Veta Limited v Evans

APPELLANTS: Mr R Ellicott QC and Mr G Hatcher SC (Freehills Solicitors) Ms A Taranto

RESPONDENTS: LEGAL REPRESENTATIVES: Mr R Kenzie QC and Mr S Prince of counsel (Abbott Tout, Lawyers) Mr B Belling

INTERVENOR: Ms N Sharp of counsel Attorney General of New South Wales

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: WRIGHT J, President WALTON J, Vice-President KAVANAGH J

Matter No IRC 4423 of 2004 VETA LIMITED AND ANOTHER v MARK ANDREW EVANS AND OTHERS

Application by Veta Limited and another for leave to appeal and appeal against the judgment of Justice Staunton given on 20 July 2004 in Matter Nos IRC 5824, 5825, 5826, 6024 and 6027 of 2001 JUDGMENT OF THE COURT [2004] NSWIRComm 336

1 The appellants, Veta Limited and Cathay Pacific Airways Limited, seek leave to appeal and, subject to leave being granted, appeal the judgment of Staunton J given on 20 July 2004 in Evans and others v Veta Ltd and Cathay Pacific Airways Ltd [2004] NSWIRComm 203.

2 The central issue which her Honour was asked to determine was how the initial proceedings under s 106 of the Industrial Relations Act 1996, together with the proceedings remitted from the High Court, should be dealt with procedurally.

3 The respondents, Mark Andrew Evans, David Michael Honner, Brett Kenneth Rosewall, David Bruce Spong and Charles Bruce Burton filed applications in this Court under s 106 of the Act in August 2001 seeking variation or avoidance of their employment contracts which had been made in Hong Kong. Subsequent to those proceedings being commenced, the appellants commenced an action by way of summons invoking the original jurisdiction of the High Court, the summons seeking that a case be stated for certain questions to be determined by the Full Court of the High Court.

4 The respondents argued in the High Court that the proceedings in that Court ought to be remitted to the Commission in Court Session pursuant to s 44 of the Judiciary Act 1903 (Cth). McHugh J, in an extempore judgment given on 2 July 2003, ordered that: (1) the further proceedings in this action be remitted to the New South Wales Industrial Relations Commission in Court Session; and

(2) the action proceed in the Court Session as if the steps already taken in the action in the High Court had been taken in the Court Session and as if Sydney had been stated in the Writ to be the place of trial. The decision at first instance 5 At para [10] of the judgment at first instance, Staunton J set out the questions which the appellants had claimed should be decided in the High Court. Those questions were:

· Question A asks whether, by reason of the Air Navigation Act 1920 and schedules of the Commonwealth and the regulations thereunder and the Civil Aviation Act 1988 and regulations of the Commonwealth, the provisions of section 106 of the Industrial Relations Act (NSW) are invalid and inoperative under section 109 of the Constitution insofar as section 106 purports to permit the variation or avoidance of contracts, whereby a person performs work in the international air transportation industry. · Question B asks whether section 106 of the Industrial Relations Act, insofar as it relates to or purports to relate to the variation of the avoidance of contracts, whereby a person performs work in the international air transportation industry, is wholly invalid and inoperative under section 109 of the Constitution by reason of inconsistency with the laws of the Commonwealth contained in the Air Navigation Act and the schedules and regulations thereunder and the Civil Aviation Act and the regulations thereunder and the Workplace Relations Act 1996 (Cth) and the schedules thereto. · Question C asks whether the international air transportation industry or any part thereof in which any of the defendants perform work in the services of Veta was an industry in and of New South Wales. · Question D asks whether any of the contracts between Veta and each of the defendants under which the defendants performed work in the services of Veta is a contract in respect of which the Industrial Relations Commission has jurisdiction under section 106 of the Act. · Question E asks whether section 106, insofar as it purports to confer jurisdiction on the Industrial Relations Commission of New South Wales to vary or avoid each of the contracts entered into between each of the defendants and Veta, is invalid and inoperative as not being a law for the peace, order and good government of New South Wales. · Question F asks whether, by reason of an affirmative answer to any one or more of the questions posited about the Industrial Relations Commission, it lacks jurisdiction to entertain the claims referred to in paragraph 44 of the statement of facts in the draft case. · Question G asks whether any or all of the questions posited at D to E are matters reserved to the Industrial Relations Commission of New South Wales in Court Session by reason of section 179 of the Industrial Relations Act.

6 The proceedings before her Honour were brought by way of notice of motion filed by the respondents, the motion seeking to have the remitted proceedings joined to the original s 106 claims. The appellants opposed the respondents' motion, arguing that the issues raised in the remitted proceedings should be dealt with before, and separate from, the original s 106 proceedings. The appellants had also previously raised in this Court the issues as to jurisdiction, filing a notice of motion pursuant to r 82 of the Industrial Relations Commission Rules 1996 prior to the commencement of the proceedings in the High Court.

7 Staunton J found that the remitted proceedings should be joined, in the sense that they be heard together, for the following reasons: (a) pursuant to the principle in Nagle (T/as W D and J L Nagle & Sons) v Tilburg (1993) 51 IR 8, it is well settled that where arguments as to jurisdiction are raised in matters arising under s 106 of the Act, the most appropriate course is for the substantive issue to be heard encompassing all relevant factual evidence: see para [15] of her Honour's judgment.

(b) further, in the context of s 106 applications, there is a real issue to be tried as to whether the work performed was an industry in and of New South Wales; and examination of that issue requires relevant factual material, material which was not before either this Court or the High Court: para [16].

(c) Questions C, D and E as set out in the judgment of McHugh J involved determination of factual matters. Those factual matters, as submitted by the respondents in the remitted proceedings, had not been fully identified and settled between the parties; and that submission had been accepted by McHugh J: para [17].

(d) her Honour considered that the decision of McHugh J indicated that factual findings were crucial, and that the remitted proceedings would be dealt with in the normal course and contemporaneously with the substantive proceedings. In so finding, her Honour cited at [18] that part of the decision of McHugh J where his Honour initially observed:

Again, even if the constitutional issues are reached in this case, it seems to me that it is a case where the arguments of the parties would be better understood if the Court had the benefit of evidence rather than the summary of facts concerning that evidence. There does not seem here to be any claim of textual collision between a law of the Commonwealth and section 106 of the Industrial Relations Act . The argument seems to rest on a 'covering the field' test. Alternatively, it may depend upon what in the jurisprudence is called operational inconsistency. In the case of a 'covering the field' test and in the case of operational inconsistency, it is obviously much better from the Court's point of view that it is in a position to examine the evidence in detail rather than upon the confined nature of facts stated in a case to the Full Court. and later:

Mr Ellicott asks me, if necessary, to refer to any facts that need to be dealt with for this Court to properly deal with the constitutional issues. However, it does not seem to me, for the reasons I have already given, that any assistance would be gained by my pointing to areas which may require further elaboration than is presently to be found in the stated case. As I indicated, I regard the stated case procedure, before the facts are found or evidence taken, as an unsatisfactory procedure. But, more significantly, the constitutional issues that Mr Ellicott seeks to raise may never need to be determined for the reason that he may succeed either on the substantive point that section 106 does not apply or, if it does, that in the exercise of its discretion the Commission in Court Session should not make orders in favour of the plaintiffs. If he succeeds on either of those alternatives, it follows that the constitutional issues will not arise for decision.

