CLAIMS AGAINSTTHE COMMONWEALTH AND STATES …

CLAIMS AGAINST THE COMMONWEALTH AND STATESAND THEIR INSTRUMENTALITIES IN FEDERAL

JURISDICTION: SECTION 64 OF THE JUDICIARY ACTl

Susan Kneebone*

INTRODUCTION

Two recent decisions of the High Court, Mutual Pools and Staff Pty Ltd v Commonwealth2

(Mutual Pools) and Georgiadis v Australian and Overseas Telecommunication Corporation3

(Georgiadis) have re-opened the debate about the source of the Commonwealth'sliability to be sued in civil proceedings.4 The debate can be expressed in this form: doesthat liability arise from the Constitution so as to confer a constitutionally guaranteedright to sue the Commonwealth (the "constitutional argument") or does it arise fromrights conferred by s 64 of the Judiciary Act 1903 (Cth) - possibly in combination with"rights to proceed" allowed by the Constitution?5 In practical terms this is a differencebetween entrenching the Commonwealth's liability in the Constitution oracknowledging that those "rights to proceed" can be removed by Commonwealthlegislation preventing action against it.

Before his recent appointment to the High Court, Gummow J raised the issue in twocases in the Federal Court, pointing to the conflict of opinion between Brennan J (as hethen was) and McHugh J in Georgiadis. In Bienke v Minister for Primary Industries andEnergy,6 an action in negligence against the Commonwealth Minister, Gummow Jcommented that "in Australia, consideration ... is required of the extent of the 'waiver'of liability effected by the Judiciary Act, or by the Constitution itself, something still

*1

234

5

6

Lecturer, Faculty of Law, Monash University.This article is a revised version of a paper presented to the 45th ALTA Conference,Australian National University, September 1990, "Claims in Tort in the FederalJurisdiction: Section 64 of the Judiciary Act". I would like to thank Professor EnidCampbell, Professor Leslie Zines and Associate Professor Peter Hanks for their detailedcomments on that paper. I accept responsibility for errors or misconceptions which mayappear in this article.(1993) 179 CLR 155.(1993) 179 CLR 297.The definition of "suit" in the Judiciary Act 1903 (Cth) makes it clear that it does not extendto criminal proceedings: below n 23. See also Commonwealth v Evans Deakin Industries Ltd(1986) 161 CLR 254 at 265.For example, Commonwealth v Dinnison (1995) 129 ALR 239 at 243 per Gummow andCooper JJ.(1994) 125 ALR 151; 34 ALD 413.

94 Federal Law Review Volume 24

unresolved ... ".7 In Commonwealth v Dinnison8 he again referred to the debate as"unsettled"9.

In view of the current composition of the High Court the debate is thus a live one.The question is whether the Commonwealth's liability should be treated as aconstitutional issue or whether its civil liability should be governed by the commonlaw. In this article, it is argued that the latter view is most consistent with the basic rulethat the civil liability of governments is to be assimilated to that of private individuals"as nearly as possible" as the words of s 64 recognise.10 It is important to note that thisbasic rule was recognised and applied by the majority in Northern Territory v Mengel(Mason CJ, Dawson J, Toohey J, Gaudron J and McHugh J);11 they expressly referred tos 64 of the Judiciary Act.

Arguing in favour of constitutionally guaranteed rights, Aitken suggests that hisview is consistent with the "dignity" of the Constitution.l2 He suggests that the viewthat the Commonwealth's liability can be removed by lefislation "demeans theConstitution as the fundamental doctrine of the Federation"l and further, that suchview is "legally disingenuous".14 He supports his argument by pointing to theimpossibility of reconciling all the "minutiae" surrounding s 64 of the Judiciary Act andcontrasts the appealing simplicity of the constitutional argument.1S He attacks the s 64view on the basis that it seems "odd" that the Commonwealth Parliament has nocontrol over the Commonwealth's liability.16

My argument is that the way that s 64 has been interpreted by the courts provides aflexible case-by-case approach appropriate to determining the civil liability ofgovernments and that it provides adequate protection for citizens' rights. The effect ofthe constitutional argument, however, enhances the assumed superiority of theCommonwealth in inter-governmental matters. In response to Aitken, I suggest thatthe constitutional argument depends upon equating a grant of jurisdiction withentrenched liability. I argue that the constitutional argument overlooks the importanceof an essential and basic distinction, recognised by the courts, between liability to besued and the conferral of jurisdiction or authority to adjudicate. This distinction is inturn consistent with the separation of powers which the Constitution implies. Byenacting s 64 of the Judiciary Act, the legislature has conferred power upon the courtsto determine the extent of liability of parties sued in the federal jurisdiction. The High

7

8910

1112

13141516

Ibid at 173; 433, citing Georgiadis v Australian and Overseas Telecommunications Corp (1993)179 CLR 297.(1995) 129 ALR 239.Ibid at 243 per Gummow and Cooper JJ.This basic principle is enshrined in the common law and in the various Crown proceedingsActs of each State, eg: Crown Proceedings Act 1980 (Qld), s 9(2); Crown Proceedings Act1992 (SA) s 5(1)(b). Cf Crown Proceedings Act 1958 (Vic), s 23(1)(b), pursuant to which theliability of the Crown is a vicarious one.(1995) 69 ALJR 527 at 544, n 82.L Aitken, "The Liability of the Commonwealth under Section 75(iii) and Related Questions"(1992) 15 UNSWLl483 at 485-486; L Aitken, "The Commonwealth's Entrenched Liability Further Refinements" (1994) 68 ALl 690 at 690-691.L Aitken (1994), above n 12 at 690.L Aitken (1992), above n 12 at 485-486 and 491.Ibid at 514.Ibid at 487.

1996 Section 64 of the Judiciary Act 95

Court has, however, recognised that its jurisdiction is entrenched by the Constitution.This provides some assurance that the rights of citizens against the Commonwealthwill be protected by the law, in contrast to the position under State Constitutions. Thishas become a major issue in Victoria, for example, in relation to damage caused byworks associated with the staging of the Formula One Grand Prix race at Albert Park.Although s 85 of the Constitution Act 1975 (Vic) prescribes a procedure for statutesaltering the jurisdiction of the Supreme Court, it does not entrench the jurisdiction ofthe Court, and legislation has removed the common law rights of citizens to sue fordamages.17

The debate raises extraordinarily complex issues. To begin with, because s 64 of theJudiciary Act has been interpreted to apply in actions between States, the debate mustbe extended to include the position of States sued in the federal jurisdiction.18 It raisesthe basis of the contract and tort liability of the Commonwealth, States and theirinstrumentalities, as s 64 extends to the latter.19 To what extent does that liabilitydepend upon the express removal of the Crown's traditional immunity in tort (andpossibly contract)? The context is often inter-governmental immunities because s 64 hasbeen interpreted as applying the statutes of one legislature to another government.20Another relevant context is principles of conflict of law. I tum first to a summary ofthese issues before examining in more detail the application of s 64 and the two HighCourt decisions in Mutual Pools and Georgiadis.

SECTION 64 IN CONTEXT

Section 64 appears in Part IX of the Judiciary Act 1903 (Cth), which makes provision for"Suits By and Against the Commonwealth and the States". Sections 56-59 of theJudiciary Act 1903 (Cth) (in Part IX) make provision for claims to be brought by andagainst the Commonwealth and the States, in courts exercising federal jurisdiction.Sections 56 and 57 each provide for claims in "contract or in tort" to be brought againstthe Commonwealth by private persons and States respectively. Sections 58 and 59 referto claims against States by "any person" (which has been held to include theCommonwealth)21 or by another State. The claims to which s 58 refers are in "contractor in tort", but s 59 refers simply to "any claim" without limiting it to contract or tort.Sections 56-59 also provide the venue22 for the hearing of such "suits",23 in courtsexercising federal jurisdiction.24 Section 64 provides:

17

181920

21222324

For example, Australian Grand Prix Act 1994 (Vic), s 50. Cf R v Hickman & ors : Ex parte Foxand Clinton (1945) 70 CLR 598. For a discussion of the effect of s 85, see C Foley, "Section 85Victorian Constitution Act 1975: Constitutionally Entrenched Right ... or Wrong" (1994) 20Mon LR 110.The nature of the federal jurisdiction is considered below at 102.Maguire v Simpson (1976) 139 CLR 362.Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254; Commissioner for Railways vPeters (1991) 102 ALR 579.Commonwealth v New South Wales (1923) 52 CLR 32.See the discussion below at 103-104."Suit" is defined in s 2 to include "any action or original proceeding between parties".The meaning of "federal jurisdiction" is discussed below at 102-105.


In any suit to which the Commonwealth or a State is a party, the rights of parties shall asnearly as possible be the same, and judgment may be given and costs awarded on eitherside, as in a suit between subject and subject.

Removal of Crown immunitySection 64 either alone or in conjunction with ss 56 and 57 is on its face directed toremoving the Commonwealth's traditional immunity in tort and contract. The historyof the Crown's immunity in tort shows that there needed to be an express removal ofthat immunity.25 In the case of the Commonwealth, the framers of the AustralianConstitution recognised that a grant of jurisdiction was not sufficient in itself to removethe immunity.26 Thus the Claims Against the Commonwealth Act 1902 (Cth)27 wasenacted to provide that persons making claims in contract or in tort against theCommonwealth could petition the Governor-General requesting him to appoint anominal defendant.28 That Act was repealed by the Judiciary Act 1903 (Cth) and itsprovisions replaced by Part IX. In two early decisions where these provisions wereconsidered it was decided that their combined effect was to render the Commonwealthliable in tort in the same manner as State Crown proceedings legislation.29 In a numberof decisions it has been recognised that the effect of s 64 in combination with s 56renders the Commonwealth liable in tort as if it were a citizen according to ordinarytort principles (but subject to any residual Crown immunities).30 In the case of theStates, other than Victoria, all had legislated to remove their immunity in tort by the

25

26

27

28

29

30

Farnell v Bowman (1887) 12 App Cas 643 (PC). With respect to claims in contract, it isarguable that no express removal of immunity was necessary as the petition of right layagainst the Crown for claims in contract. However, that procedure required the consent ofthe Crown so the difference may not be great. See Thomas v R (1874) LR 10 QB 31; P Hogg,Liability of the Crown (2nd ed 1989) at 5-6; S Arrowsmith, Government Procurement andJudicial Review (1988) at 113-118; cf G Donaldson, "Commonwealth Liability to State Law"(1985) 16 UWALR 135, who maintains the distinction.Convention Debates, Melbourne 1898, 1653-79 quoted in J Quick and D G Garran, TheAnnotated Constitution of the Australian Government 1901 (1976) at 804-6. It is clear from thedebates that s 78 of the Constitution was intended to confer the power to remove theCrown's common law immunity from suit. Howeyer, as is pointed out by ProfessorCampbell, s 78 may not be the exclusive source of "rights to proceed" under Part IX of theJudiciary Act 1903 (Cth): E Campbell, "Section 78 of the Commonwealth of AustraliaConstitution Act" (unpublished) Faculty of Law, Monash University, September 1987; seealso Final Report of the Constitutional Commission (1988) vol 1 at para 6.275.The Hansard debates on the 1902 Act suggest that the purpose of the Act was to overcomethe immunity of the Crown from action and to bring the liability of the Commonwealth inline with that of the States. See Cth ParI Deb 1902, Vol 12 at 16449-16466, 16668-16673, and16714-16728.Section 2(1). The procedural model of the Claims Against the Government and CrownSuits Act 1897 (NSW) is clear. This legislation was similar to that in issue in Farnell vBowman (1887) 12 App Cas 643. However, it should be noted that the Commonwealth Actexpressly refers to claims in tort and contract.Baume v Commonwealth (1906) 4 CLR 97 at 110; Zachariassen v Commonwealth (1917) 24 CLR166. In Baume v Commonwealth, O'Connor J pointed out that the Judiciary Act 1903 (Cth)amended the procedure of the 1902 Act to enable a subject to sue the Commonwealthdirect: (1906) 4 CLR 97 at 118-9.For example, Shaw Savill & Albion Co Ltd v Commonwealth (1940) 66 CLR 344; Parker vCommonwealth (1965) 112 CLR 295.


time the Judiciary Act came into force.31 It may be that the removal of their immunityin tort was effected by that State legislation rather than by ss 58 and 59 of the JudiciaryAct.32

Inter-governmental immunities

Section 64 has, however, been seen as going beyond removing the Crown's traditionalimmunity and supplying the "right to proceed" where a common law liability is inissue. By applying the statutes of one government to another, it enables themodification of common law liabilities in proceedings in tort33 or contract34 andimposes liability both where that liability arises from a "novel statutory right"35 andwhere that liability is a common law one arising from the implication of the right to suefor breach of statutor~ duty.36 It is settled that those statutes include both thoseconferring procedural3 and substantive38 rights. Where the Commonwealth is a party,the explanation for this is that the provisions apply as if they were a Commonwealthlaw. In this way, s 64 performs a useful role which cannot be explained by theconstitutional argument. Section 64's role in this respect appears to be at odds with thedecision in Commonwealth v Cigamatic Pty Ltd,39 which is sometimes cited as authorityfor the proposition that State parliaments have no power to enact legislation whichdiminishes or affects the Commonwealth's legal rights.40 However the Cigamaticdecision, which is based upon Dixon J's assumed supremacy of the Commonwealth inrelation to States, is controversial and has been questioned as a vestige of outdatedimmunity.41 Section 64 enables the effect of the Cigamatic decision, which enhances theposition of the Commonwealth, to be avoided by applying State laws as if they wereCommonwealth laws.42 Aitken, however, argues that the Cigamatic doctrine provides a"further and more general residual protection for the Commonwealth against liability

31

32

33

343536

37

38394041

42

The first State to legislate was South Australia in 1853 (Claims Against the LocalGovernment Act, No 6 of 1853). The formula which s 64 of the Judiciary Act contains,specifying that the rights of the parties "shall as nearly as possible be the same ... as ...between subject and subject", was introduced by the Claims Against the Government Act1866 (Qld) and reproduced in subsequent legislation.See Werrin v Commonwealth (1938) 59 CLR 150 at 166 per Dixon J, discussed below at 107108.Asiatic Steam Navigation Co Ltd v Commonwealth (1956) 96 CLR 397 (application of MerchantShipping Act 1894 (Imp) to limit the Commonwealth's liability).Maguire v Simpson (1976) 139 CLR 362.Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254.Strods v Commonwealth [1982] 2 NSWLR 182 (approved in Commonwealth v Evans DeakinIndustries Ltd (1986) 161 CLR 254).Commonwealth v Miller (1911) 10 CLR 742 (action for discovery); Maguire v Simpson (1976)139 CLR 362.Maguire v Simpson (1976) 139 CLR 362.(1962) 108 CLR 372.P J Hanks, Australian Constitutional Law (5th ed 1994) at 451.J J Doyle, "1947 Revisited - The Immunity of the Commonwealth from State Law" inG Lindell (ed), Future Directions in Australian Constitutional Law (1994) 47; G Evans,"Rethinking Commonwealth Immunity" (1972) 8 Melb Univ LR 521; R P Meagher andW M C Gummow, "Sir Owen Dixon's Heresy" (1980) 54 ALJ 25; P J Hanks, above n 40 at457; R Sackville, "The Doctrine of Immunity of Instrumentalities in the United States andAustralia: A Comparative Analysis" (1960) 7 Melb Univ LR 15 at 62.Australian Postal Commission v Dao (1984) 63 ALR 1 at 30-35 per McHugh JA.


