FEDERAL COURT OF AUSTRALIA

Dye v Commonwealth Securities Limited (No 2) [2010] FCA 817

THE COURT ORDERS THAT:

1.                  The applicant’s notice of motion seeking leave to appeal is dismissed as incompetent.

2.                  The respondent’s notice of motion is dismissed.

3.                  The applicant is to pay the respondent’s costs of the applicant’s notice of motion.

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

Introduction

1                                             This is an application brought by the applicant for leave to appeal from an interlocutory judgment of Katzmann J refusing the applicant leave to make various amendments to her statement of claim.  It has been brought on quickly since there is some urgency about it.  The proceeding is fixed for trial before her Honour commencing on 6 September 2010 for four weeks.  This is the third time the proceeding has been fixed for trial.  On two previous occasions the trial date has been vacated. 

2                                             A broad range of allegations has been pleaded by the applicant against the respondent by whom she was previously employed.  They include some quite serious allegations of misconduct on the part of other employees of the respondent toward the applicant which is alleged to have involved sexual harassment and discrimination.  The proposed amendments to the statement of claim that were disallowed by her Honour would have, if made, increased the number of issues to be determined at the trial substantially and, I infer, the duration of the trial.  I say this only by way of background.  For reasons which will become apparent, it is not necessary for me to refer in any detail to her Honour’s reasons for refusing the applicant the leave she sought. 

3                                             In my opinion, the applicant does not have any right of appeal from her Honour’s judgment even with leave.  To explain why that is so it is necessary to look to s 20 and s 24 of the Federal Court of Australia Act 1976 (Cth) (the Act) as amended by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth) (the Access Act) the relevant provisions of which took effect on 1 January 2010.  The relevant amendments apply to appeals brought to the Court on or after that date: see Schedule 2, 33(2).

Statutory Provisions

4                                             Section 19 of the Act establishes the original jurisdiction of the Court which is vested in the Court by laws made by the Parliament.  In determining the application to amend the statement of claim her Honour was exercising the original jurisdiction of the Court. 

5                                             Section 20 of the Act, as amended by the Access Act, relevantly now provides:

20  Exercise of original jurisdiction

         (1)     Except as otherwise provided by this Act or any other Act, the original jurisdiction of the Court shall be exercised by a single Judge.

         (1A)   If the Chief Justice considers that a matter coming before the Court in the original jurisdiction of the Court is of sufficient importance to justify the giving of a direction under this subsection, the Chief Justice may direct that the jurisdiction of the Court in that matter, or a specified part of that matter, shall be exercised by a Full Court.

         (1B)   Subsection (1A) does not apply in relation to indictable primary proceedings.

         (2)     The jurisdiction of the Court in a matter coming before the Court from a tribunal or authority (other than a court) while constituted by, or by members who include, a person who is a Judge of the Court or of another court created by the Parliament shall be exercised by a Full Court.

         (2A)   Subsections (1A) and (2) have effect subject to subsections (3) and (5).

         (3)     Applications:

                   (a)     for leave or special leave to institute proceedings in the Court; or

                   (b)     for an extension of time within which to institute proceedings in the Court; or

                   (c)     for leave to amend the grounds of an application or appeal to the Court; or

                   (d)     to stay a decision of the tribunal or authority mentioned in subsection (2);

                   must be heard and determined by a single Judge unless:

                   (e)     a Judge directs that the application be heard and determined by a Full Court; or

                   (f)      the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it is appropriate for it to hear and determine the application.

6                                             I interpolate that the applicant did not make any application to her Honour for a direction pursuant to subsection (3)(e) that the application for leave to amend be referred to a Full Court. 

7                                             Relevantly, s 24 of the Act, as amended by the Access Act, provides:

24  Appellant jurisdiction

(1)            Subject to this section and to any other Act, whether passed before or after the commencement of this Act (including an Act by virtue of which any judgments referred to in this section are made final and conclusive or not subject to appeal), the Court has jurisdiction to hear and determine:

                (a)     appeals from judgments of the Court constituted by a single Judge exercising the original jurisdiction of the Court;

                ...

