FEDERAL COURT OF AUSTRALIA

Davis v Insolvency and Trustee Service Australia [2010] FCAFC 141

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

2.    The applicant pay the second respondent’s costs.

3.    The matter be listed for directions on Friday, 10 December 2010.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

THE COURT ORDERS THAT:

1.    The appeal be dismissed as incompetent.

2.    The appellant pay the second respondent’s costs.

3.    The matter be listed for directions on Friday, 10 December 2010.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

THE COURT

I - Introduction

1    Before the Court is an application for leave to appeal from orders of a judge of this Court dismissing summarily Mr Davis’ proceedings. Mr Davis contends that leave is not required to appeal from such a decision and he is entitled to appeal as of right. The questions to be resolved are, therefore, whether he requires leave to appeal and, if he does, whether leave should be granted. Should leave be required it is established that its grant is generally limited to those cases where the decision below is attended with sufficient doubt to warrant its being reconsidered by a Full Court and where substantial injustice will result if leave were to be refused. For reasons which follow leave is required but in this case should not be granted. This is not only because there is no reason to doubt the conclusions of the primary judge but more importantly because no injustice is occasioned to Mr Davis by reason of that refusal.

II – Some facts

2    The laws of the Commonwealth attach significance to the obligation of separated parents of children to provide for their proper financial support. The important features of these laws are a set of provisions by which the liability of parents to pay child support is assessed and another set by which the payments thus assessed to be due are collected. The amount of child support payable by a parent to the child’s carer is assessed by the Child Support Registrar, a Commonwealth office established under s 10 of the Child Support (Registration and Collection) Act 1988 (Cth) (the Collection Act). The Registrar is empowered, on application by a child’s carer, to assess the liability of a parent to pay child support and the process of assessment bears similarities to the way in which income tax is assessed. Once assessed the parent must pay the amount of child support to the child’s carer in accordance with the assessment (s 31 of the Child Support (Assessment) Act 1989 (Cth)). A carer may choose to register the liability with the Registrar (s 25 Collection Act). Where this occurs the child’s carer is no longer entitled to enforce the child support obligation against the other parent and that obligation becomes, instead, a debt due by the parent to the Commonwealth (s 30 Collection Act). The carer becomes entitled to a payment from the Commonwealth in respect of whatever has been collected from the parent (s 76 Collection Act). To aid the efficacy of this rÉgime the Registrar is equipped with ample powers to secure compliance with it. They include, by way of example, a power to sue in a court to obtain judgment for the child support amount (s 113 Collection Act); appurtenant powers to enforce any resulting judgment debt against the judgment debtor such as the levying of execution or the appointment of receivers (s 105 Collection Act and Chapter 20 Family Law Rules 2004 (Cth)); powers of garnishment by which those owing moneys to a person with child support obligations may be compelled to pay those moneys directly to the Registrar (s 72A); and, a power to prevent a person with such an obligation from leaving the country (s 72D).

3    The present case concerns Mr Davis’ encounter with this enforcement rÉgime. It does not concern his liability to pay child support (which is uncontested) or any inability on his part to meet that obligation (which is not suggested either). More particularly, there is no dispute before this Court either that Mr Davis, on 8 November 2005, had child support obligations to the Registrar of $27,629.11 nor that on that day a New South Wales Magistrate ordered him to pay that sum to the Registrar. A submission was made to this Court that Mr Davis did contest the debt “but not for the purposes of [these] proceedings”. That submission was repeated during oral argument. Of that submission this should be observed: the only purposes with which this Court is concerned are the purposes associated with the proceedings before it. Mr Davis accepts, as he accepted before the primary judge, that for those purposes the debt is not disputed and it is on that basis that we are bound to proceed. Mr Davis cannot, on the one hand, submit that he accepts that he owes the money for the purposes of these proceedings and, in the same breath, suggest that this Court should proceed on the basis that he does not. He cannot have it both ways. That being so it is unnecessary to explore in any detail Mr Davis’ previous attempts to persuade the Full Court of the Family Court or the High Court of Australia that he did not owe the child support amounts in question. It suffices instead only to observe that those efforts rested ultimately on the proposition that the child support legislation was constitutionally invalid and that that proposition was emphatically rejected by each judge of the courts which examined it: see PD v CD [2005] FamCA 827 at [33] (“The constitutional validity of the relevant child support legislation having already been determined by the High Court in Luton creates a sufficient basis for us to refuse the grant of leave to appeal in this case. The issues sought to be agitated by the applicant have no prospects of success and accordingly no issue raised would merit the grant of leave.”); Davis v Davis [2007] HCATrans 71 (“There are no prospects of a grant of leave to reopen Luton v Lessels and the application for special leave is refused.”)

