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Thursday, 13 April 2000
Page: 14093

Senator BOLKUS (3:37 PM) —The Jurisdiction of Courts Legislation Amendment Bill 2000 addresses a particularly difficult issue facing our federal system. One of the primary purposes of the bill is to overcome difficulties arising from a recent High Court decision which has invalidated cooperative cross-vesting schemes between the states, the territories and the Commonwealth. Specifically with respect to a number of areas, including the Corporations Law and other important areas of commerce, the state and federal governments introduced similar laws based on a national code to facilitate national regulation of important areas, particularly commerce and areas such as sport. As part of those codes there were enforcement mechanisms. These mechanisms have been directed through the Federal Court system; the reasoning being that the federal courts have the ability to develop national expertise and consistency across all jurisdictions. However in the re Wakim case, the High Court held that, under chapter III of our Constitution, federal courts cannot exercise jurisdiction conferred by state legislatures.

This bill attempts to overcome some of the worst aspects of the Wakim case by facilitating a situation where actions taken by Commonwealth officers in the administration of the schemes are recast as federal actions even though they are taken pursuant to state law. This will mean that, even though the function is a function undertaken under state legislation, because the person undertaking that action is an officer of the Commonwealth, it will be subject to federal and judicial review. It sounds like a difficult way through this particular problem, but it is a problem that has now confronted the states and the Commonwealth for a little while and it is a problem that really needs to be addressed as a matter of seriousness.

Increasingly in this age of globalisation, we see that state boundaries have become increasingly burdensome and, in fact, increasingly irrelevant when it comes to trade and commerce. As a consequence, what we have in this country is a national market with international imperatives, and those old boundaries based on state jurisdictions are really not recognised by our corporate and commercial system. In that context, I think the conclusion of the court in re Wakim was regrettable, particularly as we are striving to keep pace with such international and global developments. In fact, it is fair to say that one of the reasons for Australia's economic success has been our stable and efficient legal system. In particular, as a result of that legal system, Australia has been an attractive base for much commercial activity. There is therefore a risk that, unless we properly address these matters and the difficulties arising out of the High Court case of re Wakim, Australia will be diminished in the eyes of many corporations as a desirable base for their activities.

To further demonstrate the inconveniences arising from the case, it is appropriate to draw the attention of all senators to some of those areas that have been affected. Firstly, the Administrative Appeals Tribunal was established in 1976 to review decisions taken by Commonwealth ministers, agencies and officials. It has the power to review both the merits and the legality of the decisions. It has operated so effectively that some states have legislated to adopt the provisions of the Administrative Appeals Tribunal Act as state law. This meant that the tribunal has been able to review decisions taken by state public officers and those decisions have been appealable to the Federal Court. Because of the Wakim case—a case which held that states could not confer jurisdiction on Commonwealth judicial bodies—those cooperative schemes that have been implemented will now have to be amended.

There is also the area in respect of the Administrative Decisions (Judicial Review) Act 1977. That act is an important piece of legislation, facilitating the review of administrative decisions in a more formal context than the Administrative Appeals Tribunal. At present, cooperative schemes between the federal and state governments can prescribe that the AD(JR) Act applies to decisions of the Commonwealth officers as a matter of state law. These schemes will also now have to be amended in light of re Wakim.

I mentioned sports earlier. The Australian Sports Drug Agency is a Commonwealth statutory authority which primarily focuses on the conduct of comprehensive drug testing in competitive sport. It is worth putting on the record that this agency will have an extremely important function in the lead-up to the Sydney Olympics. At present, section 9A of the Australian Sports Drug Agency Act consents to a state or territory conferring jurisdiction on certain entities, including the Federal Court. These provisions also must be amended as a result of the High Court case.

I think the most important and significant impact of re Wakim is in the area of Corporations Law. The Corporations Law is a uniform national law which deals with companies, takeovers, securities and futures. Each state has passed a law which in turn adopts the federal Corporations Law. It was not all that long ago that the former Labor government introduced such legislation and, at that stage, we got cooperation from the then opposition. The intention of each of the acts is to create a cooperative scheme designed to achieve a uniform national corporations legislation scheme despite the limitations on the Commonwealth's constitutional power in this area. One would have thought that that was a desirable outcome some 12 years ago, but it is now even more desirable given market trends in that intervening period. As part of the scheme the state acts apply Commonwealth law as state law and confer, in addition to the Federal Court, jurisdiction on their own state courts with respect to both civil matters and matters arising from the Corporations Law.

The problems arising with respect to Corporations Law are particularly complex because state supreme courts are prevented from hearing ADJR applications. Accordingly, this bill will again recast actions by Commonwealth officers as matters of federal law but, at the same time, it will be specifically necessary to confer jurisdiction on the state or territory courts to hear ADJR proceedings. It should be noted that the much wider range of non-ADJR legal proceedings which were possible under the Corporations Law of a state can no longer be cross-vested in the federal courts.

