Attorney General for New South Wales v Gatsby

BATHURST CJ: These proceedings have been brought to challenge the determination of an Appeal Panel of the Civil and Administrative Tribunal of New South Wales (the Tribunal) that the Tribunal was exercising the judicial power of the Commonwealth in determining two separate proceedings brought in the Tribunal pursuant to the provisions of the Residential Tenancies Act 2010 (NSW) (the RT Act) and that it was empowered to exercise that judicial power because it was a “court of a State” for the purpose of Chapter III of the Constitution and s 39 of the Judiciary Act 1903 (Cth).

In 2015, Ms Deva Gatsby was residing in premises at Terranora, just south of the border between New South Wales and Queensland. The premises were owned by her mother, Ms Berri Gatsby, a resident of Queensland.

In May 2015, Ms Berri Gatsby sent a notification of termination of a residential tenancy agreement to Ms Deva Gatsby and then lodged an application in the Tribunal pursuant to s 87(4) of the RT Act seeking a termination order for non-payment of rent and an order for possession.

Mr Priestley, the member of the Tribunal who heard the proceeding, delivered his decision on 30 November 2015. He stated that there were two major issues: first, whether there was a residential tenancy agreement and, if so, what were its terms; and second, if Ms Berri Gatsby established the ground of non-payment of rent for termination, “whether the Tribunal can be satisfied the ground is, in the circumstances of the case, sufficient to justify termination” as required by s 87(4) of the RT Act.

Member Priestley considered that the evidence of the arrangements between the parties constituted a residential tenancy agreement for the purpose of s 13 of the RT Act and that the rent for the premises which the agreement required Ms Deva Gatsby to pay comprised the council and water rates and maintenance costs for the premises. Member Priestley noted that there were significant arrears of council and water rates.

Member Priestley stated that, having regard to the matters set out in s 87 of the RT Act, he had taken into account the “unfortunate history of the relationship between the parties and its continued deterioration”. He stated that Ms Deva Gatsby had breached the agreement by failing to pay the rates, that the termination notice was given in accordance with s 87 and complied with s 82 and s 88 of the RT Act, and that Ms Berri Gatsby was therefore entitled to order she sought.

The Tribunal made the following orders:

In the remainder of this judgment, I will refer to this proceeding in the Tribunal as the “Gatsby v Gatsby proceeding”.

On 13 December 2014, Ms Elissa Johnson, as tenant, and Ms Christine Dibbin, as landlord, entered into a six-month residential tenancy agreement for premises just south of Tweed Heads in New South Wales. Ms Johnson was a resident of New South Wales and Ms Dibbin was a resident of Queensland.

On 15 June 2015, Ms Johnson vacated the premises in response to a termination notice served by Ms Dibbin. On 25 June 2015, Ms Dibbin applied for an order under s 175 of the RT Act that the rental bond be paid to her, together with compensation for the cost of cleaning and repair of damage to the premises in excess of the rental bond. The Tribunal was empowered to make such an order under s 187(1)(d) of the RT Act on an application under s 190 of that Act.

On 15 July 2015, in separate proceedings, Ms Johnson applied for repayment of rent under s 45 of the RT Act because the premises were alleged to be uninhabitable due to “serious mould”, together with an order under s 187(1)(d) of the RT Act for compensation and a full bond refund under s 175 of that Act.

The Tribunal made the following orders on 19 November 2015:

In the remainder of this judgment, I will refer to both of these proceedings in the Tribunal collectively as the “Dibbin v Johnson proceedings”.

The unsuccessful parties in each matter appealed from the orders made. Since what was described as a “jurisdictional issue” arose in each case, the application was referred to an Appeal Panel comprising the President of the Tribunal, a Deputy President and a Senior Member. On 18 July 2017, the Appeal Panel ordered that, in each case, separate questions relating to its jurisdiction be determined. The questions in relation to the Gatsby v Gatsby proceeding were as follows:

It should be noted that, by the time those orders were made, this Court had determined that a State tribunal which is not a “court of a State” is unable to exercise judicial power to determine matters between residents of different States: Burns v Corbett (2017) 96 NSWLR 247; [2017] NSWCA 3. The High Court later affirmed this decision, albeit on different grounds: Burns v Corbett [2018] HCA 15. In that case, the proceedings both in this Court and in the High Court proceeded on the assumption that the Tribunal was not a “court of a State” and that the power that it purported to be exercising was judicial power.

The Appeal Panel held that, in determining each of the Gatsby v Gatsby and Dibbin v Johnson proceedings, the Tribunal was exercising judicial power and was a “court of a State” for the purpose of Chapter III of the Constitution and s 39 of the Judiciary Act 1903 (Cth). The Tribunal accordingly answered the first question “No” and the second question “Yes”.

The Attorney General of New South Wales, who had been joined as a party in each proceeding before the Appeal Panel, has alternatively sought both leave to appeal from and judicial review of the decision of the Appeal Panel in each proceeding. In the Gatsby v Gatsby proceeding, he contended that the Tribunal was not exercising judicial power and that the Tribunal was not a “court of a State”. In the Dibbin v Johnson proceedings, he accepted that the Tribunal was exercising judicial power and only relied on the contention that the Tribunal was not a “court of a State”.