under State law".43 This view does not appear to be supported either by principle orauthority.In Commonwealth v Evans Deakin Industries Ltd, the majority in the High Courtcommented cryptically at the end of their judgment:

The question whether The Commonwealth v Cigamatic Pty Ltd (In Liq) (1962) 108 C.L.R. 372was correctly decided was not canvassed in argument and we do not need to considerit.44

In Maguire v Simpson,45 Gibbs J thought that it was "unnecessary" to decide whether theCigamatic decision should be followed.46 Mason J pointed out that no mention wasmade of s 64 of the Judiciary Act in that case, "although there seems to be no reasonwhy it should not have had an application if it extended to substantive rights".47 It hasbeen sug~ested that on this basis, the Cigamatic decision could be considered wronglydecided.4

It can be argued that the operation which the High Court has accorded to s 64 of theJudiciary Act is cOl\sistent with the view of Latham CJ in Uther v Federal Commissioner ofTaxation,49 that laws of general application should be applied to the Commonwealthboth in its dealings in contract and property matters and in relation to its tortiousresponsibilities. As Latham CJ has observed:

The Commonwealth of Australia was not born into a vacuum. It came into existence witha system of law already established. To much of that law the Commonwealth isnecessarily subject; for example, the Commonwealth has no general power to legislatewith respect to the law of property, the law of contract, the law of tort. In relation to thosesubjects, speaking generally, it lives and moves and has its being within a system of lawwhich consists of the common law (in the widest sense) and the statute law of the variousStates.50

This view is subject to the proviso suggested by Lumb, namely that laws do not affectthe Commonwealth in its "governmental" activities.51

In some subsequent cases, a view similar to that of Latham CJ in Uther's case,52namely that some State laws should apply to the Commonwealth, was accepted. Thisview is best expressed in the words of Fullagar J in Commonwealth v Bogle:

If ... the Commonwealth Parliament had never enacted s 56 of the Judiciary Act 19031950, it is surely unthinkable that the Victorian Parliament could have made a lawrendering the Commonwealth liable for torts committed in Victoria. The Commonwealthmay, of course, become affected by State laws. If, for example, it makes a contract in

4344454647

48

495051

52

L Aitken (1992), above n 12 at 508-512.(1986) 161 CLR 254 at 267.(1976) 139 CLR 362.Ibid at 390.Ibid at 402. See also Stephen J, who commented that "some of the possible effects of s 64,both upon the Commonwealth and upon the States and in relation both to Commonwealthstatutes and to those of a State, may prove both obscure and curious" (ibid at 396).L Zines, The High Court and the Constitution (3rd ed 1992) at 319; P J Hanks, above n 40 at474; Australian Postal Commission v Dao (1985) 63 ALR 1 at 33-34 per McHugh JA.(1947) 74 CLR 509.Ibid at 521 (emphasis added).R D Lumb, The Constitution of the Commonwealth of Australia Annotated (4th ed 1986) at 3523.(1947) 74 CLR 509.


Victoria, the terms and effect of that contract may have to be sought in the Goods Act1928 (Vic) ... 53

If it is accepted that Cigamatic did establish the Commonwealth's immunity from Statelaw, then the explanation for the "affected by" doctrine stated by Fullagar J inCommonwealth v Bogle is similar to the s 64 view - that State laws "affect" theCommonwealth as a matter of Commonwealth law. If this view of the "affected"doctrine were accepted, it would seem that s 64 is simply declaratory of the commonlaw position - as the words "as nearly as possible" in s 64 suggest.54

In summary, whatever the intentions of the original legislators, s 64 has been givena dual role in relation to common law and statutory liabilities. It clearly goes beyondthe removal of common law immunities and affects both the presumed immunity ofthe Crown from the application of statutes55 and the doctrine of intergovernmentalimmunities. Unlike its United States counterpart, it has not been used to create afederal common law or set of principles applicable in the federal jurisdiction.56 This isan important point in evaluating the constitutional argument, for the role which thecourts have attributed to s 64 cannot be explained by that argument.

Section 64 has been used to subject the Commonwealth to a State statute whichbecame the basis for an action in tort for breach of statutory duty. In Strods vCommonwealth,57 for example, which was an action for the tort of breach of statutoryduty, it was held that the Factories Shops and Industries Act 1962 (NSW) bound theCommonwealth not by its own force but by virtue of s 64 of the Judiciary Act. Section64 of the Judiciary Act thus enabled the Crown's presumptive immunity from statute tobe avoided. However it has been established by a series of cases that s 64 only operateswhen there are no constitutional impediments. It will not, for example, operate in theface of s 109 of the Constitution. In Deputy Commissioner of Taxation v Moorebank,58which was concerned with the liability of an individual to taxation, the reluctanttaxpayer claimed that a State Limitation Act, which applied by virtue of s 64 of theJudiciary Act, prevented the bringing of a claim against him by the Commonwealth. Itwas decided that s 109 of the Constitution prevented the exercise of a Commonwealthpower from being affected by a State Limitation Act.59

Choice of law issues

In Commonwealth v Bogle, Fullagar J, in the passage cited above, referred to s 56 of theJudiciary Act as the source of the power of the Victorian legislature to make theCommonwealth liable in tort. Passages in other cases suggest that it is the operation ofss 79 and 80 of the Judiciary Act which make the Commonwealth subject to a State

53

545556575859

(1953) 89 CLR 229 at 259-60. See also Federal Commissioner of Taxation v Official Liquidator ofEO Farley Ltd (Farley's case) (1940) 63 CLR 278 at 308 per Dixon J.See the discussion below at 115-116 of the meaning of those words in s 64.Bropho v State ofWestern Australia (1990) 171 CLR 1.See P Hogg, Liability of the Crown (1st ed 1971) at 224-226.[1982] 2 NSWLR 182.(1988) 165 CLR 55.See also Deputy Commissioner of Taxation v DTR Securities Pty Ltd (1988) 62 ALJR 376; Dao vAustralian Postal Commission (1987) 61 ALJR 229; Gilvarry v Commonwealth (1995) 127 ALR721.


law.60 There are two sources of choice of law in the Judiciary Act. First, ss 79, 80 and80A in Part XI ("Supplementary Provisions", Division 2 - Application of Laws)provide choice of law rules for courts exercising federal jurisdiction. That is to say, theyprovide which body of law is to apply to a court which has properly assumedjurisdiction.61 Section 79 makes applicable the law of the State in which a court issitting62 and s 80 applies English common law as modified by statute. Section 80Aapplies the same rules to courts of a Territory hearing claims against theCommonwealth under s 56 of the Judiciary Act. These sections apply a system of lawrather than particular laws from within that system.63 The latter function is theprovince of s 64 of the Judiciary Act. The difference between choosing an applicablesystem of law and applying a particular rule from within the system was explained byGibbs J in Maguire v Simpson64 when he said:

The effect of s 64, stated more directly, is that the Limitation Act, which is to be appliedin the proceedings by virtue of s 79, is rendered ap~licable to the Commonwealth asthough it were a subject, and therefore binds the Bank. 5

Sections 79 and 80 of the Judiciary Act were intended to fill the gap of applicablelaw in cases where federal jurisdiction is exercised.66 Generally, they will apply wherethere is no Commonwealth statute or constitutional provision which applies, that is,where the federal law is insufficient.67 In practice, s 79 is the most relevant provision.In some circumstances where a choice of law issue arises in actions brought in Statecourts, s 79 of the Judiciary Act will apply the lex fori. 68 Section 79 has been interpretedas applying not only the substantive common and statute law of a State,69 but also the

60

61

62

63

646566

67

6869

Federal Commissioner of Taxation v Official Liquidator of EO Farley Ltd (Farley's case) (1940) 63CLR 278 at 308 per Dixon J; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at528 per Dixon J.For a discussion of this matter, see Pavich v Bobra Nominees Pty Ltd (1988) 84 ALR 285 perFrench J; J H C Morris, Dicey's Conflict ofLaws (1958) at 7-8.Section 79 cannot apply a State law which would extend the meaning of the statute beyondthe limits of principles of construction or of the Constitution. See Commissioner of StampDuties (NSW) v Owens (No 2) (1953) 88 CLR 168; Trade Practices Commission v Manfal Pty Ltd(1990) 92 ALR 416 at 418 per Lee J; (1990) 97 ALR 231 (Full Ct Fed Ct); HE Renfree, FederalJudicial System in Australia (1984) at 305; Pedersen v Young (1964) 110 CLR 162 at 165. Seealso John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65.P Hogg, above n 56 at 226; E Campbell, "Suits between the Governments of a Federation"(1971) 6 Syd LR 309, 326; C Howard, "Some Problems of Commonwealth Immunity andExclusive Legislative Powers" (1972) 5 FL Rev 31 at 34.(1976) 139 CLR 362.Ibid at 377. See also South Australia v Commonwealth (1962) 108 CLR 130 at 140 per Dixon J.This generally refers to jurisdiction conferred under s 77(iii) of the Constitution. See belowat 104-105.P D Phillips, "Choice of Law in Federal Jurisdiction" (1961) 3 Melb Univ LR 170; M Prylesand P Hanks, Federal Conflict ofLaws (1974) at 192.Commonwealth v Dixon (1988) 13 NSWLR 601.Uther v Federal Commissioner of Taxation (1947) 74 CLR 509; L Grollo & Co Pty Ltd v Nu StattDecorating Pty Ltd (in liq) (1980) 4 ACLR 907; Trade Practices Commission v Manfal Pty Ltd(1990) 92 ALR 416. See P D Phillips, above n 67; R W Harding, "Common Law, Federal andConstitutional Aspects of Choice of Law in Tort" (1965) 7 UWALR 196. Cf B O'Brien, "TheLaw Applicable in Federal Jurisdiction" (1976) 1 UNSWLJ 327.


State's choice of law rules.70 The current position in Australia is that the rule in Phillipsv Eyre71 applies as the common law choice of law rule in tort.72 Under this rule, aplaintiff will succeed in a tort action only if he or she would be successful under boththe lex fori and the lex loci delicti. Section 79 thus preserves the common law position.Section 64's role in supplying substantive rights is consistent with these choice of lawprovisions in the Judiciary Act.73

In addition there is now substantial authority74 that in claims in tort in the federaljurisdiction where s 56 of the Judiciary Act applies, the choice of law is governed bythat section and that it refers to the lex loci delicti. That view is said to flow as a matterof intention from the invocation of federal jurisdiction.75 If that view is correct, the lawof" the place where the tort was committed will apply by virtue of s 56 and it isunnecessary to refer to s 64. The choice of law provisions (ss 56 and 79) tend todiscount the constitutional argument as they suggest that the question of choice of lawdepends on the intention of the Commonwealth Parliament. Section 79 frequentlyapplies in conjunction with s 64, but a different result may be obtained by applyings 56.76

Rights to proceedThe next important point in considering the context of s 64 is that ss 56-59 of theJudiciary Act either alone or in conjunction with s 64 appear to confer "rights toproceed" in the matters specified in ss 75(iii) and (iv) of the Constitution. The power toenact ss 56-59 seems to derive from s 78 of the Constitution. Section 78 provides:

The Parliament may make laws conferring rights to proceed against the Commonwealthor a State in respect of matters within the limits of the judicial power.

Section 75(iii) of the Constitution confers original jurisdiction on the High Court ofAustralia in all matters in which the Commonwealth or a "person suing or being suedon behalf of the Commonwealth, is a party". Section 75(iv) gives the High Courtoriginal jurisdiction in matters between States, between residents of different States, orbetween a State and a resident of another State. Section 78 was included in theConstitution to clarify the removal of the Commonwealth's immunity.77

Aitken's reasoning in favour of the constitutional argument focuses uponuncertainty as to the scope, meaning and function of s 78 of the Constitution. Is it thesource of rights to proceed in tort and contract (that is, is it tied to the operation ofss 56-59 of the Judiciary Act) or does the fact that s 64 has been read separately from

70

7172

7374

75

76

77

For example, Musgrave v Commonwealth (1937) 57 CLR 514; Parker v Commonwealth (1965)112 CLR 295 at 306 per Windeyer J; Deputy Federal Commissioner of Taxation v Brown (1958)100 CLR 32 at 39.(1870) LR 6 QB 1.McKain v Miller & Co (South Australia) Pty Ltd (1991) 174 CLR 1; Stevens v Head (1992) 176CLR433.P Hogg, above n 56 at 226-230.Suehle v Commonwealth (1967) 116 CLR 353; Breavington v Godleman (1989) 169 CLR 41;Commonwealth v Mewett (1995) 126 ALR 391.Musgrave v Commonwealth (1937) 57 CLR 514 at 547-548; Commonwealth v Dinnison (1995)129 ALR 239 at 244.Commonwealth v Mewett (1995) 126 ALR 391; cf Gilvarry v Commonwealth (1995) 127 ALR721.See above n 26.


ss 56-59 as going beyond removing governmental immunity in tort or contract (whilstat the same time s 56 has been limited to removal of the Commonwealth's immunity)mean that the reach of s 78 rights to proceed extends to any "matter" within the originaljurisdiction of the High Court as set out in ss 75 and 76 of the Constitution?78 Section 76of the Constitution provides for the express conferral of additional original jurisdictionon the High Court. The corollary of linking s 78 to the Judiciary Act is that rights toproceed can be removed by legislation.

This controversy is a "red herring" to a large extent because s 78 of the Constitutionmay not be the exclusive source of the power to confer "rights to proceed".79 Certainlythe background to the drafting of the clause showed that it was intended to clarify theremoval of the Commonwealth's common law immunities. It was accepted that a meregrant of jurisdiction was not sufficient to remove those immunities. But "rights toproceed", particularly in claims outside tort or contract, could also be supported by acombination of s 61 (the executive power) and s 51(xxxix) (the express incidentalpower), or some other heading of s 51.80 The High Court has assiduously avoided adefinitive statement of the scope of s 78. It is implicit in the expanded role that has beenattributed to s 64 that the "rights to proceed" can be found in a variety ofCommonwealth legislative sources but that liability is not entrenched by theConstitution.