8 In arguing against joining the remitted proceedings to the s 106 proceedings, the appellants had submitted that to do so would lead to a conflation of arbitral and judicial powers. Her Honour did not agree with that submission, referring to the decision of the Full Bench of this Court in Taudevin v Egis Consulting Australia Pty Limited (No 1) (2001) 131 IR 124; [2001] NSWIRComm 340, at [92] and following, and the authorities cited therein: paras [19] to [23].

9 In considering the nature of power exercised by the Commission in Court Session under s 106 of the Act, her Honour noted that the Full Bench in Taudevin v Egis Consulting Australia Pty Limited (No 1) had concluded at [124] that: [I]t is clear that the nature of the power exercised by the Commission in Court Session under s106 of the Industrial Relations Act is, or involves, the exercise of judicial power. We have earlier referred to the authorities which make clear that a relevant consideration in ascertaining the nature of the power being exercised is the nature of the body exercising it. This involves a consideration of the nature of the Commission in Court Session. An important feature of that consideration is that the Industrial Relations Commission of New South Wales in Court Session is a significantly different body to the Industrial Commission of New South Wales which was considered in 1987 by McHugh JA in Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch.

10 Whilst counsel for the appellants submitted that the power conferred by s 106 was arbitral and not judicial, her Honour observed: [24] In any event it seems to me, in the remitter proceedings before him, McHugh J rejected Mr Ellicott's submissions on this point in the following terms:

However, I do not see that as an impediment to a remitter. If the questions under section 106 involve the exercise of judicial power, no problem can arise. If on the other hand they are not, then arguably this Court had no jurisdiction over them in the first place and all that the Commission in Court Session on remitter would be able to exercise would be the issues remitted that are concerned with the exercise of judicial power.

11 Counsel for the respondents stated that regard should be had to the motions filed by the appellants in each of the s 106 proceedings; those motions having been stood over pending the outcome of the remitted proceedings before the High Court. While those motions raised jurisdictional concerns, those concerns could only be addressed through consideration of the facts, facts which would, in any event, be relevant to determination of the remitted proceedings: paras [25] to [26].

12 Although counsel for the appellants had argued that the motions had in fact been overtaken by the remitted proceedings, the motions having been filed pursuant to r 82, in particular r 82(1)(b) (at [27]), her Honour ultimately held at [29] that: [29] With equal emphasis, it must be said that McHugh J was fully appraised of the arguments wishing to be ventilated by the plaintiffs to the remitter proceedings in pressing their constitutional and jurisdictional arguments. Notwithstanding those arguments, his Honour was firm in his view that the most appropriate course was to remit the matters to the NSW Industrial Relations Commission in Court Session. In doing so, it seems to me his Honour acknowledged the inter-relationship between the matters raised in the remitter proceedings and those issues that must be determined by the Commission not only to satisfy itself as to jurisdiction but also whether the disputed contracts are unfair within the meaning of s105 of the Industrial Relations Act . Those issues, it is apparent, require a trial of all of the factual evidence relevant to determine the issues raised within the remitted proceedings within the context of the substantive s106 proceedings.

Application for leave to appeal 13 The grounds of appeal were that her Honour erred in directing that: (a) the matters be joined and heard in their totality, thereby impermissibly combining an exercise of State legislative and federal judicial power; (b) the matters proceed to final hearing notwithstanding the motions filed by the appellants pursuant to r 82, thereby challenging the jurisdiction of the Commission to deal with the matter without the appellants' submission to jurisdiction.

14 The appellants submitted that leave to appeal should be granted because the appeal raised questions as to: (a) the right of the appellants to agitate, pursuant to the provisions of r 82 of the Industrial Relations Commission Rules 1996, their contention that the Industrial Relations Commission of New South Wales in Court Session did not have jurisdiction with respect to the matters alleged in the summonses filed by the respondents without the necessity to file an appearance and submit to the Court's jurisdiction; (b) whether this Court can exercise federal judicial power pursuant to the remitter of a matter from the High Court of Australia in conjunction with the exercise of such power as the Court possesses pursuant to the provisions of s 106 of the Industrial Relations Act ; (c) whether the procedure proposed by the respondents of submerging the federal matter within the Court Session proceedings had the effect of denying the appellants' relief otherwise available to them under the Constitution.

15 Further, the appellants submitted that this was the first occasion upon which the above questions have arisen for consideration before this Court, it being the first occasion upon which the High Court has seen fit to remit a matter for determination by the Court Session. Consequently, the public interest test was satisfied.

16 The respondents opposed the grant of leave to appeal on the basis that the principles to be applied to an application for leave to appeal in interlocutory procedural decisions set out in Verso Technologies Inc (formerly Eltrax Systems Inc) v Rasmussen [2004] NSWIRComm 90 at [30] - [32] would tell against the grant of leave as, in this case, the decision of Staunton J was purely a matter of case management.

17 Further, her Honour's decision (in the remitted matter) made no substantive determination of the question of jurisdiction to make orders under s 106. The decision was, of its own force, an interlocutory order, as the High Court, having remitted the matter, vested in her Honour the full scope of the jurisdiction of the High Court (without making her Honour a Chapter III judge) in order to deal with the interlocutory steps and case management of the remitted matter and her Honour is consequently seized of jurisdiction to take whatever case management steps she thinks fit in relation to the appellants' own motion.

18 The respondents also opposed the appellants' reliance for the grant of leave on the consideration that this was the first time the Commission had considered the manner in which to proceed in a remitted matter. The respondents contended this was irrelevant in circumstances where the appellants' arguments did not raise any issue which had not already been comprehensively dealt with by the Court Session itself in Taudevin v Egis Consulting Australia Pty Limited (No 1) (2001) 131 IR 124, or by the High Court in the remitted matter itself. Further, the appellants' arguments in relation to r 82(3) rested on a fundamentally flawed premise.

Consideration: leave to appeal 19 This Court has been extremely reticent in granting leave to appeal in respect of interlocutory procedural motions: see, for example, National Australia Bank Ltd v Cassino [2002] NSWIRComm 241 at [7] - [8] and Verso Technologies at [30].

20 For example, in Caltex Petroleum Pty Limited v Harmer (1999) 92 IR 264 the Full Bench of this Court observed that "[t]he predecessors of this Court and Commission, in line with the approach of the ordinary courts, have generally deprecated and discouraged such interlocutory appeals." Leave will rarely be granted if the interlocutory decision is of a procedural nature: Metrocall Inc v Electronic Tracking Systems Pty Limited (No 2) (2000) 102 IR 309. Furthermore, the raising of a jurisdictional issue does not, of itself, establish a basis for the grant of leave: Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381.

21 Notwithstanding our normal reticence in this area, we have decided that leave to appeal should be granted in these proceedings having regard to the particular and unusual circumstances of the matter which, for the first time, raises issues as to the procedures of this Court in respect of a matter remitted to it by the High Court. In so granting leave we emphasise that in no sense do we consider that this matter has been dealt with, either at first instance or on appeal, other than in the light of its own particular facts and circumstances.

Submissions of the appellants as to the appeal 22 The submissions of the appellants as to their appeal were wide ranging. Although we do not consider it is necessary to deal with all of them, it is appropriate to record their substance. The appellants submitted that the effect of her Honour's decision was that the final relief sought by the appellants in the remitted matter was effectively denied without a hearing; the appellants were denied the right to have the question of whether they were amenable to the Court's jurisdiction determined prior to being required to file a notice of appearance; and that the respondents were thereby effectively entitled to press the Court Session proceedings to conclusion without consideration of the remitted matter.