The Attorney General for the Commonwealth, who intervened in the proceedings in this Court, contended that the Tribunal was exercising judicial power in both cases and that it was not a “court of a State”. The contradictors appointed by the Court, Mr Kennett SC and Ms Winnett, who provided great assistance at the hearing of these proceedings, contended that the Appeal Panel had answered both questions correctly.

To understand the decision of the Appeal Panel and the submissions of the parties, it is necessary to set out the relevant legislation.

Section 3 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) sets out its objects. It provides as follows:

Part 2 of the NCAT Act deals with the establishment of the Tribunal. Section 9(1) provides the following:

Members can either be appointed as term members, that is, members for a term (s 9(4)) or occasional members, that is, members appointed for the purpose of specified proceedings (s 9(5)). The President is required to be appointed as a term member (s 9(6)). A person is qualified to be appointed as President only if the person is a judge of the Supreme Court (s 13(1)).

Presidential members appointed for a term are required to be appointed by the Governor under the public seal of the State (s 10(2)). Other than the President, such members are required to be lawyers of at least seven years’ standing or a person who holds or has held judicial office (s 13(3)).

Non-presidential members appointed for a term are to be appointed by the Minister. Principal members and senior members are required to be Australian lawyers of at least seven years’ standing or, in the opinion of the appointer, have “special knowledge, skill or expertise” in relation to one or more classes of matters in respect of which the Tribunal has jurisdiction (s 13(4), s 13(5)).

General members are qualified to be appointed if, in the opinion of the appointer, they have “special knowledge, skill or expertise” in respect of any class of matters in which the Tribunal has jurisdiction, or if they are “capable of representing the public (or a sector of the public), or a particular organisation, body or group of persons (or class of organisations, bodies or groups of persons), in relation to any one or more classes of matters in respect of which the Tribunal has jurisdiction” (s 13(6)).

Section 10(4) provides that the instrument of appointment of members must specify the term for which the members are appointed.

Section 16 of the NCAT Act provides for Divisions of the Tribunal. Of relevance to the present proceedings is the Consumer and Commercial Division, to which claims under the RT Act are assigned by cl 3(1) of Schedule 4 to the NCAT Act. Section 14 provides for the appointment of presidential members as Division Heads of one or more Divisions of the Tribunal.

Section 24 provides for the establishment of a Rule Committee comprising the President, each Division Head, and such other members as may be appointed by the President. Section 25 empowers the Rule Committee to make rules as to the “practice and procedure” of the Tribunal.

Section 27 provides for the constitution of the Tribunal in certain matters. It provides that, in an internal appeal, the Tribunal is to be constituted by an Appeal Panel of the Tribunal consisting of one member who is an Australian lawyer, or two or more members, at least one of which must be an Australian lawyer (s 27(1)(a)).

If the proceedings are for contempt of the Tribunal, it is required to be constituted by one or more of the President or any other member who is a current or former judicial officer (s 27(1)(b)). In cases for the contravention of a civil penalty provision of the NCAT Act, the Tribunal is required to be constituted by one or more of the President, a Deputy President or a principal member who is an Australian lawyer of seven years’ standing (s 27(1)(c)).

Clause 2 of Schedule 2 provides that a term member holds office for a period specified in their instrument of appointment, but not exceeding five years. It also provides that term members are eligible for reappointment.

Clause 7(2) of Schedule 2 provides that the Governor may remove a member other than the President from office for “incapacity, incompetence or misbehaviour”.

Clause 13 of Schedule 2 provides that the regulations may make provision “for or with respect to … the disclosure by members of interests (whether pecuniary or otherwise) that could conflict with the proper performance of the functions of a member in proceedings” and “the participation of members in proceedings in which there may be a conflict of interest”.

Sections 28 and 29 provide for the jurisdiction of the Tribunal. These sections provide as follows:

Sections 31 and 32 deal with what are described as the external appeal and internal appeal jurisdictions of the Tribunal. It is unnecessary to set out the provisions, but the external appeal jurisdiction relates to an appeal against a decision of an external decision-maker over which the Tribunal has external appeal jurisdiction (s 31(1)). The internal appeal jurisdiction relates to an appeal against any decision made by the Tribunal in proceedings for a general decision or an administrative review decision (s 32(1)). Section 33 deals with the enforcement jurisdiction of the Tribunal, which relates to proceedings for contempt and civil penalties.

Part 4 of the NCAT Act deals with the practice and procedure of the Tribunal. Section 36(1) states that the guiding principle for the NCAT Act and the procedural rules is “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”. Section 37 empowers the Tribunal to use or require the parties to use “any one or more resolution processes”.

Section 38 deals with the procedure of the Tribunal generally. Of particular relevance are s 38(2), s 38(3) and s 38(4), which provide as follows:

Division 4 of Part 4 of the NCAT Act deals with the conduct of proceedings. Section 49(1) provides that proceedings are to be “open to the public unless the Tribunal orders otherwise”. Section 54 deals with references of questions of law to the Supreme Court. Sections 54(1) and 54(4) provide as follows:

Section 62(2) requires the Tribunal to give reasons for its decisions on the request of a party, while s 63 confers power to correct obvious errors in the text of a notice of a decision or in the written statement of reasons for a decision.

Part 5 of the NCAT Act deals with enforcement. Section 72(3) provides that contravention of any order of the Tribunal incurs a civil penalty.

Section 73 confers power on the Tribunal to punish for contempt. As far as relevant, it provides as follows:

Section 78 deals with civil enforcement, it provides as follows.

