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Thursday, 13 April 2000
Page: 14103

Senator CONROY (4:27 PM) —As the Jurisdiction of Courts Legislation Amendment Bill 2000 arises from the High Court decision in re Wakim, I feel it is appropriate to add a few words to this debate. The decision in re Wakim has ramifications for the entire Australian legal system. It causes particular problems for the operation of the Corporations Law in Australia. In re Wakim the High Court held that the Australian Constitution does not permit the Commonwealth parliament to legislate to accept the vesting of state judicial power in Federal Courts by operation of state law. This means the Federal Court will not have the power to determine matters arising under the Corporations Law.

To go back 10 years, in 1990 the Commonwealth, the states and the Northern Territory agreed to a cooperative system which created a national Corporations Law. The objective of the national scheme was to ensure that the scheme legislation: operated as a single national law applying throughout Australia; invested in ASIC, the Director of Public Prosecutions and the Australian Federal Police responsibility for the regulation, investigation and prosecution of offences under the Corporations Law; and invested jurisdiction in the Federal Court to hear cases in relation to the Corporations Law.

It is this last aspect of the system which the decision in re Wakim most affects. One objective of the national scheme was to have the company laws administered by a national court system in the Federal Court. This has enabled the Federal Court to build up considerable expertise in Corporations Law. The vesting of jurisdiction in the Federal Court was also intended to ensure national consistency in the interpretation of the national scheme of company law. Following the decision in re Wakim, the benefit of the expertise that the Federal Court has built up in Corporations Law matters is substantially lessened, and there is a risk that the national character of the Corporations Law may be compromised by different state court hierarchies applying its provisions inconsistently.

This bill attempts, in part, to deal with the problems raised by the decision in re Wakim. The bill confers federal jurisdiction on federal courts to review the decisions of Commonwealth officers and bodies made in the performance of functions conferred on them by specified state and territory laws. The bill will also enable the Supreme Court of a state or territory to exercise federal judicial review jurisdiction in limited circumstances where related proceedings are before a court of the state or territory. These amendments will address in part the problems caused by the decision in re Wakim but will not remedy all the difficulties which have arisen from that decision. There will still be many non-ADJR matters which will arise in the state arena which cannot be dealt with at a federal level.

The national cooperative scheme has allowed Australia to be promoted as having a stable and well-regulated national corporations scheme. The national cooperative scheme has also contributed to business and investor confidence. A functioning system of corporate regulation is essential to fostering a climate in which people can conduct business with confidence as to its legal efficacy. Since the decision in re Wakim, the High Court has also handed down decision in Byrnes and Hopwood and DPP v. Bond. In those cases, the High Court held that the Commonwealth Director of Public Prosecutions did not have the power to appeal against sentences for breaches of the old state company codes. More recently, the High Court has heard arguments in Queen v. Hughes as to the powers of the Commonwealth DPP in the national corporate scheme. Without wanting to anticipate the High Court, the decision in Queen v. Hughes could have wide-ranging implications for corporations law in Australia. In Queen v. Hughes, the High Court is examining the constitutionality of a section in the state corporations acts which treats offences against state law as an offence against a Commonwealth law. If that section is set aside, it will prevent the Commonwealth DPP from prosecuting breaches of state corporations law. There may also be implications for the power of ASIC to investigate breaches of the Corporations Law. Whatever the outcome in Queen v. Hughes, there are fears that it is only a matter of time before the national scheme falls apart.

My colleague Senator Bolkus has discussed the means by which the problems with all cooperative schemes, including the Corporations Law, can be addressed. I join my colleague in urging urgent action in these matters. The Commonwealth has a leadership role in consultation with the states and territories to achieve a long-term solution to the problems created by the decision in re Wakim and any other decision which imperil a national system of corporate law and regulation. A national scheme of corporate law and regulation is essential to creating an environment attractive to investment and to promoting Australia as a regional financial centre. It is critical to the future economic prosperity of Australia.

I would also like to say a few words on the other national cooperative schemes in the portfolio of Financial Services and Regulation which are affected by the decision in re Wakim. The national competition code effectively granted exclusive jurisdiction to hear matters arising from part IV of the Trade Practices Act to the Federal Court. Part IV of the Trade Practices Act deals with restrictive trade practices. Following the decision in re Wakim, vesting exclusive jurisdiction in the Federal Court is now not possible. The national price exploitation code also creates a cooperative national scheme to monitor prices and take legal action in relation to price exploitation under the GST. The states have repealed or will be repealing those provisions of their codes which purport to confer jurisdiction over matters arising under them on the Federal Court. This bill will also be removing references in the Trade Practices Act which contemplate that state jurisdiction could be conferred on federal courts. The amendments also acknowledge that the Federal Court can no longer exercise exclusive jurisdiction in relation to prosecutions arising out of the competition and price exploitation codes. As I have discussed in relation to the Corporations Law, these solutions are a legal solution but diminish the objectives of a national scheme.

The ability of the ACCC to police price exploitation in relation to the GST may also need to be considered after the decision in the Hughes case. While the Hughes case concerns the Corporations Law, a similar provision to that in question in the Hughes case exists in the price exploitation code of the states participating in the national scheme. The relevant provision provides that an offence against the new tax system price exploitation code of the state jurisdiction is taken to be an offence against the laws of the Commonwealth. If the decision in Hughes holds such a provision to be constitutionally invalid, the ability of the ACCC to police price exploitation in the wake of the GST will be severely curtailed. I will eagerly await the decision in Queen v. Hughes. I am sure the government is also awaiting the decision in Queen v. Hughes. It could make it all too clear that the ACCC is not able to police the GST and that it simply cannot be the protector of consumer interests which the government is promising.

I stand here with my colleagues, and probably most senators, to encourage all states to set aside narrow parochial views and interests. The national interest must come to the fore in this debate. The Labor Party stands ready to work with the government and all other political parties to ensure that the advances that we have made in the last 10 years are maintained and that further strides can be taken to overcome the ramifications of these decisions. I urge a speedy passage of this legislation and promise the opposition's cooperation on future matters in relation to these cases.