Scott Stephenson, Michael Crommelin and Cheryl Saunders on the Judgments in Plaintiff M68-2015 v Commonwealth

Plaintiff M68-2015 Case Page

This post collects three perspectives on the judgments of the High Court in Plaintiff M68/2015 v Commonwealth [2016] HCA 1 offered by Scott Stephenson, Michael Crommelin and Cheryl Saunders. These remarks emerged from a recent discussion of the case at a workshop by the Centre for Comparative Constitutional Studies at MLS convened by Adrienne Stone. Scott spoke on the joint judgment and the judgment of Keane J, Michael on Bell J and Gageler J’s opinions, and Cheryl on the dissent of Gordon J.

Scott Stephenson on the Joint Judgment (French CJ, Kiefel and Nettle JJ) and Keane J

Cheryl, Michael and I have divided our discussion of M68 by judgment. I will start by covering the joint judgment of French CJ, Kiefel and Nettle JJ as well as the judgment of Keane J. I imagine most people are somewhat familiar with the case and the facts, but let me provide a brief overview.

The case was a challenge to the legality of the offshore processing arrangements that operate on Nauru. The arrangements allow the Australian Government to transfer to Nauru non-citizens who arrive in Australia by boat without a valid visa and seek asylum. These persons remain on Nauru while their applications for refugee status are determined. In practice, the arrangements work as follows. The Australian Government intercepts an asylum seeker at sea, brings the person to Australia, and applies on behalf of the asylum seeker, and without their consent, to the Nauru Government for a regional processing centre visa. The Nauru Government grants this visa, allowing them to enter the country. The asylum seeker is transferred to Nauru and placed in a camp that is for the most part operated by Wilson Parking, a sub-contractor of Transfield. The asylum seeker remains in this camp while the Nauru Government determines their application for refugee status under Nauru law.

These arrangements operate pursuant to two sets of agreements. First, the Australian Government signed a Memorandum of Understanding with the Nauru Government recording the Nauru Government’s agreement to accept asylum seekers from Australia and to provide settlement opportunities for those determined to be in need of international protection. Second, the Australian Government contracted with Transfield to operate most aspects of the camps, including the provision of security, cleaning and catering services, which Transfield sub-contracted to Wilson Parking.

Turning to the facts of M68, the plaintiff is an asylum seeker from Bangladesh who was intercepted at sea, transferred to Nauru, and temporarily transferred back to Australia for medical treatment connected with her pregnancy. After her pregnancy, she initiated proceedings in the High Court to stop the government from transferring her and her child to Nauru. Pending the outcome of the Court’s decision, the Government stopped transferring asylum seekers to Nauru. As a result of the Government’s success in M68, 267 asylum seekers now face the prospect of transfer to Nauru.

If you’ve been following the legal proceedings in the news, you might remember that it initially was a Williams-type case (see also Opinions on High’s symposium on Williams No 2 here). The Government had entered into these arrangements and spent money in accordance with them without explicit statutory authorisation. After the legal proceedings were initiated, the Government knew it was in trouble because it introduced a Bill into Parliament, which was hastily enacted, that inserted s 198AHA into the Migration Act 1958 (Cth). This provision states that the Government may ‘take … any action in relation to the arrangement or the regional processing functions of the country’, including the making of payments. The legislation is retrospective, backdated to commence operation eleven days before the first Memorandum of Understanding was made in 2012.

Before the High Court there were two principal issues: first, whether there was a head of power to support s 198AHA and, second, whether the provision violated the principle in Lim’s case concerning executive detention. For the joint judges and Keane J, these two issues became quite straightforward to resolve following their finding that the plaintiff is not being detained by the Australian Government. They observe that the Australian Government participates in the detention of the plaintiff, but it is ultimately the Nauru Government that detains the plaintiff.

This resolves the head of power issue because a number of previous decisions such as Plaintiff S156/2013 (and see here) have, according to the joint judgment, already established that the aliens power supports a law detaining a non-citizen for the purposes of deportation or expulsion. According to these judges, as soon as the person is placed in Nauru they are no longer in the detention of the Commonwealth. Consequently, the law only had to authorise a limited set of actions, essentially the act of transferring non-citizens from Australia to Nauru, which is an act of deportation or expulsion. Thus, it falls within existing judicial authority on the scope of the aliens power.

It also makes resolution of the second issue straightforward because, according to the joint judgment, the rule in Lim only applies to situations where the detention is actually implemented by the Commonwealth and its officers. They state at [41]:

Lim does not refer more generally to a ‘concept of “authorise or enforce” detention’ which extends to a situation in which the detention is ‘not actually implemented’ by the Commonwealth and its officers. Lim has nothing to say about the validity of actions of the Commonwealth and its officers in participating in the detention of an alien by another State.