FEDERAL JURISDICTION AND VENUE

Before considering the application of s 64, there are some more preliminary detailsabout the source of federal jurisdiction which need to be explained. The Const~.tution

and the Judiciary Act make provision, sometimes overlapping, for the matters whichcome within federal jurisdiction and the designation of venue. Federal jurisdiction hasbeen described as authority to adjudicate derived from the CommonwealthConstitution and laws.81 Sometimes the issue may arise whether a court is indeedexercising federal jurisdiction and whether other provisions of the Judiciary Act, suchas s 64, apply to proceedings.82

The provisions in the Constitution which confer jurisdiction appear in Chapter IIIunder the heading "The Judicature". Chapter III is an expression of the separation ofpowers which the Constitution implies and contains provisions about the judicialpower of the Commonwealth. In interpreting Chapter III, the High Court hasconsistently displayed two broad concerns. The first is to preserve the special nature ofthe judicial power by ensuring that only properly constituted courts exercise the

78

7980

81

82

This was the recommendation of the Final Report of the Constitutional Commission (1988) atpara 6.285.Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254 at 263.Commissioner for Railways for State of Queensland v Peters (1991) 102 ALR 579; Mutual Pools(1993) 179 CLR 155.PH Lane, Commentaries on the Australian Constitution (1986) at 351; HE Renfree, above n 62at 534; Western Australian Psychiatric Nurses' Association (Union of Workers) v AustralianNursing Federation (1991) 102 ALR 265 at 272 per Lee J.For example, China Ocean Shipping Co & Others v State ofSouth Australia (1979) 145 CLR 172;27 ALR 1 (held: admiralty jurisdiction was conferred by Merchant Shipping Act 1894 (UK),not by s 39(2) of the Judiciary Act, and that therefore s 64 of the Judiciary Act was notapplicable); Commonwealth v Mewett (1994) 126 ALR 391.


power,83 and secondly to ensure that the provisions which confer jurisdiction are readbroadly. That last point is illustrated by the fact that the courts have assumed that thereferences to "States" and the "Commonwealth" in the Judiciary Act bear the samemeaning as in ss 75(iii) and (iv) of the Constitution.84 In relation to the Commonwealthit was accepted in Maguire v Simpson85 that, for the purposes of s 64 of the JudiciaryAct, the reference to the "Commonwealth" includes "persons suing or being sued onbehalf of the Commonwealth" as in s 75(iii) of the Constitution. In that case, theCommonwealth Trading Bank sued a customer in the Supreme Court of New SouthWales. Jacobs J, who specifically considered the issue, thought that the reference to theCommonwealth in s 78 of the Constitution should be taken as including a person suingor being sued on behalf of the Commonwealth, and that s 64 of the Judiciary Actshould be construed in the same manner.86 In relation to States, it has been accer,tedthat the same meaning applies to the Judiciary Act as to s 75 of the Constitution. 7 InCrouch v Commissioner for Railways,88 Gibbs CJ referred to Maguire v Simpson89 and said:"Logically it must follow that the words 'a State' could have a similarly widemeaning"90 for the purpose of s 75(iv).91 Thus s 64 has a potentially broad reach. Theimportant point for my argument is that the provisions which confer jurisdiction aretied to the judicial power of the Commonwealth. This assists in understanding thespecial nature of "federal jurisdiction" and points to the distinction between jurisdictionand causes of action.

Sections 56-59 in Part IX of the Judiciary Act, which provide for suits by and againstthe Commonwealth and the States, and for the venue of such suits, appear to be anexpression of the original jurisdiction of the High Court conferred by ss 75(iii) and (iv)of the Constitution. Sections 56-59 should be read together with ss 38 and 39 of theJudiciary Act. These sections appear in Part VI of the Act under the heading "Exclusiveand Invested Jurisdiction". Section 38 provides that, subject to the remittal power ins 44 of the Judiciary Act,92 the jurisdiction of the High Court shall be exclusive93 in

8384

85868788899091

92

For example, Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245.For example, State Bank of New South Wales v Commonwealth Savings Bank of Australia (StateBank case) (1986) 161 CLR 639; Breavington v Godleman (1989) 169 CLR 41; Commissioner forRailways of Queensland v Peters (1991) 102 ALR 579.(1976) 139 CLR 362.Ibid at 404.State Bank case (1986) 161 CLR 639.(1985) 159 CLR 22.(1976) 139 CLR 362.(1985) 159 CLR 22 at 32.In some instances there may be differences in the extent of liability of an instrumentalitydepending upon whether s 64 applies. If the constating statute of an instrumentalityprovides it with rights, they may conflict with those arising under s 64 of the Judiciary Act.In other situations where the liability of a State or its instrumentality is in issue, there maybe differences between its liability under State Crown proceedings legislation and underthe Judiciary Act: see, eg, Downs v Williams (1972) 126 CLR 61.This power was discussed in Johnstone v Commonwealth (1979) 143 CLR 398, in which it washeld that a negligence action against the Commonwealth arising from acts which occurredin South Australia could be remitted from the High Court to the Supreme Court of NewSouth Wales, although the Supreme Court of New South Wales did not have jurisdiction tohear the action under s 56 of the Judiciary Act. In other words, the High Court decided that


suits between States (or between persons suing or being sued on behalf of differentStates)94 and in suits between the Commonwealth and States (or between personssuing or being sued on their behalf).95 These provisions are consistent with ss 57 and 59of the Judiciary Act in requiring that the High Court be the venue for such claims.Section 58 of the Judiciary Act (claims against States), which provides that the venuefor claims is either the High Court or a State Supreme Court, is thus qualified byss 38(b) and (c) when the claim is brought by the Commonwealth.96 If a claim isbrought by an individual resident of another State, then s 38 does not apply. In suchcase, a State Supreme Court could exercise jurisdiction either pursuant to s 39(2) of theJudiciary Act, which is also in Part VI of the Act under the sub-heading "Federaljurisdiction of State Courts in other matters", or pursuant to s 56 of the Judiciary Act.Section 56 of the Judiciary Act, which deals with claims by a "person" against theCommonwealth, provides that the venue for claims against the Commonwealth shallbe either the High Court, the Supreme Court of the State or Territory "in which theclaim arose", or any other court of competent jurisdiction of the State or Territory "inwhich the claim arose".97 There is a potential for conflict between s 39(2) of theJudiciary Act and s 56, as the decision of Breavington v Godleman98 (discussed below)shows. This is because it can be argued that a State could submit to the jurisdiction ofanother State Supreme Court.

The power to "define jurisdiction" as described above arises from s 77 of theConstitution, in relation to s 75 and s 76 "matters". Section 3999 of the Judiciary Act is aprovision of general operation enacted under s 77(iii), which gives the power to investState courts with federal jurisdiction.lOO Section 39(2) provides, subject to the HighCourt's exclusive jurisdiction and other limits, that State courts be invested with federaljurisdiction in all matters in which the High Court has original jurisdiction. Section 39was passed with the object of ensuring, as far as possible, that cases of a constitutionalnature should be finally decided in the High Court. lOl The terms of ss 75 and 76 of theConstitution are consistent with the object of s 39 of the Judiciary Act; they seem to bedirected at "matters" which could be described as raising "federal", "constitutional" or"inter-State" issues. l02 The authority to adjudicate conferred by ss 56-59 and ss 38-39 ofthe Judiciary Act is in relation to the "matters" referred to in ss 75 and 76 of theConstitution. "Federal jurisdiction", in the context of s 77 of the Constitution, means theauthority to adjudicate which is conferred by federal law and which concerns a

93949596

97

9899100101102

the exercise of jurisdiction under s 56 of the Judiciary Act was not a pre-condition to theremittal of a matter under s 44.These provisions appear to be enacted under s 77(ii) of the Constitution.Judiciary Act 1903 (Cth), s 38(b).Judiciary Act 1903 (Cth), s 38(c), (d).In Commonwealth v New South Wales (1923) 52 CLR 20, it was held that the word "person" ins 58 included the Commonwealth.See also s 77(i) of the Constitution, which contains a general power to define thejurisdiction of any federal court.(1989) 169 CLR 41. ,For a discussion of s 39, see H E Renfree, above n 62, ch 4.Commissioner for Railways for State ofQueensland v Peters (1991) 102 ALR 579.HE Renfree, above n 62 at 541.Cf E Campbell, above n 63 where it is suggested that s 75(iii) refers to inter-governmental,not necessarily constitutional, matters.


"matter" in s 75 or s 76 of the Constitution.l03 The whole scheme of the legislationsuggests that the description of those matters is intended to define the ambit of federaljurisdiction rather than to prescribe causes of action available against defendants suedin the federal jurisdiction.

JURISDICTION AND CAUSE OF ACTION: A FUNDAMENTALDISTINCTION

Aitken argues that S5 75(iii) and (iv) of the Constitution have the "dual function" ofboth conferring jurisdiction on courts exercising federal jurisdiction and being thesource of substantive liability.l04 In support of that view he relies largely upon thedecision in Commonwealth v New South Wales. 105 In this section it is argued that thatdecision does not support his argument.

The distinction between "jurisdiction", meaning "authority to adjudicate"106 orauthority to decide a case,107 and the existence of a cause of action, is fundamental.There is a logical distinction between the role of a court in determining whether factsproved establish a cause of action, and the conferral of jurisdiction on a court to hear amatter. The existence of a cause of action is separate from the conferral ofjurisdiction.lOB The above distinction is particularly vital in this contextl09 for tworeasons. First, because the Constitution and the Judiciary Act make elaborate provisionfor the conferral of federal jurisdiction as an expression of tIle judicial power of theCommonwealth, these jurisdiction-conferring provisions are clearly intended to be justthat. The cause of action may arise from the common law (which can be read broadlyas including equitable principles) or from statute, but it lo~ically exists apart from theauthority to decide a matter, or indeed to grant a remedy.l 0 Indeed, the whole historyof the passage of legislation to do with proceeding against the Crown shows that theprocedural reform to the petition of right led to substantive change in the commonlaw.lll The scope of s 64 determines what causes of action arise in the federaljurisdiction.

The second feature of this context which points to the need for distinguishingbetween causes of action and jurisdiction is that the cases in which s 64 has been used

103104

105106107lOB

109

110

111

PH Lane, A Manual ofAustralian Constitutional Law (4th ed 1987) at 351.L Aitken (1992), above n 12 at 484. See also L Aitken, "Jurisdiction, Liability and 'DoubleFunction' Legislation" (1990) 19 FL Rev 31.(1923) 32 CLR 200.P H Lane, above n 103 at 351; HE Renfree, above n 62 at 534.E Campbell, above n 63.The fundamental distinction between jurisdiction and substantive or procedural rights wasrecognised in the High Court decision in Deputy Commissioner of Taxation v Richard WalterPty Ltd (1995) 69 ALJR 223 at 227 per Mason CJ, at 242-433 per Deane and Gaudron JJ, at251 per Dawson J, at 258 per Toohey J and at 264 per McHugh J.Contrast the tendency in the context of jurisdictional error and judicial review to merge theconcepts of jurisdictional and non-jurisdictional error. But in that context there is a concernto preserve the jurisdiction of the courts to review all errors of law: Re Gray; Ex parte Marsh(1985) 157 CLR 357 at 371 per Gibbs CJ.Note that in L Aitken, above n 104, the distinction between jurisdiction to grant a remedyand jurisdiction to decide or to hear a matter is not made.Farnell v Bowman (1887) 12 App Cas 643.


to impose a substantivel12 civil liability upon a public authority all arose from aprimary obligation in tort or contract. In the context of actions in tort, the courts haveconsistently made it clear that the existence of a cause of action cannot be confusedwith the obligations which might be enforced against a defendant in public law, sincethe cause of action or primary obligation must arise under the private law.113 Bycorollary, the conferral on a court of the right or jurisdiction to grant a remedy in publiclaw does not give the right to award damages for breach of a "private" lawobligation.114 The co-existence of ss 75(iii) and (v) of the Constitution, under which aremedy in the nature of prohibition, mandamus or injunction may be sought against an"officer of the Commonwealth" in conjunction with a claim for damages, might bethought to test this argument. But discussion of these provisions by McHugh J inGeorgiadisl15 endorses the view that they are basically directed at the jurisdiction of theHigh Court and that s 75(iii) is not the source of liability.

The distinction between the existence of a cause of action or rights to proceed andjurisdiction or authority to adjudicate was raised in Commonwealth v New SouthWales. 116 That case involved an action for damages by the Commonwealth against theState of New South Wales, as a result of a collision between a New South Walessteamship and a Commonwealth motor launch. The issue was whether theCommonwealth could bring a High Court action against the State without its consent.For the State, it was argued that it had a prerogative right not to be sued without itsconsent unless jurisdiction had been given by s 75, together with an enactmentpursuant to s 78 of the Constitution, conferring the right to proceed against the State. Itwas argued that the reference in s 58 of the Judiciary Act to "any person making aclaim against a State" was not intended to refer to the Commonwealth. The majority ofthe High Court accepted the latter point but rejected the s 78 argument. They said thatit was only necessary to refer to s 75(iii) of the Constitution to find a right to proceedagainst the State. In other words, it was held that both jurisdiction to entertain anaction in tort against the State and the right to proceed without its consent wereconferred by s 75(iii). It is important to note that this was an action in tort and theliability of the State as such was not in issue. Rather it was a question of whether theState was properly named as a defendant. So the existence of a cause of action was notin issue - the State's liability to the Commonwealth might have arisen from its ownCrown Proceedings legislation.117 The decision does not support the dual functionapproach except in that limited context. The reasoning of the majority can be explainedas a decision to avoid reading s 78 of the Constitution too broadly.t18

112

113

114

115116117

118

Section 64 has also been used to provide procedural rights, eg, Commonwealth v Miller (1911)10 CLR 742 (discovery).For exampl~, Rowling v Takaro Properties Ltd [1988] 1 All ER 162; Jones v Department ofEmployment [1988] 1 All ER 725; Sutherland Shire Council v Heyman (1985) 157 CLR 564.For example, Park Oh Ho v Minister for Immigration and Ethnic Affairs (1990) 167 CLR 637 (noaward of damages under the "necessary to do justice" provisions in s 16 of theAdministrative Decisions Gudicial Review) Act 1977 (Cth». Aitken suggests that adoptinga "double function" approach would allow such relief: L Aitken, above n 104 at 32.(1993) 179 CLR 297 at 325-326.(1923) 32 CLR 200.Similar reasoning was employed by Dixon J in Werrin v Commonwealth (1938) 59 CLR 150,discussed below at 107-108.G Donaldson, above n 25 at 144.


In a separate judgment, Higgins J decided that the source of the Commonwealth'sright to sue the State was s 58 of the Judiciary Act, the scope of which as a matter ofstatutory interpretation included the Commonwealth as a plaintiff. He suggested thats 58 had been enacted pursuant to s 78 of the Constitution.119 Although there wassubsequent authority which supported the majority view in Commonwealth v New SouthWales, there was also much criticism of it and support for the alternative view putforward by Higgins J in that case.120 It was suggested, for example, that if the view ofthe majority in Commonwealth v New South Wales were accepted, it would have theeffect of entrenching the Commonwealth's liability in tort in the Constitution and nolegislation of the Commonwealth could dero~ate from that liability.121 As was pointedout by McHugh J in the Mutual Pools case,12 the view of the majority has never beenoverruled.