Part 6 of the NCAT Act deals with appeals. In the case of internal appeals, s 80(2) provides that, in the case of a decision other than an interlocutory decision, an appeal lies to the Appeal Panel “as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds”.

Division 3 of Part 6 relevantly provides for appeals from decisions of the Appeal Panel to either the Supreme Court or the District Court. Section 83, so far as relevant, provides as follows.

The RT Act confers certain rights and imposes certain obligations on persons who are parties to “residential tenancy agreements” as defined in that Act. For example, s 33 requires a tenant to pay the rent under a residential tenancy agreement before the date set out in the agreement. However, the landlord is obliged by s 34 to accept payment of unpaid rent if the landlord has given a termination notice on that ground and the tenant has not yet vacated the premises.

Further examples of the nature of the obligations under the RT Act are s 50, which confers the right to quiet enjoyment on the tenant, and s 51, which imposes certain restrictions on the use of the premises by the tenant. Section 51(2) obliges the tenant to keep the residential premises in a “reasonable state of cleanliness”, while s 51(3) requires that, on giving back possession, the premises are to be left “as nearly as possible in the same condition, fair wear and tear excepted”, as set out in the condition report applicable to the premises at the time that the parties entered into the agreement. It is unnecessary to deal with the other obligations imposed on both the landlord and tenant by the RT Act in any more detail.

Part 5 of the RT Act deals with termination of residential tenancy agreements. Section 81(1) provides that a residential tenancy agreement “terminates only in the circumstances set out” in the Act. Section 81(2) provides that a residential tenancy agreement terminates if either the landlord or the tenant gives a termination notice and the tenant gives vacant possession. Section 81(3) provides that a residential tenancy agreement terminates if the Tribunal makes an order terminating the agreement under the Act. Section 82 sets out the requirements for a valid termination notice.

Section 83 provides that, if the Tribunal makes an order terminating a residential tenancy agreement, it must also make an order for possession of the premises concerned.

Section 84(1) provides that a landlord, at any time before the end of a fixed term agreement, may give a termination notice to take effect on or after the end of the fixed term. Section 84(3) provides that the Tribunal, on application by the landlord, must make a termination order if satisfied that the notice was given in accordance with the section and the tenant has not vacated as required by the Act. Section 85 makes similar provision in relation to the termination of periodic agreements.

Section 87 deals with termination for breach of a residential tenancy agreement. It is in the following terms.

Section 113 empowers the Tribunal to make a termination order notwithstanding a defect in the termination notice.

Section 120 prohibits a person from entering residential premises for the purpose of taking possession before or after the end of a residential tenancy agreement, unless they are acting “in accordance with a warrant arising out of an order for possession of the Tribunal”, or in circumstances where “the tenant has abandoned the premises or given vacant possession of the premises”.

Section 121 provides that the principal registrar of the Tribunal may, “on the application of a person in whose favour an order for possession was made, issue a warrant for possession” authorising a sheriff’s officer to “enter specified residential premises and give possession to the person specified in the warrant”.

Section 187 confers general powers on the Tribunal. It is in the following terms:

The Appeal Panel stated at [47] that it had concluded that, when dealing with matters under the RT Act, it was exercising judicial power on “two independent but related bases”:

The Appeal Panel dealt extensively with the authorities concerning the question of what constitutes the exercise of judicial power. It referred at [65] to the objects stated in s 3 of the NCAT Act and stated at [66] that to be “an independent civil decision making body whose decisions are required to be just, as well as quick, cheap, timely, fair, consistent and of high quality and whose processes are to be open and transparent and constrained by as little formality as possible can be seen as the proper aims of every court exercising civil jurisdiction”. The Appeal Panel stated that the objects did not “in any way suggest that the Parliament intended the Tribunal to be an emanation of the executive arm of government or some other form of non-judicial body”.

The Appeal Panel stated at [68] that the other provisions of the NCAT Act were “consistent with, and promote, the objects in s 3” and that nothing in the NCAT Act was “incompatible with the essential character of a court as an institution that is, and is seen to be, both impartial between the parties and independent of the parties and of other branches of government”. In that context, they referred to the various provisions of the NCAT Act which I have set out at [20]-[44] above. The Appeal Panel stated at [70] that those provisions were “consistent with the Tribunal’s processes being judicial in nature”.

The Appeal Panel then dealt with the various matters referred to by the Attorney General for New South Wales said to be contrary to the conclusion that the Tribunal was exercising judicial power in the Gatsby v Gatsby proceeding. It noted that the Attorney General conceded that “monetary orders of the Tribunal are made enforceable as judgment debts by registration in the registry of an appropriate court” under s 78 of the NCAT Act. However, it rejected the Attorney General’s submission that non-monetary orders under the RT Act did not have the “necessary character of enforceability”. In that context, it referred to the fact that a contravention of an order of the Tribunal creates a liability to a civil penalty and that non-compliance can amount to contempt of the Tribunal and be punished accordingly. More importantly, the Appeal Panel noted that orders for possession under the RT Act can be enforced through the issue of a warrant for possession by the principal registrar of the Tribunal under s 121 of the RT Act.

The Appeal Panel also rejected the contention that the obligation in s 38(4) of the NCAT Act, which requires the Tribunal to act “according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms” meant that the Tribunal was not required to act strictly according to law. It pointed to a number of decisions of this Court which it said held that such provisions “do not require or permit a court or tribunal to decide otherwise than according to law, whether statute or common law, especially where the decision is appealable on a question of law”.