As the Nauru Government detains the plaintiff while the plaintiff is present in Nauru, Lim has no application. Keane J agrees with both of these holdings in the joint judgment.

Before I hand over to Cheryl and Michael, let me point out what I think are two concerning dimensions to this case. Both concerns are separate from any questions about the merits of offshore processing, an issue that we can put to one side for the purposes of our current discussion. The first one is that the reasoning in these two judgments is characterised by an emphasis on form over substance. They find that Lim does not apply because the Commonwealth is not actually implementing the plaintiff’s detention despite the following facts: first, the Commonwealth established the camps on Nauru, second, the Commonwealth transferred the plaintiff there, third, the Commonwealth contracted with Transfield to operate the camps, fourth, the Commonwealth paid for all the costs associated with the operation of the camps, fifth, the Commonwealth oversaw, and was heavily involved with, the day-to-day operation of the camps, and, sixth, the Commonwealth maintained a contractual right to take control of the camps at its discretion.

It sits awkwardly with the line of constitutional logic behind a decision we discussed early last year, Queensland Rail (see here). You will remember in that case Queensland tried to legislatively establish a company that would not fall within the definition of a constitutional corporation and the Court was adamant that Queensland could not, in effect, legislate to avoid the operation of the Constitution by giving the corporate entity a particular label. In M68, the Court has, I would argue, allowed the Commonwealth to contract, not even legislate, to avoid the operation of the Constitution. To find that the Commonwealth was not actually implementing the plaintiff’s detention, the joint judgment and Keane J rely on the fact that the plaintiff is detained on Nauru according to Nauru law. However, the contract with Transfield is, I would argue, also essential to the majority’s conclusion. If the Commonwealth had not outsourced the operation of the camps to Transfield and instead used its own officers to operate the camps, it would be exceptionally difficult to maintain that ‘the detention is “not actually implemented” by the Commonwealth and its officers’ (at [41]). Thus, the contract allowed the Commonwealth to argue that it is not detaining the plaintiff despite its substantial involvement in the plaintiff’s detention, an argument that a majority of the Court accepts.

The majority’s line of reasoning brings to mind the fallacy of single characterisation. Just as a law can have a dual character in the sense that it can be a law with respect to more than one subject matter, so can detention have a dual character in the sense that it is being implemented by more than one entity. While the Nauru Government and Transfield are playing some part in implementing the plaintiff’s detention, so is the Australian Government given that they transferred the plaintiff to Nauru, oversee the operation of the camps and have the ability to accept asylum seekers back into Australia, which is precisely what happened in this case when the plaintiff was brought back to Australia for medical treatment. I will leave my comments on the Lim point there. In particular, I note that I have put to one side the question of whether, if the Lim principle applies to the plaintiff, it was infringed.

The second concerning dimension to this case, and this is not one confined to the judgments of the four judges I am discussing, is the reliance on retrospective legislation to uphold the validity of these agreements. Given the reliance on this retrospective legislation, it appears that the Government was operating without legal authorisation for three years — a point that is explicitly acknowledged in the judgment of Gageler J (see at [180]). In my opinion, this sets a worrying precedent. It encourages Governments to act, even if they don’t have explicit legal authority, if they think Parliament can and will be able to bail them out. It also has troubling implications in terms of parliamentary process in that, if the Government acts without authority and legal proceedings are subsequently launched, it places pressure on Parliament to enact remedial legislation in a very short period of time to remedy the issue before the matter comes to trial rather than allow Parliament to consider the issue at a normal pace. And, of course, it relies on litigation to ensure that the Commonwealth Government is acting with legal authority.

Michael Crommelin on the Judgments of Bell J and Gageler J

I agree with Scott’s main points, and in particular I think that the reliance by the plurality and Keane J on form over substance is surprising, particularly without explicit acknowledgment or justification. But that leads directly to Bell J’s judgment because she disagrees specifically on that point. She examines carefully and in some detail the arrangements that Scott has summarised and concludes: ‘that the plaintiff’s detention’ — and she describes it as detention — ‘in Nauru was, as a matter of substance’ — pointedly emphasising the substance — ‘caused and effectively controlled by the Commonwealth parties’ (at [65]). To me, that conclusion seems beyond argument.

Nevertheless, Bell J held that the Commonwealth’s actions in relation to the plaintiff did not infringe the Lim principle that detention usually requires an exercise of judicial power in accordance with Chapter III of the Constitution, apart from quite specific exceptions. Rather, she held that those actions fell within the exceptions. I find it difficult to reconcile this conclusion with her analysis of the arrangements applicable to the plaintiff’s detention.

