Bell Group N.v ((in Liquidation)) and Another (Plaintiffs) v The State of Western Australia

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: French CJ,Kiefel,Bell,Keane,Nettle,Gordon JJ
• Judgment Date: 16 May 2016
• Neutral Citation: [2016] HCA 21
• Docket Number: S248/2015, P63/2015 & P4/2016
• Date: 16 May 2016

Bell Group N.V. (In Liquidation) & Anor

Plaintiffs

and

The State of Western Australia

Defendant

W.A. Glendinning & Associates Pty Ltd

Plaintiff

and

The State of Western Australia

Defendant

Maranoa Transport Pty Ltd (In Liq) & ORS

Plaintiffs

and

State of Western Australia & ORS

Defendants

[2016] HCA 21

French CJ, Kiefel, Bell, Gageler, Keane, NettleAnd Gordon JJ

S248/2015, P63/2015 & P4/2016

HIGH COURT OF AUSTRALIA

Bell Group N.V. (in liquidation) v Western Australia

W.A. Glendinning & Associates Pty Ltd v Western Australia

Maranoa Transport Pty Ltd (in liq) v Western Australia

Constitutional law – Inconsistency between Commonwealth and State laws – Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) – Where rights and obligations arose and had accrued to Commonwealth under Commonwealth law prior to commencement of State law – Where State law purports to create scheme under which Commonwealth tax debts stripped of characteristics ascribed to them by Income Tax Assessment Act 1936 (Cth) and Taxation Administration Act 1953 (Cth) – Whether State law invalid by reason of s 109 of Constitution – Whether State law alters, impairs or detracts from operation of Commonwealth law – Whether provisions can be read down or severed – Whether State law invalid in its entirety.

Constitutional law – Standing – Where Attorney-General of Commonwealth intervened generally in support of plaintiffs – Whether plaintiffs have standing in their own right to challenge validity of State law.

Words and phrases – ‘accrued rights’, ‘alter, impair or detract from’, ‘inconsistency’, ‘justiciable controversy’, ‘reading down’, ‘severance’, ‘standing’.

Constitution, s 109.

Income Tax Assessment Act 1936 (Cth), ss 177, 208, 209, 215, 254.

Taxation Administration Act 1953 (Cth), Sched 1, ss 255–5, 260–45, 350–10(1).

Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA).

Representation

B W Walker SC with A A D'Arcy for the plaintiffs in S248/2015 (instructed by Lipman Karas)

S Penglis with A K Sharpe and B C Gauntlett for the plaintiff in P63/2015 (instructed by DLA Piper Australia)

C G Colvin SC with J C Vaughan SC and P A Walker for the plaintiffs in P4/2016 (instructed by Ashurst)

G R Donaldson SC, Solicitor-General for the State of Western Australia with A J Sefton and R Young for the defendant in S248/2015 and P63/2015 and the first defendant in P4/2016 (instructed by State Solicitor (WA))

Submitting appearance for the second defendants in P4/2016

Interveners

J T Gleeson SC, Solicitor-General of the Commonwealth with J A Watson, M J O'Meara and Z C Heger for the Attorney-General of the Commonwealth and the Commissioner of Taxation, both intervening (instructed by Australian Government Solicitor)

M G Sexton SC, Solicitor-General for the State of New South Wales with S Robertson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW))

M G Hinton QC, Solicitor-General for the State of South Australia with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA))

P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld))

M E O'Farrell SC, Solicitor-General of the State of Tasmania with S K Kay for the Attorney-General of the State of Tasmania, intervening (instructed by Crown Law (Tas))

R M Niall QC, Solicitor-General for the State of Victoria with K E Foley for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor)

ORDER

Matter No S248/2015

The questions stated by the parties in the amended special case dated 29 February 2016 and referred for consideration by the Full Court be answered as follows:

Question 1

Do the plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) on the grounds alleged in paragraph 56 of the statement of claim?

Answer

Yes.

Question 1A

Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) on the grounds alleged in paragraphs 56.1 and 56.2 of the statement of claim insofar as the grounds rely on former s 215 of the [Income Tax Assessment Act 1936 (Cth)] (and alternatively, s 260–45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth))]?

Answer

Yes.

Question 2

Is the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) invalid in its entirety?

Answer

Yes.

Question 3

If the answer to question 2 is ‘no’, are any of the provisions of Parts 3 and 4 and any of ss 48, 54, 55, 56, 58 and 69 to 74 of the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) invalid (and, if so, to what extent)?

