Zurich Insurance PLC v Koper

1. [1]

   BELL CJ: By judgment delivered on 8 December 2021, Rein J (the primary judge), pursuant to s 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (the Claims Act), granted leave to the Plaintiff, Mr Dariusz Koper, to pursue representative proceedings against Zurich Insurance PLC (Zurich) and Aspen Insurance UK Ltd (Aspen) (together, the Insurers): Dariusz Koper v Zurich Insurance PLC [2021] NSWSC 1587 (the primary judgment or PJ).

2. [2]

   The Insurers relevantly insured Brookfield Multiplex Constructions (NZ) Ltd (BMX NZ), an entity incorporated in New Zealand and without any assets or presence in Australia. BMX NZ had designed and constructed the Victopia Apartments in Auckland, New Zealand. Mr Koper, and the group members who he represents, are the registered proprietors of residential units in those apartments.

3. [3]

   As long ago as October 2012, Mr Koper and other registered proprietors of the units in the Victopia Apartments brought proceedings against BMX NZ and other defendants in the High Court of New Zealand seeking damages in respect of various building defects (the Victopia Proceedings). BMX NZ was placed into liquidation in December 2012.

4. [4]

   On 22 March 2017, following a hearing in which BMX NZ played no active role, judgment was delivered in the Victopia Proceedings, resulting in the award of damages against BMX NZ and KNZ International Co Ltd in the amount of NZ $53,124,719.76: see Body Corporate 346799 v KNZ International Co Ltd [2017] NZHC 511 (the NZ judgment). Of this amount, a sum of NZ $23,124,719.76 remained outstanding, at least as of 29 June 2021.

5. [5]

   In April 2021, the litigation switched to New South Wales when Mr Koper filed a Summons seeking leave (the Summons for leave), pursuant to s 5 of the Claims Act, to bring proceedings against Zurich under s 4 of that Act. Section 4 of the Claims Act relevantly provides:

6. [6]

   Section 3(1) of the Claims Act defines court as meaning “a court or tribunal of New South Wales”; insured liability as meaning “a liability in respect of which an insured person is entitled to be indemnified by the insurer”; insured person as including “a person who is, in respect of a liability to a third party, entitled to indemnity pursuant to the terms of a contract of insurance”; and liability as meaning “a liability to pay damages, compensation or costs”.

7. [7]

   Section 5(1) of the Claims Act provides that “[p]roceedings may not be brought, or continued, against an insurer under section 4 except by leave of the court in which the proceedings are to be, or have been, commenced.”

8. [8]

   The parties agreed that the criteria for the grant of leave pursuant to s 5 of the Claims Act were as stated in Murphy, McCarthy & Associates Pty Limited v Zurich Australian Insurance Limited [2018] NSWSC 627 at [17], namely that, subject to a residual discretion to refuse leave, a claimant must establish that he, she or it has an arguable case that the insured is liable to the claimant, that the policy responds to that liability, and that the insured is not able to meet the liability in full: see also Wayland v Bird [2017] NSWCA 26 at [25]–[26]; DSHE Holdings Ltd (recs and mgrs apptd) (in liq) v Abboud; National Australia Bank Ltd v Abboud [2017] NSWSC 579 at [20]–[21].

9. [9]

   The Claims Act was enacted following the repeal of part 4 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (LRMPA). Of s 6 of that Act, it had been said that “ambiguity may be its only clear feature” (McMillan v Mannix (1993) 31 NSWLR 538 at 542), that its provisions were "undoubtedly opaque and ambiguous" (New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469 at 479) and that it was “somewhat enigmatic”: Chubb Insurance Company of Australia Ltd v Moore (2013) 302 ALR 101; [2013] NSWCA 212 at [5] (Chubb).

10. [10]

    Section 4 of the Claims Act in its open-textured language, as with s 6 of the LRMPA, does not give any express guidance as to the sphere of its territorial operation, cf DRJ v Commissioner of Victims Rights (No 2) (2020) 103 NSWLR 692; [2020] NSWCA 242 generally and, in relation to s 6 of the LRMPA, at [6]–[7]. That is to say, it does not spell out in express terms what nexus the cause of action, the claimant, the insured or the insurer must have with New South Wales. The territorial operation of s 6 of the LRMPA, which was the progenitor to or at least the predecessor of s 4 of the Claims Act, was the subject of this Court’s decision in Chubb. The significance of that decision for present purposes is explained at [13] below.