4    Locked out of disputing the debt itself and driven to concede its existence, Mr Davis now seeks to frustrate anew the process of the debt’s enforcement. His grievance is directed at the Registrar’s efforts now to enforce the undisputed debt by seeking execution against some land owned by Mr Davis and by seeking payment from his late father’s estate. It should be noted that these actions only took place because he has not paid the child support payments he was required by law to make. Our observation above that Mr Davis neither disputes that obligation nor suggests any inability on his part to meet it casts his present complaint about the Registrar’s steps in seeking to enforce that obligation in a somewhat curious light. It will be necessary to explore further what the full implications of that matter are but it suffices presently to observe, at least so far as the material before this Court is concerned, that Mr Davis’ wounds appear to be largely self-inflicted: payment of his debt would have averted the steps which have now been taken against his property.

5    The precise matters about which he makes complaint are these: at the same time that the Magistrate ordered Mr Davis to pay child support to the Registrar his Honour also made orders to facilitate the sale of an investment property jointly owned by Mr Davis and his present wife at 20 St Kevins Avenue, Benowa which is on the Gold Coast in Queensland. Those orders would have had the effect of making whatever Mr Davis’ equity in that property was available for payment of his child support obligations and, if there remained any equity thereafter, remitting the balance to him. On 24 July 2007 Mr Davis’ interest in that property was transferred, pursuant to the Magistrate’s orders, to the party appointed to enforce them against the land, namely, the Official Receiver. The present first respondent is the agency corporately responsible for the Official Receiver.

6    On 20 January 2009 Mr Davis commenced proceedings in this Court whose end appears to have been the quashing by certiorari of the Magistrate’s orders, the retransfer to Mr Davis of his former interest in the Gold Coast property and damages for trespass. The Registrar moved swiftly for dismissal of that proceeding on the basis that Mr Davis had no reasonable prospects of prosecuting the proceeding: s 31A Federal Court of Australia Act 1976 (Cth). Before that application was heard, however, the Registrar moved against Mr Davis’ interest in his late father’s estate by issuing a garnishee notice. Of that deceased estate one may say this: the late Dr Davis died on 25 October 2008. He jointly owned land at Lane Cove in Sydney with his wife which was of some considerable value but which passed to the widow by survivorship. After the payment of some minor legacies Mr Davis was likely to be entitled to one third of the residue which was thought to be worth about $62,000 before testamentary expenses. Not long after the commencement of Mr Davis’ proceeding in this Court challenging the execution against his Gold Coast land the Registrar, on 30 March 2009, caused to be served upon the solicitors acting for the executor of Dr Davis’ estate a notice requiring them to pay to him the amount of Mr Davis’ child support obligations. By that time his obligation to pay child support, together with late payment penalties, had swollen to $53,383.11. Confronted with that notice Mr Davis then moved this Court for interlocutory relief restraining the Registrar from acting upon it. At the same time he sought to amend his original claim to challenge the notice. That challenge was articulated on the basis of ordinary administrative law grounds going to the notice’s validity and also on the basis of an argument that the provision authorising the notice (s 72A) was constitutionally invalid.

