The High Court has dismissed an appeal on a constitutional matter on the operation of s 79 of the Judiciary Act 1903 (Cth). The appellant was a New South Wales resident who was convicted of state drug offences against s 6(1)(a) of the Misuse of Drugs Act 1981 (WA) in the Western Australia District Court by a majority jury verdict. As the trial was a ‘federal diversity’ matter (that is, between a state and the resident of another state), the WADC tried the appellant in exercise of its federal jurisdiction. The WASCA dismissed his arguments that this majority verdict was inconsistent with the requirement in s 80 of the Constitution that juries must return unanimous verdicts for convictions, and held that Western Australia’s state law on majority verdicts, and not s 80, applied to the case as a federal diversity matter, due to the operation of s 79. Before the High Court the appellant sought to contend that the WASCA erred in its application of the High Court’s decision in Momcilovic v The Queen [2011] HCA 34, and that it erred in its approach to the interaction between the State law and s 79.

The High Court unanimously dismissed the appeal.

The plurality (Bell, Gageler, Keane, Nettle and Gordon JJ) held that s 6(1)(a) applied at the time of the appellant’s offences and continued to govern the assessment of his criminal liability, even though the WADC exercised federal jurisdiction to resolve the controversy between the appellant and WA about the existence and consequences of that liability (at [40]). While this was in federal jurisdiction, s 79 was ‘not need needed, and was not engaged, to pick up and apply the text’ of s 6(1)(a) as a Commonwealth law: the trial was of state offences, not federal ones, and s 80 did not apply (at [41]). But s 79 was relevant in conducting the trial, with the effect that s 114(2) of the Criminal Procedure Act 2004 (WA), allowing majority verdicts, was picked up and applied as a law of the Commonwealth (at [42]).

After covering the basic structures of the Constitution (see [44]ff) and emphasising that federal and state laws form ‘a single though composite body of law’ (at [48] and at [56]), the plurality reiterated that judicial power’s essential character stems from the ‘unique and essential function that judicial power performs by quelling controversies about legal rights and legal obligations through ascertainment of facts, application of law and exercise, where appropriate, of judicial discretion’ (at [52]). In Australia’s federal system, the character of that power, as distinct from the source of a court’s authority to adjudicate a controversy, is unaffected by the source of the law applied (at [53]). While a matter within federal jurisdiction may involve both federal and State law, and indeed a matter can be in federal jurisdiction while resolved entirely through the application of State law, at all times, ‘[t]here is but one matter and that matter is entirely within federal jurisdiction, as opposed to State jurisdiction’ (at [55]).

The plurality then turned to the incapacity of State laws to affect the exercise of federal jurisdiction by a State court (at [58]ff). This incapacity is due to the Commonwealth Parliament’s sole capacity to affect and vest the exercise of federal jurisdiction in Ch III (see [58]–[59]) and the corollary absence of any State-level legislative power to add or detract from federal jurisdiction or command a court invested with federal jurisdiction on the manner of exercising that jurisdiction (at [60]–[61]). State incapacity explains the need for s 79: that provision ensures that the exercise of federal jurisdiction is effective, filling a gap in the law due to the absence of State legislative power by ‘picking up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction’ (at [63]).

After reviewing the text, history and early interpretations of s 79 (at [65]ff), the plurality turned to the interpretative difficulties explored in recent case law and the emergence of the ‘modern interpretation’ (at [78]ff). In Commissioner of Stamp Duties (NSW) v Owens [No 2] [1953] HCA 62 the High Court stated that s 79’s purpose was to ‘adopt the law of the State’ as the law to be applied to ascertain the rights and liabilities of parties and matters of procedure (except where the Constitution or federal law otherwise provides): at [80]. Later cases clarified, first, that s 79’s adoption was to take the text of State law and apply it as Commonwealth law, without altering the meaning of the text (except so as to make it applicable to a federal court) (at [81]), and secondly that the State laws to which this applies are ones that are ‘binding’ on State courts (see at [82]–[83]). In determining this question of what is binding, the useful distinction is not between procedure and substance (see [83]), but rather between a court’s ‘jurisdiction’ in its precise, technical Ch III sense and a ‘power’ that a court must or can exercise in the execution of jurisdiction: at [84]–[89]. At [87] (citations omitted) the plurality stated that:

“Characteristically an exercise of jurisdiction is attended by an exercise of power“. By making State laws that are ‘binding’ on courts also binding on courts exercising federal jurisdiction, s 79 of the Judiciary Act takes the text of State laws conferring or governing powers that State courts have when exercising State jurisdiction and applies that text as Commonwealth law to confer or govern powers that State courts and federal courts have when exercising federal jurisdiction.