The Appeal Panel also accepted that “not being bound by the rules of evidence is often, if not invariably, a characteristic of administrative decision-making bodies”. However, it also pointed out that often courts are not bound by the rules of evidence, whether generally or in relation to particular functions. It referred to the decision of the High Court in Sue v Hill (1999) 199 CLR 462; [1999] HCA 30 at [42] (Sue v Hill).

The Appeal Panel then stated at [98] that “the nature of the body in question, its processes and functions, will usually be a more certain indicator of whether it is an administrative or judicial body”. It said that, “even though the Tribunal is not generally bound by the rules of evidence, its processes and procedures and the nature of its predominant functions point to the conclusion that the Tribunal is exercising judicial power when it deals with matters in its general jurisdiction, including matters under the RT Act”. The Appeal Panel stated that this view was reinforced by the express requirement in s 38(2) of the NCAT Act to “comply with the rules of natural justice even when not bound by the rules of evidence”.

The Appeal Panel next referred to the lack of a right to legal representation. It said at [101] that there was no authority supporting the contention that s 45(1) of the NCAT Act, which provides that a party “may be represented by another person only if the Tribunal grants leave”, points to the conclusion that the Tribunal does not exercise judicial power. It also pointed out at [102] that, “in virtually all proceedings in the Administrative and Equal Opportunity Division and in all proceedings in the Occupational Division, parties are entitled to legal representation and leave is not required”. It said at [104] that s 45 could be seen to be “consistent with acting judicially but proportionately”, and that, when exercising its discretion to grant leave, the Tribunal was “required to act judicially and exercise the discretion having regard to the relevant circumstances of each case”.

The Appeal Panel accepted that matters arising under the RT Act could be heard by a member who is not legally qualified, although it pointed out that, in the Gatsby v Gatsby and Dibbin v Johnson proceedings, the members who heard the claims were in fact legally qualified. It stated at [109] that, in any event, members of the Tribunal dealing with matters arising under the RT Act, like all other members, were required to decide matters in accordance with the law. It noted that, in Owen v Menzies [2013] 2 Qd R 327; [2012] QCA 170 (Owen v Menzies), the Queensland Court of Appeal rejected a submission that the Queensland Civil and Administrative Tribunal was not a court because persons not qualified as lawyers could hear matters. The Appeal Panel referred specifically to a statement by the Court of Appeal at [50] which noted that, prior to the time of Federation, “Magistrates Courts were commonly constituted by justices of the peace who for the most part were not legally qualified”.

The Appeal Panel then turned to the provisions of the RT Act which I have summarised at [45]-[54] above and certain other provisions which are relevant only to the Dibbin v Johnson proceedings.

The Appeal Panel noted the Attorney General’s submission that, in making a termination order under s 87 of the RT Act, the Tribunal “was not called upon to determine the existence of legal rights and obligations” because even if it was satisfied of matters in ss 87(4)(a)-(c), the Tribunal still retained a discretion about whether to make an order. However, the Appeal Panel took the view that the question of whether the Tribunal was satisfied that the tenant had breached a residential tenancy agreement did involve the legal rights and obligations of the parties and did have legal effects or consequences.

The Appeal Panel stated at [135] that the state of satisfaction required under s 87(4) must be based on “conclusions of fact and law such as: there was a residential tenancy agreement; under that agreement the tenant was obliged to do or not do something; and, the tenant breached the agreement by failing to comply with the obligation”. In those circumstances, the Appeal Panel did not accept that the terms of s 87 of the RT Act meant the Tribunal was not exercising judicial power when making a termination order.

Therefore, the Appeal Panel said at [164] that the fact that the Tribunal was required to exercise the discretion in s 87(4) when determining the Gatsby v Gatsby proceeding did not have the consequence that the power being exercised was not judicial power. It said at [166] that the “effect of the Tribunal’s decision was that Ms Deva Gatsby’s existing right of occupation of the premises, with the concomitant obligation to pay rent, was terminated” and a “new right to obtain possession of the property was created in Ms Berri Gatsby’s favour”. The Appeal Panel concluded that, in that way, the Tribunal’s function in the Gatsby v Gatsby proceeding involved “making a decision settling for the future … a question as to the existence of rights or obligations so that the exercise of the power created a new charter by reference to which that question is in the future to be decided”.

In support of its conclusion that the Tribunal was exercising judicial power, the Appeal Panel noted at [176] that proceedings under the RT Act are closely analogous to “actions for breach of contract or for civil wrongs”. The Appeal Panel also stated that its conclusion was consistent with the conclusion reached by the Full Court of the Federal Court of Australia in Dattilo v Commonwealth (2017) 249 FCR 347; [2017] FCAFC 17 (Dattilo) and Rigney v Commonwealth [2017] FCAFC 18 (Rigney).

The Appeal Panel recognised that it was relevant to the reasoning in Dattilo and Rigney that the powers at issue in those cases had been conferred on a court. Therefore, the Appeal Panel said that it was required to consider whether the Tribunal was a “court”.