7    It is with the consequences of those various applications that this Court is concerned. The important elements of the primary judge’s conclusions were as follows: first, he permitted Mr Davis to amend his application to challenge the garnishee notice on administrative law grounds but declined to grant an amendment to raise any challenge on the basis of constitutional grounds; secondly, he dismissed the application for interlocutory relief; thirdly, he dismissed the entirety of Mr Davis’ proceedings pursuant to s 31A of the Federal Court of Australia Act 1976. As a result of Mr Davis’ failing to obtain interlocutory relief the Registrar, in fact, recovered a sum of money from the estate under the garnishee notice and this has reduced, but by no means eliminated, Mr Davis’ remaining child support obligations.

8    Mr Davis now seeks to have this Court reverse both the primary judge’s conclusion that the proceeding be pre-emptively dismissed as well as his Honour’s refusal to permit the garnishee notice to be challenged on constitutional grounds.

III – is leave to appeal required?

9    Section 24(1) of the Federal Court of Australia Act 1976 provides for an appeal from judgments of this Court given by a single judge. However, that right of appeal is qualified by s 24(1A) which prohibits the bringing of such an appeal if the judgment involved is interlocutory “unless the Court or a Judge gives leave to appeal”. Plainly, insofar as Mr Davis’ complaints relate to the primary judge’s refusal to allow him to amend his application to challenge the garnishee notice on constitutional grounds, leave is required since such a decision is manifestly interlocutory. In the case of the primary judge’s conclusion that Mr Davis’ proceedings should, in their entirety, be dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 the situation is governed by s 24(1D)(b) which says, in effect, that for the purpose of determining whether leave to appeal is necessary, “a decision granting or refusing summary judgment under section 31A” is taken to be an interlocutory judgment.

10    Mr Davis contends that s 24(1D)(b) is constitutionally invalid because it is a usurpation of the judicial power; that the true position is that a judgment under s 31A is final in nature; and, that the most recent holding by the Full Court of the Federal Court to the contrary – Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401 – is plainly incorrect and should not be followed. We reject the first step in this argument. Mr Davis submitted “[i]t is not for [P]arliament to direct the courts of the land, at least [C]hapter III courts, by a deeming provision what is the legal effect of a judgment of the court whatever its true character, eg interlocutory or final” [sic]. But this proceeds only on a misconceived grasp of what s 24(1D)(b) does. It does not “direct” the Court in the exercise of its jurisdiction. Rather, together with s 24(1A), it specifies the circumstances in which an appeal may be brought only by leave. All appeals in this Court are statutory and the necessary consequence is that it is entirely within Parliament’s competence to specify the circumstances in which an appeal may exist and, if it does, the conditions attaching to its exercise. Mr Davis relied upon a number of decisions, including Nicholas v The Queen (1998) 193 CLR 173 and Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1, for the proposition that the Parliament may not usurp the judicial power. So much may be accepted. But s 24(1D)(b) does not tell this Court how it is to exercise a jurisdiction which exists but, in contradistinction, merely defines the circumstances in which the jurisdiction exists at all. It is only where jurisdiction exists that questions of usurpation begin to be relevant (“The judicial power of a court is defined by the matters in which jurisdiction has been conferred upon it”: Nicholas v The Queen 193 CLR 173 at 188 [23] per Brennan CJ). The challenge to the validity of s 24(1D)(b) fails.

11    It follows that leave is required. That conclusion makes it unnecessary to determine whether the course of authority in this Court before the introduction of s 24(1D)(b) requires the conclusion that a judgment under s 31A is, or is not, interlocutory in nature. The precise purpose of the provision was to put to an end that very debate. The former differing views are reflected in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 (FC) and Kowalski v MMAL Staff Superannuation Fund 178 FCR 401 (FC). There is no utility in further considering that question which should now be regarded as having been superseded by s 24(1D)(b).

IV – should leave be granted?

12    The principles upon which leave is granted are clear. Leave to appeal against an interlocutory order will usually be granted only where an applicant is able to show that the order occasions substantial prejudice to him or her and there is a reasonable argument that the order should be set aside: DÉcor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 399-400 (FC). For reasons which follow Mr Davis’ claim for leave to appeal fails both of these tests.