In Werrin v Commonwealth,123 an action for refund of tax paid under mistake of law,the corollary of Commonwealth v State of New South Wales was successfully argued: thatthe effect of s 75(iii) was not to entrench substantive rights, and that therefore a statutebanning recovery could apply.124 Dixon J attempted to explain the decision inCommonwealth v State of New South Wales on two grounds. He said first that the casecame before the court on a motion to set aside the writ for want of jurisdiction.Therefore no question of substantive liability arose, only the question of whether thecourt had jurisdiction to entertain the suit and determine the liability, a jurisdictionwhich it clearly had under s 75.125 Secondly, the decision could be explained on thebasis that as the State of New South Wales had enacted Crown proceedings legislationit had abandoned its immunity.126 He continued:

Probably the joint judgment of Isaacs, Rich and Starke JJ was not intended as apronouncement that the liability of the State within Federal jurisdiction and of theCommonwealth was imposed directly by the Constitution so as to be unalterable andindestructible by legislation. It might be remembered that the question to which the

119120

121122123124125126

(1923) 32 CLR 200 at 220-221.The decision in Commonwealth v New South Wales (1923) 32 CLR 200 was approved in thefollowing decisions: New South Wales v The Commonwealth (No 1) (1932) 46 CLR 155 at 210,211 and 215; New South Wales v Bardolph (1934) 52 CLR 455 at 458-9; Heinemann vCommonwealth (1935) 54 CLR 126 at 129; Musgrave v Commonwealth (1937) 57 CLR 514 at 550per Evatt and McTiernan JJ; South Australia v Commonwealth (1962) 108 CLR 130 at 148.Decisions which establish that s 75(iii) does not create liability in tort include: Werrin vCommonwealth (1938) 59 CLR 150 at 167 per Dixon J, approved by Windeyer J in Suehle v.Commonwealth (1967) 116 CLR 353 at 355; Asiatic Steam Navigation Co Ltd v Commonwealth(1956) 96 CLR 397 at 422-423 per Fullagar J; Washington v Commonwealth (1939) 39 SR(NSW) 133 at 140 per Jordan CJ. The weight of academic opinion supports the propositionthat s 75(iii) is a procedural or jurisdictional section only: P Hogg, above n 56 at 215-6;PH Lane, The Australian Federal System (2nd ed 1979) at 531-2; M Pryles and P Hanks,above n 67; HE Renfree, above n 62 at 162-9; G Donaldson, above n 25 at 144; Z Cowenand L Zines, Federal Jurisdiction in Australia (2nd ed 1978) at 32-38. See also Commonwealth vEvans Deakin Industries Ltd (1986) 161 CLR 254 at 269 per Brennan J (dissenting).Musgrave v Commonwealth (1937) 57 CLR 514 at 546 per Dixon J.(1994) 179 CLR 155 at 217. See also L Aitken (1992), above n 12 at 491.(1938) 59 CLR 150.See M Pryles and P Hanks, above n 67 at 186.(1938) 59 CLR 150 at 166.Ibid.


material parts of the judgment are directed is the actionable liability of the Crown for tortand this is a subject upon which the distinction between procedure and substantive lawhas never been steadily maintained, at all events in the manner in which the Crown'simmunity has been stated and explained.... Farnell v Bowman [(1887) 12 App. Cas. 643] isbased upon the view that the grant of a general remedy against the Crown makes thetorts committed on its behalf actionable. Implicit in this view appears to be theassumption that the Crown's substantive responsibility existed in contemplation of lawbut had not been the subject of legal remedy. If this mode of reasoning is applied, it iseasy to understand how sec. 75 should be considered enough to expose the State and theCommonwealth to a remedy for tortious liability. It treats the liability as already existingin abstracto as a duty of imperfect obligation and made perfect by the creation of ajurisdiction in which the Crown may be sued without its consent. But it would not meanthat the substantive liability was itselfcreated and imposed by the Constitution.127

This passage seems to recognise that on the facts of Commonwealth v New South Wales,the conferral of jurisdiction by s 75(iii) eliminated the procedural difficulty.128 The casedoes not support the proposition that conferral of jurisdiction under s 75(iii) of theConstitution removes the immunity of the Commonwealth or a State in tort.129 AsMcHugh Jexplained in the Mutual Pools case, Commonwealth v New South Wales doesnot establish that s 75(iii) is the source of liability but rather that the inclusion of theaction in s 75(iii) enables actions to be brought to challenge the scope of powersconferred by that section.130

The decision in Breavington v Godleman131 is relied upon by Aitken to support hisargument against the use of s 64 of the Judiciary Act.132 He suggests that the decisionshows the difficulty in reconciling the "minutiae" of s 64. As the discussion whichfollows shows, that case gives firm support to the distinction between the conferral ofjurisdiction and the existence of a cause of action. Breavington v Godleman133 involvedan action brought in the Supreme Court of Victoria arising from a motor accidentwhich had occurred in the Northern Territory. The claim was covered by s 56 of theJudiciary Act because it was accepted that the third defendant, the AustralianTelecommunications Commission (Telecom) was the "Commonwealth" for thepurposes of that section. On the facts the venue was important because a choice of lawissue arose. Under the Motor Accidents (Compensation) Act 1979 (NT), a claim foreconomic loss was barred, whereas in Victoria common law principles applied. TheHigh Court in Breavington v Godleman held that s 56 did not preclude the litigationbeing heard in the Supreme Court of Victoria, although it decided that the law of the

127128

129

130131132133

Ibid at 167-168 (emphasis added).This passage was approved by Mason CJ in Deputy Commissioner of Taxation v RichardWalter Pty Ltd (1995) 69 ALJR 223 at 227, when he explained (re s 75(v»: "The provision isnot a source of substantive rights except in so far as the grant of jurisdiction necessarilyrecognises the principles of general law according to which the jurisdiction to grant theremedies mentioned is exercised".Maguire v Simpson (1976) 139 CLR 362 at 404 per Jacobs J; Z Cowen and L Zines, aboven 120 at 32-38; H E Renfree, above n 62 at 162-9. Cf L Aitken (1992), above n 12 at 487-489.(1994) 179 CLR 155 at 217.(1989) 169 CLR 41.L Aitken (1992), above n 12 at 497-500.(1989) 169 CLR 41.


Northern Territory applied.l34 As, on the facts, Telecom had not objected to thejurisdiction of the Supreme Court, s 39(2) prevailed over s 56.

Breavington v Godleman showed the potential conflict between ss 56 and 39(2) of theJudiciary Act which arises because s 56 provides that the venue for claims against theCommonwealth should be the High Court or a court of the State or Territory in whichthe claim arose, whereas s 39(2) invests State courts generally with federal jurisdiction.In other words, one issue was whether s 56, a specific provision, prevailed over s 39(2),a general and ambulatory135 provision. The rule with respect to the interpretation ofstatutes is that a general provision gives way to a specific provision.136 Section 56 ands 39(2) both appear to be provisions investing State and other courts with federaljurisdiction pursuant to s 77(iii) of the Constitution. It has been suggested that s 77(iii)may be the source of power for more than one law investing State courts with federaljurisdiction.137

The High Court, however, interpreted s 56 of the Judiciary Act as merely"qualifying or restricting"138 s 39(2) of the Judiciary Act rather than "limiting orcurtailing" it.139 To have interpreted the sections otherwise, as three of the judgessaid,140 would be to deprive the States of jurisdiction invested under s 39(2). Section 56,said the High Court, was not a provision which invested jurisdiction in the High Courtor in the courts of States in actions against the Commonwealth.141 That, said Mason CJ,is the function of s 75(iii) of the Constitution and s 39(2) of the Judiciary Act.142 Thatview, which was shared by the other judges, was based upon a comparison of ss 56 and39(2) of the Judiciary Act. Wilson and Gaudron JJ, for example, relied upon thelanguage of ss 39(2) and 56, and the difference between the headings of the Act underwhich they appeared.143 They suggested that Part VI ("Exclusive and InvestedJurisdiction") was referable to s 77 of the Constitution, whereas Part IX ("Suits by andagainst the Commonwealth") was probably referable to s 78.144 The "permissive"language of s 56, they thought, enabled a plaintiff to select the Supreme Court of theState in which the action arose.145 The result of this aspect of the case is summed up inthe words of Toohey J:

In the present case s 39(2) operates to confer jurisdiction on the Supreme Court ofVictoria to entertain a claim against the Commonwealth. Notwithstanding s 56, the

134

135136137138139140141142

143144145

Four judges (Wilson, Gaudron, Brennan and Dawson JJ) decided that s 56 provided thechoice of law: (1989) 169 CLR 41 at 101, 118 and 141.P H Lane, above n 103 at 344-5.DC Pearce and R S Geddes, Statutory Interpretation in Australia (3rd ed 1988) at para 2.5-2.9.H E Renfree, above n 62 at 537; P H Lane, above n 103 at 343.(1989) 169 CLR 41 at 69 per Mason CJ.Ibid.Ibid at 102 per Wilson and Gaudron JJ and 140 per Deane J.Ibid at 68 per Mason CJ and 118 per Brennan J.Ibid at 68, following the decision in Commonwealth v Evans Deakin Industries Ltd (1986) 161CLR 254. See also (1989) 169 CLR 41 at 102 per Wilson and Gaudron JJ and at 140 perDeaneJ.Ibid at 100-101.Ibid at 104.Ibid at 104 and 118 per Brennan J. See also at 140 per Deane J.


Commonwealth may submit to the jurisdiction of the Court and that is what it has donein the present case.1ii6

The High Court left open the question whether s 56 is the source of the~ommonwealth's liability in tort either alone or in conjunction with s 64 of theJudiciary Act and perhaps ss 75(iii) and 78 of the Constitution. All of the seven judgestouched on the issue in passing. Four judges appeared to approve the suggestion thats 56 is the source of the Commonwealth's liability in tort.147 But Gaudron and Wilson JJ(with whose view Toohey J seemed to agree) referred to Commonwealth v Evans DeakinIndustries Ltd and firmly rejected the view that s 56 rendered the Commonwealth liablein tort.148 There is thus tentative support for the suggestion that s 56 removes theCrown's immunity in tort but strong support for the view that Part IX of the JudiciaryAct is not concerned with matters of jurisdiction; rather it is concerned with causes ofaction. At the same time it was accepted that s 75(iii) of the Constitution and s 39(2) ofthe Judiciary Act are concerned with jurisdiction. It is therefore difficult to understandAitken's conclusion that the decision shows the High Court "groping its way again tothe original position in Commonwealth v New South Wales" and that it made "heavJweather" in explaining the relationship between ss 56, 64 and 39 of the Judiciary Act.1 9

On the facts, the High Court did not need to explain the relationship any more than itdid.

THE APPLICATION OF SECTION 64: THE DISTINCTION BETWEENJURISDICTION AND SUBSTANTIVE LIABILITY MAINTAINED

In this section three features of the application of s 64 are demonstrated. First, that s 64operates to apply statutes between governments by which they might not otherwise bebound. Secondly, that s 64 is applied flexibly to ensure that the liability ofinstrumentalities is "as nearly as possible" assimilated to private individuals. Thirdly,advancing the argument put forward in this article, the application of s 64demonstrates a distinction between jurisdiction and causes of action.

Applying statutes to the CommonwealthSection 64 was discussed in Maguire v Simpson,150 where an action in contract wasbrought by the Commonwealth Trading Bank against a customer. It was held that theLimitation Act 1969 (NSW) applied to the bank by virtue of s 64 of the Judiciary Act. Itwas argued 'that s 64 of the Judiciary Act only ap~lied procedural laws, but five of thesix-member High Court rejected that argument.1 1 The case therefore establishes thats 64 of the Judiciary Act applies both procedural and substantive laws.152 As the factsdid not involve a claim against the Commonwealth, the case did not fall within ss 56-59of the Judiciary Act, although it did fall broadly within the scope of Part IX of the Act.The case therefore established that s 64 of the Judiciary Act was independent of ss 56-

146147148149150151152

Ibid at 169.Ibid at 69 per Mason CJ, at 152 per Dawson J, at 118 per Brennan J, at 140 per Deane J.Ibid at 101. Cf ibid at 169 per Toohey J.L Aitken (1992), above n 12 at 500.(1976) 139 CLR 362.Stephen J characterised s 14(1) of the Limitation Act as a procedural provision: ibid at 392.Cf L Aitken (1992), above n 12 at 492 where it is suggested that the decision "onlyinferentially touched upon the question of the Commonwealth's substantive liability".


59 of the Act in the sense that it is not limited to claims in tort or contract against theCommonwealth or States or instrumentalities. How was s 64 the source of thesubstantive right to proceed? The majority of the judges accepted that the reason s 64applies such laws is because "it is proper to regard s 64 as expressing the intention ofthe Parliament to subject the Crown in right of the Commonwealth as nearly aspossible to the same liability as would obtain in the like circumstances as betweensubject and subject".153 In the words of Murphy J, the Limitation Act became"surrogate Commonwealth law".154 The Limitation Act applied "by force ofCommonwealth law, and not by its own force as a State law".155

In his judgment, Gibbs J expressly adopted the passage from Kitto }'S judgment inAsiatic Steam Navigation Co Ltd v Commonwealth156 when the latter suggested that s 64was an independent ground for reaching the decision in that case. Kitto J had said:

[Section] 64 must be interpreted as taking up and enacting, as the law to be applied inevery suit to which the Commonwealth or a State is a party, the whole body of the law,statutory or not, by which the rights of the parties would be governed if theCommonwealth or State were a subject instead of being the Crown.157

The majority reasoning in Maguire v Simpson has been taken to endorse Kitto 1'sreasoning. In that passage Gibbs J referred to cases in which State statutes were appliedto the Commonwealth in claims in tort,158 suggesting that it was s 64 alone without s 56that rendered the Commonwealth subject to the State legislation in these cases.159 Thetort claims in those cases came in any event within the scope of s 56, but the commentsabout s 64 support the view that it applied the statute as a matter of federal law. It isimportant to note that the statutes in question in those cases affected or modified anexisting common law tort liability. They were not statutes which of their own rightimposed a direct statutory duty, breach of which could lead to a common law tortliability.160

Two judges in Maguire v Simpson, Barwick CJ and Jacobs J, considered that s 78 ofthe Constitution authorised the making of a law (that is, s 64 of the Judiciary Act) withrespect to substantive rights.161 Barwick CJ emphasised the historical context of Part IXof the Judiciary Act and the fact that s 78 was enacted to remove the Crown'straditional immunity in tort. He also contrasted s 78 rights with the exercise of federaljurisdiction under s 75 of the Constitution.162 He said:

153154

155156157158

159

160161162

(1976) 139 CLR 362 at 373 per Barwick CJ.Ibid at 408 per Murphy J. See also Australian Postal Commission v Dao (1985) 63 ALR 1 at 33per McHugh JA.(1976) 139 CLR 362 at 377 per Gibbs J.(1956) 96 CLR 397.Ibid at 424.Pitcher v Federal Capital Commission (1928) 41 CLR 385 (whether the Compensation toRelatives Act 1897 (NSW) bound the Commission in a claim in tort); Suehle v Commonwealth(1967) 116 CLR 353 (claim in tort under s 56 of the Judiciary Act); and Asiatic SteamNavigation (1956) 96 CLR 397 (proceedings in tort by the Commonwealth: whether s 503 ofthe Merchant Shipping Act 1894 (Imp) enabled the Commonwealth to limit its liability).Maguire v Simpson (1976) 139 CLR 362 at 381 per Gibbs J; see also P Hogg, above n 56 at228-229.For example, Cutler v Wandsworth Stadium Ltd [1949] AC 398.(1976) 139 CLR 362 at 370 per Barwick CJ.Ibid at 371.


In my opinion, the Parliament was authorized by s 78 to make a law giving ... asubstantive right against the Commonwealth in respect of any matter within the judicialcompetence of the Commonwealth.163

This comment about s 78 has been read in two ways. First, it has been read as limitingthe operation of s 78 to removal of the Crown's traditional immunity in tort andcontract.164 Secondly, it has been read as extending the operation of s 78 to literally"any matter within the judicial competence of the Commonwealth".165 It is implicit inthe Maguire v Simpson reasoning that, as s 64 operated to apply statutes as "surrogatecommon law", and thus supplied the basis of a cause of action, the distinction betweenjurisdiction and cause of action was maintained. It is important to note that Barwick CJwas the only judge to refer to the provisions in s 75 of the Constitution and that was inthe context of defining the removal of the Crown's traditional immunity andcomparing s 75 with s 78.