23 It was also submitted that the remitter, having been made under the power conferred on the High Court by the Judiciary Act, was an exercise of the judicial power of the Commonwealth. Inherent in the remitter was that the respondents were restrained from maintaining the Court Session proceedings.

24 The appellants submitted that, consequently, any determination of the Court Session proceedings was effectively a refusal to consider the relief sought in the remitted matter and separate trials were therefore warranted. The appellants emphasised strenuously that they were not amenable to this Court's jurisdiction in respect of the proceedings commenced here.

25 While the principle in Taudevin v Egis Consulting Australia Pty Limited (2000) 97 IR 165 at 171 indicated that a conditional appearance is no longer permitted, r 82(3) maintained the right to appear for the purpose of challenging the jurisdiction of the Court Session over the aggrieved party. Further, pursuant to the approach in Verso Technologies, a party should not readily be subjected to jurisdiction in circumstances where there is a clear intention to challenge an attempt to bring it within the Court's jurisdiction.

26 The appellants also submitted that: (a) pursuant to the principle in Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Limited & Ors (1995) 58 FCR 365 (per Lindgren J), the facility to challenge jurisdiction without entering an appearance, as with rules in relation to the entry of a conditional appearance in other jurisdictions: ... make[s] it clear that the focus of concern is the invoking by an applicant of the Court's coercive power to grant the relief sought in the application. The question raised is whether a respondent should be subjected to that power by nothing more than the filing and service of an application. (b) pursuant to r 82, there is a right to have the question of jurisdiction determined before the hearing of substantive issues. This right is rendered nugatory if, as Staunton J contemplated, the hearing of the motions could be adjourned to final hearing and the appellants are directed to file an appearance, thereby submitting to jurisdiction. (c) further, in the absence of an appearance being filed, under r 76 a respondent was not entitled to file a defence without being granted leave to do so. Consequently, her Honour's decision required the appellants either to submit to jurisdiction in circumstances where they have actively sought to challenge that jurisdiction in accordance with the Court's rules, or face a default judgment. Ultimately, her Honour had determined the appellants' objection to jurisdiction without hearing it. (d) as to the nature of proceedings under s 106 generally, the appellants submitted that such proceedings have been characterised as non-judicial in the sense that they are about the creation of rights rather than the determination of existing rights: Mullins v Peoplebank Australia Pty Limited [2003] NSWIRComm 457. Further, the fact that in the course of reaching an arbitral determination the Court must form opinions on matters of law does not convert the proceedings to judicial proceedings: Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 at 149. In any event, the question of whether the proceedings are judicial or arbitral is open to debate: Taudevin v Egis Consulting Australia Pty Limited (No 1) . (e) the Court was bound by the decision of the High Court in Re Dingjan; ex parte Wagner (1995) 183 CLR 323 where it was held that the power conferred on the Court Session pursuant to s 106 was non-judicial. The appellants referred to the consideration that because a tribunal possesses certain procedural powers enjoyed by courts, is authorised to determine questions of law arising before it, and is constituted by a judge, does not necessarily mean that the tribunal is exercising judicial power: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 414. (f) insofar as a tribunal is a federal tribunal, it is clear that it cannot exercise judicial power unless it is established under the Constitution and its jurisdiction respects the separation of powers which is constitutionally guaranteed: R v Kirby; ex parte Boilermakers' Society of Australia (1956) 94 CLR 254. Of course, that is not to say that in a system of State jurisprudence, a Court might not have allocated to it non-judicial functions. (g) nevertheless, the question of whether a court in which federal jurisdiction is reposed may continue to exercise non-judicial power simultaneously has not been previously considered, notwithstanding the conclusions of the Full Bench in Taudevin v Egis Consulting Australia Pty Limited (No 1) . (h) a State court which is entrusted with federal judicial power cannot have reposed in it any power or function antithetical to the exercise of federal judicial power: Kable v The Director of Public Prosecutions for the State of New South Wales (1996) 189 CLR 51. (i) while the State legislature, unrestricted by the doctrine of the separation of powers, may confer non-judicial powers on a court and need not have recourse to the principles of persona designata (even if the court exercises federal jurisdiction, provided the exercise of the non-judicial power is not incompatible with the exercise of federal judicial power), it nonetheless remains the case that the exercise of non-judicial power must be detached from the exercise of federal judicial power.

27 The appellants further submitted that it would be antithetical to the Constitution to permit a situation where s 179 of the Industrial Relations Act could operate to prevent review of the determination of a question of law remitted to the Court Session by the High Court; and the hearing of the remitted matter in conjunction with the Court Session proceedings may yet yield this result. Consequently, a question would arise as to whether this Court had judicially determined the matter or had simply formed an opinion in relation to the remitted matter whilst exercising its arbitral power in considering whether to vary or avoid the subject contracts. If it were determined that the Court Session had formed an opinion, the final decision may well be protected by s 179 of the Industrial Relations Act; and notwithstanding the expressed views of McHugh J, there may be no right of appeal as the remitted matter had not been judicially determined and was accordingly protected.

28 The remitted matter, it was contended, should be heard separately from the Court Session proceedings to avoid any constitutional complications. If the remitted matter were heard first, it would obviously, subject to appeal, determine the jurisdictional issues for the purposes of the proceedings commenced in the Court Session.

29 The appellants also relied in their oral submissions on a High Court judgment not earlier raised. This was the judgment in R v The Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556. In that case Dixon and Evatt JJ, in dissent, in a way in which it was contended predicted the approach of the High Court in the Boilermakers case, would have held that certain provisions of the Bankruptcy Act 1924-1933 (Cth) were invalid as unconstitutionally conferring certain powers on the Federal Court of Bankruptcy and State courts exercising jurisdiction under the Commonwealth statute.

Consideration of the appeal 30 Having granted leave to appeal and emphasised the importance of addressing the issues in the appeal by reference to the actual circumstances of these proceedings, it is useful to identify the issues that are necessary to be determined by the Full Bench.

31 We consider that there are two issues which may be distilled from those advanced by the appellants which require determination. Although there are some subsidiary issues requiring consideration, the two essential issues which need to be determined are: (1) whether this Court has jurisdiction to hear and determine in the same proceedings judicial and non-judicial proceedings; (2) whether her Honour's exercise of discretion miscarried because, for example, it involved some level of predetermination or prejudgment of the issues raised by the appellants in the High Court and remitted to this Court for determination.

32 As to the first of those issues the phrase "in the same proceedings" refers to a hearing of two or more matters together before the same judge on essentially the one set of evidence.

33 Further, as to the first issue, the appellants sought to raise the issue whether s 106 of the Industrial Relations Act involved the conferral of judicial power, submitting that the judgment of the Full Bench in Taudevin v Egis Consulting Australia Pty Limited (No 1) (2001) 131 IR 124; [2001] NSWIRComm 340 was incorrect when it was held that the question was to be answered affirmatively.

34 We do not consider it is necessary to revisit that issue in this matter although by taking that approach we are not doubting the correctness of Taudevin v Egis Consulting Australia Pty Limited (No 1) on the point. Rather, we consider that the issues that require determination for disposal of this appeal are limited to those stated.