11. [11]

    Returning to the background to the present proceedings, in August 2021, whilst Mr Koper’s application for leave under s 5 of the Claims Act was pending in the General List of the Equity Division of the Supreme Court, he commenced the proposed proceedings against Zurich in the Division’s Commercial List. That course was not inconsistent with s 5(2) of the Claims Act, which provides that “[a]n application for leave may be made before or after proceedings under section 4 have been commenced”.

12. [12]

    Aspen was joined as the Second Defendant to the Summons for leave, pursuant to s 5 of the Claims Act, on 13 September 2021. Aspen has a presence in New South Wales and it is accepted that it was properly served with proceedings in New South Wales.

13. [13]

    Relevantly, for the purposes of this application for leave to appeal, the Insurers' contention before the primary judge was that leave under s 5 of the Claims Act should not be granted because that Act could not confer upon Mr Koper a right of action against either of them in the circumstances of these proceedings. Underpinning this argument was the conclusion of the primary judge (accepted by all parties to this appeal as correct) that the “hinge” (or criterion of operation) of s 4 of the Claims Act was that the underlying claim against the insured (that is, Mr Koper’s claim against BMX NZ and not the claim against the Insurers under s 4) had to be one either brought in New South Wales or one that could properly have been brought in New South Wales: see PJ [74]–[75]. The primary judge’s reference to the “hinge”, or criterion of operation, of the Claims Act derived from the reasoning of this Court in Chubb, in relation to s 6 of the LRMPA: see, especially, at [197]–[206].

14. [14]

    Of course, Mr Koper had brought no such claim against BMX NZ in New South Wales. Rather, the claim giving rise to the NZ judgment was brought in the High Court of New Zealand at Auckland: see [3]–[4] above. The primary judge concluded, however, that Mr Koper could properly have brought his defective building claim (in tort) against BMX NZ in the Supreme Court of New South Wales and, thus, that the criterion of operation of s 4 of the Claims Act was satisfied or engaged, thereby exposing the Insurers to a surrogate claim by Mr Koper against them in the Commercial List.

15. [15]

    Central to the dispute between the parties was the question of how Mr Koper’s notional or hypothetical claim against BMX NZ could properly have been brought in the Supreme Court of New South Wales, in circumstances where: BMX NZ never had a presence in New South Wales (and thus could not have been served in the jurisdiction); BMX NZ had not agreed to submit to the jurisdiction; the claimed damage occurred in New Zealand; and service of the notional New South Wales proceedings would not have been authorised by schedule 6 to the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), which specifies the cases in which originating process may be served outside Australia without leave, pursuant to r 11.4 (or with leave, pursuant to r 11.5).

16. [16]

    Rules 11.4 and 11.5 fall within part 11, division 1A of the UCPR, entitled “Service outside of Australia in accordance with harmonised rules”. Rule 11.2 provides that “[t]his Part does not require the leave of the Supreme Court for any service or other thing that may be effected or done under any law of the Commonwealth, the Hague Convention or Part 11A”. Rule 11.3 (which falls within division 1A of part 11) provides that:

17. [17]

    For the notional New South Wales proceedings to have been brought properly by Mr Koper against BMX NZ, that company would have to have been capable of being served with New South Wales originating process, valid service of process being the source of in personam or personal jurisdiction over any defendant: Laurie v Carroll (1958) 98 CLR 310 at 323; [1958] HCA 4; Gosper v Sawyer (1985) 160 CLR 548; [1985] HCA 19.

18. [18]

    The primary judge formulated the central question to be determined by stating that “whether or not leave should be granted to the Plaintiff to proceed with the Commercial List Proceedings against Zurich is to be determined by whether or not the TTPA [Trans-Tasman Proceedings Act 2010 (Cth)] could have been relied on by the Plaintiff to bring BMX [NZ] before this Court”: PJ [75].

19. [19]

    Mr Koper submitted, and the primary judge accepted, that s 9 of the Trans-Tasman Proceedings Act 2010 (Cth) (the TTPA) would have authorised the service of the notional New South Wales proceedings on BMX NZ in New Zealand, where it was domiciled. Section 9 of the TTPA provides that:

20. [20]

    The terms of s 10 of the TTPA should also be noted because they ascribe a legal effect to the service of an “initiating document” on a person in New Zealand under part 2 of the Act:

21. [21]

    In accepting Mr Koper’s argument, the primary judge rejected an argument advanced by the Insurers to the effect that ss 9 and 10 of the TTPA were constitutionally invalid insofar as they purported to confer jurisdiction on the Supreme Court of New South Wales in relation to matters not within federal jurisdiction. It was common ground that Mr Koper’s notional New South Wales proceedings against BMX NZ did not involve an exercise of federal jurisdiction, as they involved a common law claim between parties domiciled in New Zealand.

