FEDERAL COURT OF AUSTRALIA

 

Australian Competition & Consumer Commission v C G Berbatis Holdings Pty Ltd [1999] FCA 1151

 

PRACTICE AND PROCEDURE – section 78B Judiciary Act 1903 – matter arising under the Constitution or involving its interpretation – matter not raised by parties – application for relief based on contravention of section 51AA of the Trade Practices Act 1974 – similarity of section 51AA of Trade Practices Act to unconstitutional provision of Native Title Act 1993 – purpose and application of section 78B Judiciary Act – duty of court where matter raised by Court – proceedings adjourned.

 

 

Trade Practices Act 1974 (Cth) s 51AA, s 52

Native Title Act 1993 (Cth) s 12

Judiciary Act 1903  s 78B

Judiciary Amendment Act 1976

 

The State of Western Australia v The Commonwealth (1995) 183 CLR 373, cited

State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 66 ALR 129, cited

Green v Jones (1979) 39 FLR 428, cited

Capelvenere v Omega Development Corporation Pty Ltd (1983) 5 ATPR 44,536, cited

Re An Application by the Public Service Association of New South Wales (1947) 75 CLR 430, cited

Amrit Lal Narain v Parnell  (1989) 9 FCR 479, cited

Nikolic v MGIC Limited [1999] FCA 849, cited

R v Bean Ex parte Elias (1942) 66 CLR 452, cited

Hopper v Egg and Egg Pulp Marketing Board (Vic) (1939) 61 CLR 665, cited

Re Judiciary and Navigation Acts (1921) 29 CLR 257, cited

Fencott v Muller (1983) 152 CLR 570, cited

Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261, cited

Re Wakim ex parte McNally (1999) 163 ALR 270, cited

Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73, cited

Boath v Wyvill (1989) 85 ALR 621, cited

 

 

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v C G BERBATIS HOLDINGS PTY LTD (ACN 008 799 0400), GPA PTY LTD (ACN 008 779 664), P & G INVESTMENTS PTY LTD (ACN 009 224 757), GEORGE PALASSIS ATZEMIS, CONSTANTINE GEORGE BERBATIS, ANNA MARIE ANTONIA HEIJNE, BRIAN SULLIVAN PROPERTY PTY LTD (ACN 075 946 244) and BRIAN EDWARD SULLIVAN

WAG 47 of 1998

 

FRENCH J

18 OCTOBER 1999

PERTH

 


 

IN THE FEDERAL COURT OF AUSTRALIA

 

WESTERN AUSTRALIA DISTRICT REGISTRY

WAG 47 OF 1998

 

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

 

AND:

C G BERBATIS HOLDINGS PTY LTD (ACN 008 799 040)

First Respondent

 

GPA PTY LTD (ACN 008 779 664)

Second Respondent

 

P & G INVESTMENTS PTY LTD (ACN 009 224 757)

Third Respondent

 

GEORGE PALASSIS ATZEMIS

Fourth Respondent

 

CONSTANTINE GEORGE BERBATIS

Fifth Respondent

 

ANNA MARIE ANTONIA HEIJNE

Sixth Respondent

 

BRIAN SULLIVAN PROPERTY PTY LTD (ACN 075 946 244)

Seventh Respondent

 

BRIAN EDWARD SULLIVAN

Eighth Respondent

JUDGE:

FRENCH J

DATE OF ORDER:

18 OCTOBER 1999

WHERE MADE:

PERTH

 

THE COURT ORDERS THAT:

1.         The application is adjourned for mention to 5 November 1999 at 9.15am.

2.         The Applicant is to issue notices under section 78B of the Judiciary Act 1903 specifying the nature of the matter arising under the Constitution.

3.         The Court reserves the dates 22 and 23 November 1999 and 7, 8, 9, 10 and 13 December 1999 for the further hearing of this application until further order.

4.         Costs today reserved.



Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.