35 In that case, the Full Bench of this Court held that there was no legal or constitutional impediment to this Court, as with other New South Wales courts, exercising non-judicial power when it is also exercising federal judicial power. The arguments in Taudevin v Egis Consulting Australia Pty Limited (No 1) which were rejected had been mounted by the Commonwealth itself. The Commonwealth had argued that, as the Court was exercising federal jurisdiction because the Commonwealth was a party to the proceedings (see s 75(iii) of the Australian Constitution), it could not grant relief under s 106 of the Industrial Relations Act since s 106 involved the exercise of non-judicial power. In rejecting the Commonwealth's contentions, the Full Bench said: Court exercising federal jurisdiction may only exercise judicial power

[92] A fundamental assumption in the Constitution is the separation of powers. Federal judicial power is conferred solely on courts created by Chapter III of the Constitution . This basic principle was established by R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254. Two principles have been said to arise from the Boilermakers' Case : first, only Chapter III courts may be conferred with judicial power; and second, Chapter III courts cannot be conferred with power other than judicial power, except where such other power is ancillary or incidental to the exercise of judicial power: see G Williams, Labour Law and the Constitution (Sydney, The Federation Press, 1999) at p 32. These principles are well established: see for example Gould v Brown at 440: [A]s was established by R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; affd Attorney-General (Cth) v The Queen (1957) 95 CLR 529; [1957] AC 288 (PC), the Parliament may not confer upon a federal court functions which are non-judicial and which are not ancillary or incidental to the exercise of the judicial power of the Commonwealth.

[93] The argument of the Commonwealth is dependant on the proposition that, when exercising federal jurisdiction, State courts are bound by the requirements of Chapter III of the Constitution . The argument is, in effect, that the Boilermakers' principle applies to State courts exercising federal jurisdiction.

[94] The cases cited by the Commonwealth establish that the Commonwealth Parliament cannot confer non-judicial functions on State courts: see Queen Victoria Memorial Hospital v Thornton and Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd at 85 per Fullager J. In the Boilermakers' Case , Williams J stated (at 315 - 316): State courts … can be invested with judicial power and it is necessary strictly to limit the extent to which State courts can have duties imposed on them by federal law . Non judicial functions cannot be imposed on such courts. (Emphasis added)

[95] The relevant question here is whether the same principle applies to limit the legislative power of the States. The recent case of Kable v Director of Public Prosecutions (NSW ) (1996) 189 CLR 51 is important in this context, even though it related to the distinct "incompatibility doctrine". In that case, two competing views were expressed. The judgment of Toohey J may appear to provide some support for the Commonwealth's argument. His Honour stated (at 94): To the extent that they are invested with federal jurisdiction, the federal courts and the courts of the States exercise a common jurisdiction. It follows that in the exercise of its federal jurisdiction a State court may not act in a manner which is incompatible with Ch III of the Constitution." (Emphasis added)

[96] On the other hand, Dawson J, albeit in a minority judgment, emphasised that there is no separation of powers doctrine under the New South Wales Constitution, and that the federal Parliament, in investing State courts with federal jurisdiction, must take them as it finds them. His Honour held that the Boilermakers' principle did not apply to State courts invested with federal jurisdiction. His Honour held, at 85 - 86, that State courts, even those exercising federal judicial power, may exercise powers (such as non-judicial powers) which could not be exercised by a Chapter III federal court: What is incompatible with the exercise of the judicial power of the Commonwealth by a Ch III court may not be incompatible with the exercise of the judicial power of the Commonwealth by a court which is not restricted by any separation of powers. Of course, only judicial functions may be vested by the federal Parliament in State courts pursuant to s 77(iii) (see Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144.), but that is an entirely different thing.

and at 86 - 87: Because Ch III contemplates that federal judicial power will be exercised by a State court which is not otherwise confined to the exercise of judicial power, it makes no difference that in this case the Supreme Court of New South Wales may have been exercising federal jurisdiction …

[97] We do not consider that the statement of Toohey J extracted earlier from his Honour's judgment in Kable should be read as intending a different approach on the present issue which although referred to in these proceedings, was not decisive in Kable. The approach, for example, of Gaudron J demonstrates that the principle as stated by Toohey J is not inconsistent with the approach of Dawson J. Her Honour held, at 103 - 104: The prohibition on State legislative power which derives from Ch III is not at all comparable with the limitation on the legislative power of the Commonwealth enunciated in R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254. The limitation on State legislative power is more closely confined and relates to powers or functions imposed on a State court, rather than its judges in their capacity as individuals, and is concerned with powers or functions that are repugnant to or incompatible with the exercise of judicial power of the Commonwealth.

These approaches, so understood, provide no support for the submissions made by the Commonwealth.

[98] The implications limiting the powers of State parliaments in relation to State courts identified by McHugh J do not extend as far as the Commonwealth claims in this case. His Honour said at 118 - 119: A State may invest a State court with non-judicial functions and its judges with duties that, in the federal sphere, would be incompatible with the holding of judicial office. But under the Constitution the boundary of State legislative power is crossed when the vesting of those functions or duties might lead ordinary reasonable members of the public to conclude that the State court as an institution was not free of government influence in administering the judicial functions invested in the court. [99] Brennan CJ was also in the minority in Kable . Nevertheless, his Honour's rejection of the majority view as set out in these words (at 67) serves to show the limits of the issue and thus of the holding in that case: The submission that a State court cannot be a repository of both State non-judicial power and federal judicial power if the exercise of the former would be incompatible with the exercise of the latter attributes to Ch III a novel operation. On one approach Ch III would limit the power of the Parliament of a State to invest the courts of the State with incompatible non-judicial powers. [100] The Commonwealth submission is not put in terms of the invalidity of State (or federal) law, but in terms of the restriction imposed by Chapter III on the State court because, it is said, when exercising federal jurisdiction State courts are bound by the requirements of Chapter III of the Constitution . [101] Indeed, Professor Enid Campbell recently observed, in reflecting on the implications of Kable for State courts and the powers of State legislatures as to these courts ("Constitutional Protection of State Courts and Judges" (1997) 23 Monash Law Review 397 at 417): After all, in some cases State courts will be exercising federal and State jurisdiction concurrently. And from a practical point of view it would be highly inconvenient if State courts were required to observe certain minimal procedural requirements in federal cases but not in State cases.

36 Nothing has been put by the appellants which persuades us that the judgment in Taudevin v Egis Consulting Australia Pty Limited (No 1), so far as it deals with the first issue, is incorrect. We shall apply it, in that respect, in this matter.

37 The appellants synthesised their approach on this issue in this way in their written submissions: In the Appellants' submission, whilst the State legislature, unrestricted by the doctrine of separation of powers, can confer non judicial powers on a Court and need not have recourse to the principles of persona designata , and this even if the Court be one which exercises federal jurisdiction provided the exercise of that non judicial power is not incompatible with the exercise of federal judicial power, it nonetheless remains the case that the exercise of the non judicial power must be detached from the exercise of federal judicial power. For the reasons we have given, this contention must be rejected.