1(AA)      An appeal must not be brought from a judgment referred to in paragraph (1)(a) if the judgment is:

                (a)     a determination of an application of the kind mentioned in subsection 20(3); or

                (b)     a decision to join or remove a party, or not to join or remove a party; or

                (d)     a decision to adjourn or expedite a hearing or to vacate a hearing date.

(1A)         An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal.

(1B)         Subsection (1A) is subject to subsection (1C).

(1C)         Leave to appeal under subsection (1A) is not required for an appeal from a judgment referred to in subsection (1) that is an interlocutory judgment:

                (a)     affecting the liberty of an individual; or

                (b)     in proceedings relating to contempt of the Court or any other court.

(1D)         The following are taken to be interlocutory judgments for the purposes of subsections (1A) and (1C):

                (a)     a judgment by consent;

                (b)     a decision granting or refusing summary judgment under section 31A.

(1E)          The fact that there has been, or can be, no appeal from an interlocutory judgment of the Court in a proceeding does not prevent:

                (a)     a party from founding an appeal from a final judgment in the proceeding on the interlocutory judgment; or

                (b)     the Court from taking account of the interlocutory judgment in determining an appeal from a final judgment in the proceeding.

8                                             I should also mention s 33 of the Act which is concerned with appeals from this Court to the High Court.  Section 33(2) provides that, except as otherwise provided by another Act, an appeal shall not be brought to the High Court from a judgment of the Court constituted by a single Judge exercising the original jurisdiction of the Court.

Extrinsic Material

9                                             The Explanatory Memorandum to the Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 states:

80.       As a result of item 12, only judgments of a single Judge exercising original jurisdiction can be appealed to the Full Court.  However, new subsection 24(1AA) provides that there is no appeal to the Full Court from a number of specified interlocutory decisions of a single Judge exercising original jurisdiction.

81.       These interlocutory matters involve minor procedural decisions for which there should be no avenue of appeal. The removal of the right to appeal for these types of matters will ensure the efficient administration of justice by reducing delays caused by appeals from these decisions.

82.       New subsection 24(1AA) provides that there will be no appeal avenue in relation to the following minor interlocutory decisions:

·                     all decisions under subsection 20(3) (i.e. for leave or special leave to institute proceedings in the Court, for an extension of time within which to institute proceedings in the Court, for leave to amend the grounds of an application or appeal to the Court, or to stay a decision of the tribunal or authority); or

·                     to join or remove a party; or

·                     decisions about security for the payment of costs in relation to a proceeding under s 56; or

·                     decisions to adjourn a hearing, to vacate a hearing date or expedite a hearing.

(emphasis added)

10                                          The Attorney General said of the proposed amendments in his Second Reading Speech to the House of Representatives (Hansard, 22 June 2009, pp 6732-6734 at p 6733):

The new appeals measures will assist the court to provide greater flexibility in dealing with appeal proceedings.

Uncertainty surrounding appeal rights in relation to interlocutory judgments will be removed, so that the court’s time will no longer be spent unnecessarily hearing appeals from certain interlocutory decisions.

The court’s power to manage cases will be strengthened. The amendments ensure that a single judge is able to deal with ancillary and interlocutory matters in most circumstances without the need to constitute a full court. 

Consideration

11                                          For present purposes, s 24(1AA) is the key provision.  When read with s 24(1)(a), it provides that an appeal may not be brought from a judgment of the Court constituted by a single judge exercising the original jurisdiction of the Court if the judgment is, relevantly, “a determination of an application of the kind mentioned in subsection 20(3)”. 