Since the decision of Wakim we have seen a significant reduction in Federal Court cases. As I said earlier, this is regrettable. It is particularly regrettable as the Federal Court had developed considerable expertise in respect of that important area of Corporations Law. Indeed, in handing down a landmark report on the federal civil justice system—the ALRC Report No. 89—earlier this year, the Australian Law Reform Commission noted:

Australia's legal system plays a crucial role in the nation's economy, with law and legal services a key export and effective dispute resolution a potential selling point.

The independence, integrity and quality of the Federal Justice System gives Australia a competitive advantage in the Asia Pacific region and beyond, so we should be pushing this message to the international business community.

In particular, the ALRC report singled out the Federal Court for praise as providing high quality service for litigants and playing a pivotal role in relation to various sectors of economic activity. Unfortunately, that leading role is now jeopardised and will now be taken away from the Federal Court in respect of many areas under the Corporations Law. As I said, there is a whole range of areas. Another one is in respect of the natural gas pipeline. Since early in the 1990s, both the former Labor government and the present government have attempted to promote competition in the natural gas industry. As a result of an intergovernmental agreement, third parties have been allowed to negotiate access to natural gas transmission pipelines and distribution networks under a broad regulatory framework that applies across the nation. Clearly, this is desirable, given the increasing importance of natural gas and the fact that it is transported across state boundaries.

The Jurisdictions of Courts (Cross-Vesting) Act 1987 is a general scheme by which proceedings have been transferred between federal, state and territory courts, and it has some relevance to the way that the natural gas system has been operating. The scheme has been tremendously successful in avoiding costly and inefficient duplication in several jurisdictions. What we do have though, with the advent of the Wakim case, is elements of the scheme involving conferral of state jurisdiction now in jeopardy and, as a consequence, we have this bill containing provisions for state courts to hear matters which have been treated as special federal matters and have been dealt with in the past by the federal courts.

The NCA is also affected by the decision, as is the Trade Practices Act and competition policy reform acts passed by the Commonwealth, states and territories in the mid-1990s to create a uniform national competition code. The competition provisions contained in part IV of the Trade Practices Act were applied by that code throughout Australia because state and territory laws applied the Commonwealth legislation as if it were a law of their own state or Territory. The Competition Policy Reform Act 1995 also created as a regulator the Australian Competition and Consumer Commission, arising from the merger of the Trade Practices Commission and the Prices Surveillance Authority. The ACCC is now responsible for the enforcement of the competition provisions of the Trade Practices Act. In order to preserve and maintain national standards, all state and territory governments have agreed, through their competition codes, to confer exclusive jurisdiction over matters arising under those codes on the Federal Court. Again, unfortunately, as a result of the High Court case those state codes, in conferring power on the Federal Court, are in conflict with the findings of the High Court.

It should also be noted that a similar cooperative scheme of the Commonwealth, state and territory legislatures will create a national price exploitation code to monitor prices and take legal action in relation to price exploitation under the GST. Once again, we have provisions within this act to ensure that such schemes can be sustainable. The list goes on—the implications of this High Court case cover the field from the National Crime Authority to prices surveillance to competition and to corporations. The Workplace Relations Act is another act which is affected by this legislation. It is noted that this bill deletes subsection 5(7) of the Workplace Relations Act, which arose from a cooperative arrangement between the NSW, Queensland and federal governments in respect of enforcement of awards and instruments in the coalmining industry in the context of the situation where the Australian Industrial Relations Commission had been exercising jurisdiction as a result of cooperative legislation of both the state and federal governments. That has to be the longest sentence I have actually read out in this place, Senator Carr.

Senator Carr —Yes.

Senator BOLKUS —Similarly, subsection 5(9) gave the Federal Court of Australia authority to deal with unfair dismissal matters in circumstances where a state had adopted the laws as laws of the state. While it is conceded that it has been necessary to repeal those sections in light of the Wakim case, we as an opposition are not satisfied that there are appropriate measures which could be taken to repair the vacuum. We have reserved our right to further consider these provisions. With that as our guiding force and in the time that we have, we will be moving amendments in this place to try to fill the vacuum that has been left because of the government's provisions.

In summary, the significance of these cooperative cross-vesting arrangements to our economic prosperity cannot be underestimated. The question then becomes whether the approach in the legislation will be adequate. While we will be supporting the legislation as an attempt to resolve some of the immediate difficulties created by the Wakim case, we believe that this legislation is a long way from being a complete or perfect proposal.