The scope of s 64 was considered further in Commonwealth v Evans Deakin IndustriesLtd.166 In that case it was successfully argued that the Subcontractors' Charges Act 1974(Qld), which was expressed to bind the Crown in right of the State of Queensland,bound the Commonwealth. The effect of that decision was that the Commonwealth asan employer became directly liable to its contractor's subcontractor. A majority of theHigh Court rejected the Commonwealth's argument that there needed to be some otherlaw of the Commonwealth which enabled the Commonwealth to be sued before s 64operated. For the Commonwealth it was argued that s 56 of the Judiciary Actperformed that function and as this was not a claim in tort or in contract, s 64 wasinapplicable. This argument, said the High Court,167 amounted to a return to thetheory rejected in Maguire v Simpson,168 that s 64 does not refer to the substantive rightsof the parties. The majority said, relying upon Commonwealth v Anderson, that theSupreme Court is given jurisdiction to entertain a suit to which the Commonwealth is aparty by the combined effect of s 39(2) of the Judiciary Act and s 75(iii) of theConstitution. That, they said, was the condition for the operation of s 64.169 Themajority found it "unnecessary" to consider whether s 78 was the sole source of thepower to make laws such as s 64 "governing the liability of the Commonwealth".170

In his dissenting judgment, Brennan J (as he then was) suggested that the reasoningof the majority equates a grant of jurisdiction conferred by the combined operation ofs 75(iii) of the Constitution and s 39(2) of the Judiciary Act with "rights to proceed".Brennan J's judgment is based upon the distinction between rights to proceed conferredby legislation made under s 78 of the Constitution and the conferring of jurisdiction toentertain a suit.171 Section 64, he said, is not a law conferring rights to proceed and

163164165166167168169

170171

Ibid at 370.Georgiadis (1993) 179 CLR 297 at 326 per McHugh J.Commissioner for Railways ofQueensland v Peters (1991) 102 ALR 579. See below at 116-119.(1986) 161 CLR 254. .Ibid at 264.(1976) 139 CLR 362.(1986) 161 CLR 254 at 264. The majority in the High Court also relied upon China OceanShipping Co v South Australia (1979) 145 CLR 172. The issue was whether the SupremeCourt of South Australia was exercising a federal jurisdiction.(1986) 161 CLR 254 at 263.

Ibid at 270.


cannot operate alone to confer rights to proceed.172 Brennan J said that for a suit to bevalidly constituted for the purpose of s 64, two partly coincident elements must bepresent. The first is that the suit is brought to obtain a remedy which can be grantedagainst the defendant if the relevant facts are established. He described the claimagainst the Commonwealth as a "novel statutory right".173 The second element is thatthe suit be brought in a court of competent jurisdiction.174

The majority reasoning has been criticised175 on the basis that it appears to amountto a reversion to the controversial decision of the majority in Commonwealth v State ofNew South Wales. 176 Certainly statements in the majority judgment referring toprevious authority could be so interpreted. However, on closer examination, they canbe explained by arguing that the majority in Commonwealth v Evans Deakin Industries Ltdmaintained the distinction between jurisdiction and cause of action.

The ma~ority relied in particular upon the statement by Dixon Jin Commonwealth vAnderson17 that "the essential condition of the application of s 64 is the existence of thesuit to which the Commonwealth is a party ...".178 To point to that statement asevidence of the blurring of the distinction is to take it out of context. That decision wasconcerned with whether the Commonwealth could be prevented by the Landlord andTenant (Amendment) Act, 1948-1958 (NSW) from taking an action in ejectment againstits tenant. The terms of the Act expressly excluded the Commonwealth from itsoperation. It was conceded that the Supreme Court had jurisdiction under s 39(2) of theJudiciary Act. It was decided that the State Act did not apply to the Commonwealth byvirtue of s 64. Dixon J said: "[I]t is the rights of parties as in a suit between subject andsubject, not the law, that are to apply as nearly as may be."179 The decision wasexplained by Gibbs J in Maguire v Simpson180 as follows:

All that this case decided is that a provision of a State law which prevents a court fromexercising jurisdiction in a suit of a particular kind is not applied by s 64 because it isonly when the court has jurisdiction that s 64 can operate.181

It was in other words "a case in which the law which was sought to apply affected thejurisdiction of the court and not the rights of the parties in the court which wasexercising the jurisdiction".182

Another view expressed by the majority in Commonwealth v Evans Deakin IndustriesLtd appears at first sight to endorse the constitutional argument.183 This arises from theexpress disapproval of dicta of McHugh JA (as he then was) in Australian PostalCommission v Dao184 when he said:

172173174175176177178179180181182183184

Ibid at 271-273.Ibid at 273.Ibid at 269.D Rose, "Government and Contract" in PD Finn (ed), Essays on Contract (1987) 233 at 236.(1923) 23 CLR 200.(1960) 105 CLR 303.Ibid at 310.Ibid.(1976) 139 CLR 383.Ibid at 384.Ibid.(1986) 161 CLR 254 at 266-267.(1985) 63 ALR 1.


Section 64 does not create causes of action; it assumes that the plaintiff has a cause ofaction against the Commonwealth. ... In my opinion, s 64 does not begin to operate asagainst the Commonwealth until the plaintiff has a cause of action which he can bringagainst the Commonwealth.18S

McHugh JA's dicta must, however, be read in the context of the facts in Dao's case.The issue in that case was whether the Anti-Discrimination Act 1977 (NSW) bound theAustralian Postal Commission against whom a complaint under the Act had beenlodged in the New South Wales Equal Opportunity Tribunal. It was decided that thetribunal had no jurisdiction to hear the claim because the New South Wales Act did notbind the Commission. In reaching this decision, Kirby P and Samuels JA relied upons 52(ii) of the Constitution as the Act conflicted with the exclusive power of theCommonwealth Parliament under that provision with respect to "departments" of thePublic Service. McHugh JA decided that the Act did not bind the Commission becausethere was an inconsistency between the Act and the provisions of the Postal ServicesAct 1975 (Cth) which set out the requirements for the employment of the Commission'sofficers. On a~peal, the High Court upheld the decision on the basis of theinconsistency.1 6 In giving its reasons, the High Court said:

[Section 64] was intended to fill what would otherwise be lacunae or gaps in the law ofthe Commonwealth. It is not to be understood as intended to have the practical effect ofoverriding s 109 of the Constitution by indirectly applying a provision of a law of a Stateto circumstances to which its direct application is invalidated by reason ofinconsistency...187

The dicta of McHugh JA cited above were in response to an argument that, despitethe inconsistency, s 64 of the Judiciary Act applied the New South Wales Act to theCommission. McHugh JA rejected that argument, as in effect did the High Court onappeal. He explained that because the Act did not apply, no action in tort (he socharacterised the action) arose. Earlier in his judgment, he agreed that s 64 had theeffect which the High Court gave to it in Commonwealth v Evans Deakin Industries Ltd,188namely that:

[T]he enforcement of an obligation, which the Commonwealth has incurredi

by reason ofits express or tacit consent, may in turn attract other liabilities under s 64 ... 89

It is important to note that, like Maguire v Simpson, the claim in Commonwealth v EvansDeakin Industries Ltd was primarily a claim in contract (as the effect of the statute was tosubrogate the contractor's rights to the subcontractor) which came broadly within thescope of Part IX of the Judiciary Act. The decision is equally open to the interpretationthat on the facts the majority of the High Court simply found it unnecessary todetermine the precise source of the right to proceed, as the Commonwealth's primaryliability arose under the general or common law. By contrast, on the facts of Dao's caseas characterised by McHugh JA, that primary liability (in tort) simply did not exist.

18S186187

188189

Ibid at 40.Dao v Australian Postal Commission (1987) 61 ALJR 229.Ibid at 231. This view is used by L Aitken (1992), above n 12, to support the constitutionalargument on the basis that s 64 provides some federal control over Commonwealthliability.(1988) 161 CLR 254 at 266-267.(1985) 63 ALR 1 at 33-34. At this point his Honour was dealing with the effect of theCigamatic and Bogle decisions discussed above at 97-99.


"As nearly as possible ..."On the facts of Commonwealth v Evans Deakin Industries Ltd it seemed sensible to applythe statute to the Commonwealth as it concerned IImakin~ a contract of a kindcommonly entered into by ordinary members of the public."19 This is consistent withthe meaning that has been given to the words "as nearly as possible" in s 64 of theJudiciary Act. Commonwealth Evans Deakin Industries Ltd can be supported as a policydecision which accords with the principle that governments should be subject to thesame law as citizens when analogous functions are being exercised.191 The results ofboth Commonwealth v Evans Deakin Industries Ltd and Maguire v Simpson are compatiblewith that principle.

In Commonwealth v Evans Deakin Industries Ltd,192 the High Court suggested that thenatural meaning of "as nearly as possible" means "as completely as possible".193 In thatcase, as no "function peculiar to government was involved",194 there was no problem inapplying the Subcontractors' Charges Act 1974 (Qld) to the Commonwealth. Similarlyin Maguire v Simpson,195 there was no difficulty in applying a State Limitation Act tothe Commonwealth Trading Bank. If s 64 were "naturally construed", it was said, thestatute would apply.196 However, the words have been interpreted as excludingliability where "purposes or functions peculiar to government" are in issue,197 or wherethe Crown's prerogative198 or "traditional immunities"199 are involved. But if theCommonwealth (or State) is carrying on business or pursuing an activity as if it were aprivate individual, the words "as nearly as possible" require that it be treated as such.In Commonwealth v John Fairfax and Sons, when the Commonwealth sought aninjunction to restrain the defendant from publishing a book in breach of copyright,Mason J said that the Commonwealth should give the usual undertaking with respectto damages as there was "no reason why a distinction should be drawn between theCommonwealth, at least when it seeks an interim injunction to protect a proprietary orprivate right, and a private citizen ...".200 Similarly, where the Commonwealth's tort

190191

192193

194195196197

198

199

200

(1986) 161 CLR 254 at 265.For that reason it has been decided that s 64 does not affect the principle in AucklandHarbour Board v R [1924] AC 318 (that the Crown can recover illegal payments made fromconsolidated revenue): Commonwealth v Burns [1971] VR 825; Sandvik Australia Pty Ltd vCommonwealth (1989) 89 ALR 213; cf Commonwealth v Crothall Hospital Services (AustJ Ltd(1981) 36 ALR 567(1986) 161 CLR 254.Ibid at 265 per Gibbs CJ, Mason, Wilson, Deane and Dawson JJ, adopting the expression ofKitto J in Asiatic Steam Navigation Co Ltd v The Commonwealth (1956) 96 CLR 397 at 427.(1986) 161 CLR 254 at 265.(1976) 139 CLR 362.Ibid at 376 per Gibbs J.Maguire v Simpson (1976) 139 CLR 362 at 393-5 per Stephen J, at 408 per Murphy J;Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254. See above n 191.Maguire v Simpson (1976) 139 CLR 362 at 406 per Jacobs J (eg, with respect to limitation ofactions.)Commonwealth v Lawrence (1960) 77 WN (NSW) 538 at 540 per Else-Mitchell J (eg: priority inrelation to Crown debts; restraints on disposal of Crown lands.)(1980) 32 ALR 485 at 498.


liability arises in circumstances which are analogous to a private citizen's, it will beliable.t01

Actions against States

The next issue to arise for decision was whether the explanation for s 64 which themajority in Maguire v Simpson had accepted was applicable to claims against States.That is, was s 64 a provision conferring rights to proceed in the federal jurisdictionagainst States because of Commonwealth law? Or was it necessary to refer to s 78 ofthe Constitution as Barwick CJ and Jacobs J had suggested in Maguire v Simpson?Doubts had been expressed about the soundness of either view to explain the ability ofthe Commonwealth legislature to affect the rights of States. In Commonwealth v EvansDeakin Industries Ltd, the High Court said in relation to s 64 of the Judiciary Act:

It is ... doubtful whether the Commonwealth has a general power to legislate to affect thesubstantive rights of the States in proceedings in the exercise of federal jurisdiction ...202

In Maguire v Simpson, Mason J had raised a similar query when he said:In the exercise of the powers conferred by s 51 the Commonwealth may make lawswhich alter or affect such substantive rights, but it is doubtful... whether theCommonwealth possesses a universal competence with respect to such rights, say, forexample, by virtue of s 51(xxxix).203

Gibbs J in China Ocean Shipping v South Australia agreed with that last view and,referring to s 78, added that "it seems clear that the Parliament has no power tolegislate so as to affect the substantive rights of a State outside the limits of federaljurisdiction ...".204 In Maguire v Simpson, Jacobs J pointed out that s 78 of theConstitution deals only with rights to proceed against the Commonwealth or a State,whilst s 64 of the Judiciary Act deals with the rights of the Commonwealth or a State insuits where the Commonwealth or State is a party. He added:

The source of the power to prescribe the rights of a State when that State is seeking reliefrather than the subject of proceedings against it is not clear to me ...205

In Commissioner for Railways of Queensland v Peters,206 the New South Wales Court ofAppeal decided that s 64 did prescribe the rights of a State in proceedings against it. Inthat case, the reasoning of Commonwealth v Evans Deakin Industries Ltd was applied to asituation where a State court was exercising federal jurisdiction under the combinedauthority of s 75(iv) of the Constitution and s 39(2) of the Judiciary Act in respect of aclaim which did not come within the scope of s 58 of the Judiciary Act. Furthermore,the Court referred to s 78 of the Constitution to support its conclusion. The proceedingsin the Peters case were to enforce a statutory entitlement to workers' compensation. Theworker was injured in New South Wales while cutting logs into railway sleepers to besupplied to the Commissioner of Railways in Queensland. The issue was whether theWorkers' Compensation Act 1926 (NSW) applied to the Commissioner.207 Section 47(1)

201202203204205206207

Groves v Commonwealth (1982) 150 CLR 113.(1986) 161 CLR 254 at 264.(1976) 139 CLR 362 at 401. Cf at 388 per Gibbs J.(1979) 27 ALR 1 at 24.(1976) 139 CLR 362 at 405. Cf at 370-371 per Barwick CJ.(1991) 102 ALR 579.It was found that the Commissioner was for relevant purposes to be treated as the Crownin right of Queensland.


of the Act provided that it "shall apply to workers employed by or under the Crown orany government department to whom [it] would apply if the employer were a privateperson".208 Two judgments were delivered, that of Kirby P (as he then was) and that ofPriestley JA (Waddell AJA agreeing).