The Appeal Panel said at [191] that this issue turned principally on the Tribunal’s powers in relation to contempt and the power to impose a fine. In relation to the latter question, it referred at [195] to a number of statutes which conferred on it powers to impose monetary penalties. The Appeal Panel stated at [197] that it was a “long established principle that a new jurisdiction erected with power to fine or imprison is a court of record”. It stated at [201] that the creation of the Tribunal with “the nature, processes and functions established by the NCAT Act, means that the Tribunal is a new judicial decision-making body … erected with the power to punish for contempt in the face of the Tribunal and to imprison and fine”. It said that, in light of the principles to which it had referred, it would be “proper to conclude that the Tribunal is a court of record”.

In those circumstances, the Appeal Panel concluded at [203] that, in exercising the powers under the RT Act in the Gatsby v Gatsby proceeding, the Tribunal was exercising judicial power.

In relation to the second question for determination, namely whether the Tribunal was a “court of a State” for the purpose of Chapter III of the Constitution and s 39 of the Judiciary Act 1903 (Cth), the Appeal Panel noted at [205] that no party had submitted that there was authority binding on it that required it to hold that the Tribunal was not a “court of a State”.

Dealing with that question, the Appeal Panel compared the nature and functions of the Tribunal to those of one of its predecessors, the Administrative Decisions Tribunal. The Appeal Panel pointed out at [210] that administrative review matters under the Administrative Decisions Review Act 1997 (NSW) account for “only a very small percentage” of the Tribunal’s caseload. The Appeal Panel then set out at [211] the matters heard by the Tribunal which it said involved the exercise of judicial power and which were not dealt with by the former Administrative Decisions Tribunal, including residential and agricultural tenancy matters, consumer claims, home building and motor vehicle matters. The Tribunal also stated at [215] that, if matters under the Guardianship Act 1987 (NSW) were included, then the “overwhelming majority of all proceedings” in the Tribunal involved the exercise of judicial power.

In those circumstances, the Appeal Panel stated that it could not be assumed that the reasoning of this Court in Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185 (Skiwing) concerning the Administrative Decisions Tribunal would be directly applicable to the Tribunal in the present case.

The Appeal Panel also stated that there was a further difference between the Administrative Decisions Tribunal and the Tribunal in the present case in that the Tribunal could be seen to be a “court of record”, whereas the Administrative Decisions Tribunal was not.

The Appeal Panel then addressed the Attorney General’s submission that the “independence and impartiality” of a body is relevant to determining whether that body is a “court of a State”. The Appeal Panel stated at [227] that “independence and impartiality mark a court apart from other decision-making bodies”, but that they did not “constitute an exhaustive list of the defining characteristics of courts in this context”. It stated at [232] that “central” to the concept of decisional independence, although not exhaustive of it, was “independence from influences external to the proceedings in question, including, but not limited to, the influence of the executive government and its authorities”. It stated at [236] that, in those circumstances, it was necessary to “consider in combination all the arrangements and safeguards that apply to [the Tribunal] and its members, both institutional and personal”.

In that regard, the Appeal Panel referred to the objects of the NCAT Act and, in particular, that the Tribunal was intended to be an “‘independent’, principally ‘civil’, ‘primary–decision’ making body that is to resolve issues ‘justly’ with ‘processes that are open and transparent’”. It referred again generally at [238] to the provisions of the NCAT Act which it said required the Tribunal to “act judicially, using judicial processes and procedures”. It said at [239] that the “institutional and decisional independence and impartiality of the Tribunal are enhanced and enforced by the availability and application of the Supreme Court’s judicial review and appellate jurisdiction”.

The Appeal Panel stated at [240] that there was no provision of the NCAT Act which would absolve any member from “the requirement in all cases to decide matters independently and impartially”. It said at [242] that the “rights of appeal and judicial review are rendered effective and meaningful by the requirement that the Tribunal give reasons for its decisions”.

The Appeal Panel also stated at [243] that “personal independence and impartiality” is achieved by a number of provisions in the NCAT Act which protect members in the performance of their duties from interference. It referred to the fact that members are “statutory officer holders appointed by the Governor or the Minister”, that, in the exercise of their functions, they have “the same protection and immunities as a Judge of the Supreme Court”, that they have “the protections afforded by the law relating to contempt in the face of the Tribunal”, that a member’s remuneration may not be reduced during a member’s term of office, and that members are protected from “arbitrary removal”.

The Appeal Panel stated at [246] that, when all the arrangements and safeguards to which they referred were considered together, as well as the general provisions concerning the Tribunal’s nature, functions and processes, “it can legitimately be concluded that the Tribunal has the necessary independence and impartiality to make it an appropriate repository for federal jurisdiction and a ‘court of a State’” for the purpose of Chapter III of the Constitution and s 39 of the Judiciary Act 1903 (Cth).

The Appeal Panel rejected the submission that the fact that members other than the President could be removed by the Governor for “incapacity, incompetence or misbehaviour” was inconsistent with it being a “court of a State”. It said at [248] that cl 7(2) of Schedule 2 to the NCAT Act was a legislative provision that specified three grounds on which the Governor may remove a Tribunal member. It said that, in light of the object in s 3(a) of the NCAT Act of establishing an “independent tribunal” as well as the NCAT Act as a whole, cl 7(2) should be construed as precluding the removal of members on any ground other than the three grounds specified. It stated that, in those circumstances, removal “merely because the executive desires it” is precluded.