The judgment of Gageler J is made up of two distinct parts. The second deals specifically with the case, in a way rather similar to that of Bell J. Gageler J regards the plaintiff’s detention as a matter of deprivation of liberty. The issue is whether s 198AHA of the Migration Act, inserted by an amendment in 2015, authorised this deprivation of liberty. While Gageler J notes the retrospective operation of the section (at [180]) he does not appear to attach significance to it. There’s a statutory construction point that he resolves in favour of the Commonwealth parties: the section is held to apply to the plaintiff. He takes a broad view of the scope of Commonwealth legislative powers — not just in relation to aliens but also external affairs — that authorise the enactment of the section. In relation to the Chapter III matter, he refers to his previous judgments (including that in CPCF, see here) where he reformulated the Lim principle; according to that approach, the deprivation of the plaintiff’s liberty in this case did not involve an exercise of judicial power.

The first part of Gageler J’s judgment is an excursus on executive government in the Constitution that includes a response to the High Court’s earlier decisions in Pape and the two Wiliams cases. While strictly unnecessary in the face of the retrospective operation of s 198AHA, it provides an interesting and provocative formulation of the structure of the Constitution, the relations among the three branches of the Commonwealth government, and the distribution of power among those three branches of government. Prior to his appointment to the Court, Gageler J drew attention to the doctrine of responsible government and its significance not only to the relationship between the legislative and executive branches of the Commonwealth, but also to the judicial branch in determining the scope of legislative and executive power: see Stephen Gageler, ‘Beyond the Text: A Vision of the Structure and Function of the Constitution’ (2009) 32 Australian Bar Review 138 (see the lecture version here). His judgment in M68 extends this vision with particular emphasis upon the centrality of the executive branch in the constitutional structure. It also provokes further questions upon aspects of Commonwealth executive power that the Williams cases appeared to resolve, such as the capacity of the executive to enter into contracts and the utility of Professor Winterton’s breadth and depth analysis in determining the scope of Commonwealth executive power (see here).

Cheryl Saunders on the Dissenting Judgment of Gordon J

Gordon J is the only justice who was formally in dissent in M68. She would have answered the questions in the special case in the following way. First, she would have accepted the standing of the plaintiff; secondly, she would have denied that the conduct of the Commonwealth in relation to the plaintiff was authorised by s 61; thirdly, she would have accepted that it was literally authorised by s 198AHA of the Migration Act (if that were valid); but fourthly she held that the section was invalid. The principal point of difference between Justice Gordon and most of the other members of the Court was that she held that the plaintiff was detained by the Commonwealth on Nauru. There is a neat statement to that effect at [276]. Compare the statement in the joint reasons at [34], which regards ‘the independent exercise of sovereign legislative and executive power by Nauru’ to support a conclusion that ‘the Commonwealth did not itself detain the plaintiff’: [36].

Gordon J reached her key conclusion about detention through her willingness to consider substance over form. This comes back to both Scott and Michael’s points about the formalistic reasoning of the majority of the other judges. Her finding that the Commonwealth had detained the plaintiff had consequences for the rest of her reasons. It required her to consider Lim directly and, in particular, to consider whether what she regarded as a new exception to Lim should be created to allow the Commonwealth to detain the plaintiff in a foreign state. She concluded that there should be no such a new exception. There is a powerful passage to this effect in her reasons at [401].

Her decision on detention also led her to consider explicitly the question of the application of the constitutional separation of powers outside Australia’s borders. It will be obvious that she decided that it continues to apply (and, indeed, why should it not?). She also makes several observations about the aliens power and the executive power, which are of some interest. An additional and very helpful benefit of her reasons is that they place on the public record a clear and detailed statement of how Australia’s arrangements with Nauru work. If nothing else, it is a very useful thing to have this available now.

So let me just step you quickly through this rather long but very clearly written judgment. Justice Gordon’s conclusion that the Commonwealth actually detained the plaintiff is based on a careful unravelling of the terms of a series of instruments and the interrelationship between them. There are four sets of these. One is the Memorandum of Understanding between Australia and Nauru. The second is the administrative arrangements between Australia and Nauru, which are made pursuant to the Memorandum of Understanding. The third is relevant aspects of the law of Nauru; there is an amusing observation at [315] where she says that the ‘careful reader will notice’ that the Commonwealth is empowered to give responsibility to the Operational Manager under pt 2 of the Asylum Seekers (Regional Processing Centre) Act 2012 (Nauru), which appears not to be contemplated by the Administrative Arrangements. The fourth set of instruments that she analyses are the various contracts between the Commonwealth and Transfield, and between Transfield and the subcontractor Wilson. Her analysis of these instruments is detailed and specific..

You might note in passing the way in which Justice Gordon treats the question of the relaxation of detention. You may remember that, shortly before this case came on for hearing, the Government of Nauru announced that the centre was now open, in the sense that those previously detained within it were now able to move around the island. This may have influenced the reasons of some of the other Justices. It does not seem to have influenced Gordon J, however. She notes that this feature of the scheme still seems to rely entirely on discretion, without altering the formal instruments on which detention was based, insofar as it is possible to work out exactly what is going on: [338]–[346], [416].