Answer

Unnecessary to answer.

Question 4

If the answer to question 3 is yes is the invalid provision severable from the rest of the Act (and, if so, to what extent)?

Answer

Unnecessary to answer.

Question 5

Who should pay the costs of the special case?

Answer

The defendant.

Matter No P63/2015

The questions stated by the parties in the amended special case dated 26 February 2016 and referred for consideration by the Full Court be answered as follows:

Question 1

Do the plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 [of] the Bell Group Companies (Finalisation of Matters and Distribution of Proceeds) Act 2015 (WA) ( Bell Act) on the grounds alleged in paragraphs 56 to 58 of the statement of claim?

Answer

Yes.

Question 2

Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Act on the grounds alleged in paragraphs 56.1 and 56.2 of the statement of claim insofar as the grounds rely upon s 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260–45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)])?

Answer

Yes.

Question 3

Are any of the provisions of Parts 3 and 4 and any of ss 51, 52 and 73 of the Bell Act invalid (and, if so, which and to what extent):

• (a) by the operation of s 109 of the Commonwealth Constitution by reason of:

  • (i) inconsistency between that provision (as a law of the State of Western Australia) and:

    • (1) the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) or the Taxation Administration Act 1953(Cth), on the grounds alleged in paragraph 56 to 58 of the statement of claim; further or alternatively

    • (2) the Corporations Act 2001 (Cth), on the grounds alleged in paragraphs 72 to 88 of the statement of claim; further or alternatively

    • ( 3) s 39(2) of the Judiciary Act 1903 (Cth), on the grounds alleged in paragraphs 59 to 68 of the statement of claim?; further or alternatively

• (b) because it infringes Chapter III of the Constitution, on the grounds alleged in paragraphs 59 to 68 of the statement of claim?

Answer

(a)(i)(1) Yes. The Bell Act is invalid in its entirety.

(a)(i)(2) Unnecessary to answer.

(a)(i)(3) Unnecessary to answer.

(b) Unnecessary to answer.

Question 4

If any provisions of the Bell Act are invalid, are they severable from the rest of the Act (and, if so, to what extent); or is the Bell Act invalid in its entirety?

Answer

The Bell Act is invalid in its entirety.

Question 5

Is the Bell Act invalid in its entirety because it infringes Chapter III of the Constitution on the grounds alleged in paragraphs 69 and 71 of the Statement of Claim?

Answer

Unnecessary to answer.

Question 6

Who should pay the costs of the special case?

Answer

The defendant.

Matter No P4/2016

The questions stated by the parties in the amended special case dated 26 February 2016 and referred for consideration by the Full Court be answered as follows:

Question 1

Do the Plaintiffs have standing to seek relief in respect of the alleged invalidity of Parts 3 and 4 of the [Bell Group Companies (Finalisation of

Matters and Distribution of Proceeds) Act 2015 (WA) (‘the Bell Act’)] on the grounds alleged in:

• (a) paragraph 56.1 of the [statement of claim], insofar as the grounds rely upon ss 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260–45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)]) and 254(1)(h) of the [Income Tax Assessment Act 1936 (Cth)]; and

• (b) paragraphs 56.2, 56.3 and 56.4 of the [statement of claim]?

Answer

• (a) Yes.

• (b) Yes.

Question 2

Does any justiciable controversy arise in respect of the alleged invalidity of Parts 3 and 4 of the Bell Act on the grounds alleged in paragraphs 56.1 and 56.2 of the [statement of claim] insofar as the grounds rely upon s 215 of the [Income Tax Assessment Act 1936 (Cth)] (alternatively, s 260–45 of Schedule 1 to the [Taxation Administration Act 1953 (Cth)]) and s 254(1)(h) of the [Income Tax Assessment Act 1936 (Cth)]?

Answer

Yes.

Question 3

Are any of ss 9, 10, 22, 25, 27, 28, 29, 30, 33, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 54, 55, 56, 68, 69, 71, 72 or 73 of the Bell Act invalid, and, if so, which and to what extent, by the operation of s 109 of the Commonwealth Constitution by reason of inconsistency between that provision (as a law of the State of Western Australia) and:

• (a) the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) or the Taxation Administration Act 1953(Cth), on the grounds alleged in paragraphs 40 to 56 and 91A of the statement of claim; further or alternatively:

• (b) the...