We see two very large clouds on the horizon in respect of this legislation. Firstly, the High Court, in May or June this year, will hear a challenge to state legislation which has effectively adopted and validated those decisions of the Federal Court which have been invalidated as a result of the Wakim case. If those federal decisions cannot be validated by state legislation, then the consequences are quite horrendous. It goes without saying that it would be a disgusting waste of resources for those cases to have to be rerun, but that is a consequence which we cannot be oblivious to.

The other cloud on the horizon is the High Court case of Hughes and the Queen, which was heard by the High Court on 20 October 1999. That case involves, among other things, a challenge to the validity of section 45 of the Corporations Act, a section which states, in effect, that offences against the various state laws that mirror the Commonwealth's Corporations Act and constitute the Corporations Law as a national code are taken to be `offences against the Commonwealth'. Related questions in the proceedings are whether the Commonwealth law has been imported by the states and whether Commonwealth officers are empowered to prosecute corporate offences in the states. It is not our role to prejudge the outcome of that particular case. It is sufficient to note, however, that, if the challenge is upheld, then it will have enormous consequences for the operations of the Corporations Law and also potentially for the other cooperative regimes I mentioned earlier, particularly in the circumstance where Commonwealth officers are not empowered to prosecute offences under state legislation. Indeed, the scheme of the current bill in many instances is based on an assumption that such action by officers of the Commonwealth is valid.

Aside from these two pending problems building up on the horizon, we should not be under any illusion that this bill will solve the cross-vesting problems. In particular, while the action of officers of the Commonwealth has been recast as action under federal law for the purposes of judicial review, there will still be many instances where Commonwealth officers are not, or indeed cannot be, involved in all aspects of these cooperative schemes. One example is in relation to the gas pipelines access legislation where, for instance, South Australian legislation still gives a significant role to South Australian public servants.

It is fair to say that the implications of this legislation are broad ranging and quite pervasive. It is probably also fair to say that no-one in this parliament has had sufficient time to really investigate each of the state acts of the schemes involved, but it is quite fair to anticipate that, with respect to many pieces of state legislation, circumstances that I have mentioned in relation to specific legislation will also have to be confronted. In those circumstances we will have unsatisfactory situations where action by officers of the Commonwealth will be the subject of federal judicial review but action taken under the same schemes by state officers or state public servants will not be. Australian citizens affected by decisions of these and relevant instrumentalities will be compelled to seek state remedies as well. So we have got a problem of potential inconsistency and potential duplication. These are problems which, as I said earlier, can be quite complex. The overall dilemma is one that will face potential litigants, and that is whether to commence proceedings both in the state jurisdiction and also under the federal ADJR Act, or to take other courses.

Another problem that needs to be mentioned is in relation to the Australian Sports Drug Agency Act 1990. I note that item 28 of the bill seeks to confer power to review decisions of that agency on judges or officers of the Federal Court of Australia acting in their personal capacity. There has got to be a substantial question mark as to whether that is a valid provision. It raises questions as to whether a judge of the Federal Court, albeit one acting in a personal capacity, would nonetheless be fulfilling a judicial function and, if they are, whether their involvement in the adjudication of matters under state law would offend the principles of the Wakim case.

I could go on because, as I said earlier, there are quite a number of wide-ranging implications in this legislation and it is legislation that does require urgent and comprehensive treatment. I will not do so at this stage, however. To the extent that other matters need to be raised, I will raise them during the committee stage. There are quite a number of amendments that the opposition will be moving in the committee stage. I will explain those amendments as we go to them sequentially. But I repeat that this is one case where the High Court has in a sense had its collective head in the sand, not recognising the necessity for a national scheme here which needs to have consistency, needs to have a degree of efficiency and needs to recognise that when it comes to Corporations Law the old state borders are somewhat irrelevant these days. It also needs to recognise that maybe powers such as the incidental power in the Constitution could be deployed to overcome some of the problems that the High Court has left us.

We all await with trepidation the Hughes case. In that context it was interesting to see last week that only two states are not prepared to refer powers at this stage to the Commonwealth. The states are South Australia and Western Australia. Coming from South Australia, I find this quite a bizarre decision by the South Australian government and the South Australian Attorney-General. Any state corporate sector that is left out of a national scheme is going to suffer because of being left out. I would have thought it would have been in the interests of South Australia, the South Australian economy and the South Australian business community for the South Australian government to have ditched its ideological fixations and to have embraced the concept of referring further powers to the Commonwealth to overcome such a problem. To the extent that a state's jurisdiction is not so conferred and not consistent with the rest of the Commonwealth, corporations operating in that state will be at a disadvantage. I say to both the Western Australian and South Australian Attorneys that they should rethink their position. I look forward to the committee stage.