From [353] she sets out, over about a page and a half of the reasons, a non-exhaustive summary of the Commonwealth’s involvement in the scheme that lead to her conclusion that Australia had relevantly detained the plaintiff. This is also a useful list of the key features of the regime. These include (at [353]): applying to the Nauruan Justice Secretary, without the consent of the plaintiff, for the grant of a Nauruan visa to the plaintiff; paying to Nauru the fee payable for the grant of the visa; taking the plaintiff to the Nauru centre; contracting with and paying for Transfield’s services in providing the Nauru RPC itself; contracting with and paying Transfield to maintain the security of the centre; ‘requiring’ Transfield to ‘exercise use of force’ within the Nauruan processing centre. One feature that becomes significant later in the reasons as well, is what she describes as the power to ‘step in’ and take over the Nauru processing centre.

Once Gordon J came to the conclusion that the Commonwealth had effectively detained the plaintiff, the remaining questions were directed to whether the detention was authorised pursuant to executive or legislative power. Executive power is not sufficient when liberty is at stake; there is a statement to this effect at [372]. The problem for the exercise of any head of legislative power potentially is Lim. For Gordon J, Lim holds that the separation of judicial power under Ch III requires exceptional reasons to justify a law permitting executive detention without a judicial order. Lim also has settled, in subsequent cases as well, that detention that is reasonably necessary to effectuate entry to or deportation from Australia is just such an exceptional case. But, she says, that is not the case here. The plaintiff was detained after leaving Australia, so that exception is no longer in play. Should another exception be recognised to cover this case? Gordon J thinks not. At [401] she notes that there had been no persuasive formulation of the case for another exception, which identified its parameters or how it should work.

It follows that, for Gordon J, even if the challenged provision of the Migration Act in this case is an exercise of power with respect to aliens, it falls foul of Ch III on the basis of a Lim analysis. There is an interesting suggestion, however, at [402] that the aliens power is not engaged in any event. The fact that the persons to whom the exercise of power is directed are no longer in Australia may be relevant in this context. On the other hand, Ch III aside, Gordon J would have accepted the external affairs power as a head of power that would have supported the challenged legislation. But this power also is subject to the Constitution and therefore to the requirements of Ch III (see at [404]–[411]).

So it follows that, for Gordon J, the relevant section of the Migration Act is invalid. Interestingly, however, to return to Scott’s point about retrospectivity, with which I agree, she does not take up the retrospectivity point either. I think it is odd that there is no discussion of this issue at all.

Some final thoughts. For me, the reasoning of Gordon J in this case throws out a real challenge to the High Court to engage with contract and international and intergovernmental arrangements for the purposes of determining whether the exercise of executive action is constitutionally valid or not. It seems to me, given the case law on s 61 and the limits of s 61, that the Court must do this as a matter of logic. And the Court should do so as a matter of principle as well, unless it is willing to preside over the evolution of contract and other forms of the exercise of executive power in ways that enable the constraints of the Constitution to be evaded. On the other hand, we know that Australian judicial method is reluctant to engage with soft law. The High Court is most comfortable when it has a piece of substantive legislation that creates rights and duties. In a sense, the Court is between a rock and a hard place here as it begins to adjust to what is required of it in the context of the exercise of executive power. M68 is an interesting illustration of divisions between the Justices over these matters, in what still are early days.

So, in sum, I think this is one of the next frontiers of Australian constitutional law, and a very important one. I think and hope that the approach of Gordon J will be influential in the future.

AGLC3 Citation: Scott Stephenson, Michael Crommelin and Cheryl Saunders, ‘Scott Stephenson, Michael Crommelin and Cheryl Saunders on the Judgments in Plaintiff M68-2015 v Commonwealth‘ on Opinions on High (29 February 2016) <http://blogs.unimelb.edu.au/opinionsonhigh/2016/02/29/stephenson-crommelin-saunders-m68>.

Dr Scott Stephenson is a Lecturer at MLS; Professor Michael Crommelin AO is the Zelman Cowen Professor of Law and Director of Studies, Energy and Resources Law at MLS; Professor Cheryl Saunders AO is Laureate Professor Emeritus at MLS.

2 thoughts on “Scott Stephenson, Michael Crommelin and Cheryl Saunders on the Judgments in Plaintiff M68-2015 v Commonwealth

  1. I guess it just goes to show that the world really would be a better place if we had more tax lawyers 😉

    More seriously thank you for this very clear and easy-to-read summary, it is a real public service.

  2. Terrific piece – lucid, accessible and sophisticated. I can’t wait to hop into the judgements of Gordon and Gageler JJ. I really thought the latter would go the other way…

    Without wishing to minimise the gravity of the underlying issues, from a purely academic perspective, I can’t wait to see the future developments. *popcorn

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