V – no substantial injustice occasioned by primary judge’s orders

13    This may, at first blush, sound rather surprising in view of the fact that the whole of his proceeding has been dismissed. However, it is a necessary corollary of the undisputed fact that Mr Davis owed amounts of child support both at the time that the Magistrate made the enforcement orders and also at the time that the Registrar issued the garnishee notice. Since the Registrar does not seek to recover any more by execution than he is in fact owed, it follows that the execution has no impact on Mr Davis’ asset position. Viewed from that perspective, there has always been a very straightforward way for Mr Davis to avoid execution against his assets and that is to pay his debts. That he has chosen not to and has thereafter provoked entirely foreseeable enforcement action from his creditor, the Registrar, is a matter of his personal choice rather than the visitation of some external misfortune. As we have said, it was not suggested to us that he was unable to meet his obligations or that his non-payment was foist upon him by the actions of others or by adverse circumstance. It follows that at any time Mr Davis has been able to bring to a speedy conclusion the Registrar’s enforcement activities by the simple expedient of submission to what the law requires, namely, payment by him of his lawful debts.

14    In saying that, we have taken account of the argument advanced on his behalf that somehow what has been lost by reason of the enforcement process represents a greater loss to him than the amount he originally owed under the child support orders. Mr Davis gave evidence by affidavit about this matter before the primary judge. Having recited his concerns for the interests of his wife (which are of no relevance for present purposes) he went on to state the extra loss with which he was concerned as follows:

“There is also a substantial risk of sale at an undervalue if the property is sold in this fashion [scil. compulsorily], once the market discovers the reason for the sale, which is likely, without regard to optimum marketing conditions and a proper marketing programme.”

15    To make the matter plain, Mr Davis’ claim for damages depends therefore on the paradoxical hope that his property might be sold at an undervalue. If that fails to occur then he will suffer no loss – his property will be sold to meet his debts; the one will extinguish the other and his net asset position will remain unchanged. Granted, however, that the property has not yet been sold, and leaving aside lawyers’ quibbles such as the possibility that the identified concern may not in fact come to pass, the difficulty is that even this hypothetical loss is one that Mr Davis will have brought on himself by allowing matters to proceed this far. In any event, it is inappropriate to proceed on the basis that the Official Receiver will somehow misconduct the sale. That process is governed by the Family Law Rules 2004 and rule 20.21A requires that the Official Receiver “must, in good faith and with reasonable care having regard to all the circumstances relevant to the sale of property seized under an Enforcement Warrant, fix a reasonable price for the property”.

16    In those circumstances, even if we were of the view that there were reasonable arguments that the primary judge’s order should be set aside we would not be disposed to grant leave. We do not perceive that Mr Davis suffers any loss. Even if we did, however, whatever injustice exists is entirely of Mr Davis’ own making.

VI – no reasonable argument about correctness of primary judgment

17    In any event, we do not accept that any of Mr Davis’ criticisms of the primary judgment are well-founded. Five basic points were made on his behalf. First, it was said that the primary judge had approached the standard to be applied under s 31A incorrectly and had reached views about various factual matters which ought not to have been reached on such an application. Secondly, a submission was made that the execution orders made by the Magistrate were beyond his authority. Thirdly, it was put that the notice issued to the solicitors for Dr Davis’ estate was beyond the Registrar’s legal competence. Fourthly, Mr Davis claimed that the amendments which sought to challenge the constitutional validity of the garnishee provision (s 72A) should have been permitted. Finally it was said that the notice under s 72A had not been served in a sufficiently timely fashion or issued by an authorised officer. It is convenient to deal with each in turn.