The Appeal Panel also stated at [249] that, to the extent that it was submitted that “only removal ‘by the Governor on an address from both Houses of Parliament in the same session seeking removal on the ground of proved misbehaviour or incapacity’” was necessary to ensure the necessary independence and impartiality, that submission appeared to be inconsistent with what the High Court of Australia said in Forge v Australian Securities and Investments Commission (2006) 228 CLR 45; [2006] HCA 44 at [83]-[85] (Forge). The Appeal Panel stated at [253] that, in addition, the protection against arbitrary removal provided by cl 7(2) is enhanced by the fact that the “improper exercise of that power of removal could be challenged in the Supreme Court for bad faith and improper purpose” and that “any improper exercise of the power may attract the operation of the Independent Commission Against Corruption Act 1988 (NSW).

The Appeal Panel also rejected the submission that the fact that members are appointed for a term of up to five years and are eligible for reappointment under cl 2 of Schedule 2 to the NCAT Act indicated that the Tribunal did not meet the requisite standard of independence. It stated at [258] that “‘Act of Settlement’ tenure for members is not necessary for a body to be a ‘court of a State’”, and referred to Forge at [36], [83]-[85] and North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146; [2004] HCA 31 at [3], [5] (Bradley). The Appeal Panel also stated that the “chief characteristics of ‘Act of Settlement’ tenure are ‘appointment during good behaviour and protection from diminution in remuneration’”. The Appeal Panel said that Tribunal members enjoyed both of those characteristics.

The Appeal Panel also stated at [262] that, so far as it was aware, there was “no High Court authority to the effect that term appointments, with the potential for reappointment, always or even generally, lead to the perception of lack of independence so as to deprive a body of the requisite independence and render it ineligible to be a ‘court of a State’”. It noted that it had been held that, “for State legislatures establishing bodies that are ‘courts of a State’, there is room for legislative choice in relation to tenure”, including “the choice to have appointments for ‘fixed, renewable terms”. The Appeal Panel also said at [266] that its reasoning was supported by the judgment of de Jersey CJ in Owen v Menzies at [15(6)] and that of McMurdo P at [49].

So far as occasional Tribunal members are concerned, the Appeal Panel stated at [274] that the power to appoint them could be seen as “a means of involving appropriate professional and lay participation in the Tribunal’s decision-making without compromising the independence and impartiality of the Tribunal”. It stated that it was “analogous to the participation of juries in courts’ decision making processes”.

The Appeal Panel also noted at [288] that it was “expressly bound to apply the rules of natural justice” by s 38(2) of the NCAT Act and stated at [294] that the “open-court principle” found in the NCAT Act is another “essential aspect of the characteristics of courts that are a ‘court of a State’ or otherwise exercise federal jurisdiction”. It stated at [296] that s 49 “put beyond doubt that the Tribunal satisfies the characteristic that it adheres as a general rule to the open court principle”.

The Appeal Panel also noted that Tribunal members are “under a duty to give parties notice of every decision made and to provide a written statement of reasons for every decision, on request”, under s 62(2) of the NCAT Act.

For these reasons, the Appeal Panel concluded at [310] that the Tribunal should be held to be a “court of a State”.

The Appeal Panel also rejected the submission that, in order for federal jurisdiction to be permissibly conferred upon it, a “court of a State” must exclusively, or at least predominantely, be constituted by “judges” in substance, if not actually called “judges” or “magistrates”. It said at [320] that it did not find it “possible to derive definitive guidance” from what was said on this issue in Skiwing because, although Skiwing concluded that the Administrative Decisions Tribunal did not predominantly comprise “judges”, the judgment did not explain “the specific factors taken into account to reach that conclusion”. The Appeal Panel concluded at [321] that a “fair reading” of Skiwing in context requires that, when assessing whether a body predominantly comprises “judges in substance”, consideration must be given to whether “the decision-makers who compose that body have the required institutional and personal independence and impartiality” described in cases such as Bradley and Forge. The Appeal Panel concluded that “decision-makers who satisfy those requirements should be found to be ‘judges in substance’ for this purpose”, and that, if this was the relevant test to be applied, then members of the Tribunal would satisfy that test.

The Appeal Panel also concluded at [343] that, adopting what it described as the “balance sheet approach” to determining whether the Tribunal was a “court of a State” from Skiwing, it came to the same conclusion.

Finally, the Appeal Panel considered the decision of the Queensland Court of Appeal in Owen v Menzies and concluded that it was not inconsistent with what was said in Forge. The Tribunal stated at [353] that it was “bound to follow Owen v Menzies” unless it was distinguishable or plainly incorrect. It noted the bases on which the Court distinguished Skiwing and the bases on which de Jersey CJ rejected the contention that the Queensland Civil and Administrative Tribunal (QCAT) was not a “court of a State”: see Owen v Menzies at [10]-[19]; see also McMurdo P at [49], [52].

The Appeal Panel noted the differences between the NCAT Act and the Civil and Administrative Tribunal Act 2009 (Qld), and in particular, that the latter specifically designated QCAT as a “court of record”. However, the Appeal Panel stated at [360] that the Tribunal was a “court of record” by implication.

The Appeal Panel also stated at [361] that there was “much to recommend the general comments” of McMurdo P in Owen v Menzies concerning Chapter III of the Constitution and the role in “the integrated national court system of what have been called the State ‘super tribunals established in accordance with the model adopted’” for QCAT and the Tribunal.

For these reasons, the Appeal Panel concluded that the Tribunal was a “court of a State” for the purpose of Chapter III of the Constitution and s 39 of the Judiciary Act 1903 (Cth).