38 As to the appellants' additional point relying on the minority judgment of Dixon and Evatt JJ in Lowenstein, the powers considered in that case in the joint minority judgment to be invalid were those provided by s 217(1), (2) and (3) of the Bankruptcy Act. Those provisions, in substance, provided the relevant courts, when hearing any application for an order of discharge from bankruptcy (either voluntary or compulsory) if the relevant court has reason to believe that the bankrupt has been guilty of an offence against the statute punishable by imprisonment, with powers to (a) charge the bankrupt with the offence and try him summarily; or (b) commit him for trial before any court of competent jurisdiction. There were ancillary machinery provisions such as, in s 217(2), an obligation on the court to serve the bankrupt with a copy of the charge and appoint a day for him to answer it. It also provided that on the day appointed the court shall require the bankrupt to plead to the charge, and if the bankrupt admits to the charge, or if after the trial the court finds that the bankrupt is guilty of the offence, the court may sentence him to imprisonment for any period not exceeding six months. Section 217(3) provides that at the summary trial, if the offence is not admitted, the court may cause to be read to the bankrupt the evidence taken before the court on which the charge is based, and that evidence shall thereupon be evidence in the trial; and the court may take further evidence in support of the charge, and shall allow evidence and argument to be adduced on behalf of the bankrupt.

But when the legislature confers on the courts, as inseparable functions, the duties of prosecutor and judge, the question at once arises whether this is not outside the conception of judicial power. The question is not one of the wisdom, propriety or justice of the course laid down by the provision. It is entirely a question of the nature of the legislative power. If the provision is in conformity with the power its validity cannot be impugned on any such ground. But if the inherent character of the function reposed in the courts is at variance with the conception of judicial power, then, in our opinion, it must fail even if the mode of proceeding has been found so convenient, speedy and satisfactory as to overcome the traditional objection expressed in the maxim nemo potest esse simul actor et judex . But, in our opinion, the authority given to the courts by sec. 217 (1) (a), (2) and (3) does not fall within the conception of judicial power. The maxim quoted does not express a mere caution against human frailty. It epitomizes part of the English notion of the judicial function. A long course of development produced a conception of the judicial process which placed the court in the position of a detached tribunal entertaining and determining civil and criminal pleas brought before it. It is true that in relation to contempt of court the courts of justice are armed with powers of summary punishment, at all events for contempts in facie curiae exercisable ex mero motu . But this has always been regarded as an exceptional power based on the necessity of keeping order and of preserving the court from actual interference in the discharge of its duties. The discussion of the power has proceeded since R. v. Almon [(1765) Wilm. 243; 97 E.R. 94] upon a basis which may well be thought to illustrate the use of an exception to prove the existence and strength of a rule. The judicial power does not include the promotion, prosecution and proof of criminal charges by a court for its own determination.

We do not think that a legislative power to create courts, to invest them with jurisdiction and to make laws upon all matters incidental to the exercise of the judicial power extends to the kind of power which sec. 217 (1) (a), (2) and (3) attempt to give. However it may be described, whether as a combination of functions, as a course of procedure, or as a jurisdiction or authority, it terminates in an act which under the Constitution can be done only in the exercise of judicial power, namely, the conviction of an offender and the passing of judgment upon him; yet the duty is to be performed in a manner at variance with the conception of judicial power. The general power to make laws with respect to bankruptcy does not authorize the imposition of such duties upon the court, because the presence of the judiciary chapter prevents a construction which would extend so far, and neither the provisions of that chapter nor sec. 51 (xxxix.) enable it, because to impose such duties cannot be to legislate upon a matter ancillary to the judicial power or incidental to its exercise.

The reasoning which has led us to this conclusion applies alike to Federal courts and to State courts exercising Federal jurisdiction. But it is perhaps proper to add that, unless the latter courts are part of the Federal judicature within the meaning of sec. 51 (xxxix.), Federal power or authority must be conferred upon them pursuant to sec. 77 (iii.) of the Constitution . Sec. 217 of the Bankruptcy Act includes Federal and State courts without discrimination.

40 We do not accept the approach taken by the appellants as to the judgment of Dixon and Evatt JJ in Lowenstein. We do not consider that their Honours' judgment seeks to lay down any principle which supports the appellants' approach. What it does do, in a way prescient of the High Court judgment in Kable, is to define certain functions or the exercise of certain powers as incompatible "with the conception of judicial power". As the appellants contended, Kable was to be seen as an authority for the proposition that a State court which might be entrusted with federal judicial power cannot have reposed in it any power or function antithetical to the exercise of federal judicial power and similarly, a member of the federal judiciary cannot have reposed in him or her, personally, any power which is incompatible with his or her role as a member of the judiciary: Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1. It could not be seriously suggested that s 106 is a power of that kind. Certainly, the appellants did not contend that it was.

41 The appellants contended that for the approach taken by Staunton J to stand would result in a situation "antithetical to the Constitution to permit a situation where s 179 of the Industrial Relations Act could operate to prevent review of the determination of a question of law remitted to the Commission by the High Court, yet the hearing of the Remitted Matter in conjunction with the IRC proceedings may well yield this result". At this point it is appropriate to reject that part of the appellants' contentions: see s 39 of the Judiciary Act 1903 which relevantly provides: 39 Federal jurisdiction of State Courts in other matters ... (2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions: ... Special leave to appeal from decisions of State Courts though State law prohibits appeal (c) The High Court may grant special leave to appeal to the High Court from any decision of any Court or Judge of a State notwithstanding that the law of the State may prohibit any appeal from such Court or Judge. ... The terms of s 39(2)(c) plainly show the appellants' point lacks substance.

42 Attention was drawn by counsel for the respondents and counsel for the Attorney General for New South Wales in their helpful submissions on the issue to the two recent judgments of the High Court in Fardon v Attorney-General for the State of Queensland (2004) 210 ALR 50 and Baker v The Queen (2004) 210 ALR 1, those judgments being delivered on 1 October 2004.

43 Although the present issue did not fall for decision in either of the recent High Court judgments, there are a number of statements in those cases, particularly Fardon, which support our conclusions in this appeal and neither judgment is inconsistent with them.

44 For example, McHugh J in Fardon observed that in Kable it had been held that there is nothing to prevent State Parliament from conferring powers on State courts which are wholly non-judicial "so long as they are not repugnant to or inconsistent with the exercise by those courts of the judicial power of the Commonwealth" (see Fardon at [40]). His Honour also said: [41] The bare fact that particular State legislation invests a State court with powers that are or jurisdiction that is repugnant to the traditional judicial process will seldom, if ever, compromise the institutional integrity of that court to the extent that it affects that court's capacity to exercise federal jurisdiction impartially and according to federal law. State legislation may alter the burden of proof and the rules of evidence and procedure in civil and criminal courts in ways that are repugnant to the traditional judicial process without compromising the institutional integrity of the courts that must administer that legislation. State legislation may require State courts to exercise powers and take away substantive rights on grounds that judges think are foolish, unwise or even patently unjust. Nevertheless, it does not follow that, because State legislation requires State courts to make orders that could not be countenanced in a society with a Bill of Rights, the institutional integrity of those courts is compromised. [42] The pejorative phrase - "repugnant to the judicial process" - is not the constitutional criterion. In this area of constitutional discourse, it is best avoided, for it invites error. That which judges regard as repugnant to the judicial process may be no more than a reflection of their personal dislike of legislation that they think unjustifiably affects long recognised rights, freedoms and judicial procedures. State legislation that requires State courts to act in ways inconsistent with the traditional judicial process will be invalid only when it leads to the conclusion that reasonable persons might think that the legislation compromises the capacity of State courts to administer invested federal jurisdiction impartially according to federal law. That conclusion is likely to be reached only when other provisions of the legislation or the surrounding circumstances as well as the departure from the traditional judicial process indicate that the State court might not be an impartial tribunal that is independent of the legislative and the executive arms of government.