(a) the application of s 31A (Proposed Grounds 2, 5, 6 and 7)

18    This is not a case to ponder long the principles governing the exercise of relief under s 31A. Mr Davis’ point, as developed before us, was that s 31A ought not to be utilised where there are any disputed questions of fact or disputed questions of mixed fact and law. Certainly authority supports that submission (“Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue”: Spencer v Commonwealth (2010) 269 ALR 233 at 243 [25] per French CJ and Gummow J). However, we do not read Spencer as requiring that summary relief be withheld where there are factual disputes about matters which are not material to the resolution of the litigation.

19    Mr Davis nominated eight matters said to require resolution at trial. The first was whether the Gold Coast land was jointly owned by Mr Davis with his wife. However, this was not, in fact, in issue nor, even if had been, material to any claim made by Mr Davis. The second was whether the Official Receiver has any interest in the Gold Coast land “by reason of a severance of the joint tenancy by operation of law or otherwise”. Plainly, if the orders of the Magistrate were effective the Official Receiver holds Mr Davis’ former interest by paramount force of federal law. Whether the Official Receiver holds Mr Davis’ interest by transfer from him or whether instead merely succeeds to his title may have an impact on whether the joint tenancy has been severed. We fail, however, to see why that question has any impact on any claim made by Mr Davis. The third matter was whether the actions of the Official Receiver to sell the land “have caused the land to be sold or are at risk of being sold at an undervalue”. The land has not been sold so the first limb of this may disregarded. Mr Davis submitted that it was an important matter which had not been admitted by the respondent. However, there would be no purpose submitting that question to trial unless there was some sensible argument that the actions of the Registrar were unlawful. Mr Davis’ claim rests entirely for its efficacy upon depriving the actions of the Registrar (and the Magistrate) of their legal effect so as to provide the platform for an argument that the Registrar was a tortfeasor. If that venture be hopeless (as the learned primary judge held) then it would be idle to let through to trial damages issues which could never arise. Put another way, Mr Davis’ argument that the Registrar is a tortfeasor does not rest on this allegation which can only go to the question of loss.

20    The fourth matter said to be triable was whether the actions of the Registrar in taking Mr Davis’ interest in the Gold Coast land caused his wife economic harm and whether it also conferred upon the Commonwealth a benefit. These two propositions had as their terminus the notion that the child support legislation thereby operated as a law with respect to the acquisition of property which was not accompanied by just terms and was, therefore, invalid by reason of s 51(xxxi) of the Constitution. The learned primary judge rejected this as an issue worth trying on the basis that enforcement provisions designed to allow admitted debts to be recovered could not possibly be an acquisition of property to which s 51(xxxi) of the Constitution was directed. We agree. The proposition that the enforcement and execution provisions of statutes governing the civil process of courts involves an acquisition of property to which the language of s 51(xxxi) is directed is without merit. Execution by civil process is properly to be seen as being in the same category, for s 51(xxxi) purposes, as the making of a sequestration order: Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372 per Dixon CJ; Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 170-171 per Mason CJ, 187-188 per Deane and Gaudron JJ. The acquisition of an asset as part of the process of the curial enforcement of debts is an acquisition of a kind which “is inconsistent or incongruous with the notion of just terms” (Mutual Pools 179 CLR at 187). Such execution provisions are to be seen as a means of “resolving or adjusting competing claims, obligations or property rights of individuals as an incident of the regulation of their relationship, e.g., the relationship between a bankrupt and the creditors in the bankruptcy” (Mutual Pools 179 CLR at 171).

21    We would add that, in any event, Mr Davis has no standing to pursue the point since the property allegedly acquired was his wife’s and not his. The draft notice of appeal also refers to loss suffered by Mr Davis but the argument, as articulated before us, was that Mr Davis was exposed to the risk of sale at an undervalue. The laws impugned, however, do not authorise that outcome. As we have indicated above, rule 20.21A requires the Official Receiver to obtain a reasonable price for the property. Even if sale at an undervalue eventually occurs it will not be by reason of the operation of the legislation which does not permit that outcome. In any event, it is not possible to see how the validity of the legislation depends upon something which may, or may not, happen to Mr Davis’ house.