IN THE FEDERAL COURT OF AUSTRALIA

 

WESTERN AUSTRALIA DISTRICT REGISTRY

WAG 47 OF 1998

 

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

 

AND:

C G BERBATIS HOLDINGS PTY LTD (ACN 008 799 040)

First Respondent

 

GPA PTY LTD (ACN 008 779 664)

Second Respondent

 

P & G INVESTMENTS PTY LTD (ACN 009 224 757)

Third Respondent

 

GEORGE PALASSIS ATZEMIS

Fourth Respondent

 

CONSTANTINE GEORGE BERBATIS

Fifth Respondent

 

ANNA MARIE ANTONIA HEIJNE

Sixth Respondent

 

BRIAN SULLIVAN PROPERTY PTY LTD (ACN 075 946 244)

Seventh Respondent

 

BRIAN EDWARD SULLIVAN

Eighth Respondent

JUDGE:

FRENCH J

DATE OF ORDER:

29 OCTOBER 1999

WHERE MADE:

PERTH

 

THE COURT ORDERS THAT:


1.         Order 3 of the Orders made 18 October 1999 by French J is varied so that it now reads:


            “The Court reserves the dates 22 and 23 November 1999 and 31 January 2000–4 February 2000 for the further hearing of this application.”


Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

 

WESTERN AUSTRALIA DISTRICT REGISTRY

WAG 47 OF 1998

 

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

 

AND:

C G BERBATIS HOLDINGS PTY LTD (ACN 008 799 040)

First Respondent

 

GPA PTY LTD (ACN 008 779 664)

Second Respondent

 

P & G INVESTMENTS PTY LTD (ACN 009 224 757)

Third Respondent

 

GEORGE PALASSIS ATZEMIS

Fourth Respondent

 

CONSTANTINE GEORGE BERBATIS

Fifth Respondent

 

ANNA MARIE ANTONIA HEIJNE

Sixth Respondent

 

BRIAN SULLIVAN PROPERTY PTY LTD (ACN 075 946 244)

Seventh Respondent

 

BRIAN EDWARD SULLIVAN

Eighth Respondent

 

 

JUDGE:

FRENCH J

DATE:

18 OCTOBER 1999

PLACE:

PERTH


REASONS FOR EX TEMPORE RULING RELATING

TO ISSUE OF NOTICES UNDER S 78B, JUDICIARY ACT 1903

(EDITED AND EXPANDED)

 

Introduction

1                     The Australian Competition and Consumer Commission has instituted proceedings against the owners of the Farrington Fayre Shopping Centre for contraventions of s 51AA of the Trade Practices Act 1974 (Cth).  Those contraventions are said to arise out of alleged unconscionable conduct by the owners towards their tenants.  On the first day of the hearing I raised a question about the constitutional validity of s 51AA in regard to the decision of the High Court concerning s 12 of the Native Title Act 1993 (Cth) in The State of Western Australia v Commonwealth (1995) 183 CLR 373 (the Native Title case).  The matter was stood down for a short time to enable counsel to make submissions.  It appears all parties had given consideration to the constitutional issue but had decided not to raise it.  In the event, after hearing from counsel, I made an ex tempore ruling that the application be adjourned and that notices be issued under s 78B of the Judiciary Act 1903 to the Attorneys-General of the Commonwealth and the States specifying the constitutional issue raised by the Court.  I reserved the right to edit and expand upon the ex tempore reasons for that ruling and they are now published.   The case raises the general issue of the operation of s 78B and the circumstances in which a matter before the Court may be said to arise under the Constitution or involve its interpretation even though none of the parties had taken a constitutional point.

The Nature of the Proceedings

2                     The Farrington Fayre Shopping Centre is located at Farrington Road, Leeming.  C.G. Berbatis Holdings Pty Ltd, GPA Pty Ltd, P & G Investments Pty Ltd and George Atzemis are the owners of the land on which the shopping centre stands.  They operate in partnership under the business name “Farrington Fayre Shopping Centre”.  Mr Atzemis and Mr Constantine Berbatis are directors of the first two companies.  Ms Anna Heijne is a director of P & G Investments.  Each of the companies and their respondents is sued in these proceedings for contraventions or involvement in contraventions of s 51AA and s 52 of the Trade Practices Act

3                     Brian Sullivan Property Pty Ltd carries on business in real estate and is said to have been employed by the owners of Farrington Fayre as a consultant or asset manager.  Brian Sullivan, a director of that company, is said to have been employed by it from October 1996 as asset manager for Farrington Fayre.  The company and Mr Sullivan are said to have been directly or indirectly knowingly involved in or party to the contraventions of the Act by the owners. 