[43] In my opinion, Kable does not govern this case. Kable is a decision of very limited application. That is not surprising. One would not expect the States to legislate, whether by accident or design, in a manner that would compromise the institutional integrity of their courts. Kable was the result of legislation that was almost unique in the history of Australia. More importantly, however, the background to and provisions of the Community Protection Act pointed to a legislative scheme enacted solely for the purpose of ensuring that Mr Kable, alone of all people in New South Wales, would be kept in prison after his term of imprisonment had expired. The terms, background and parliamentary history of the legislation gave rise to the perception that the Supreme Court of that State might be acting in conjunction with the New South Wales Parliament and the executive government to keep Mr Kable in prison. The combination of circumstances which gave rise to the perception in Kable is unlikely to be repeated. The Kable principle, if required to be applied in future, is more likely to be applied in respect of the terms, conditions and manner of appointment of State judges or in circumstances where State judges are used to carry out non-judicial functions, rather than in the context of Kable -type legislation.

[44] In this case, it is impossible to conclude that the Queensland Parliament or the executive government of that State might be working in conjunction with the Supreme Court to continue the imprisonment of the appellant. Nor is it possible to conclude that the Act gives rise to a perception that the Supreme Court of Queensland might not render invested federal jurisdiction impartially in accordance with federal law. The Act is not directed to a particular person but to a class of persons that the Parliament might reasonably think is a danger to the community. [See, eg, Queensland, Dangerous Prisoners (Sexual Offenders) Bill 2003 (Q) Explanatory Notes, (2003) at 1; Queensland, Legislative Assembly, Parliamentary Debates (Hansard), 3 June 2003 at 2484 per Welford; Queensland, Dangerous Prisoners (Sexual Offenders) Bill 2003 (Q), Amendments in Committee, Explanatory Notes, (2003) at 1]. Far from the Act giving rise to a perception that the Supreme Court of Queensland is acting in conjunction with the Queensland Parliament or the executive government, it shows the opposite. It requires the Court to adjudicate on the claim by the Executive that a prisoner is "a serious danger to the community" in accordance with the rules of evidence and "to a high degree of probability". Even if the Court is satisfied that there is an unacceptable risk that the prisoner will commit a serious sexual offence if released from custody, the Court is not required to order the prisoner's continued detention or supervised release. Furthermore, the Court must give detailed reasons for its order [Section 17], reasons that are inevitably subject to public scrutiny. It is impossible to hold, therefore, that the Queensland Parliament and the executive government intend that the appellant's imprisonment should continue and that they have simply used the Act "to cloak their work in the neutral colors of judicial action." Mistretta v United States 488 US 361 at 407 (1989). On the contrary, the irresistible conclusion is that the Queensland Parliament has invested the Supreme Court of Queensland with this jurisdiction because that Court, rather than the Parliament, the executive government or a tribunal such as a Parole Board or a panel of psychiatrists, is the institution best fitted to exercise the jurisdiction.

45 McHugh J observed in Fardon at [36]: [36] It is a serious constitutional mistake to think that either Kable or the Constitution assimilates State courts or their judges and officers with federal courts and their judges and officers. The Constitution provides for an integrated court system. But that does not mean that what federal courts cannot do, State courts cannot do. Australia is governed by a federal, not a unitary, system of government. As Knox CJ, Rich and Dixon JJ pointed out in Le Mesurier v Connor (1929) 42 CLR 481 at 495-496: "The Parliament may create Federal Courts, and over them and their organization it has ample power. But the Courts of a State are the judicial organs of another Government. They are created by State law; their existence depends upon State law; that law, primarily at least, determines the constitution of the Court itself, and the organization through which its powers and jurisdictions are exercised. When a Court has been erected, its jurisdiction, whether in respect of place, person or subject matter, may be enlarged or restricted. The extent of the jurisdiction of a State Court would naturally be determined by State Law".

46 Further, as Callinan and Heydon JJ held in Fardon: [219] The Act here is not such a bill. Its purpose is not to punish people for their past conduct. It is a protective measure and provides, in any event, for many of the safeguards of a judicial trial. It is necessary to keep in mind the issues with which Kable was concerned and the true nature of the decision which the Court made there. Despite the differing formulations of the Justices in the majority, the primary issue remained whether the process which the legislation required the Supreme Court of New South Wales to undertake, was so far removed from a truly judicial process that the Court, by undertaking it, would be so tainted or polluted that it would no longer be a suitable receptacle for the exercise of Federal judicial power under Ch III of the Constitution. This Court did not in Kable hold however that in all respects, a Supreme Court of a State was the same, and subject to the same constraints, as a federal court established under Ch III of the Constitution. Federal judicial power is not identical with State judicial power. Although the test, whether, if the State enactment were a federal enactment, it would infringe Ch III of the Constitution, is a useful one, it is not the exclusive test of validity. It is possible that a State legislative conferral of power which, if it were federal legislation, would infringe Ch III of the Constitution, may nonetheless be valid. Not everything by way of decision-making denied to a federal judge is denied to a judge of a State. So long as the State court, in applying legislation, is not called upon to act and decide, effectively as the alter ego of the legislature or the executive, so long as it is to undertake a genuine adjudicative process and so long as its integrity and independence as a court are not compromised, then the legislation in question will not infringe Ch III of the Constitution.

47 Kirby J took a similar approach for present purposes in Baker where his Honour held: [85] The test of federal lawmaking : It is true [cf joint reasons at [22]] that since Kable , in H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 it was suggested by this Court that the principle stated in Kable could be tested by asking whether an impugned State law, if it were a federal law, would have offended the principles applicable to federal courts created pursuant to Ch III of the Constitution (1998) 195 CLR 547 at 561-562 [13]-[14]. This, indeed, may sometimes be a useful step in the path of reasoning about Kable submissions.

[86] However, because the approach described in Bachrach involves an hypothesis prone to artificiality (given the subject matters normal to federal and State legislation respectively), care must be taken to avoid unnecessary dependence on such fictions: Silbert (2004) 78 ALJR 464 at 470 [32]-[33] of my own reasons; 205 ALR 43 at 51; Fardon [2004] HCA 46 at [144] of my own reasons. The safer course is to measure the State legislation by reference to the Kable standard, and not to become unduly diverted by considering what would have been the case if the State law were something it was not. Bachrach was a simple case requiring differentiation between a statute affecting rights in issue in pending litigation and an invasion of the judicial power [(1998) 195 CLR 547 at 562-563 [17], citing R v Humby; Ex parte Rooney (1973) 129 CLR 231 at 250]. The question presented by the State legislation in the present case is more complex, as I shall show.

48 The judgments of the High Court in Fardon and Baker, generally and as exemplified by the passages cited, confirm the conclusions reached in Taudevin v Egis Consulting Australia Pty Limited (No 1) as to the power of the Commission in Court Session to hear matters of a judicial and non-judicial nature together in appropriate circumstances and also the irrelevance of Kable and Lowenstein to the issues in the present proceedings.