22. [22]

    This argument was repeated on appeal, albeit with some modifications insofar as the Insurers sought to introduce a Melbourne Corporation dimension into it: see The Lord Mayor, Councillors and Citizens of the City of Melbourne v The Commonwealth (1947) 74 CLR 31; [1947] HCA 26 (Melbourne Corporation); [57] ff below. It finds reflection in the single ground of appeal in this Court which was in the following terms:

Primary judge’s reasoning

1. [23]

   The primary judge rehearsed the parties’ arguments in close detail, including those of the Attorney-General of the Commonwealth, who intervened at first instance pursuant to s 78A of the Judiciary Act 1903 (Cth).

2. [24]

   As summarised by his Honour, the argument of the Insurers was that the external affairs power in s 51(xxix) of the Commonwealth Constitution (which was agreed to be the head of legislative power that supported the TTPA) could not support a grant of jurisdiction to the Supreme Court of New South Wales if that grant was not one of federal jurisdiction within the ambit of chapter III of the Commonwealth Constitution. The application of ss 9 and 10 of the TTPA to the facts of the present case was said to result in the invalid conferral, contrary to chapter III of the Constitution, of personal jurisdiction on the Supreme Court of New South Wales in respect of a non-federal matter, namely Mr Koper’s notional common law claim in negligence against BMX NZ.

3. [25]

   Central to his Honour’s disposition of the constitutional argument was his conclusion that the Insurers’ case was inconsistent with the decision of the High Court in Flaherty v Girgis (1987) 162 CLR 574; [1987] HCA 17 (Flaherty). That case involved a question of whether the Service and Execution of Process Act 1901 (Cth) (SEPA) was inconsistent with the Supreme Court Rules 1970 (NSW).

4. [26]

   Although the precise question in Flaherty, involving s 109 of the Commonwealth Constitution, was different from that under consideration in the present case, its significance for present purposes lay and lies in what the High Court said about SEPA which, in authorising the service of the originating process of a court of one Australian State or Territory on a defendant in another State or Territory, adopted a quasi-deeming fiction in relation to service of the same kind that one sees in ss 9 and 10 of the TTPA.

5. [27]

   Section 4 of SEPA provided that:

6. [28]

   It is convenient to set out the key passage from Flaherty relied upon by the primary judge at this stage of these reasons. At 598, Mason ACJ, Wilson and Dawson JJ said:

7. [29]

   Also to be noted is the majority’s observation that SEPA, in relation to the extraterritorial service of civil process, was “essentially enabling and the adoption of its procedures has no other significant result than to render service out of the jurisdiction valid, in circumstances in which it might otherwise be legally ineffective”: at 596. It followed that, where service had been validly effected pursuant to SEPA in a case otherwise involving non-federal jurisdiction, the character of that jurisdiction was not altered by reason of the fact of service pursuant to SEPA. As Sir Gerard Brennan said at 601, “[a]lthough s. 4(1) [of SEPA] authorizes extraterritorial service within the Commonwealth of any writ, the Act does not confer jurisdiction on or affirm the jurisdiction of the court out of which the writ is issued to entertain every action commenced by the issue of a writ thus served” (emphasis added).

8. [30]

   The Flaherty majority emphasised that, although the jurisdiction exercised in granting or refusing leave to proceed under SEPA was clearly federal (as was any dispute about service under SEPA), once service had been effected in an otherwise non-federal matter, any jurisdiction to be exercised thereafter would not be federal. In answering a submission that had been advanced, the Flaherty majority explained that nothing said by the majority in Gosper v Sawyer was to the contrary effect: at 597–598. As Deane J put it at 609, “[o]nce that federal jurisdiction in relation to service has been exercised and service has been effected however, it is State jurisdiction which is subsequently exercised pursuant to that service except, of course, to the extent that the determination of the substantive issues involves an exercise of federal jurisdiction.”