4                     The action is principally concerned with claimed contraventions of s 51AA based upon the conduct of the owners in relation to the renewal or assignment of tenant leases.  In particular, the owners are said to have imposed conditions on lease renewals or the grant of new leases requiring the relevant tenants to withdraw pending legal proceedings against the owners.  The circumstances in which these conditions are said to have been imposed and the associated conduct are claimed to have constituted unconscionable conduct contrary to s 51AA.  In addition, there were representations said to have been made in the course of negotiation of the grants and renewals which were misleading or deceptive in contravention of s 52 of the Act.

5                     The trial of this action has been set down for two weeks, commencing today, although the parties now estimate it is likely to take only one week.  At the commencement of the hearing I raised a question with counsel, whether there was an issue about the constitutional validity of s 51AA having regard to similarities between that section and s 12 of the Native Title Act 1993 (Cth) which was found to be invalid by the High Court in the Native Titlecase).

6                     Section 12 of the Native Title Act, which was struck down in the Native Title case, provided that:

“Subject to this Act, the common law of Australia in respect of native title has, after 30 June 1993, the force of a law of the Commonwealth.”

In the judgment, the Court said at 485:

“If the “common law” in s 12 is understood to be the body of law which the courts create and define, s 12 attempts to confer legislative power upon the judicial branch of government.  That attempt must fail either because the Parliament cannot exercise the powers of the Courts or because the Courts cannot exercise the powers of the Parliament.”

7                     Section 51AA of the Trade Practices Act provides:

“A corporation must not in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.”

While the language differs from that of s 12 and may possibly be said to differ significantly, it is seriously arguable that the section suffers from the same vice as s 12 of the Native Title Act.  That is to say, the section may be said to give statutory effect to judge made law which may change from time to time.  The express inclusion of the words “from time to time indicates that that possibility is contemplated by the section.

8                     Upon raising the matter with the parties, the Court was informed at the beginning of the trial, that all parties had considered the possibility but had decided not to raise it.  That appears, at least on the part of the respondents, not to have been because it was thought not arguable, but rather because of the time and cost involved in the resolution of the constitutional issue.  I stood the matter down to the afternoon in order to enable the parties to make submissions on whether the Court should regard the cause now before it, as involving a matter arising under the Constitution or involving its interpretation.  If so, the duty of the Court, under s 78B(1) is not to proceed until notices have been given to the Attorneys-General of the Commonwealth and of the States. 

The Purpose of Section 78B

9                     Section 78B of the Judiciary Act provides:

“78B(1)   Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court.

      (2)  For the purposes of subsection (1), a court in which a cause referred to in that subsection is pending:

(a)       may adjourn the proceedings in the cause for such time as it thinks necessary and may make such order as to costs in relation to such an adjournment as it thinks fit;

(b)       may direct a party to give notice in accordance with that subsection; and

(c)        may continue to hear evidence and argument concerning matters severable from any matter arising under the Constitution or involving its interpretation.

      (3)  For the purposes of subsection (1), a notice in respect of a cause:

(a)       shall be taken to have been given to an Attorney-General if steps have been taken that, in the opinion of the court, could reasonably be expected to cause the matters to be notified to be brought to the attention of that Attorney-General; and

(b)       is not required to be given to the Attorney-General of the Commonwealth if he or she or the Commonwealth is a party to the cause and is not required to be given to the Attorney-General of a State if he or the State is a party to the cause.

      (4) The Attorney-General may authorise the payment by the Commonwealth to a party of an amount in respect of costs arising out of the adjournment of a cause by reason of this section.