Judgment of McHugh J in the High Court 49 It is appropriate to refer at this point in detail to what McHugh J said in remitting the appellants' High Court proceedings to this Court pursuant to s 44 of the Judiciary Act. His Honour held (in his decision in transcript on 2 July 2003 at lines 1334 to 1465; emphasis supplied): As I indicated during argument, a stated case before trial or before the taking of evidence is always an unsatisfactory course. Experience has shown that the stated case does not always capture all the facts that are ultimately needed to determine issues. It is a common experience on stated cases for the judge who stated the case to have to add additional facts to the matter. So the use of the stated case procedure is never one that should be encouraged when there are other ways of determining the facts of the case.

Mr Ellicott rightly points out that his client has a right to have a matter determined under the Constitution, but that right of course is subject to the power of this Court under section 44 of the Judiciary Act to remit the matter to the Federal Court or a court of a State. Standing against the stating of a case and reserving questions is the fundamental principle that constitutional issues should not be decided unless it is necessary to do so. As Justice Kirby pointed out in Residual Assco Group v Spalvins (2000) 202 CLR 629 at 666: This Court should confine its constitutional elaboration to those matters which must be decided to resolve the dispute between the present parties.

It is quite possible that the constitutional issues which the plaintiffs seek to raise may never be reached in this particular case. That may be because, upon a full evaluation of the evidence, it may appear that none of the defendants was employed in an industry in and of New South Wales. It is not enough that the employees may do some work in New South Wales: see Perrott v XcelleNet Australia Limited (1998) 84 IR 255 at 269. On the other hand, it is not decisive that the proper law of the contract is the law of a jurisdiction outside of New South Wales: see also Perrott at 266.

Given the "facts" as they appear in the draft stated case and the claims in the statement of claim, the plaintiffs seem to me to have strong arguments that the employees in this case did not work in an industry in and of New South Wales. Even if upon a proper evaluation of the evidence it was held that they did work in an industry in and of New South Wales, it is open to the Commission in Court Session in the exercise of its discretion not to make an order in the proceedings: see Savage v Digital Equipment Pty Limited , unreported, 17 May 1999 at pages 12 to 13 of the typescript.

Again, even if the constitutional issues are reached in this case, it seems to me that it is a case where the arguments of the parties would be better understood if the Court had the benefit of evidence rather than the summary of facts concerning that evidence. There does not seem here to be any claim of textual collision between a law of the Commonwealth and section 106 of the Industrial Relations Act . The argument seems to rest on a "covering the field" test. Alternatively, it may depend upon what in the jurisprudence is called operational inconsistency. In the case of a "covering the field" test and in the case of operational inconsistency, it is obviously much better from the Court's point of view that it is in a position to examine the evidence in detail rather than upon the confined nature of facts stated in a case to the Full Court.

The plaintiffs contend that the Court should not remit the matter, relying heavily on the claim that the Commission in Court Session is not a court for the purposes of section 44 of the Constitution. Mr Ellicott points out that in Minister for Youth and Community Services v Health and Research Employees' Association of Australia (1987) 10 NSWLR 543 at 559 and following, I expressed the view that the Commission, exercising a not dissimilar power to section 106, is not exercising judicial power.

However, the real question is not whether the Commission in Court Session is exercising judicial power under section 106 but whether it is a court for the purposes of section 44 of the Judiciary Act. There is nothing in the Constitution which prevents State courts being invested with federal jurisdiction, notwithstanding that some or a significant part of their jurisdiction is concerned with the determination of non-judicial matters.

The Industrial Relations Act (NSW) contains several considerations which point strongly to the Commission in Court Session being a court. Section 152 of the Act declares the Commission in Court Session to be a superior court of record. The members of the Commission have the same rank, title, status and precedence as judges of the Supreme Court of New South Wales. They have the constitutional protection under the Constitution that the Supreme Court judges have. When sitting in court session the rules of evidence and the procedures of a superior court of record apply. Legal practitioners have a right of appearance. The Commission in Court Session may punish for contempt. It also has a summary criminal jurisdiction in criminal proceedings for offences under the Act.

Some years ago in In re an Application by Public Service Association of New South Wales (1947) 75 CLR 430 Mr Justice Williams held that the Industrial Commission of New South Wales as formerly constituted was a court for the purposes of section 40 of the Judiciary Act . This Court has also assumed that the predecessor of the present Industrial Relations Commission was a court exercising federal jurisdiction for the purposes of section 73 of the Constitution: see Gosper v Sawyer (1985) 160 CLR 548 at 556 and Tana v Baxter (1986) 160 CLR 572. More recently in Tszyu v Fightvision Pty Ltd (2001) 104 IR 225, [2001] NSWCA 103, Justice Mason said at paragraph 58 that the Commission in Court Session was a superior court of record and, when exercising jurisdiction under section 106 of the Industrial Relations Act , was exercising judicial power.

Mr Ellicott contends, however, that there are problems of remitting the matter to the Commission in Court Session because there would be a mixing of judicial and non-judicial functions. However, I do not see that as an impediment to a remitter. If the questions under section 106 involve the exercise of judicial power, no problem can arise. If on the other hand they are not, then arguably this Court had no jurisdiction over them in the first place and all that the Commission in Court Session on remitter would be able to exercise would be the issues remitted that are concerned with the exercise of judicial power.

I do not think that section 179 of the Industrial Relations Act upon which Mr Ellicott relies has anything significant to say as to whether or not the Commission in Court Session is a court. The terms of that section are concerned with the Commission's judgments and order. They prohibit an appeal being taken against those judgments and orders. If this Court remits the matter to the Industrial Commission in Court Session, as I intend to do, the Commission will be exercising the jurisdiction of this Court. Nothing in section 179 can prevent the present plaintiffs from applying to this Court for special leave to appeal.

Mr Ellicott asks me, if necessary, to refer to any facts that need to be dealt with for this Court to properly deal with the constitutional issues. However, it does not seem to me, for the reasons I have already given, that any assistance would be gained by my pointing to areas which may require further elaboration than is presently to be found in the stated case. As I indicated, I regard the stated case procedure, before the facts are found or evidence taken, as an unsatisfactory procedure. But, more significantly, the constitutional issues that Mr Ellicott seeks to raise may never need to be determined for the reason that he may succeed either on the substantive point that section 106 does not apply or, if it does, that in the exercise of its discretion the Commission in Court Session should not make orders in favour of the plaintiffs. If he succeeds on either of those alternatives, it follows that the constitutional issues will not arise for decision.

In all the circumstances, I consider that the proper course in this case is to remit the matter to the Industrial Commission of New South Wales in Court Session. I would remit the whole matter in accordance with the usual practice and on the usual terms. I certify for counsel.