Kirby P's reasoning was based upon a broad view of the scope of s 78. He adoptedthe view of Barwick CJ in Maguire v Simpson209 that s 64 of the Judiciary Act is a lawmade pursuant to s 78 of the Constitution. Kirby P's view was that the scope of s 58 islimited to claims in tort or contract210 and therefore did not apply on the facts of thatcase as the claim involved neither, but was "one based upon a statute conferringrights".211 In his view, the Workers' Compensation Act 1926 (NSW) applied by virtueof s 64 of the Judiciart Act. That is, he accepted that s 64 operates independently ofss 58-59. He confined2 2 those comments in Commonwealth v Evans Deakin Industries Ltdand Maguire v Simpson which questioned the role of s 64 in relation to the substantiverights of States to a situation where a State was seeking to enforce rights. He justifiedthe decision in Peters on two broad bases. First, he said that to decide that s 64 did notaffect the substantive rights of States in proceedings against it would lead to adichotomy between States and Commonwealth when sued in the federal jurisdiction.He said:

It would be a wholly unusual and unconventional construction of s 64 ... to find that,where the Commonwealth is a party, the "rights of parties" include substantive rights;but where the suit is against a State only, these "rights of parties" are confined toprocedural rights. 213

Secondly, he justified the decision in terms of the broad policy behind the words "asnearly as possible" in s 64. He drew support for this "process of assimilation"214 fromBropho v State of Western Australia215 in which the High Court re-examined the status ofthe presumption that the Crown is not bound by statutes in the light of the nature ofmodem government and said that it did not apply as an inflexible rule.216 He alsothought that, on the basis of Breavington v Godleman,217 the Commissioner hadconsented to the jurisdiction of the New South Wales court. Priestley JA, with whomWaddell AJA agreed, came to the same conclusion, but read s 58 of the Judiciary Act asapplying to this claim. That is, he thought that the words "whether in tort or incontract" in s 58 were not "words of limitation, but were used on the footing that any

208

209210211212

213214215216

217

A preliminary issue was whether the Workers' Compensation Act 1987 (NSW), which wasproclaimed after the date of injury, applied. Section 6(2) of that Act provided that it "bindsthe Crown, not only in right of New South Wales but also, so far as the legislative power ofParliament permits, in all other capacities". It was held that the Act did not applyretrospectively.(1976) 139 CLR 362 at 371-3.(1991) 102 ALR 579 at 598-600. On this point, Priestley JA and Waddell AJA disagreed.Ibid at 600.The leading judgment was delivered by Kirby P, with whom Priestley JA and WaddellAJA generally agreed, although they adopted different reasoning in relation to s 58 of theJudiciary Act.(1991) 102 ALR 579 at 603.Ibid at 604.(1990) 171 CLR 1.See S Kneebone, "The Crown's Presumptive Immunity from Statute New Light inAustralia" [1991] Public Law 363.(1989) 169 CLR 41.


claim otherwise within the section could be brought".218 He relied upon theParliamentary Debates on the Bill which became the Claims Against theCommonwealth Act 1902 to show that "the general understanding of the languageused [was] that any claim that a subject could bring against another could be broughtagainst the Crown".219 However, he agreed that s 78 was probably the source, thoughnot necessarily the exclusive source, of the rights to proceed, whether under ss 56 -59 ors 64 of the Judiciary Act.

Several comments can be made about this decision. The first is that it has clearlylinked the "rights to proceed" conferred by s 78 of the Constitution with the rightsreferred to in s 64 of the Judiciary Act,220 but has interpreted those rights as operatingbroadly to assimilate the liability of governments to that of private individuals "asnearly as possible" whether in tort, contract or otherwise. The policy behind the decisionin Commissioner for Railways v Peters is consistent with that in Commonwealth v EvansDeakin Industries Ltd of "assimilating" the liability of public defendants and privateindividuals "as nearly as possible". The distinction between causes of action andjurisdiction was maintained by the emphasis on s 78. The relevant causes of actionwere not limited to those described in ss 56-59 of the Judiciary Act, but extended to"any matter within the judicial competence of the Commonwealth", in this case s 75(iv)of the Constitution. It is arguable that the claim was in any event one in tort, as theprimary obligation (to compensate an injured employee) was a tortious one codified bystatute.221 If that analysis is correct, the application of the New South Wales statutewas consistent with the lex loci delicti.

Secondly it is significant that the Court relied upon the nature of the federaljurisdiction. There was a concern that the "rights of parties" in the federal jurisdictionbe uniform whether proceeding against States or the Commonwealth. Kirby Preferredto the need to interpret the provisions of the Constitution broadly so as to achieveuniformity in the application of laws to determine the rights of parties in the federaljurisdiction.222 The Court accepted the "legislative competence of the Commonwealth... in conferring rights to proceed against States ...".223 But the question of the rights ofparties in proceedings by States was left untouched. The fact that Kirby P saw s 64 asan expression of rights to proceed conferred by s 78 of the Constitution suggests that heagreed with the reservations of Jacobs J in Maguire v Simpson.224 A final comment isthat on the facts the decision is consistent with principles of extra-territorial application

218219220

221

222223224

(1991) 102 ALR 579 at 614.Ibid.This is consistent with the view of Barwick CJ in Maguire v Simpson (1976) 139 CLR 362 at371-3. Cf Brennan J in Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254 at271.The expression is used here to describe legislation which abrogates existing common laweither in whole or in part and replaces it with statutory provisions, eg, defamationlegislation and compensation schemes.For example, (1991) 102 ALR 579 at 598 (re s 75(iv); at 599 (re s 78); at 605 (re s 51(xxxix).Ibid at 613 per Priestley JA. See also at 605 per Kirby P.Also Maguire v Simpson (1976) 139 CLR 362 at 388 per Gibbs J: "The conclusion that I havereached ... does not mean that s 64 has an operation which extends beyond constitutionalpower". Note that the Constitutional Commission in its final report at para 6.277 remarked:"There can be no question of a general law under section 78, that lays down that [sic] thesubstantive rights of the States in all proceedings in federal jurisdiction."


of State legislation.225 It is also consistent with Public Curator of Queensland v Morris,226in which it was decided that a New South Wales Act bound the Crown in right of theState of Queensland.

TWO RECENT HIGH COURT DECISIONS: ENTRENCHEDJURISDICTION AND VESTED RIGHTS

In two recent High Court decisions the question was whether the Commonwealth'sliability could be extinguished by legislation, thus raising the issue of whether theCommonwealth's liability is constitutionally entrenched. In both cases, s 51(xxxi), the"acquisition of property on)ust terms" guarantee in the Constitution, was relevant. Inthe Mutual Pools decision,22 in which legislation which prescribed the circumstances inwhich a builder could claim a refund of sales tax paid under invalid legislation waschallenged, it was held that the Commonwealth could extinguish its liability to make arefund. In the Georgiadis decision,228 it was decided that legislation which extinguishedthe Commonwealth's common law liability in tort was invalid. In both cases counselhad referred in argument to the scope of s 78 of the Constitution, or to ss 56 and 64 ofthe Judiciary Act, but, with the notable exceptions of McHugh and Brennan JJ, inneither case did the High Court find it necessary to deal with these arguments. Thediscussion in the cases confirms that the jurisdiction of the High Court rather than therights of parties is entrenched by the Constitution.

The Mutual Pools decision

In Mutual Pools, the issue was whether the Swimming Pools Tax Refund Act 1992 (Cth)providing for tax refunds was valid. The Refund Act had been passed to deal with asuccessful High Court challenge by builders of swimming pools that legislationimposing a sales tax on the construction of swimming pools was an invalid tax law.Pending the outcome of the High Court challenge, builders had paid the disputed salestax on the basis that if the challenge were successful all amounts paid would berefunded. The Refund Act provided that the Commonwealth was liable to make arefund if a builder had not passed the liability to stamp duty on to the purchaser of theswimming pool, or if the builder had passed on the stamp duty but had refunded theamount paid to the purchaser. In this case the builder had passed on the stamp dutybut had not given a refund to the purchaser. The builder challenged the validity of theAct on the basis that it took away his right to claim "restitution" of a payment madeunder an invalid law. He argued that it was invalid for three reasons - that it was nota valid tax law under s 51(ii) of the Constitution, or under the incidental power inplacitum (xxxix) or an acquisition of property on just terms as required by placitum(xxxi). The Commonwealth argued that it had power under s 78 of the Constitution tolimit its liability and further that this power was not subject to s 51(xxxi) (and that inany event this was not an acquisition of "property" or that if it was, it was on "justterms" as it prevented a windfall to the builder). The Commonwealth's s 78 argument

225 For example, Union Steamship Co. of Australia v King (1988) 166 CLR 1; Pearce v Florenca(1976) 135 CLR 507. Kirby P noted (102 ALR 579 at 595) that had the 1987 Act hadretrospective operation those principles would have applied.

226 (1951) 51 SR (NSW) 402.227 (1993) 179 CLR 155.228 (1993) 179 CLR 297.


was based on the extended interpretation of the views of Barwick CJ and Jacobs J inMaguire v Simpson that s 78 applied to any relevant matter. The Solicitor-General forSouth Australia, intervening, argued that s 78 was not the source of power for theextinction of liability - that s 78 only applies to remove the "prerogative" immunitiesand does not extend to the creation or removal of liabilities not existing at common lawor under a valid statute. This is the limited interpretation of the views of Barwick CJand Jacobs J.

The High Court decided unanimously that the Act was a valid tax law under s 51(ii)and that it did not contravene placitum (xxxi). Four members of the Court also saidthat it was authorised by placitum (xxxix).229 The majority thus did not need to dealwith the s 78 argument. The exception was McHugh J, who agreed with the submissionof the Solicitor-General of South Australia that s 78 primarily relates to the removal ofthe Crown's immunity in tort and contract.230 He also cited a series of cases in supportof the proposition that the power of the federal Parliament to bar remedies is subject totwo restrictions: namely s 51(xxxi) and the principle that "what Parliament cannot do itcannot do indirectly". That is, the power conferred by s 78 was not intended "to enablethe federal Parliament to protect itself against the consequences of enacting a statutebeyond its constitutional powers."231 He said:

Section 78 must be read in the context of a document which allocates powers between theCommonwealth and States and creates a High Court in which it vests the judicial powerof the Commonwealth for the purpose, inter alia, of enforcing the Constitution'sallocation of power.232

This, he thought, was an argument for saying that the jurisdiction conferred on theHigh Court by s 75(iii) should be entrenched in the same way as it is for s 75(v) of theConstitution when a privative clause is in issue.233 However, he continued, referring toCommonwealth v New South Wales,234 this did not mean that s 75(iii) was itself thesource of liability.235 It simply meant that its inclusion in the Constitution enablesactions to be brought in the High Court about the scope of the Commonwealth'sconstitutional powers. He concluded that this meant that "it would not be open to thefederal parliament to bar the right to Eroceed against the Commonwealth in respect ofthe scope of its constitutional powers".236

McHugh ]'8 view is consistent with the idea that s 78 of the Constitution is limited toremoval of the Crown's immunity in tort (and contract). It is also endorses thedistinction between a cause of action and jurisdiction. By comparing ss 75(iii) and (v) of

229230231

232233

234235236

Mason CJ, Brennan, Dawson and Toohey JJ.(1993) 179 CLR 155 at 215.Ibid. McHugh J relied in particular upon the Canadian authority of Amax Potash Ltd vGovernment of Saskatchewan [1977] 2 SLR 576 at 592. Note that Professor Campbell pointsout that some of the opinions in Werrin's case (1938) 59 CLR 150 support the contraryproposition. See E Campbell, above n 26 at 27-34. See also C L Pannam, "Torts underUnconstitutional Statutes" (1966) 5 Melb Univ LR 113 at 133-134.(1993) 179 CLR 155 at 216.Ibid. In support, he cited a number of cases involving privative clauses in which the HighCourt has held that its jurisdiction in relation to judicial review under s 75(v) is entrenched,eg, R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598.(1923) 32 CLR 200.(1993) 179 CLR 155 at 217.Ibid.


the Constitution, McHugh J emphasised the significance and entrenched nature of theHigh Court's jurisdiction. By suggesting that s 78 does not permit the enactment ofinvalid legislation, McHugh J rejected the Commonwealth's argument based upon thebroad view of s 78 and recognised that s 78 is subject to the Constitution.

The High Court in Mutual Pools recognised that their decision was consistent withthat in Werrin v Commonwealth.237 That was an action in restitution and two membersof the High Court decided that there could be no recovery because the money was paidvoluntarily under a mistake of law,238 whilst three decided on the basis that thelegislation barring the action was valid.239 In Mutual Pools, some indirect reference wasmade to the fact that the plaintiff's rights might lie in restitution. Counsel for theCommonwealth argued that the terms of the Act (which precluded a refund where thebuilder had passed the tax on to the purchaser and not refunded the tax) wereconsistent with the common law (equitable) principles of restitution based on unjustenrichment; these principles prevented windfall gains by builders. Because of theviews developed in their judgments, the High Court did not need to consider whetherthe "acquisition" was in any event on "just terms". Brennan J alone considered this inpassing - he thought that it did not satisfy that requirement. He pointed out that "thedebt was owned beneficially by the plaintiff ... not by the pool owners" and thattechnically the plaintiff's claim for "restitution" was not dependent on the plaintiff'sarrangement with the pool owner.240

As a result of the decision of the High Court in David Securities v CommonwealthBank,241 and that of the House of Lords\'in Woolwich Equitable Building Society v InlandRevenue Commissioners,242 the plaintiff's claim could not have been rejected on theground that it involved a mistake of law. As for the Commonwealth's argument thatthe Act prevented a windfall by the builder as he had passed on the payment, it ispossible that a defence of "passing on" might have succeeded. It is now well establishedthat the right to restitution is based upon the unjust enrichment of the recipient ratherthan upon an implied contract.243 The "passing on" defence was recently considered byMason CJ,244 who concluded that it should not succeed "unless it is established that thedefendant's enrichment is not at the expense of the plaintiff but at the expense of someother person ...".245 He explained that a plaintiff fails in such circumstances not becausethe tax has been passed on, but because the defendant is enriched by someone other

237

238239240241242243244

245

Ibid at 173 per Mason CJ, at 204-205 per Dawson and Toohey JJ, at 211-212 per McHugh J.Werrin v Commonwealth was discussed above in relation to the effect of s 75(iii) of theConstitution.Latham CJ and McTiernan J.Rich, Starke and Dixon JJ.(1993) 179 CLR 155 at 177.(1992) 175 CLR 353.[1992] 3 All ER 737.Pavey Matthew Pty Ltd v Paul (1986) 162 CLR 217.See Commissioner of State Revenue v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 69. Inthat case, which concerned the interpretation of a statutory discretion to refund overpaidstamp duty, Mason CJ alone based his conclusion upon "common law restitution" (asBrennan J labelled it, ibid at 90). The other judges came to the same conclusion on the factsby relying upon the interpretation of the statutory discretion.Ibid at 73.


than the plaintiff.246 On the facts of Mutual Pools, the Commonwealth's enrichmentappeared to be at the expense of the purchaser and thus the decision is consistent withthe merits (despite Brennan J's view).

On the facts of Mutual Pools in the context of the placitum (xxxi) "acquisition on justterms" argument, the Refund Act was characterised as extinguishing a cause ofaction247 (the plaintiff's "chose-in-action" or common law right to claim the debt)248rather than "an acquisition of property".249 Deane and Gaudron JJ in their jointjudgment and McHugh J in his judgment stressed that s 51(xxxi) contains aconstitutional guarantee but that such guarantees are subject to displacement wheretaxation laws are concerned. They said that it is a matter of construction.250 McHugh Jexplained that the exercise of the taxation power necessarily involves an acquisition ofproperty from the taxpayer.251 Deane and Gaudron JJ said that placitum (xxxi) in s 51"exists as a confining component of the subject matter of that paragraph's positive grantof legislative power."252 In a spate of recent cases, challenges to Commonwealth lawsremoving the rights of individuals as contraventions of placitum (xxxi) have beenrejected and the Mutual Pools decision has been applied to uphold the legislation. Thesewere cases where the individual's rights could be described as statutory entitlements253or where the nature of the right was subject to the exercise of the Commonwealth'sprerogative rights254 or the public interest.255 These cases illustrate the limits of theconstitutional guarantee which s 51(xxxi) contains.