      (5)  Nothing in subsection (1) prevents a court from proceeding without delay to hear and determine proceedings, so far as they relate to the grant of urgent relief of an interlocutory nature, where the court thinks it necessary in the interests of justice to do so.” 

10                  The section was introduced into the Judiciary Act by the Judiciary Amendment Act 1976.  A number of related amendments were made at the same time.  Sections 38A and 40A, which had conferred exclusive jurisdiction on the High Court in matters involving constitutional questions about the limits of Commonwealth and State powers inter se and requiring automatic removal of such questions into the High Court from the State Courts, were repealed.  The automatic removal provisions had been inserted in 1907 so that the Privy Council could not deal with constitutional questions of an inter se nature – H of R Deb 3 June 1976 p 2945.  Because such appeals were abolished by the Judiciary Act 1968, they were no longer necessary.  The power of the High Court to order removal of constitutional issues into the High Court was extended to provide for removal from Federal and Territory courts as well as from State courts (s 40).  Attorneys-General of the Commonwealth and States were given a right to intervene in proceedings in the High Court or any other Federal Court or a court of a State or Territory relating to a matter arising under the Constitution or involving its interpretation (s 78A). 

11                  Section 78B was ancillary to these provisions relating to intervention and removal.  It was briefly explained by the Attorney-General, the Hon R. Ellicott, in the Second Reading Speech thus:

“A new provision is to be inserted requiring notice to be given to the Attorneys-General of the Commonwealth and the States of proceedings involving constitutional issues in  courts other than the High Court.  A provision is included to enable the Commonwealth Attorney-General to compensate parties for any increased costs due to an adjournment of a case for the purpose of giving such notice.”

The background to the introduction of s 78B was also discussed by Kirby P in State Bank of New South Wales v Commonwealth Savings Bank of Australia (1986) 66 ALR 129 at 131-132.

The Nature of the Court’s Duty

12                  Subject to the provisions relating to the grant of interlocutory relief (s 78B(5)) and the facility to continue proceedings on matters severable from the constitutional matter, the duty of the court not to proceed in a case to which the section applies is unqualified by any residual discretion to proceed  – Green v Jones (1979) 39 FLR 428 at 432-433 per Hunt J, albeit that case preceded the enactment of par 78B(2)(c) relating to severable matters. Kirby P said in State Bank of NSW at 140:

“…although there is a limited power to continue the hearing in default of notice, s 78B is expressed in terms which are unusually emphatic.  It is “the duty of the court not to proceed”.  Thus, it is not for the parties to determine the matter by their agreement.  The court’s duty arises because of its obligation to protect the interests of the partners in the polity of the Commonwealth.”

As his Honour went on to observe, the emphatic language of the section and the strictly limited exceptions to the duty it imposes on the Court, stress the importance attached by Parliament to the proper fulfilment of the duty of notification which should not be narrowly confined.  

13                   The rigidity of the duty imposed on the Court by s 78B has been the subject of some criticism – Capelvenere v Omega Development Corporation Pty Ltd (1983) 5 ATPR 40-386 at 44,546. Concern was there expressed about the possibility that constitutional points could be raised which were patently without substance. It was suggested that even a point recently decided  by the High Court in indistinguishable circumstances could be raised again and again.  That speculation was at odds with the observation of Hunt J in Green v Jones (supra) at 435, that s 78B was not intended “to permit never ending challenges to matters which have already been determined by the High Court particularly recently by that Court”.  By extrapolation from judicial construction of like language in s 40 of the Judiciary Act, relating to removal of causes, a matter should “really and substantially arise under the Constitution” before it attracts the operation of s 78B – Re An Application by the Public Service Association of New South Wales (1947) 75 CLR 430 at 433 per Williams J.  These cases and the general principles surrounding the application of s 78B were discussed by Burchett J in Amrit Lal Narain v Parnell (1989) 9 FCR 479 at 486-489. His Honour said, at 489, and I respectfully agree:

“Section 78B only operates when the circumstances it postulates are made to appear to the court: it does not operate simply because a party asserts those circumstances.  It is clear, from the reference to the possibility of intervention or removal of the cause to the High Court upon the initiative of an Attorney-General, that what the section contemplates is a constitutional question which is a live issue in the proceedings.”