22    The fifth point was whether the Official Receiver had been validly appointed under the orders of the Magistrate. However, Mr Davis’ case below was that the orders of the Magistrate were invalid on administrative grounds (or, if the amendment had been allowed, on constitutional grounds). No case was advanced before the learned primary judge that there had been some additional factual matter going to whether the Official Receiver had been properly appointed and no such ground is articulated in the proposed notice of appeal. A related point was said to be the factual question of whether sufficient notice of the intention to exercise the power of sale had been given to Mr Davis. Given that the land has not yet been sold this is a puzzling submission. However, it suffices to say that this point has nothing to do with the validity of the orders or, to put it another way, with the arguments advanced below or in the draft notice of appeal.

23    The sixth point said to involve a triable factual question was whether Mr Davis’ delay in commencing the proceeding in this Court was sufficient to deny him relief were it otherwise appropriate. If Mr Davis has no sensible basis for any relief, however, there is no utility in deciding whether he should be denied that relief by reason of delay.

24    The seventh point was whether the persons named in the garnishee notice (who were the partners of the firm of solicitors acting for the estate of Dr Davis) were “public officers”. The learned primary judge found that they were. We do not believe that the resolution of this question is material. Section 72A allows a garnishee notice to be issued to a “person”. The partners of the firm in question are “persons”. That is the end of the matter. There is no basis in the language of the provision for the submission.

25    The final point, pursued in oral submission, was that the issue of whether Dr Davis’ estate was fully administered or not was a factual one which should have been permitted to proceed to trial. We do not agree. Whether or not Mr Davis had an interest in his late father’s estate beyond a mere right to require the executor to carry out the terms of the will has no relevance to the questions posed by s 72A. There is no requirement in that provision that limits its scope to those situations where the debtor has an existing interest in property. Its wording is quite to the contrary. Section 72A(1)(b) allows a notice to be issued to a person who “may subsequently hold money for or on account of a child support debtor”.

26    In those circumstances, the suggested factual disputes either do not exist or are not germane to any issue which is material to the disposition of the proceeding.

(b) whether orders made by Magistrate beyond authority (Proposed Ground 3)

27    The argument here was twofold. First, it was submitted that, on their proper construction, the provisions authorising the Magistrate to make enforcement orders generally did not authorise these orders in particular. Secondly, it was said that a New South Wales Magistrate had no power to make orders with respect to the enforcement of debts against property outside of New South Wales.

28    There is no substance in the first point. Before the learned primary judge Mr Davis did not descend into the detail of what the alleged want of power was. Despite that, the primary judge considered the structure under which the orders were made adopting the explication of those provisions by Sackville J in Flanagan v Australian Prudential Regulation Authority (2004) 138 FCR 286 at 290-292 [15]-[21]. However, the learned primary judge’s principal reason for finding the argument to be without merit was his observation that the misconstruction by the Magistrate of the legislation involved would not by itself demonstrate jurisdictional excess.

29    Before us Mr Davis only argued that Orders 3, 6 and 7 of the Magistrate’s orders were ultra vires. Order 3 “charged” the Gold Coast property (and some shares) “with the debt…until the debt and costs have been paid in full”. Order 6 required Mr Davis to do all things necessary to transfer his interest in the Gold Coast property to the Official Receiver within 14 days of being so asked to do. Order 7 permitted the Official Receiver to sign documents on Mr Davis’ behalf if he did not obey Order 6.