9. [31]

   For the primary judge, the significance of Flaherty lay in the fact that the various passages set out above were inconsistent with the Insurers’ contention that the broadly equivalent provisions in the TTPA, relating to service in New Zealand, involved an illegitimate conferral of jurisdiction on a State court outside the types of jurisdiction that may validly be conferred on a State court by the Commonwealth Parliament pursuant to chapter III of the Constitution, and s 77(iii) in particular.

10. [32]

    His Honour (PJ [125]) also drew upon the observation of the plurality in Lipohar v The Queen (1999) 200 CLR 485; [1999] HCA 65 at [69] (Lipohar), that:

11. [33]

    The primary judge (PJ [124]) also referred to the observations of Gummow and Callinan JJ in Truong v The Queen (2004) 223 CLR 122; [2004] HCA 10 at [78] (Truong), that:

12. [34]

    The primary judge went on to hold (PJ [127]) that:

Consideration

1. [35]

   On the application for leave to appeal to this Court, and with some refinements, the Insurers re-made their unsuccessful first instance argument. In particular, Mr Walker SC drew upon Gleeson CJ’s observation in Ruhani v Director of Police (2005) 222 CLR 489; [2005] HCA 42 at [4]–[5] (Ruhani), to the effect that chapter III of the Constitution carries with it a “negative implication” that the Commonwealth Parliament lacks constitutional power to confer jurisdiction on any court (including a State Supreme Court) other than as contemplated in chapter III. In terms, the submission was that:

2. [36]

   This submission treated the concept of personal jurisdiction as falling within the concept of “jurisdiction” as contained within chapter III of the Constitution. It also treated ss 9 and 10 of the TTPA as purporting to grant the judicial power of the Commonwealth to the Supreme Court of New South Wales in relation to matters which do not fall within s 77(iii) of the Constitution. As such, it was submitted that ss 9 and 10 of the TTPA should be read down so that they only apply to the service of process in a case which is otherwise within federal jurisdiction (which Mr Koper’s notional case against BMX NZ is not).

3. [37]

   There was and is an obvious tension between this argument and the High Court’s decision in Flaherty. Mr Walker did not contend that Flaherty was wrongly decided, but rather sought to explain it on the basis that s 51(xxiv) of the Constitution grants a specific power on the Commonwealth Parliament to make laws “with respect to the service and execution throughout the Commonwealth of the civil and criminal process and the judgments of the courts of the States” and that “it is only the service throughout the Commonwealth of a State court’s process that falls outside Ch III, and only because s 51(xxiv) is not to be found in Ch III” (emphasis added). This explanation resulted in the awkward written submission that:

4. [38]

   This submission was awkward because one cannot simply or comfortably set s 51(xxiv) “aside”. The fact that s 51(xxiv) of the Constitution expressly authorised SEPA (and SEPA 1992) cannot supply a satisfactory answer to why an enactment based upon that head of legislative power does not offend the “negative implication” in chapter III noted in Ruhani but that ss 9 and 10 of the TTPA do, given that those provisions (and the TTPA more generally) equally rest upon another broad head of legislative power, namely the “external affairs power” in placitum (xxix) of s 51 of the Constitution.

5. [39]

   Section 51(xxix) supports the TTPA both by reason of the fact, as recorded at PJ [84]–[85], that the Act implemented an agreement between Australia and New Zealand (see The Commonwealth v Tasmania (1983) 158 CLR 1 at 129–130 (Mason J), 171–172 (Murphy J), 258–259 (Deane J); [1983] HCA 21 (Tasmanian Dam Case); New South Wales v The Commonwealth (1975) 135 CLR 337 at 365–366 (Barwick CJ); [1975] HCA 58 (Seas and Submerged Lands Case); R v Burgess; Ex parte Henry (1936) 55 CLR 608 at 658 (Starke J), 678, 688 (Evatt and McTiernan JJ); [1936] HCA 52 (Burgess)) and because its subject matter concerned something external to Australia, namely the service of process in New Zealand: Polyukhovich v Commonwealth (1991) 172 CLR 501 at 530–531 (Mason CJ), 599–600 (Deane J), 636–637 (Dawson J), 695–696 (Dawson J); [1991] HCA 32; XYZ v Commonwealth (2006) 227 CLR 532; [2006] HCA 25.

