intention as expressed in the statutory provisions under which the investigation was made, and, having examined the provisions of the Act of 1958 in detail and discussed the authorities bearing upon the point, their Honours reached two conclusions. First, that the Act imposed no obligation upon an inspector to act judicially, as that phrase is used in the authorities, or to conduct his investigations by a process analogous to the judicial process. Secondly, that it could not be said that a report, made by an inspector as the result of his investigations, could of its own force prejudicially affect the rights of the company the affairs of which were the subject of the investigation. It followed, as their Honours pointed out, that the prerogative writs would not lie: R. v. Legislative Committee of the Church Assembly; Ex parte Haynes-Smith [1] : Nakkuda Ali v. Jayaratne [2] . We agree, with respect, with these conclusions and the reasoning which led to them.

[25]

That this is such a prejudice to the legal rights of the company as attracts the salutary principle of law to which I have referred I find myself unable to doubt. It is not as great a prejudice, of course, as the actual making of a winding-up order would be, but it is none the less a real prejudice in a legal respect, and that in my opinion is enough. The foundation of the rule, after all, is the recognition that where a legislature or other body is found entrusting to a person a power to alter for the worse another's legal situation in virtue of a judgment formed after inquiry, it should be credited, unless it otherwise indicates, with an intention to be understood as speaking in the context of generally accepted ideas of decency in adjudication. It is not an artificial rule, and to state it in terms which would leave a case like the present outside its application would be, in my opinion, to overlook the broad basis of reason on which it rests. If analogy be sought, it may, I think, be found in the case of Smith v. The Queen [1] . A statute empowered the Governor of Queensland to declare a lease forfeited if it should be proved to the satisfaction of a Commissioner that the lessee had abandoned his selection and failed to perform conditions of residence. It was held that the function of the Commissioner was of a nature to require that the lessee be given a hearing "in the sense required by the elementary principles of natural justice" [2] . A Commissioner certified that in a particular case the abandonment and failure to perform conditions had been proved to his satisfaction; but he had not given the lessee any but an illusory opportunity to meet the case against him, for though the lessee had been summoned to answer general charges of non-residence and abandonment the evidence in support of the charges had been withheld from him. For that reason it was held that a purported forfeiture of his selection, made by the Governor on the footing of the Commissioner's certificate, was void. The general conclusion seems justified that an inquiry may be of the character that implies a necessity to allow a person affected a fair opportunity to be heard, notwithstanding that an adverse report will do no more than expose him to a possibility not previously existing of a deprivation of rights by the exercise of a discretionary power by another authority. The reason is that the report itself prejudices the rights by placing them in a new jeopardy; it involves "civil consequences" to an individual, as Kelly C.B. expressed it in Wood v. Woad [3] in a passage approved by the Privy Council in Lapointe v. L'Association de Bienfaisance [4] . That is the case here. "What is required by our notions of justice," said Lindley L.J. in In re King & Co.'s Trade Mark [5] , "is that no man shall have his case disposed of, or be aggrieved or interfered with, without ample notice to him, and an ample opportunity of showing cause against it" [1] .

[27]

Of course it is not every statutory power to do an act to the prejudice of another which is quasi-judicial. (It is convenient to use that somewhat loose expression while not disagreeing with the warnings which it evoked from Lord Greene M.R. in Johnson & Co. v. Minister of Health [2] .) The statute may show by its terms a contrary intention, as in Cheetham v. Manchester Corporation [3] ; or the power may be quasi-legislative (an expression of Palles C.B. mentioned by Bankes L.J. in R. v. Electricity Commissioners [4] ), as was the case in Reg. v. Wright; Ex parte Waterside Workers' Federation [5] ; or the relevant statute may give a completely unfettered discretion, the power being purely administrative or executive in character, as in Meat Industry Board v. Finlayson [6] and Laffer v. Gillen [7] . The case of R. v. Macfarlane; Ex parte O'Flanagan and O'Kelly [8] is, I think, to be assigned to this category. Even if an otherwise unfettered discretion is subject to the condition that the repository has reasonable ground for a belief, the power is nevertheless executive and no obligation to act judicially attaches to it: Liversidge v. Anderson [9] ; Nakkuda Ali v. Jayaratne [10] ; Boucaut Bay Co. Ltd. (In Liquidation) v. The Commonwealth [11] . The reason is that there is no duty to decide anything upon inquiry. It is the duty of antecedent decision upon some question that makes the analogy of judicial powers at once appropriate and compelling. "They must act in good faith and fairly listen to both sides, for that is a duty lying upon every one who decides anything", said Lord Loreburn L.C. in a well-known passage of his judgment in Board of Education v. Rice [12] . The kind of decision here referred to is not a mere decision to act; it is a decision upon a question which is posed by the relevant statute as requiring investigation before the act may be done; for, by contrast, the mark of a purely executive power is its independence of any preliminary necessity to decide whether a particular state of things exists. "A power to determine and decide" was the form of words by which Salter J. expressed the idea in a passage approved by Lord Reid in Ridge v. Baldwin [13] . The subject is somewhat embarrassed by the difference of opinion between, on the one side, Lord Hewart in R. v. Legislative Committee of the Church Assembly; Ex parte Haynes-Smith [1] and Lord Radcliffe in Nakkuda Ali's Case [2] and, on the other side, Lord Reid in Ridge v. Baldwin [3] as to the meaning of the passage in the judgment of Atkin L.J. in R. v. Electricity Commissioners; Ex parte London Electricity Joint Committee Co. [4] in which his Lordship said: "wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these (the prerogative) writs" [5] . But it may, I think, be accepted that a legal authority to make an "inquiry, and a judgment as the result of that inquiry which is to affect him in his character and his property" (to use Lord Lyndhurst's language in Capel v. Child [6] as quoted in Smith v. The Queen [7] - in particular, to affect him either by directly curtailing or destroying rights of his or by subjecting them to a new hazard - is prima facie an authority from the nature of which the law implies a necessity to observe the recognized standards of judicial fairness. This I understand to be the principle of Cooper v. Wandsworth District Board of Works [8] which this Court applied in Sydney Corporation v. Harris [9] ; Delta Properties Pty. Ltd. v. Brisbane City Council [10] and The Commissioner of Police v. Tanos [11] .