30    The Local Court was exercising the jurisdiction conferred by s 104(2) of the Collection Act. We too adopt, with respect, the reasoning of Sackville J in Flanagan v Australian Prudential Regulation Authority 138 FCR at 290-292 [15]-[21] explaining why the Local Court had power to make orders under the Family Law Rules 2004. The question then is whether those rules authorised the making of an order charging payment of the debt on the Gold Coast land coupled with orders for transfer. We have no doubt that they did. Part 20.3 of those rules authorised the issue of enforcement warrants which in terms permitted the sale of property including real property. Such a warrant was issued in this case by Order 5 of the Magistrate and Mr Davis did not seek to impugn it. Rule 20.07(d) specifically authorises the court in question to make an order “in aid of the enforcement of an obligation”. Mr Davis’ submissions to us did not involve any engagement with the Rules and we do not see, in those circumstances, how the three orders in question could not be seen as being other than covered by that rule. The charging order facilitated the sale process by permitting the lodging of a caveat. Orders 6 and 7 were directly related to accomplishing the transfer. Indeed, Order 7 merely reflected the power that the Official Receiver was, in any event, given by rule 20.18(2)(f) to “sign any documents relating to the transfer of ownership of the property”. The argument is without substance.

31    There is no substance in the second argument either. The Constitution permits the Parliament to make laws “investing any court of a State with federal jurisdiction”: s 77(iii). The Collection Act is a law of the Parliament. Section 104(2) of the Collection Act provides relevantly that “each court of summary jurisdiction of each State is invested with federal jurisdiction, and jurisdiction is conferred on each court of summary jurisdiction of each Territory, in relation to matters arising under this Act”. At the time that the Magistrate made the orders on 8 November 2005 the Local Court was a court of record (s 8A) established under s 6 of the then Local Courts Act 1982 (NSW). That Act in turn gave the Court the jurisdiction previously exercised by the Courts of Petty Session (s 7(1)) which the Local Court replaced (s 9) and that jurisdiction was necessarily summary. The jurisdiction of the Court was to be exercised, as it was on this occasion, by a single Magistrate (s 8). It follows that the Local Court constituted by the Magistrate was invested with federal jurisdiction by s 104(2).

32    Mr Davis’ argument was that the Local Court could not as a matter of State law, levy execution on land outside of New South Wales. However, that proposition has no relevance to a case governed by federal law. In that sphere it is established that the Commonwealth Parliament may expand the jurisdiction of State courts when it utilises the machinery of s 77(iii) (“It may make the jurisdiction as wide or as narrow as it pleases with respect to persons, localities or amounts involved”: Peacock v Newtown Marrickville & General Co-operative Building Society No. 4 Ltd (1943) 67 CLR 25 at 37 per Latham CJ). There is no obstacle, therefore, to conferring federal jurisdiction on a State court which runs beyond the borders of the State in question. Given the nature of federal jurisdiction any other result might be thought curious. It is true that at times the Parliament has imposed “self-inflicted” limitations on federal jurisdiction. For example, the general investiture of federal jurisdiction on State courts by s 39(2) of the Judiciary Act 1903 (Cth) occurs “within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise”. However, no such limitation is to be found within the grant established by s 104(2).

33    Mr Davis submitted that the Commonwealth Parliament could not alter the Local Court’s organisation or constitution and that the conferral of the jurisdiction under the Collection Act infringed that principle. It is true that the Commonwealth takes a State court as it finds it: Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 67 per Brennan CJ. However, the conferral of additional jurisdiction does not infringe that principle. If it did the machinery of s 77(iii) would be put at nought. For completeness, it should be noted that Mr Davis abandoned before this Court an argument based on the rule in British South Africa Company v Companhia de MoÇambique [1893] AC 602 which forbids local courts to determine title to foreign land. That abandonment was appropriate. That rule was abolished in New South Wales by s 3 of the Jurisdiction of Courts (Foreign Land) Act 1989 (NSW) (“The jurisdiction of any court is not excluded or limited merely because the proceedings relate to or may otherwise concern land or immovable property situated outside New South Wales”). In any event, even if the rule existed it would be overridden by s 104(2) of the Collection Act which vests federal jurisdiction, and hence national jurisdiction, in the Local Court.