By linking the purpose from Owens [No 2] to the limit on State legislative power, the class of State laws on which s 79 operates becomes clear (at [90], and see [91]ff):

The purpose is fulfilled by aligning s 79’s description of State laws as “binding” on courts with the gap in the law governing the exercise of federal jurisdiction which exists absent other applicable Commonwealth law by reason of the absence of State legislative power to govern what a court does in the exercise of federal jurisdiction. That is how it should be read.

The plurality then turned to the appellant’s invocation of several cases in support of his contentions which, on closer examination, departed from the approach to s 79 explained above (at [93]–[102]). Reiterating that a State law cannot bind a court exercising federal jurisdiction, but that s 79 operates to make the text of that law apply as a Commonwealth law to bind that court (at [103]), the plurality held that this was the operation of s 114 on majority jury verdicts: the section itself applies to Western Australian courts exercising Western Australian jurisdiction, and its text applies, as Commonwealth law, where a Western Australian court exercises federal jurisdiction through s 79, except as otherwise provided by the Constitution or another federal law: ‘That is what occurred in the trial of Mr Rizeq’ (at [104]). Section 6(1)(a) is a law that applies independently of anything done by a Court, squarely within State legislative competence and outside the operation of s 79: ‘It applied in the trial of Mr Rizeq as Western Australian law just as it applied to him before any court was called upon to exercise jurisdiction in relation to the charges brought against him’: at [105].

Kiefel CJ also dismissed the appeal, reading the appellant’s basic argument as being that because s 6(1)(a) was a State law it could not apply of its own force in federal jurisdiction (at [2]). For Kiefel CJ, s 6(1)(a), in contrast to s 114(2), is addressed to the conduct of individuals and liability for offences rather than to State courts and their powers to hear and determine matters (at [24]). State courts exercising federal jurisdiction hear and determine matters in accordance with ‘independently existing substantive law’, which includes applicable State laws (subject to inconsistency with federal laws): at [25]. Noting French CJ’s endorsement in Momcilovic v The Queen [2011] HCA 34 of the strengths of the view that State offence provisions apply directly and not through s 79 (at [26]), and that the cases the appellant raised in support of the contrary contention did not deal with offence provisions (at [27]ff), Kiefel CJ stated that, even if the statements in those cases were to be understood in the way the appellant urged, they would not resolve the question here because that question (whether s 79 must pick up a provision like s 6(1)(a) for it to have effect) was ‘neither argued nor discussed in those cases’: at [31]. Ultimately, Kiefel CJ held that s 6(1)(a) did not need to be and was not picked up by s 79, while s 114 needed to be and was (at [32]):

Section 79 of the Judiciary Act is directed to courts. Its purpose is to fill the gaps created by a lack of Commonwealth law governing when and how a court exercising federal jurisdiction is to hear and determine a matter and the inability of a State law to apply directly to that court whilst exercising federal jurisdiction. In such a case it is necessary that s 79 adopt the State provision and apply it. Section 114(2) of the Criminal Procedure Act is a provision of this kind. Section 6(1)(a) of the MDA is not. Its application was unaffected by the fact that the offence it created was tried in federal jurisdiction. It was not necessary for s 79 of the Judiciary Act to adopt it. Section 6(1)(a) of the MDA applied directly. It follows that s 80 of the Constitution was not engaged.

Edelman J also dismissed the appeal. Noting that the central issue was the construction of s 79, his Honour began by outlining four constructions of that section. The first construction — that s 79 refers to all statutory laws of a State and thus all State laws become federal laws in a court exercising federal jurisdiction — was the broadest construction and the one urged by the appellant (at [115]). The second construction was that s 79 refers to statutory laws that confer powers on courts or that govern or regulate a court’s powers; for Edelman J, this was the approach taken by the other judges in this matter (at [116]ff). The third construction was that s 79 refers to only those statutory laws that govern or regulate the powers that a court exercises as part of its authority to decide (at [120]). The fourth construction was that s 79 refers to laws concerning procedure rather than substance: for Edelman J, this was the approach of the WASCA which, while finding some support in early High Court decisions, has been rejected and was not supported by any party or intervener here (at [122]). For Edelman J, while the first construction also had ‘significant support’ in a number of High Court decisions (at [109], and in detail at [164]ff), the second and third were the only viable alternatives and should be preferred to the first: at [111]. While that rejection was enough to dismiss the appeal, Edelman J also contended that the third construction best accorded with the history, text, context and purpose of s 79 (see [181]–[197]).