His Honour was there dealing with an application for judicial review from a Magistrate’s decision to refuse bail to a person the subject of an extradition warrant pending the hearing of the extradition proceedings.  A purported constitutional point having been raised, Burchett J said:

“On the basis that the constitutional point depends entirely upon an erroneous construction of the Extradition (Commonwealth Countries) Act, the cause pending in this Court does not “really and substantially” (to use the language of Williams J in the passage cited above) involve a matter arising under the Constitution or involving its interpretation.”

14                  Section 78B does not impose on the Court a duty not to proceed pending the issue of a notice no matter how trivial, unarguable or concluded the constitutional point may be.  If the asserted constitutional point is frivolous or vexatious or raised as an abuse of process, it will not attach to the matter in which it is raised the character of a matter arising under the Constitution or involving its interpretation – Nikolic v MGIC Limited [1999] FCA 849 cf Australian Securities and Investments Commission v White (unrep, Fed Court, 16/7/98, Drummond J). 

15                  Where a constitutional question is properly raised or appears, the public interest considerations which informed the enactment of s 78B will transcend the private interests involved.  See the judgment of Kirby P in State Bank of NSW at 140-141:

“In the unexpected course of litigation, a new and unanticipated matter may arise.  However, the Act provides specifically for such an eventuality and does so in terms.  Once that occurs, the high public interest in the consistent interpretation of the Constitution, if appropriate at the highest level of the judiciary, necessitates the opportunity being reasonably afforded to the Attorneys-General to consider whether or not to intervene or remove the cause (relevantly) from the State court.  The injustices that may arise from delay and adjournment of the proceedings are addressed by the Parliament in ss 78B(2)(a) (providing for an order as to costs) and 78B(4) (providing for the Attorney-General of the Commonwealth in certain circumstances to authorize payment of an amount in respect of costs arising out of the adjournment).  These provisions simply underline the fact that parties engaged in litigation which arises under the Constitution or involves its interpretation necessarily become caught up in disputes the importance of which may transcend their own private interests.”

The Duty of the Court Where the Parties Do Not Raise the Constitutional Point

16                  Counsel were unable to refer the Court to any reported case in which the Court itself has raised the point that attracts the operation of s 78B.  On the face of the section however its operation is not conditioned upon the constitutional point being raised by one of the parties.  It is the character of the cause before the Court that determines whether the operation of the section is attracted.  High Court practice appears to support this view.  A former Registrar of the High Court, Mr F.W.D. Jones, writing in the Australian Bar Review in 1994 and discussing the content of s 78B notices and the need to specify the constitutional points raised in a case, said:

“The parties can never be entirely satisfied that they have covered all eventualities where a s 78B notice may be required.  There is always the chance that a justice may raise an issue during the course of the argument which counsel had not considered.  When this occurs, the court is required to adjourn the proceedings to allow fresh notices to be sent to the attorneys-general.”  The Story Behind the Headlines: Constitutional Procedures (1994) ABR 148 at 158, see also another version of the same article in Jones, High Court Procedure under the Judiciary Act (1994) 68 ALJ 442 at 447.

17                  In R v Bevan Ex parte Elias (1942) 66 CLR 452, an application for a writ of habeas corpus fell outside the original jurisdiction of the High Court, that Court not having a general original jurisdiction in matters arising under laws of the Commonwealth.  But once a constitutional issue was raised by the Court the application for habeas corpus was encompassed within its accrued jurisdiction, the Court having original jurisdiction by virtue of s 30 of the Judiciary Act 1903 (Cth) to deal with “all matters arising under the Constitution or involving its interpretation”. 

