Re Wakim; Ex parte McNally
Encyclopedia
Re Wakim; Ex parte McNally was a significant case decided in the High Court of Australia
on 17 June 1999. The case concerned the constitutional validity of cross-vesting of jurisdiction, in particular, the vesting of state companies law jurisdiction in the Federal Court
.
(1990) the states were required to legislate for the formation of corporations. As a result of this the states had to vest the Federal Court
with state jurisdiction to allow the Commonwealth to have effective judicial control over corporations law.
The first two proceedings were launched by respondents in Federal Court proceedings who were allegedly liable for damages in negligence. They had issued writs of prohibition
against the Federal Court.
The third proceeding involved writs of certiorari
and prohibition against the Federal Court. One of the orders sought to be quashed was an order for the winding up of a company. The prosecutors sought to prevent the Federal Court from enforcing this order.
The final proceeding involved an application for special leave to appeal the decision of the Full Federal Court affirming orders for the issue of summonses under the corporations law of the Australian Capital Territory
.
and Hayne
JJ. In relation to the first argument advanced in favour of the validity of the legislation it was held that no amount of Commonwealth-State cooperation could supply a power that did not exist. Their Honours considered that such a situation would simply allow legislative amendment of the Constitution.
The second argument was advanced on the basis that the Commonwealth, as the national polity, could do what was necessary "to protect its own existence and the unhindered play of its legitimate activities”. Their Honours also rejected this argument on the basis that convenience or desirability was not a valid criterion of constitutional validity.
Ultimately, it was held that the jurisdiction that may be conferred on a federal court was prescribed by, and limited to, the heads of power contained in ss 75 and 76 of the Constitution and that no other polity could confer jurisdiction on federal courts.
and R v Hughes would eventually see the effective downfall of the scheme and lead to the Corporations Act 2001 (Cth).
High Court of Australia
The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...
on 17 June 1999. The case concerned the constitutional validity of cross-vesting of jurisdiction, in particular, the vesting of state companies law jurisdiction in the Federal Court
Federal Court of Australia
The Federal Court of Australia is an Australian superior court of record which has jurisdiction to deal with most civil disputes governed by federal law , along with some summary criminal matters. Cases are heard at first instance by single Judges...
.
Background
As part of the national corporations law scheme instigated after the High Court's ruling in New South Wales v The CommonwealthNew South Wales v Commonwealth (1990)
New South Wales v The Commonwealth [1990] HCA 2; 169 CLR 482; 90 ALR 355, also known as the Incorporation Case, was a decision handed down in the High Court of Australia on 8 February 1990 concerning the corporations power in s51 of the Commonwealth Constitution...
(1990) the states were required to legislate for the formation of corporations. As a result of this the states had to vest the Federal Court
Federal Court of Australia
The Federal Court of Australia is an Australian superior court of record which has jurisdiction to deal with most civil disputes governed by federal law , along with some summary criminal matters. Cases are heard at first instance by single Judges...
with state jurisdiction to allow the Commonwealth to have effective judicial control over corporations law.
The proceedings
Four sets of proceedings were launched in the High Court by various parties. Given the similarity of the issues to be decided each was heard and decided at the same time.The first two proceedings were launched by respondents in Federal Court proceedings who were allegedly liable for damages in negligence. They had issued writs of prohibition
Prohibition (writ)
A writ of prohibition is a writ directing a subordinate to stop doing something the law prohibits. In practice, the Court directs the Clerk to issue the Writ, and directs the Sheriff to serve it on the subordinate, and the Clerk prepares the Writ and gives it to the Sheriff, who serves it.This...
against the Federal Court.
The third proceeding involved writs of certiorari
Certiorari
Certiorari is a type of writ seeking judicial review, recognized in U.S., Roman, English, Philippine, and other law. Certiorari is the present passive infinitive of the Latin certiorare...
and prohibition against the Federal Court. One of the orders sought to be quashed was an order for the winding up of a company. The prosecutors sought to prevent the Federal Court from enforcing this order.
The final proceeding involved an application for special leave to appeal the decision of the Full Federal Court affirming orders for the issue of summonses under the corporations law of the Australian Capital Territory
Australian Capital Territory
The Australian Capital Territory, often abbreviated ACT, is the capital territory of the Commonwealth of Australia and is the smallest self-governing internal territory...
.
Arguments
There were two principal arguments in favour of the validity of the legislation:- that any deficiency in the power of either the States or the Commonwealth to enact a cross-vesting scheme was made good by both the States and the Commonwealth legislating to give effect to the scheme; and
- that the Commonwealth has power to consent to the conferring of jurisdiction by the States on courts created by the Commonwealth parliament.
The decision
The leading judgement on the main issue of cross-vesting of jurisdiction was written by GummowWilliam Gummow
William Montague Charles Gummow AC is a Justice of the High Court of Australia, the highest court in the Australian court hierarchy.-Biography:...
and Hayne
Kenneth Hayne
Kenneth Madison Hayne AC is a Justice of the High Court of Australia which is the highest court in the Australian court hierarchy.-Education and professional life:...
JJ. In relation to the first argument advanced in favour of the validity of the legislation it was held that no amount of Commonwealth-State cooperation could supply a power that did not exist. Their Honours considered that such a situation would simply allow legislative amendment of the Constitution.
The second argument was advanced on the basis that the Commonwealth, as the national polity, could do what was necessary "to protect its own existence and the unhindered play of its legitimate activities”. Their Honours also rejected this argument on the basis that convenience or desirability was not a valid criterion of constitutional validity.
Ultimately, it was held that the jurisdiction that may be conferred on a federal court was prescribed by, and limited to, the heads of power contained in ss 75 and 76 of the Constitution and that no other polity could confer jurisdiction on federal courts.
Consequences
The ramifications of the court's decision were immediately apparent. It had raised the possibility that every decision made by a federal court exercising state jurisdiction was invalid. Although the states and the Commonwealth quickly moved to legislate to allow for the affirmation of federal decisions by the state Supreme Courts, the decision had represented a significant blow to the national corporations law scheme. Subsequent decisions in Bond v The QueenBond v The Queen
Bond v The Queen [2000] HCA 13; 201 CLR 213; 169 ALR 607, was a significant case decided in the High Court of Australia regarding the power of the Commonwealth DPP to institute appeals in state courts....
and R v Hughes would eventually see the effective downfall of the scheme and lead to the Corporations Act 2001 (Cth).