6. [40]

   The external affairs power in s 51(xxix) is, like other heads of legislative power, to be given a broad plenary construction and to be read “with all the generality that the words used admit”: see, for example, New South Wales v Commonwealth (2006) 229 CLR 1; [2006] HCA 52 at [142] (Work Choices); The Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479; [2000] HCA 14 at [16], [119]; Seas and Submerged Lands Case at 471 (Mason J), 497 (Jacobs J). Constitutional heads of legislative power should be read “without making implications or imposing limitations which are not found in the express words”: R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225; [1964] HCA 15.

7. [41]

   Moreover, and importantly for present purposes, s 51(xxix) is not to be read down by reference to other heads of power: Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 510 (Menzies J), 523 (Gibbs J); [1971] HCA 40; Tasmanian Dam Case at 268–269; Work Choices at [219]–[221]. This proposition is to be qualified where a head of power expressly abstracts from Commonwealth legislative competence a particular subject matter such as State banking or State insurance: Bourke v State Bank of New South Wales (1990) 170 CLR 276 at 288–289; [1990] HCA 29; Attorney-General (Vic) v Andrews (2007) 230 CLR 369; [2007] HCA 9; see, more generally, J Stellios, Zines’s The High Court and the Constitution (6th ed, The Federation Press, 2015) at 31 ff. That is not this case.

8. [42]

   It follows that s 51(xxix) should not be interpreted as abstracting from its scope the legislative power to authorise service of process in New Zealand pursuant to an agreement between Australia and New Zealand simply because there is another head of power (s 51(xxiv)) authorising service within and throughout the Commonwealth. In other words, legislation on the topic of service of process should not be treated as being exhausted by s 51(xxiv) on some form of an expressio unius principle of constitutional interpretation. In Burgess, and with reference to the external affairs power, Latham CJ described as an “unintelligible proposition” the argument that “any other single power conferred by s 51 is limited by reference to all the other powers conferred by that section” and that “[t]here is no reason whatever why placitum xxix should not be given its natural and proper meaning, whatever that may be, as an independent express legislative power”: at 639.

9. [43]

   In submitting that “having regard to the express and specific language of s 51(xxiv), as well as its subject matter", that head of power "does not indicate the existence, elsewhere in s 51, of a more extensive power to make laws with respect to the service of process, but indeed, connotes the contrary”, the Insurers engaged, in my opinion, in a form of reasoning inconsistent with the authorities cited above.

10. [44]

    Moreover, to the extent that the Insurers placed reliance upon the observation of Latham CJ in Peacock v Newtown Marrickville and General Co-operative Building Society (No 4) Ltd (1943) 67 CLR 25 at 39; [1943] HCA 13, that "[t]he Federal Parliament may, in conferring jurisdiction in respect of Federal subject matter, extend or limit the jurisdiction of a State court in respect of persons, locality, amount or otherwise, as it may think proper", that passage does not imply that the reach of jurisdiction over persons may not otherwise be extended in relation to a State court, exercising non-federal jurisdiction, if the legislation authorising that course found support in s 51 of the Constitution.

11. [45]

    The argument advanced by the Insurers, based upon negative implication from chapter III of the Constitution, has as an essential premise that chapter III is concerned with, amongst other matters, the vesting or conferral of personal jurisdiction. The short point, which is supported by Flaherty, Truong and Lipohar, is that it is not. Had it been, there would be no need for s 51(xxiv) and Flaherty must have been wrongly decided to the extent that it applied to service of process in non-federal matters because s 51(xxiv), like s 51(xxix), is itself “subject to the Constitution”, including any negative implications flowing from chapter III: see Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 36; [1992] HCA 64.

12. [46]

    “Jurisdiction” is a notoriously polysemous word. Care must be taken as to its meaning and usage in any given context. That care must ensure that this “verbal coat of too many colours”, to borrow the language of Frankfurter J in United States v L A Tucker Truck Lines Inc 344 US 33 (1952) at 39, quoted by Spigelman CJ in Bros Bins Systems Pty Ltd v Industrial Relations Commission of New South Wales (2008) 74 NSWLR 257; [2008] NSWCA 292 at [36], is not deployed in a manner that conflates usages of the term and results in a misapplication or misunderstanding of authorities dealing with the term in different contexts: see also Plaintiff S164/2018 v Minister for Home Affairs (2018) 92 ALJR 1039; [2018] HCA 51 at [6], where Edelman J warned against “an erroneous conflation of the different dimensions of jurisdiction”. To similar effect is his Honour’s observation in Deputy Commissioner of Taxation v Huang (2021) 96 ALJR 43; [2021] HCA 43 at [46].