12                                          The kinds of application mentioned in s 20(3) include an application “for leave to amend the grounds of an application or appeal to the Court”.  It is clear enough, in my view, that this includes an application to amend a statement of claim.  The proceeding to be heard by her Honour was commenced by application and statement of claim filed on 24 July 2008.  According to that application, the accompanying statement of claim stated the “grounds” of the applicant’s claims.  In this respect the application was in a form satisfying the requirements of the rules:  Order 4, Rule 1 and Schedule 1, Form 5 of the Federal Court Rules.  The rules also required that the statement of claim show the nature of the applicant’s claim and the material facts on which it was based:  Order 4, Rule 6(2) of the Federal Court Rules. 

13                                          Since her Honour’s judgment was a determination of an application to amend the grounds of an application to the Court, it is a determination of the kind mentioned in sub-section 20(3).  Section 24(1AA) provides that an appeal must not be brought from such a judgment.

14                                          This interpretation of the relevant provisions accords with their ordinary meaning.  If regard is had to the Explanatory Memorandum and Second Reading Speech for the purpose of seeking confirmation that it was Parliament’s intention to amend s 24 to exclude any right of appeal from interlocutory judgments of the kind specified in s 24(1AA) (including determinations of the kind specified in s 20(3)) then the position is put beyond doubt. 

15                                          The change brought about by the introduction of s 24(1AA) is significant and far reaching.  The statement appearing in the Explanatory Memorandum at para [81] to the effect that the interlocutory judgments to which s 24(1AA) now applies are “minor procedural decisions” is a generalisation to which there will inevitably be exceptions.  In some cases s 24(1AA) may be the source of considerable hardship where there is reason to believe that a judge’s discretion has miscarried.  But it is clear when one has regard to the extrinsic material to which I have referred as well as other important amendments that were made to the Act by the Access Act that Parliament intended that there should be no appeal from interlocutory decisions of the kinds specified in s 24(1AA). 

The applicant’s constitutional point

16                                          At the directions hearing that took place a few days prior to the hearing of the present application, the applicant applied to have the hearing of the applicant’s notice of motion adjourned so that notices could be given pursuant to s 78B of the Judiciary Act 1903 (Cth).  Counsel for the applicant did not attend that directions hearing but the solicitor for the applicant who appeared provided me with a short written submission prepared by counsel together with a draft notice which the applicant suggested should be served pursuant to s 78B.  I declined to make any direction for the service of a notice on that occasion. 

17                                          Section 78B provides:

78B  Notice to Attorneys-General

         (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 she or the State is a party to the cause.

         (4)     The Attorney-General may authorize 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.

18                                          As Burchett J said in Amrit Lal Narain v Parnell (1986) 9 FCR 479 at 489: “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.”  Nor is s 78B engaged unless the application before the Court involves a matter that “really and substantially” arises under the Constitution (Amrit at 489).  French J expressed his agreement with these statements of principle in Australian Competition and Consumer Commission v C J Berbatis Holdings Pty Ltd (1999) 95 FCR 292 at para [13].  At para [14] his Honour added:

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 …

At para [20] his Honour also referred to the decision of Toohey J in Re Finlayson; Ex parte Finlayson (1997) 72 ALJR 73 at 74 where Toohey J said:

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 Toohey J (sitting as a single judge of the High Court) confessed to having much difficulty following the argument put by counsel for the applicant in support of the proposition that the Family Court should not have proceeded in an appeal in circumstances where no notices had been given in accordance with s 78B.  His Honour went on to hold that the argument that the Family Court was bound not to proceed because the appeal involved a matter arising under the Constitution or involving its interpretation was based upon a misunderstanding of the structure of the Family Court. 

19                                          It is contended in the draft notice that the consequence of a construction of s 24(1AA) that deprives the applicant of a right to appeal is that the section is “invalid as an impermissible intrusion into the manner of exercise of the appellate jurisdiction of this Court… [it] being a Chapter III court.”  It was argued by the applicant in the written submission accompanying the draft notice that if, properly construed, s 24(1AA) deprives the applicant of a right of appeal then:

the law is invalid as an impermissible intrusion by the legislature in the manner of the exercise of judicial power by a Chapter III court, in that the law denies the court power to determine an unresolved right of appeal in respect of a matter falling within its jurisdiction, and has the further practical consequence of destroying the underlying unresolved choses in action before the judicial forum which undoubtedly has jurisdiction to hear them.