A preliminary question arises as to the constitution of the proceedings. In each case, the Attorney General for New South Wales (the applicant) brought a summons seeking leave to appeal against the decision made by the Appeal Panel, relying on s 83(1) of the NCAT Act, as well as a summons seeking judicial review of the decision. Both the summons seeking leave to appeal and the summons seeking judicial review asserted errors of law in answering the questions which I have set out at [14] above. In the initial draft notices of appeal, the errors of law asserted by the applicant were that the Appeal Panel should have answered the first question “Yes” and had erred in concluding that it had power to answer the second question. Before the hearing of the present proceedings, the applicant accepted that, in relation to the Dibbin v Johnson proceedings, the Appeal Panel had answered the first question correctly.

I agree with the reasons expressed by Leeming JA on the issue of jurisdiction. As will be seen from my reasons below, I have concluded that the answer to each of the questions should be “No”. However, it seems to me unsatisfactory merely to answer these questions without any consequential relief. In those circumstances, it is appropriate to make declaratory orders to give effect to these reasons.

In one sense, it may have been more logical to deal with the second question first, as “there are functions which, when performed by a court, constitute the exercise of judicial power but, when performed by some other body do not”: R v Davison (1954) 90 CLR 353 at 368; [1954] HCA 46; Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 267; [1995] HCA 10 (Brandy). Nonetheless, as I have come to the clear view that in the Gatsby v Gatsby proceeding, the Tribunal was exercising judicial power, it is convenient to deal with the questions in the order in which they were framed and in the order that they were dealt with by the Tribunal.

At the hearing,it was accepted by all parties that the Tribunal’s determination in the Dibbin v Johnson proceedings involved the exercise of judicial power. The question thus only arises in the Gatsby v Gatsby proceeding.

The applicant set out a number of matters which he described as the “applicable principles” in identifying an exercise of judicial power. They were relevantly uncontroversial, although they are frequently difficult to apply. As the applicant pointed out, “judicial power has proved to be insusceptible to comprehensive definition”: Love v Attorney-General (NSW) (1990) 169 CLR 307 at 319; [1990] HCA 4.

The applicant submitted that “the exercise of judicial power involves the binding and authoritative quelling of contentions between parties”. He submitted that it has been observed that “an exercise of judicial power determines existing rights and duties according to law”, rather than by “the formulation of policy or the exercise of administrative discretion”. He noted that, “although some functions, such as the determination and punishment of criminal guilt are necessarily judicial”, other functions are “neither purely executive nor purely judicial”, quoting Paphos Providores Pty Ltd v Ladha (2015) 91 NSWLR 400; [2015] NSWCA 353 at [41]. He noted that “a function may be judicial or administrative in nature depending upon the manner of its exercise”, and, as I have already indicated at [97] above, that the “proper characterisation of a power as administrative or judicial may also be contingent, inter alia, on the ‘nature of the body dealing with it’”.

Senior counsel for the applicant emphasised that there were some powers in the RT Act which were administrative. In that context, she referred to Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410; [1997] HCA 36, where she submitted that the High Court said that, in making orders that a landlord was entitled to enter leased premises and orders that the tenant provide a key to the landlord for that purpose, the Residential Tenancies Tribunal was exercising administrative power rather than judicial power: see at 448 (Dawson, Toohey and Gaudron JJ); at 460 (McHugh J); at 474 (Gummow J). That may be accepted, but the question remains whether the particular power exercised by the Tribunal in the present case was an exercise of judicial power.

Senior counsel for the applicant emphasised that there was no entitlement to legal representation before the Tribunal, that s 38(2) of the NCAT Act provided that the rules of evidence did not apply, and that the Tribunal was entitled to inform itself in any manner it thought fit and to act according to “equity, good conscience and the substantial merits of the case”. She also referred to the fact that the general obligation is to provide reasons on request.

Senior counsel for the applicant then referred to s 81 of the RT Act, which sets out the circumstances in which residential tenancy agreements may be terminated. She noted that the Tribunal was the only body entitled to terminate such an agreement. She referred to the requirements for a valid termination notice in s 82 and noted that s 84 and s 85 provide that the Tribunal “must” make a termination order in the circumstance stated in those sections, contrasting that with the use of the word “may” in s 87(4). She submitted that this emphasised that s 87(4) conferred a discretion: see Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1; [2014] NSWCA 28 at [47]-[49]. She submitted that, in those circumstances, the decision of the Full Court of the Federal Court in Odzic v Commonwealth [2017] FCAFC 28 at [101]-[104] (Odzic), holding that, in making an order under s 85 of the RT Act, the Federal Circuit Court was exercising judicial power, was not determinative of the present case.

Senior counsel for the applicant submitted that s 87(4) was the only provision in the RT Act in which the tenant’s breach was a precondition to the power conferred on the Tribunal to terminate a residential tenancy agreement. She submitted that a finding that there was a breach of an agreement did not have direct legal consequences because “that alone does not enliven the power to make an order”. She submitted that this was different from the situation where “a tribunal decides or a Court makes the finding there has been a breach or a contravention of the Act and then has a discretion” whether or not to grant a remedy.

Senior counsel for the applicant referred to the breadth of the discretion conferred by s 87(4) and s 87(5). She noted that s 87(5) was a “non-exhaustive” list of factors to be taken into account.