18                  Starke J at 465, noting that the Defence Act 1903-1941 conferred no original jurisdiction upon the Court in relation to the proceedings of courts-martial, which were in issue before the Court, but went on to say:

But consideration has led me to the conclusion that the matter before us involves the interpretation of the Constitution, which founds the original jurisdiction of this Court, though we heard no argument to that effect from counsel.  And the jurisdiction being thus attracted, this Court is clothed with full authority essential for the complete adjudication of the matter and not merely the interpretation of the Constitution.

.

.

.

Once jurisdiction is acquired by the Court, that jurisdiction is not lost by reason of the rejection of a constitutional point.”

And Williams J, at 480, said:

“A constitutional question arises when its determination becomes necessary upon the ascertained or asserted facts of the case…The jurisdiction of this Court once vested is not lost by reason of the rejection of the constitutional point.”

After referring to Hopper v Egg and Egg Pulp Marketing Board (Vic) (1939) 61 CLR 665, his Honour said:

“In the last-mentioned case Latham CJ said: “The fact that the constitutional objection has failed does not deprive the Court of jurisdiction if the ‘facts relied on were bona fide raised, and were such as to raise’ the question”.”

Section 30(a) of the Judiciary Act, under consideration in that case, used the same phrase as that which appears in s 78B, namely:

“A matter arising under the Constitution or involving its interpretation.”

19                  The word “matter” in s 78B bears the same meaning as in Chapter III of the Constitution.  In that sense it embraces the “subject matter for determination in a legal proceeding” – Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265.  It is the “justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy” – Fencott v Muller (1983) 152 CLR 570 at 603.  The content of the controversy which constitutes a matter “is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out” – Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 at 294.  See also Re Wakim ex parte McNally (1999) 163 ALR 270 at 310-313 (Gummow and Hayne JJ). 

20                  The scope of a “matter” in respect of which the Court has jurisdiction is defined by the controversy between the parties, but nothing in the concept of matter as developed in the cases requires that its characterisation as “arising under the Constitution or involving the interpretation of the Constitution" should depend critically upon the particular pleadings, claims or assertions made by the parties.  Assertion or non-assertion of a constitutional question is not determinative of the character of the matter.  Toohey J said in Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73 at 74 that:

“In terms of s 78B, a cause does not “involve” a matter arising under the Constitution or involving its interpretation merely because someone asserts that it does.  That is not to say that the strength or weakness of the proposition is critical.  But it must be established that the challenge does involve a matter arising under the Constitution.”

In that case the applicant’s argument was based on a misunderstanding of the structure of the Family Court involving no more than a consideration of the division of functions that is a feature of any court.  The mere assertion that there is a constitutional point, will not establish that the matter is one arising under the Constitution or involving its interpretation.  On the other hand the failure to assert the constitutional point does not mean that a matter is not one arising under the Constitution or involving its interpretation.

21                  In Boath v Wyvill (1989) 85 ALR 621 the Full Court, noting the reference in s 106 of the Australian Constitution to the continuation of the Constitutions of the States, said at p 634:

“Questions as to the legislative competence of State parliaments thus, within the meaning of s 78B of the Judiciary Act 1903 (Cth)…involve a matter involving the interpretation of ss 106 and 107 of the Constitution, even if that matter may not, in a particular case, arise under those provisions.  Accordingly, when these proceedings first came before the Full Court on 21 December 1988, the court (without any opposition by the parties) gave directions for the serving of the necessary notices upon Attorneys-General, pursuant to s 78B of the Judiciary Act.”

It would seem from that passage that the parties had raised an issue concerning the territorial limitations of State legislative power, but had not explicitly raised it as a matter arising under the Commonwealth Constitution.  That characterisation seems to have been perceived by the Court and led to the requirement to issue s 78B notices.  That can be inferred  from the text of the judgment.  Even if incorrect, as a matter of inference, the quoted passage supports the proposition that a s 78B notice would be necessary in a case challenging the legislative competence of the State Parliaments notwithstanding that it did not expressly raise any issue arising under the Commonwealth Constitution.