The Georgiadis decisionIn the second case, Georgiadis v Australian and Overseas TelecommunicationsCorporation,256 it was decided by four judges to three that a statute removing thecommon law right to claim damages did contravene placitum (xxxi) of s 51 (acquisitionon "just terms"). The statute in question was s 44 of the Commonwealth Employees'Rehabilitation and Compensation Act 1988 (Cth) (the Comcare Act) which had theeffect of limiting an injured employee to a claim for statutory compensation bypreventing an action for damages after December 1988. The plaintiff had sustained a

246247

248249

250251252253

254

255

256

Ibid.(1993) 179 CLR 155 at 173 per Mason CJ, at 185 per Deane and Gaudron JJ, at 204 perDawson and Toohey JJ.Ibid at 176 per Brennan J.Brennan J decided that the Refund Act could not be characterised as a law providing forthe taking of property: ibid at 177-181. Cf Deane and Gaudron JJ, who decided that the Actwas outside the reach of the constitutional guarantee provided by s 51(xxix): ibid at 184190. See also ibid at 221-222 per McHugh J. Dawson and Toohey JJ decided that the Act didnot involve the acquisition of property: ibid at 194-204.Ibid at 186 -187 per Deane and Gaudron JJ, at 222-223 per McHugh J.Ibid at 221.Ibid at 185.For example, Health Insurance Commission v Peverill (1993) 179 CLR 226 (retrospectivereduction of benefits payable under the Medicare scheme). Cf Gilvarry v Commonwealth(1994) 127 ALR 721, discussed below at 126-128.Re Director of Public Prosecutions; Ex parte Lawler (1993) 179 CLR 270 (seizure of vessel usedin commission of offence under fisheries legislation).For example, WSGAL Pty Ltd v Trade Practices Commission (1994) 122 ALR 673 (divestitureprovisions justified in the public interest to maintain competition in trade and commerce).(1993) 179 CLR 297.


series of injuries before 1988. Thus the statute extinguished the plaintiff's pre-existingright to bring a common law action in tort. It was argued on behalf of theCommonwealth that s 51(xxxi) does not operate to restrict the powers of Parliament toamend statutory schemes dealing with rights which have not yet come into existence,or which merely alter the plaintiff's right to claim compensation. It was argued furtherthat rights to proceed against the Commonwealth are creations of ss 56 and 64 of theJudiciary Act, "granted gratuitously, and as such are liable to diminution orextinction."257 That is, it was argued that because the Commonwealth's immunity intort had been removed by statute, it could be later "waived" by statute, as in the case ofother statutory entitlements. Finally it was argued that the legislation did not involvean acquisition of property; at the most it involved extinguishing property.

The judges in the majority decided the case on the s 51(xxxi) argument, althoughBrennan J did refer to the Commonwealth's argument that its immunity could berestored by statute. Mason CJ/ Deane and Gaudron JJ/ in a joint judgment, decided thatextinguishing a vested cause of action amounted to an acquisition, "at least where theextinguishment results in a direct benefit or financial gain ... and the cause of actionarises under the generallaw."258 They continued:

The position may be different in a case involving the extinguishment or modification of aright that has no existence apart from statute.... There is no acquisition of a right whichhas no basis in the general law and which, of its nature, is susceptible to that course.259

In conclusion they said:Thus and so far as it bears on the issues in this case, s 44 is, in substance if not in form, alaw for the acquisition of causes of action against the Commonwealth and its agencieswhich vested in employees before s 44 came into operation ....260

In response to the Commonwealth's argument based upon ss 56 and 64 of the JudiciaryAct, Brennan J said:

Assuming, without deciding, that the Commonwealth's liability in tort is dependent onlaws of the Commonwealth, that liability is not the creature of statute. The liability iscreated by the common law and, provided the corresponding common law cause of action isvested, the person in whom it is vested is entitled to the protection of s 51(xxxi). It may be... that the Commonwealth's immunity in tort was removed by laws of theCommonwealth but, so long as that immunity is removed, the causes of action created by thecommon law and vested in a person are protected by s 51(xxxi).261

It is important to note that the plaintiff's interest was consistently characterised by themajority as a vested or common law right. It is conceivable that if the judges whodelivered the joint judgment had considered the source of the Commonwealth'sliability, they would have expressed the same opinion as Brennan J/ namely that it is acreature of the common law giving rise to a vested common law right which s 51(xxxi)would protect. The view of Brennan J (which is consistent with the reasoning of theother majority judges) is that there could be no "waiver" of such common law rights solong as the immunity is removed. But in the same passage he leaves open the question

257 Ibid at 300.258 Ibid at 305. They gave as an example of a "vested cause of action" an action against the

Commonwealth for goods sold and delivered.259 Ibid at 305-306.260 Ibid at 306 (emphasis added).261 Ibid at 312 (emphasis added).


whether a removal of that immunity by amendment to s 64 of the Judiciary Act wouldinfringe s 51(xxxi). Significantly, the majority did not refer to s 78 of the Constitution.

The dissenting judges in Georgiadis all delivered separate judgments and two ofthose three, relying upon s 78 of the Constitution, expressed the view that a "waiver" ofimmunity would not contravene s 51(xxxi). Dawson and Toohey JJ concluded that thelegislation involved an extinguishment rather than an acquisition of property.262Toohey J seemed to accept the Commonwealth's argument that the legislative waiverof the immunity in tort could be reversed. He said:

The right to bring a suit against the Commonwealth in tort is conferred byCommonwealth legislation and it is hard to see how a law which affects that right, evena law diminishing or extinguishing it, can fall within s 51(xxxi).263

McHugh J also dealt with the argument that the Commonwealth could "reverse" thewaiver of its immunity. He thought that ss 56 and 64 of the Judiciary Act were thesource of the Commonwealth's liability and that in the light of s 78, laws could bepassed removing that liability.264 McHugh J reiterated the view that s 75(iii) of theConstitution was not the source of liability,265 referring again to the decision inCommonwealth v New South Wales. On the facts (and because s 78 was the constitutionalsource of the "right to proceed"), McHugh J thought that no question of complying withs 51(xxxi) arose.266 Thus McHugh J confirmed the views he had expressed in theMutual Pools case, that s 78 of the Constitution should be read with ss 56 and 64 of theJudiciary Act as being directed to removing the Crown's immunity in tort and contract,and that such removal could be reversed. Further, he was of the opinion that where anexercise of power is challenged for contravening s 51(xxxi) of the Constitution, theconstitutional guarantee is subject to displacement. In this case, because s 78 of theConstitution referred to rights which could be altered by subsequent legislation, theconstitutional guarantee was displaced.

As a result of this case it appears that there is a view emerging amongst somemembers of the High Court (Brennan CJ and Gaudron J of the current Court) that theliability of the Commonwealth is entrenched in the common law, protected bys 51(xxxi). The corollary of this view is that there cannot be any "waiver" of thetraditional immunity. The cases suggest a distinction between vested (common law)rights and non-vested or statutory and prerogative rights and this must be appreciatedin determining whether removal of the Commonwealth's liability infringes s 51(xxxi),and whether there can be a "waiver" of immunity. However, some members of theHigh Court (for example, McHugh and Toohey JJ)267 are of the view that theCommonwealth's liability arises from a statutory waiver of immunity and can besubsequently modified or reversed by legislation which falls outside the protection ofs 51(xxxi). But it is difficult to see how it can be concluded, as Aitken has, that thesecases show that some members of the High Court "are moving to a position where the

262263264265266267

Ibid at 315 per Dawson J, at 320 per Toohey J.Ibid at 321.Ibid at 326.Ibid at 325.Ibid at 326.It is possible that Kirby P ('1-s he then was) shares their view on the basis of his analysis inCommissioner for Railways v Peters (1991) ALR 579. See discussion above at 116-119.


liability of the Commonwealth is entrenched and constitutionally guaranteed".268 Theposition as described above is that some judges look for the source of liability in thecommon law or otherwise as a preliminary to considering the constitutional validity ofCommonwealth action, whereas others tend to the view that the removal of theCrown's traditional liability can be reversed by legislation. However it is accepted thatthe jurisdiction of the High Court, but not the liability of the Commonwealth, isentrenched by the Constitution.

The view that Georgiadis endorses the entrenchment of vested or common law rightswas acce~ted and applied in the recent Federal Court decision of Commonwealth vMewett.26 In a preliminary application to strike out a statement of claim, the effect ofthe Georgiadis decision and the notion of "acquisition of property" were extended toprotect vested rights which were barred by a Statute of Limitations. In that case theplaintiff sued the Commonwealth in tort and contract in New South Wales for injurieshe had sustained in Victoria whilst aboard a ship. The plaintiff was a member of theRoyal Australian Navy at the time.270 The incident occurred in 1979 and, if ss 14 and63(1) of the Limitation Act 1969 (NSW) had applied, the plaintiff's cause of actionwould have been extinguished in 1985. Section 44 of the Comcare Act was also in issue(as in Georgiadis) as the claim was made after December 1988. Foster J rejected theapplication to strike out the statement of claim on the basis that, subject to theplaintiff's right to seek an extension of the limitation period, his rights were "vested"within the meaning of s 51(xxxi) and capable of being revived at the time that s 44came into operation.271 Foster J described "vested" rights as those "otherwise availableto found an action".272 He decided that a successful application for extension of timewould retrospectively result in the plaintiff's cause of action being vested at the timethat s 44 commenced. He rejected the argument that s 44 converted the plaintiff's rightsinto mere statutory creations for the purpose of s 51(xxxi) of the Constitution.

The facts of that case also show that the issue of whether rights are vested oftenintermingles with choice of law issues. The cause of action arose in Victoria and thelegislation in that State may not have had the effect of barring the action as did theLimitation Act 1969 (NSW) on its face. Foster J decided that s 56 rather than s 79 of theJudiciary Act supplied the choice of law rule on the facts of that case, where it was aquestion of the application of a State statute to a plaintiff rather than to theCommonwealth. In so doing, he applied the decision of Windeyer J in Suehle vCommonwealth,273 in which it was decided that s 56 refers to the lex loci delicti. InCommonwealth v Dinnison,274 where a claim was brought against the Commonwealth inNew South Wales for a cause of action arising in South Austalia (where the relevant

268269270

271

272273274

L Aitken (1994), above n 12 at 691.(1995) 126 ALR 391 per Foster J.Groves v Commonwealth (1982) 150 CLR 113; Commonwealth v Verwayen (1990) 170 CLR 394;Commonwealth v Connell (1986) 5 NSWLR 218 are examples of liability arising out of theservices in peace time.Cf Gilvarry v Commonwealth (1994) 127 ALR 721. In that case it was decided that there wasno acquisition by s 44 of a statute-barred claim, in the face of a provision which updatedthe limitation period to a point after s 44 had come into effect. This is discussed below at126-128.(1995) 126 ALR 391 at 397.(1967) 116 CLR 353.(1995) 129 ALR 239.


Limitation Act barred the action), Gummow and Cooper JJ in obiter discussion thoughtthat the parties might have argued that s 79 "picked up" s 63 of the Limitation Act(NSW) and that this contravened s 51(xxxi) of the Constitution.275

The decision of Nathan J in the Supreme Court of Victoria in Gilvarry vCommonwealth,276 where the facts were substantially similar to those in Mewett's case,illustrates a different approach. Gilvarry's case, like Georgiadis and Mewett, was alsoconcerned with the effect of s 44 of the Comcare Act. The plaintiff was a sailor on boardthe HMAS Voyager which sank off Jervis Bay in New South Wales in 1964. In 1994 heissued a writ against the Commonwealth in the Supreme Court of Victoria; his claimrelated to psychiatric injuries. The Commonwealth raised s 5(1)(a) of the Limitation ofActions Act 1958 (Vic), which prohibits the bringing of a negligence action more thansix years after the cause of action arose. The Commonwealth also argued that s 44extinguished the plaintiff's claim. The plaintiff in tum claimed that s 5(1A) of theLimitation Act applied to him, as it allowed for an action in negligence to be broughtnot more than six years from the date upon which a person first knew that he hadsuffered personal injuries. He argued that s 44 contravened s 51(xxxi) of theConstitution. Nathan J decided that the plaintiff's action was not maintainable.

He proceeded from the premise that the issue was to be decided as one ofconsistency between a State and a Commonwealth Act. He referred to DeputyCommissioner of Taxation v Moorebank277 as further authority, and decided that theComcare Act had "covered the field".278 He rejected the argument that s 44 could becharacterised as an acquisition of property, saying that the plaintiff's statute-barredcause of action "is not property that can be acquired", or, alternatively that "his rightshave been extinguished rather than acquired".279 He dismissed the argument thats 5(1A) of the Limitation Act was a procedural provision which applied by virtue ofs 64 or s 79 of the Judiciary Act. There are two aspects of this reasoning which aretroubling. The first is Nathan J's primary analysis of the issue as a constitutional one.The second is his analysis of the effect of the Limitation Act upon Mr Gilvarry's rights.

In Georgiadis,280 the effect of s 44 of the Comcare Act upon statute-barred causes ofaction was expressly left open in the majority joint judgment,281 but it was stressed thats 44 is not a law which modifies limitation periods in relation to causes of action whichhad come into effect before the new scheme.282 It was said in the joint judgment inGeorgiadis that it was necessary to see what causes of action were vested in the plaintiffwhen s 44 of the Comcare Act came into effect, but it was also emphasised that thecauses of action which were found to be vested on the facts of that case reflected theexpectations of the plaintiff when he performed the work which led to the injury.283That is consistent with the majority's characterisation of the plaintiff's rights as arisingfrom the common law in that case. Further, in the joint judgment in Georgiadis it was

275276277278279280281282283

Ibid at 243.(1995) 127 ALR 721.(1988) 165 CLR 55, referred to (1995) 127 ALR 721 at 737.Ibid at 735-736 and 737.(1995) 127 ALR 721 at 733.(1993) 179 CLR 297.Ibid at 308.Ibid at 307.Ibid at 306.


stressed that the constitutional guarantee contained in s 51(xxxi) was to be construed"liberally".284 Their Honours did say, however, that tIs 44 may be susceptible of othercharacterizations".285

Nathan J in Gilvarry viewed the matter as primarily one of a competition betweenState and Commonwealth legislation, rather than analysing what rights the plaintiffhad when the Comcare Act came into effect. He characterised Mr Gilvarry's "statutebarred action" as "not property that can be acquired."286 This reasoning appears to becontrary to the thrust of the majority's emphasis on common law rights in Georgiadis,but aligned with the emphasis placed by the minority in that case on theCommonwealth's power. Further, in Gilvarry the plaintiff was claiming the benefit of aextension of his rights rather than the benefit of the extinguishment of claims againsthim as in Moorebank. It seems inappropriate to use s 109 of the Constitution to resolvequestions about a plaintiff's rights as distinct from Commonwealth rights, particularlywhen those rights concern a basic common law right to compensation.287 The majorityin the Georgiadis case regarded it as significant that s 44 of the Comcare Act appliesonly to Commonwealth employees.288 That strengthened their view that s 44 was a lawfor acquisition of property as it targeted those employees as a special group. That againemphasises the plaintiff's common law rights.