50 At the risk of some repetition, it is useful to identify specifically those parts of his Honour's judgment which are relevant for present purposes. They may be summarised as follows: (a) there is a fundamental principle that constitutional issues should not be decided unless it is necessary to do so;

(b) constitutional issues which the appellants seek to raise may never be reached in the present case because, for example, upon a full evaluation of the relevant evidence, none of the respondents may be held to have been employed in an industry in and of New South Wales;

(c) indeed, there are strong arguments available to that effect on the "facts" as they appeared in the draft stated case;

(d) even if a proper evaluation of the evidence leads to the contrary conclusion, it is still open to the Commission in Court Session in its discretion not to make an order in the proceedings;

(e) even if the constitutional issues are reached the present case is one where the arguments of the parties would be better understood if the High Court had the benefit of evidence rather than a summary of facts concerning the evidence;

(f) there is nothing in the Constitution which prevents State courts being invested with federal jurisdiction notwithstanding that some or a significant part of their jurisdiction is concerned with the determination of non-judicial matters;

(g) nothing in s 179 of the Industrial Relations Act 1996 can prevent the present appellants from applying to the High Court for special leave to appeal;

(h) significantly, the constitutional issues raised by the appellants may never need to be determined for the reason that they may succeed on the substantive point that s 106 does not apply or, if it does, that in the exercise of its discretion the Commission in Court Session should not make orders in favour of the respondents. If the appellants succeed on either of these alternatives, the constitutional issues will not arise for decision.

51 It may be seen that the conclusions of his Honour, so summarised, demonstrate that many of the arguments relied on by the appellants in these proceedings were relied on by them in the proceedings in the High Court and were not accepted by McHugh J.

Is there a right of priority under rule 82(1)(a)? 52 A crucial part of the appellants' case on the second issue in the appeal was the contention that because they had filed an application under r 82, they had a right to have the r 82 application heard before other parts of the litigation and, in particular, before any evidence from the respondents except, perhaps, evidence relevant to the appellants' jurisdictional issues.

53 Rule 82 provides: 82 Setting aside originating process etc (1) A tribunal may, on notice of motion filed by a respondent in accordance with subrule (2), by order: (a) set aside the originating process, or (b) set aside the service of the originating process on the respondent, or (c) declare that the originating process has not been duly served on the respondent, or (d) discharge any order giving leave to serve the originating process outside the State or confirming service of the originating process outside the State, or (e) discharge any order extending the validity for service of the originating process, or (f) protect or release property seized, or threatened with seizure, in the proceedings, or (g) declare that the tribunal has no jurisdiction over the respondent in respect of the subject matter of the proceedings, or (h) decline in its discretion to exercise its jurisdiction in the proceedings, or (i) grant such other relief as it thinks appropriate. (2) Notice of motion under subrule (1): (a) may be filed without entering an appearance, (b) must bear a note "The respondent's address for service is" and state the address, (c) must be filed within the time limited for entering an appearance. (3) The making of an application under subrule (1) is not to be treated as a voluntary submission to jurisdiction.

54 The scope of r 82 was considered in Taudevin v Egis Consulting Australia Pty Limited (2000) 97 IR 165 where Wright J held, after referring to the judgments in Hyde v Energy Australia (1999) 92 IR 409 and Caltex Petroleum Pty Ltd v Harmer: [34] Unlike the cases referred to above, these motions represent an appropriate use of r 82. I have already referred to the situation where a motion under r 82 would be appropriate, such as where, in earlier times, a notice of conditional appearance may have been appropriate. The facility and the purpose of the rule is consistent with modern approaches to litigation. That is, to have promptly placed before the Court issues which either require early determination or should be appropriately placed before the Court for early consideration as to when they should be determined. Consequent notice is also provided to an applicant as to an issue which the applicant must take into account in conducting its litigation. The matter is placed in the litigation "equation" at an early stage so that appropriate directions can be given for the timely disposition of the litigation. All these considerations emphasise that it is entirely inappropriate for a respondent to rely on and file a conditional appearance (emphasis supplied).

55 In that case, his Honour did not find it necessary to determine whether the jurisdictional question ought, to adopt the appellants' terminology, be given priority over the substantive questions as in that case the only issue for consideration was whether the application for extension of time should be granted.

56 His Honour did however observe, in the passage emphasised earlier, that the purpose of the rule was clear and that there were two elements of it: not only to have issues placed before the Court promptly for determination but also to have issues placed promptly for the Court's early determination as to when they should be determined. We consider that his Honour's analysis of r 82 is correct. It follows that there is no basis in the appellants' contention that r 82 gives them some right to have their jurisdictional issues determined with any particular priority although r 82 does require the Court, if the issue is raised, to exercise its procedural discretion as to the way in which, including the relevant timing, the jurisdictional issue is to be dealt with in terms of the proceedings overall. It cannot be doubted that Staunton J did precisely that.

The proper case management of jurisdictional questions 57 The jurisprudence as to the proper case management of s 106 proceedings in which jurisdictional questions are raised has been the subject of detailed consideration in this jurisdiction: see, for example, Nagle (T/as W D and J L Nagle & Sons) v Tilburg (1993) 51 IR 8 at [27] to [30]; Euphoric Pty Limited v Ryledar Pty Limited (2002) 117 IR 1 at 1 to 5; and Taudevin v Egis Consulting Australia Pty Limited (No 2) (2002) 131 IR 178. It is sufficient for present purposes to state that the effect of the settled approach as to case management, in circumstances where the relevant factual circumstances for the determination of jurisdictional issues are not fully and appropriately settled, is that the matter is essentially a matter for the trial judge's discretion. On the one hand it is important that an objection to jurisdiction be determined as early in the litigation as is feasible; on the other hand it is only feasible to do so at the preliminary stage where the facts are appropriately and sufficiently established. In the present case the exercise of the discretion was affected by the important consideration, emphasised by McHugh J, that it was undesirable to determine constitutional issues unless it was plainly necessary to do so and the reason why that was such an important consideration in this case was that there were grounds of substance, both legal and discretionary, whereby the appellants could be successful in the proceedings remitted (and the substantive proceedings) with the constitutional issues thus not, or not necessarily, requiring determination.

58 Once regard is paid to that matrix of considerations, as it necessarily must have been by Staunton J, in the context of the case management issues her Honour was obliged to determine, the question before us becomes: was the exercise of discretion undertaken by her Honour reasonably open to her? We consider it was. We are not required to determine whether her Honour's exercise of discretion was correct in the sense that we would have reached the same conclusion. However, we consider that it is appropriate in this appeal to indicate that we consider her Honour's discretion was correctly exercised in that sense too.

59 One of the reasons why we have taken this unusual course is that what is plain is that her Honour, having regard to the way in which the issue was argued, was left with a choice between the two alternatives put forward by the respective parties. In that situation, it was equally plain that her Honour's discretion would have miscarried if she had accepted the appellants' approach because that would have involved failure to give adequate weight to the views of McHugh J as to the management of the constitutional issues when his Honour made the remitter to this Court pursuant to s 44 of the Judiciary Act and may well have involved insufficient regard being paid to the factual issues which were to be resolved in the proceedings.

60 The final issue we need to deal with is the main thrust of the second issue in the appeal (see para [31] above): that is, whether the decision at first instance involved some level of predetermination or prejudgment of the issues raised by the appellants in the High Court and remitted to this Court for determination. When that issue is seen in the light of the conclusions we have reached earlier in these reasons, particularly as to the r 82 and the case management questions, the appellants' contention as to predetermination or prejudgment has no substance. The appellants will be able to argue their case in an appropriate way at the appropriate time as determined by the trial judge subject only to other relevant matters referred to earlier such as the observations of McHugh J as to undesirability of determining constitutional issues when that may not be necessary.

Orders 61 The appeal should be dismissed. The Court makes the following orders: 1. Leave to appeal granted. 2. Appeal dismissed. 3. The appellants to pay the respondents' costs in an amount to be assessed in default of agreement. ___________________

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