22                  A cause may involve a matter arising under the Constitution or involving its interpretation notwithstanding that it is not raised on the pleading or otherwise asserted by any of the parties.  That is not to say that the Court should be astute to excavate constitutional questions out of the causes before it.  But where, as in this case, it appears that  there is a real and substantial constitutional issue, the Court’s duty is plain.  For where there is such a question it goes to the authority of the Court to continue with the proceeding and so has something of the character of a jurisdictional issue.  In this particular case there is the additional and practical concern that the constitutional question affects the statutory basis for the application.  Were the applicant to succeed in its case at first instance, without the point being addressed, there is the possibility that it might thereafter be raised on appeal.  Quite independently of s 78B, the constitutional question is a threshold issue and cannot be avoided.

23                  No counsel has been in a position in the present case to challenge the characterisation of the point raised by the Court as arising under the Constitution or involving its interpretation.  Counsel for the applicant asserted confidence in the validity of s 51AA, but did not develop argument.  It can be accepted that the assertion of a hopeless point characterised as a constitutional point does not attract the operation of s 78B.  However, in my opinion, there is a live issue in this case and although there seems to be some difference between the information which I have obtained from my own inquiries and that which Mr McKerracher has obtained from the Australian Government Solicitor, I understand that the same point has been the subject of  a s 78B notice in other proceedings in the Court.  Whether that is so or not is in a sense immaterial to the determination I have to make.  In my opinion this action is a cause in which there is a matter arising under the Constitution or involving its interpretation and that attracts the operation of s 78B which means it is the duty of the Court not to proceed unless and until notice of the cause specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and the States and Territories and a reasonable time has elapsed.

24                  Under s 78B(2) it is possible for the Court to continue to hear evidence and argument concerning matters severable from any matter arising under the Constitution or involving its interpretation.  It may be arguable that the issues concerning alleged contraventions of s 52 of the Trade Practices Act would fall into that category and attract that discretion.  However there is little doubt that the principal argument in this case concerns the application of s 51AA and the claims under s 52 are, in a sense, ancillary to it.  Indeed, it may be difficult to see them as severable from the matter in which the constitutional point arises.  In any event there is little enthusiasm from the parties, and I quite understand that, for splitting the case to hear and deal with the s 52 matters as a separate issue.  I propose therefore to adjourn the hearing of the application to allow notices to be issued under s 78B.

25                  In the ordinary course, if one or other of the parties had raised the constitutional point in its pleadings, the question of the issue of a s 78B notice would have arisen well prior to the trial date.  Although in this case there were case management conferences prior to trial, the issue was not raised.  The Court’s awareness of the point as arising in this case was only enlivened upon a review of the pleadings in the weekend prior to the trial and recent unrelated consideration of the issue by the trial judge. 

26                  It is probably not possible to construct a fail safe mechanism to avoid recurrence of the inconvenient course thrust upon the Court and the parties in this case.  It may be, however, that in future the possibility of s 78B applying to a case should routinely be checked by solicitors and counsel for the parties and, in a case where there is any doubt, should be raised in a directions hearing or case management conference. 

27                  The provisions of s 78B themselves may merit further review to broaden the discretion of the Court to proceed with a cause to which it applies provided that reasonable notice is given to Attorneys-General so that they may  intervene at some time before the conclusion of the proceedings which could be adjourned part heard for that purpose or, in a suitable case, to allow submissions by any intervening Attorney-General after the evidence and before judgment.  That, however, is a matter for the legislature.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.



Associate:


Dated:              18 October 1999



Counsel for the Applicant:

Mr N McKerracher QC

Solicitor for the Applicant:

Australian Government Solicitor



Counsel for the First to Sixth Respondents:

Solicitor for the First to Sixth Respondents:


Counsel for the Seventh and Eighth Respondents:

Mr P. Clifford and Mr H.R. Robinson


Haydn Robinson



Mr J.R. Johnson

Solicitor for the Seventh and Eighth Respondents:

Ilbery Barblett



Date of Hearing:

18 October 1999

Date of Judgment:

18 October 1999