The second aspect of Nathan ]'S reasoning relates to the effect of s 5(lA) of theLimitation Act. Arguably it is similar to the extension provisions of the New SouthWales Act which were discussed in Mewett's case. 289 Mr Gilvarry had also argued thats 5(lA) of the Limitation Act operated retrospectively, and that in this respect it wasakin to s 23A of the Victorian Act which provides for an extension of time. Nathan J,however, equated enforceable claims (remedies) with vested claims or rights.290 Thatappears to confuse the issue of jurisdiction with causes of action. He said:

Section 44 does what it says, and s 5(lA) does not by procedural means, reinstate thesubstantive right to common law damages for negligence, curtailed by Comcare.291

However, it could be argued that the plaintiff's cause of action did vest retrospectively,particularly given the nature of the injury (psychiatric damage which can be latent forsome years). Further it is arguable that s 5(lA) is both substantive in that it defines aclaimant's rights and procedural in qualifying s 5(l)(a).292 Moreover, it is a wellestablished principle of statutory construction that statutes should not be interpreted"so as to impair existing rights or to attach a new disability in regard to events alreadypassed."293

284285286287288289290291292293

Ibid at 303.Ibid at 308.127 ALR 721 at 733.Commonwealth v Dixon (1988) 13 NSWLR 601 at 622 per Mahoney J.(1993) 179 CLR 297 at 308.(1995) 126 ALR 391.(1995) 127 ALR 721 at 729.Ibid at 738.Cf McKain v Miller (1991) 174 CLR 1 at 41.Commonwealth v Dixon (1988) 13 NSWLR 601 at 611 per Hope JA (discussing the effect ofs 63 of the New South Wales Limitation Act which was expressed to extinguish a cause ofaction on the expiration of the limitation period).


Gilvarry's case simply raised the question whether s 79 (in conjunction with s 64 ofthe Judiciary Act) applied s 5(lA) of the Limitation Act to the Commonwealth inproceedings against it in the Victorian Supreme Court as the lex fori. Nathan J,however, discussed and dismissed an argument based upon the effect of s 79 of theJudiciary Act, distinguishing Maguire v Simpson294 on the basis that it was concernedwith the substantive rights of the Commonwealth.295 A similar distinction was madeby Foster J in Mewett's case,296 and possibly for that reason his Honour preferred s 56as a choice of law rule (Nathan J did not refer to s 56). But, with respect to both judges,this manner of distinguishing Maguire v Simpson is not consistent with the fact that s 79applies generally to proceedings in the exercise of federal jurisdiction. Overall theGilvarry decision illustrates in a practical way the difference between the perspectivesadopted by McHugh J and Brennan CJ. The latter emphasises common law rights, theformer the Commonwealth's power.

SUMMARY AND DISCUSSION

At the outset the debate as to the source of the Commonwealth's civil liability wasexpressed as being between constitutionally entrenched liability (arising from theconferral of jurisdiction under the Constitution) and rights conferred by s 64 of theJudiciary Act, combined with "rights to proceed" allowed by the Constitution, subjectto legislative removal. In fact the authorities suggest that in the light of the followingpropositions, the debate has to be reformulated:

• The High Court has stressed that its jurisdiction rather than the cause of action(or its substantive liability) is entrenched by the Constitution.

• The bulk of authority favours the view that s 78 of the Constitution, read withss 56 and 64 of the Judiciary Act, is responsible for the removal of theCommonwealth's immunity in tort. The corollary of this, according to the viewof McHugh J (which is shared by Toohey J), is that such removal can be"waived".

• There is a division of opinion about whether that removal of immunity can bewaived in the light of s 51(xxxi) of the Constitution. In Georgiadis the majoritystressed the common law source of rights to sue the Commonwealth. In theirview such rights are entrenched and protected by s 51(xxxi). That view wasendorsed in Mewett's case. It follows from this view that the immunity cannot bewaived in relation to entrenched common law rights.

• The minority in Georgiadis thought that the fact that such immunity wasconferred by statute (s 78 of the Constitution was stressed) meant that it could bewaived by statl.lte. The constitutional guarantee of s 51(xxxi) was thus displaced.That view is the antithesis of the constitutional argument as it uses the fact that"rights to proceed" are conferred by the Constitution to argue for their removal.

Thus the debate is not about whether s 75(iii) of the Constitution entrenches liabilitybut whether the immunity of the Commonwealth can be waived in relation to its

294 (1976) 139 CLR 383.295 (1995) 127 ALR 721 at 737.296 (1995) 126 ALR 391 at 409. Foster J's reasoning was also based upon his view of the nature

of the jurisdiction which the Federal Court exercised in that case. See discussion below at130.


liabilities. The debate has arisen in the context of the constitutional guarantee providedby s 51(xxxi). There is agreement that statutory and other "non-vested" liabilities can bewaived.297 At the heart of the debate is the nature of rights to sue the Commonwealthand the effect of removal of the traditional immunity: are such rights, as Dixon Jexpressed it in Werrin v Commonwealth, rights existing "in contemplation of law"298which ripen upon the creation of a procedural right? This view, which accords withBrennan Crs notion of "entrenched common law rights", is consistent with the basicrule that the liability of governments is to be governed by the same principles andunder the same headings as apply to private individuals. The view of McHugh J ineffect treats the tort liability of the Commonwealth as a species of statutory liability.

There are important differences between the two views. The view of McHugh J (thatthere can be "waiver") is based upon his vision of the nature of the federal system. Inthe Mutual Pools case he stressed that s 78 had to be read in the context of aConstitution that allocates power between the Commonwealth and States but whichvests judicial power in the Commonwealth. The view of Brennan CJ is that liabilityderives from the common law and that s 51(xxxi) of the Constitution preserves it. Thereis thus a fundamental difference of perspective which is illustrated by the comparisonbetween the views of Foster J in Mewett's case299 and those of Nathan J in Gilvarry'scase.300 The view of McHugh J (which corresponds to that of Nathan J), emphasises theparamountcy of Commonwealth rights under the Constitution. The view of Brennan CJ(which corresponds to that of Foster J), emphasises the common law basis of citizens'rights agahLst governments where civil liability is in issue.

There are serious limitations to the view of McHugh J which is based upon thejudicial power of the Commonwealth. Consideration needs to be given to the positionof courts exercising federal jurisdiction. That federal jurisdiction is of a special nature,deriving from different sources301 to those of the High Court's jurisdiction (upon whichthe view of McHugh J relies). In Breavington v Godleman302 and again in McKain vMiller,303 Deane J insisted upon "the overall unity of the law of this country and theconsistency and predictability of the identity of applicable substantive rules under [a]national legal system".304 Commissioner for Railways v Peters illustrated that in thecontext of proceedings against States, s 78 of the Constitution, in conjunction with s 64of the Judiciary Act, enables a degree of consistency and uniformity to be obtained inproceedings in the federal jurisdiction. The view of McHugh J, which emphasises theparamountcy of Commonwealth powers, is not easily reconciled with the nature of thefederal jurisdiction.

Further, there are uncertainties about the application of the view of McHugh J whenthe Federal Court is exercising jurisdiction. The Federal Court may derive its

297

298299300301302303304

Health Insurance Commission v Peverill (1993) 179 CLR 226; Re Director of Public Prosecutions;Ex parte Lawler (1993) 179 CLR 270; WSGAL Pty Ltd v Trade Practices Commission (1994) 122ALR673.(1938) 59 CLR 150 at 167-168.(1995) 126 ALR 391.(1994) 127 ALR 721., ·Discussed above at 102-105.(1988) 169 CLR 41 at 121.(1991) 174 CLR 1.Ibid at 46.


jurisdiction from several sources: cross-vested jurisdiction, associated or accruedjurisdiction305 in conjunction with an application under s 39B of the Judiciary Act,306 orremitted jurisdiction under s 44(2A) of the Judiciary Act which refers to s 75(iii)matters. In Commonwealth v Dinnison,307 Gummow J described the Federal Court'sremitted jurisdiction as "co-extensive"308 with the High Court's for the purpose of theapplication of s 79 of the Judiciary Act.309 The combined effect of s 44(2A) of theJudiciary Act and s 19 of the Federal Court Act (which describes the Federal Court'soriginal jurisdiction) is to confer the High Court's original jurisdiction in s 75(iii)matters on the Federal Court. If the Federal Court's jurisdiction derives from s 39B ofthe Judiciary Act, recent High Court authority suggests that the jurisdiction is notconstitutionally entrenched, at least where a privative clause is in issue.310 It is thusunclear whether the argument about entrenched jurisdiction applies to the exercise ofjurisdiction by the Federal Court in civil proceedings.

CONCLUSION

The reformulated debate about the source of the Commonwealth's liability involvestwo interrelated questions:

• whether the Commonwealth's liability should be constitutionally entrenched in someform; or

• whether s 64 of the Judiciary Act in conjunction with s 51(xxxi) provides adequateprotection for the rights of citizens.In relation to the first issue it is submitted that the argument in favour of

constitutional entrenchment is weak. It pays insufficient regard to the history of Crownimmunity and to the background of the legislation which was clearly intended to putthe Commonwealth in the same position as individuals in accordance with the basicrule. It ignores the fact that the courts have achieved sensible results through theapplication of s 64 of the Judiciary Act. It would lead to difficulties in applyingstatutory protection clauses311 and other similar restrictions upon liability against theCommonwealth.312 This in tum would create discrepancies in comparison with theposition of the States, the liability of which is not constitutionally entrenched.Moreover, it is arguable that entrenching rights in the Constitution would have theeffect of enhancing the assumed superiority of the Commonwealth by preventing theapplication of statutes. It was argued that the operation of s 64 of the Judiciary Actmodifies the effect of the Cigamatic decision which is based upon the assumedsuperiority of the Commonwealth. Gilvarry's case illustrates the effect which an

305306

307308309

310

311312

Federal Court Act 1976 (Cth), s 32.For example, Bienke v Minister for Primary Industries & Energy (1994) 125 ALR 151; 34 ALD413.(1995) 129 ALR 239.Ibid at 243.Cf Commonwealth v Mewett (1995) 126 ALR 391 at 402 where Foster J described it as"derivative or surrogate" of the High Court.Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 69 ALJR 223. A majoritydisapproved of the decision in David Jones Finance & Investments Pty Ltd v FederalCommissioner ofTaxation (1991) 99 ALR 447.Little v Commonwealth (1947) 75 CLR 94.Musgrave v Commonwealth (1937) 57 CLR at 546 per Dixon J.


approach based on the assumed supremacy of Commonwealth powers has upon therights of an individual. Finally, constitutional entrenchment is difficult to reconcilewith the separation of powers which the Constitution envisages. To enable Parliamentto control the liability of the Commonwealth or States sued in the federal jurisdictionwould undermine the role of the courts to determine the rights of parties.

In Bienke v Minister for Primary Industries and Energy,313 after querying the extentand source of "waiver" of the Commonwealth's liability, Gummow J continued: "Doesthe 'waiver' extend to actions against public officers of a kind previously noncognisable?"314 This statement highlights the potential of the constitutional argumentto unsettle the stability which the courts' interpretation of s 64 has created. Gummow Jsaid that the uncertainty surrounding this "waiver" might be used to create new typesof liability, such as an "administrative tort".315 These comments overlook the rolewhich s 64 of the Judiciary Act has played in confining liability to existing causes ofaction and to statutory liabilities in accordance with the basic rule.

Section 64's role is consistent with the "affected by" doctrine and the policy ofassimilating the liability of governments and individuals as far as possible inaccordance with the basic rule. On balance, in the context of civil claims againstgovernment in the federal jurisdiction, the s 64 argument appears to have more meritas it emphasises the common law nature of liability through the "process ofassimilation" and takes into account the nature of the federal jurisdiction. In support ofthis view it is important to note that there have been three unsuccessful attempts toamend s 64. These were prompted by concerns about the implications of the decision inCommonwealth v Evans Deakin Industries Ltd and the assumption that there is the sameneed to protect the States as a result of that decision31b All three attempts weredefeated by the Opposition on the basis that both the policy behind that decision andthe courts' application of s 64 of the Judiciary Act are sound.317 Further, in an attemptto achieve uniformity, some of the States and Territories have enacted new CrownProceedings legislation318 which provides that:

[S]ubject to the Judiciary Act 1903 ...

(a) proceedings may be brought by or against the Crown in the same way as proceedingsbetween subjects; and

(b) the same procedural319 and substantive law applies to such proceedings as in thecase of proceedings between subjects. 320

313314315

316

317318

319

(1994) 125 ALR 151; 34 ALD 413.Ibid at 173; 433.But on the facts of that case, which arose from changes to a fishery plan, he decided that inany event no action would lie for an act of "law-making". That is, it was not an act of"operational" negligence: see Anns v Merton London Borough Council (1978) AC 728;Sutherland Shire Council v Heyman (1985) 157 CLR 424.Attorney-General's Second Reading Speech to 1989 Bill (H Reps Deb 1989, Vol 167 at 32983300). The three attempts were the Commonwealth and Commonwealth Instrumentalities(Application of Laws) Bill 1989, the Government and Government Instrumentalities(Application of Laws) Bill 1990 and the Law and Justice Legislation Amendment Bill (No 2)1991.H Reps Deb 1989, Vol 168 at 873-894; Sen Deb 1991, Vol 149 at 3383 (Senator R Hill).Crown Proceedings Act 1992 (ACI); Crown Proceedings Act 1993 (NT); CrownProceedings Act 1992 (SA); Crown Proceedings Act 1993 (Tas).The word "procedural" is omitted in the South Australian Act.


Provision is also made for the retention of Crown immunity from statute321 and for"corresponding" laws of each State and other Territory to bind the Crown. Theseprovisions attempt to pick up and clarify the meaning of s 64 of the Judiciary Act.

In this complex area, a solution such as that provided by the constitutionalargument is dangerously simplistic. What is in issue is the demonstrated role of thecourts to provide adequate protection to individuals in claims against governmentsversus the assumed supremacy of government powers. The power of governments tomodify their liabilities by legislation remains. Given the degree of self-interest ofgovernments in such matters it is best that liability issues be left in the hands of thejudiciary. However, guarantees that the role of the courts will not be undermined needto exist. The experiences in relation to s 51(xxxi) and in Victoria322 illustrate the limitsof constitutional protection. In my view the current debate about whether there is needfor a Bill of Rights in this country should be extended to incorporate the fundamentalright of citizens to seek compensation from governments.323 Where the civil liability ofa government is in issue, the courts should enforce that right, rather than ensuring thatthe "dignity" of the Constitution is upheld.

320321322

323

Section 5(1) of each of the Acts.Section 6 of each of the Acts.See Australian Grand Prix Act 1994 (Vic), s 50. The legislation has the effect of denying theright of homeowners whose houses have been damaged by construction work on theGrand Prix track at Albert Park to claim compensation. See Age, 29 April, 1995 at 6 "GPoffer sparks call for rights".Cf New Zealand Bill of Rights Act 1990, s 27(3). See Age, 20 February, 1996 at 14, letter tothe Editor by R Richter QC, "Disquiet on rights a source of alarm".

CLAIMS AGAINSTTHE COMMONWEALTH AND STATES …

Documents

Transcript of CLAIMS AGAINSTTHE COMMONWEALTH AND STATES …