13. [47]

    In PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (2012) 247 CLR 240; [2012] HCA 33 at [14], the plurality said that:

14. [48]

    “Federal jurisdiction”, with which chapter III of the Constitution and the Judiciary Act are concerned, has a further and different focus again; it is concerned with the allocation of the judicial power of the Commonwealth to particular courts or “the authority to exercise the judicial power of the Commonwealth”: Authority to Decide at [1.3], citing Ah Yick v Lehmert (1905) 2 CLR 593 at 603; [1905] HCA 22 (for a fuller discussion, including elements of ambiguity in its use, see Authority to Decide at [1.3]).

15. [49]

    While it is common to speak of a court being invested with subject matter jurisdiction (see, for example, CGU Insurance Ltd v Blakeley (2016) 259 CLR 339; [2016] HCA 2; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322; [2005] HCA 44 at [79]; Schultz at [46], [51]; Sydney Seaplanes Pty Ltd v Page (2021) 106 NSWLR 1; [2021] NSWCA 204 at [116]–[129]) or with federal jurisdiction in the constitutional context (see, for example, Citta Hobart Pty Ltd v Cawthorn (2022) 400 ALR 1; [2022] HCA 16; Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15; Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23; Gaynor v Attorney General for New South Wales (2020) 102 NSWLR 123; [2020] NSWCA 48 at [41]–[57]; CSL Australia Pty Ltd v Formosa (2009) 261 ALR 441; [2009] NSWCA 363 at [23]–[26]), it is unusual to speak about a court being “invested with” personal jurisdiction or having personal jurisdiction “conferred” upon it. An example of the distinction being drawn in the Commonwealth statute book is s 9(1) of the Admiralty Act 1988 (Cth), which speaks of the courts of the States being “invested with federal jurisdiction, in respect of proceedings commenced as actions in personam”.

16. [50]

    Personal jurisdiction, by way of contrast to both subject matter and federal jurisdiction, is something which a court may have, but that flows from the act of lawful service of process as opposed to such jurisdiction being “invested in” or “conferred upon” the court in question. A court will have personal jurisdiction either:

17. [51]

    The distinction emphasised above, between subject matter and federal jurisdiction, on the one hand, and personal jurisdiction, on the other hand, is also reflected in Justice Leeming’s observation that “[i]t is essential to distinguish a court’s authority to decide a particular class of dispute from its authority to bind a particular defendant”: Authority to Decide at [6.4].

18. [52]

    Personal jurisdiction is not a constitutional concept. Those responsible for the drafting of the Constitution did not, in s 51(xxiv), employ the language of personal jurisdiction nor did they seek to authorise the investment of personal jurisdiction in State courts in chapter III. Nor did the legislature confer it by the Judiciary Act (with the arguable exception of s 25 of that Act, which relates to service of High Court process). In short, neither chapter III of the Constitution nor the Judiciary Act (subject to the possible exception noted) is concerned with the amenability of defendants to the writ or originating process of Australian courts. And ss 9 and 10 of the TTPA equally are not seeking to invest the judicial power of the Commonwealth in every “Australian court” to which that Act applies, cf ss 39 and 39A of the Judiciary Act, which are concerned with the vesting of federal jurisdiction in certain courts. This observation in relation to ss 9 and 10 of the TTPA is true both as a matter of the language of those provisions as well as the secondary, extrinsic material which led to the passage of the TTPA. They make provision for an “antecedent federal process”, to borrow the language from Truong quoted at [33] above, which occurs prior to the exercise of non-federal jurisdiction.

19. [53]

    As was put succinctly on behalf of Mr Koper, “rather than as an ‘exception’ to Ch III, s 51(xxiv) deals with the service of process, which is not a topic regulated by Ch III” (emphasis in original). The same may be said of ss 9 and 10 of the TTPA.

20. [54]

    And, as was put by Dr Lim on behalf of the Commonwealth Attorney-General, ss 9 and 10 of the TTPA could not be fairly considered to be, nor construed as, constituting the Supreme Court as “the judicial agent of the Commonwealth” in the exercise of judicial power, to borrow the language of Lorenzo v Carey (1921) 29 CLR 243 at 252; [1921] HCA 58. Indeed, s 9 of the Act speaks to the plaintiff in the proceedings rather than to any Australian court, and s 10 in effect deems the plaintiff’s act of service on the defendant to have occurred within the territory of the court out of which the originating process has been issued. It is the operation of the common law and the legal significance it attaches to the act of service of process, in light of that deeming provision, which gives the originating court in personam or personal jurisdiction over the defendant who has been served in New Zealand: see John Russell at 302, cited in Laurie v Carroll at 323.