The applicant elaborated on this submission at the hearing of the present application briefly and it was put in precisely the same terms in a further set of written submissions to which I was taken.  Neither of the applicant’s written submissions referred to any relevant authority but in oral submissions counsel for the applicant referred me to a paragraph in the judgment of Deane J in Polyukhovich v Commonwealth (1991) 172 CLR 501 at 606-607.  I will return to that shortly. 

20                                          There are some basic difficulties with the applicant’s assertion that this application “involves a matter arising under the Constitution or involving its interpretation.” 

21                                          First, the premise underlying the submission that s 24(1AA) deprives a Court of its power to determine an unresolved right of appeal is incorrect.  The application to amend the statement of claim was filed after s 24(1AA) came into effect and was, of course, heard and determined by her Honour some time after that.  So the applicant has never enjoyed a right of appeal (or a right to apply for leave to appeal) from her Honour’s decision refusing the application for leave to amend the statement of claim. 

22                                          Secondly, it is also incorrect to say that her Honour’s decision “has the further practical consequence of destroying the underlying unresolved choses in action before the judicial forum which undoubtedly has jurisdiction to hear them.”  There is no doubt that Katzmann J had jurisdiction to allow the applicant to raise the additional causes of action the subject of the proposed amendments.  But her Honour’s refusal to grant the applicant leave to raise them did not “destroy” the additional causes of action. 

23                                          If the applicant’s argument is understood as saying that the effect of her Honour’s decision was to deny the applicant the ability to raise such matters at the trial scheduled to commence in September then that is probably correct if one ignores the theoretical possibility that there may be permitted departures from the pleadings or further interlocutory orders allowing amendments to the pleadings.  More importantly, however, the applicant’s argument ignores the presence of s 24(1E) which enables the applicant to raise her complaints concerning her Honour’s interlocutory judgment disallowing the proposed amendments in any appeal from a final judgment. 

24                                          The passage in the judgment of Deane J in Polyukhovich to which counsel for the applicant referred (172 CLR at 606-607) seems to have little, if anything, to do with the postulated invalidity of s 24(1AA).  In that case the Court was concerned with the validity of s 9 of the War Crimes Act 1945 (Cth) (as amended).  One of the arguments raised in that case in support of the contention that the section was invalid was that it involved a usurpation of the judicial power of the Commonwealth and was therefore inconsistent with Ch. III of the Constitution.  The applicant’s submissions to me made no serious attempt to explain how s 24(1AA) might be viewed as involving a usurpation of judicial power. 

25                                          I do not intend to imply that there are not aspects of Ch. III of the Constitution which proscribe the powers of the Parliament to prevent appeals being brought from judgments of a federal court to the High Court.  But it has been held that s 73 of the Constitution allows the Parliament to create exceptions preventing the bringing of such appeals in particular types of cases or to regulate how and when appeals in particular types of cases might be brought:  Cockle v Isaksen (1957) 99 CLR 155 at 164-165.  See also Watson v Federal Commissioner of Taxation (1952) 87 CLR 353. 

26                                          In my view the constitutional point postulated by the applicant is based upon a misunderstanding of the nature, scope and operation of s 24(1AA).  I do not think it really arises. 

27                                          I propose to dismiss the notice of motion seeking leave to appeal on the basis that it is incompetent.  I think the applicant should pay the respondent’s costs of her notice of motion.  I refuse the respondent’s application for indemnity costs.  The respondent filed its own notice of motion seeking an order that the applicant’s notice of motion be dismissed.  That application is superfluous and I will simply dismiss it without making any other order as to costs.  I do not think the applicant should be liable for any additional costs as a result of the respondent filing its own motion. 

Associate:

Dated:         4 August 2010