(c) whether notice under s 72A may be issued to Dr Davis’ estate (Proposed Ground 4A)

34    In the section above dealing with the question of whether there was a factual dispute as to whether the late Dr Davis’ estate was fully administered we concluded that the issue was irrelevant because the power in s 72A was not limited to situations where the debtor had an interest in any existing fund. On this limb of the argument Mr Davis now submitted that there was no power to issue a notice to persons who did not owe money to Mr Davis. Again this submission proceeds only by ignoring the text of s 72A(1) which, as we have already explained, extends to persons who “may subsequently hold” money belonging to the debtor. We can see no reason why the solicitors for the estate did not meet that description.

(d) constitutional invalidity of garnishee provisions (Proposed Ground 1)

35    The learned primary judge refused to grant leave to allow this argument to be raised. The point was that in deciding whether to issue a garnishee notice the Registrar was exercising the judicial power of the Commonwealth. This was because the enforcement of the debt “was characteristic of the exercise of judicial power”.

36    This submission should be rejected for at least three reasons. First, whilst it is true that enforcement by a body of its own antecedent orders is, in some circumstances, an indicia that the making of those orders involves the exercise of judicial power, it is not the case that enforcement of pre-existing liabilities, by itself, involves judicial power. Where, as here, the enforcement step is simply the statutory consequence of the existence of a legal factum (the antecedent child support obligation) there is no exercise of judicial power. Secondly, it is equally plain that administrative collection rÉgimes do not involve judicial power. So much was said by the High Court in Luton v Lessels (2002) 210 CLR 333 at 346 [24]-[27] per Gleeson CJ, 360 [77] per Gaudron and Hayne JJ, 361 [79] per McHugh J, 376 [133]-[134] per Kirby J, 389 [201]-[202] per Callinan J. More recently, the Full Court of this Court has confirmed that decision that to issue a departure control order under Part VA of the Collection Act (which operated to prevent a person with a child support obligation from leaving the country until the debt was paid) did not involve the exercise of judicial power: Whittaker v Child Support Registrar [2010] FCAFC 112 at [49]. There is no relevant difference for present purposes between a departure control order and a garnishee notice under s 72A. Finally, the issuing of the garnishee notice did not decide or declare any pre-existing rights or obligations but, rather, created new rights. The pre-existing obligation that the third party had to the child support payee was transformed into an obligation to the Registrar. This was not the vindication of some antecedent legal right or duty but, instead, the fashioning of an entirely new right. So much has already been stated by the High Court in Luton v Lessels 210 CLR at 345-346 [22], 355 [60], 361 [79], 376 [131], 387-389 [187], [198]-[201].

(e) formal validity of s 72A notice (Proposed Ground 4)

37    Although the proposed notice of appeal raises the question of whether the notice was issued by a person with sufficient authority, no written or oral submission was made in its support. We consider it no further in those circumstances. The second aspect of the ground was the argument that the notice had required too short a period for compliance. The notice was issued on 25 March 2009 but only served on 30 March 2009. Mr Davis submitted that it required payment by the garnishees within seven days of the date of its issue and that this was 1 April 2009. They were given, therefore, only two days to respond. It is likely that it is only the garnishees who have standing to make this point. However, the point is, in any event, without substance. The notice required payment “within seven (7) days of the date on which the money becomes due or is held.”

VII – disposition

38    The application for leave to appeal should be dismissed with costs. It has come to the attention of the Court that the publication of these reasons on the website www.austlii.edu.au (“Austlii”) may infringe s 121 Family Law Act 1975 (Cth) by reason of s 105(1) of the Collection Act, particularly in light of Lindgren J’s decision in Atkinson v Commissioner of Taxation (No 2) [2000] FCA 637 at [7]-[8]. How such a proposition sits comfortably alongside previous publications such as the recent Full Federal Court decision in Whittaker v Child Support Registrar [2010] FCAFC 112 or the High Court decision in Luton v Lessels 210 CLR 333 is not altogether clear. However, the Court invites submissions from the parties to resolve this issue within seven days hereof, directs that these reasons not be published on Austlii until such time as the Court orders otherwise and lists the matter for directions on Friday, 10 December 2010 before Perram J.

Associate:

Dated:    3 December 2010