21. [55]

    For these reasons, as well as the additional reason given at PJ [127] (noted at [34] above), the primary judge was correct to conclude that ss 9 and 10 of the TTPA were not to be read down so as to apply only to service of process involving the exercise of federal jurisdiction, and were not otherwise invalid.

22. [56]

    Subject to the argument addressed below, his Honour’s conclusion that BMX NZ could have been served with the notional New South Wales proceedings by reason of ss 9 and 10 of the TTPA (and thus that Mr Koper’s notional common law claim against BMX NZ could properly have been brought in New South Wales) warranted the grant of leave to proceed against the Insurers pursuant to s 5 of the Claims Act on the basis, as agreed by the parties, that the criterion of operation of that Act was satisfied.

23. [57]

    The Insurers sought to raise (over the objection of Mr Koper) an alternative argument, not advanced before the primary judge, to the effect that the Melbourne Corporation doctrine operated to invalidate ss 9 and 10 of the TTPA at least insofar as they applied to a State court exercising non-federal jurisdiction.

24. [58]

    Omitting footnotes, the Insurers submitted that:

25. [59]

    This argument was ambitious in at least two respects.

26. [60]

    First, the Melbourne Corporation test, as most recently explained in cases such as Austin v Commonwealth (2003) 215 CLR 185; [2003] HCA 3 (Austin) and Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272; [2009] HCA 33, places emphasis on the evaluative nature of the consideration of concepts such as “special disability” and “curtailment of capacity”, and involves questions of degree. The inquiry must examine the substance and actual operation of the impugned law in the circumstances to which it applies (Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 239–240; [1995] HCA 71) and “inevitably turns upon matters of evaluation and degree and of ‘constitutional facts’ which are not readily established by objective methods in curial proceedings”: Austin at [124]. It is an “essentially practical” inquiry: Spence v Queensland (2019) 268 CLR 355; [2019] HCA 15 at [100].

27. [61]

    Contrary to the Insurers’ contention, the question is thus not a pure question of law in the Suttor v Gundowda Pty Ltd sense: (1950) 81 CLR 418; [1950] HCA 35. Plainly enough, the question sought to be raised by the Insurers cannot be considered in a factual vacuum. Whether that vacuum be expressed by reference to constitutional facts or facts more generally, the critical point is that the factual base against which the argument must fall to be considered has not been laid, and it is not fair to Mr Koper that the argument be introduced at this stage of the litigation: Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12; University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483; [1985] HCA 28; Coulton v Holcombe (1986) 162 CLR 1 at 7–8; [1986] HCA 33; O'Brien v Komesaroff (1982) 150 CLR 310 at 319; [1982] HCA 33.

28. [62]

    In any event, the argument is a weak one, as was reflected in the brief submissions advanced both in writing and orally by the Insurers in support of it. As was submitted by Mr Hutley SC on behalf of Mr Koper, part 2 of the TTPA does not affect the structure or organisation of the States or their courts and does not interfere with the exercise of a State’s judicial functions even though it may increase the occasions on which those functions are exercised. But the augmentation of functions is different to their diminution or destruction and, in any event, an increased burden on the Supreme Courts of the various States exercising State jurisdiction is likely to be exiguous, given the breadth of existing provisions for service out of the jurisdiction and the power conferred by part 3 of the TTPA to stay proceedings where New Zealand provides the more appropriate forum for the resolution of the dispute, or where there is a New Zealand jurisdiction clause the scope of which captures the dispute.

29. [63]

    For these reasons, the Insurers’ argument based upon Melbourne Corporation should be rejected.

30. [64]

    I note for completeness that it has not been necessary and would not be appropriate in light of my conclusions to deal with the draft Notice of Contention filed on behalf of the Commonwealth Attorney-General.

Conclusion

1. [65]

   Although leave to appeal was opposed by Mr Koper and the Attorney-General of the Commonwealth, it should be granted but the appeal should be dismissed with costs.

2. [66]

   WARD P: I agree with Bell CJ.

3. [67]

   BEECH-JONES JA: I agree with the Chief Justice and the orders his Honour proposes.