[41]

The Victorian Companies Act has been changed materially since Reg. v. Coppel; Ex parte Viney Industries Pty. Ltd. [2] was decided. It was in reliance upon that decision that O'Bryan J. refused to grant an order nisi for prohibition or mandamus in this case and because of intervening amendments it is not perhaps strictly necessary to express an opinion whether or not that case was correctly decided. I have, however, reached the conclusion that I should do so because I think the essential character of the legislation concerning special investigations was the same in 1962 as it is to-day. I cannot regard Reg. v. Coppel [2] as an application of the decisions in Re Grosvenor and West-End Railway Terminus Hotel Co. Ltd. [1] and Hearts of Oak Assurance Co. Ltd. v. Attorney-General [2] . In each of those cases the enquiry with which the courts were concerned had been simply to "recover information as to the company's affairs", to use the language of Lord Thankerton in the latter case [3] . This could not be said with any approach to accuracy of an inspector's investigation pursuant to s. 173 of the Victorian Companies Act as it stood in June 1962 and this the Supreme Court recognized. Its decision that an inspector is not required to act judicially rests, I think, upon twin grounds: first, that notwithstanding that a reported opinion of an inspector that a company cannot pay its debts and should be wound up had been introduced as a ground for winding-up the company, a survey of the Act revealed an absence of features to indicate an intention on the part of the legislature that the inspector conducting the investigation should act judically; second, that it is not the report itself but only action upon it to obtain a winding-up order that would affect the legal position of the company, for it is said: " it is not the report or the opinion of the inspector expressed in it, but action which others may or may not decide to take, that will affect the position of the company" [4] . As to this latter point I have already stated my conclusion that a reported adverse opinion is an incontrovertible finding against the company which must be accepted by the Court upon a petition for winding up as establishing a ground for making an order and I now add that to my mind such a finding would itself affect the legal position of the company. Because of it the company may be wound up in just the same way as the estate of an individual may be sequestrated because an act of bankruptcy has been established against him. It seems to me that a company liable to be wound up upon an established ground and an individual liable to be made bankrupt upon an established act of bankruptcy are in a different and less secure legal position than is a company or person against which or whom no such ground or act has been established. Starting from my conclusion that a report containing an opinion of the kind under consideration against a company would itself adversely affect its rights, I do not find the difficulty that the Supreme Court did arising from the absence of some positive legislative indication that an inspector is bound to act judicially. Once it appears that an inspector is given power by his report to affect the legal position of the company whose affairs he is required to investigate, the intention ought, in the absence of some different indication, to be inferred that the enquiry is to be carried on in accordance with the root principles of justice. This principle has often been accepted. One of the cases that is clear and authoritative is Delta Properties Pty. Ltd. v. Brisbane City Council [1] where, the Council having declared its opinion that certain land belonging to the company was so situate as to be incapable of being drained, this Court said: - "In such a situation the law insists, according to long-established doctrine, that the step which will have that prejudicial effect, namely the formation and expression of the opinion, requires for its efficacy the prior observance of the fundamental principles of natural justice. In particular it is essential that the person whose property is in question must be given a full and fair opportunity of placing before the council his case against the formation of the opinion" [2] . In the Victorian Companies Act there is no contrary provision and I have not found any indication of a contrary intention.

Testro and Tait [1963] HCA 29 - HCA 1963 case summary — Zoe