Senior counsel for the applicant accepted that s 187 of the RT Act empowered the Tribunal to grant the type of remedies that would be commonly conferred on a court, but submitted that the “proper characterisation of [s 187] comes in at the anterior point of looking at the basis upon which the termination order is made under s 87”. She accepted, however, that s 87(4)(b) involved an “evaluative process”. However, she submitted that a finding under that subsection was not sufficient to enliven the power to make an order. She accepted that broad discretions are commonly conferred on courts, but said that, in the case of courts, “guiding principles will emerge to guide the exercise of broad discretions”, while there could be no such expectation in relation to the exercise of a power by the Tribunal when it might not be constituted by a lawyer.

Senior counsel for the applicant submitted that the effect of s 81(1) and s 120 of the RT Act was to “take away the general right that a tenant or landlord would have under contract to terminate” a lease for breach. She submitted that this was made clear by the Full Court of the Federal Court in Dattilo at [119]. She submitted that it followed that there was no “pre-existing right” which the Tribunal could enforce.

Senior counsel for the applicant, referring to the judgment of Latham CJ in Rola Co (Australia) Pty Ltd v Commonwealth (1944) 69 CLR 185 at 200; [1944] HCA 17, submitted that “a tribunal is not necessarily a court in the strict sense of exercising judicial power because it gives a final decision”, nor because “two or more contending parties appear before it between whom it has to decide”. She submitted that, in the present case, because it is the termination order itself that terminates the residential tenancy agreement, the effect of the RT Act is that, even where the tenant has breached the agreement, the landlord has no right to terminate for breach and take back possession, but only a right to approach the Tribunal and to seek an order.

Senior counsel for the applicant submitted that this distinguished the present case from the decision in Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1; [1943] HCA 2 (Silk Bros), where the Fair Rents Board, in making enforceable orders for the recovery of premises, was held to be exercising judicial power. She submitted that, in that case, once the Board had determined that a valid notice to quit had been issued, the Board had no discretion but to terminate the tenancy.

In his written submissions, the applicant set out a number of additional matters which he submitted demonstrated that the Tribunal was exercising administrative power, rather than judicial power. He submitted that one of those matters was that a determination made by the Tribunal was not “binding and authoritative” as the proceedings could be “renewed” under cl 8 of Schedule 4 to the NCAT Act. That clause conferred on a person in whose favour an order has been made but not complied with, a right to “renew the proceedings”, and empowered the Tribunal to make further orders in those proceedings. He also submitted that the power in cl 10 of Schedule 4 to the NCAT Act, which permitted the Tribunal to dismiss proceedings if it was of the opinion that they were being conducted “in such a way that unreasonably disadvantages another party”, told against the power being judicial in nature.

The Attorney General for the Commonwealth (the Commonwealth) contended that, in determining the Gatsby v Gatsby proceeding, the Tribunal was exercising judicial power.

Counsel for the Commonwealth referred to the comment by Leeming JA in Burns v Corbett (2017) 96 NSWLR 247; [2017] NSWCA 3 at [30] that the parties were correct in conceding in that case that the Tribunal was exercising judicial power because, if it made the order sought, Mr Burns would have been able to unilaterally obtain a certificate from the Tribunal’s registrar which, when registered in a court, would operate as a judgment of the court. He submitted that the position was the same in the present case, pointing out that in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; [2013] HCA 5 at [28], French CJ and Gageler J observed that the “fundamental character” of judicial power was that it was “a sovereign or governmental power exercisable, on application, independently of the consent of those whose legal rights or legal obligations are determined by its exercise”. He submitted that this was consistent with what was said in Dattilo at [119] and Silk Bros at 9.

In its written submissions, the Commonwealth pointed to the fact that, as a matter of history, “landlord and tenant disputes of [the kind in issue in the Gatsby v Gatsby proceeding] were heard and determined by the ordinary courts”. It was accepted that this was not conclusive of this issue, but rather, it was said that this supported the conclusion that the power exercised by the Tribunal was judicial power.

The Commonwealth placed particular reliance on s 121 of the RT Act, which entitled a person who obtained an order for possession to have a warrant issued authorising a sheriff’s officer to give possession to the person specified in the warrant. It was emphasised that there was “no other ‘independent exercise of judicial power’ required” to make this order enforceable.

The Commonwealth submitted that the discretion conferred by s 87(4)(b) was not as broad as contended by the applicant. Counsel for the Commonwealth submitted that the Tribunal was “not free to act on broad policy considerations or the public interest”. He submitted that the discretion required the Tribunal to “have regard to the circumstances of the case” in order to determine “whether the breach is sufficient to warrant the making of” a termination order. He submitted that a contrary approach was at odds with the decision in Silk Bros.

The Commonwealth submitted that, in any event, “the existence of a discretion, even of a broad kind involving policy and public interest considerations, does not necessarily deny that a function is judicial”. It was also submitted that making findings of fact and value judgments are “common ingredients in the exercise of judicial power”. It was submitted that the “presence of broadly expressed discretions” did not mean that what was involved was the creation of a “new right”. Counsel for the Commonwealth submitted that existing rights and obligations commonly involve “rights and obligations that are added by legislation to existing general law relationships”.

The Commonwealth submitted that cl 8 of Schedule 4 to the NCAT Act did not affect the conclusion that the Tribunal was exercising judicial power. It was submitted that it did not empower the Tribunal to “revisit the orders previously made”.

The contradictors’ submissions were in similar terms to those of the Commonwealth. They submitted that the fact that a finding of a breach of a residential tenancy agreement is not the “sole criteria” by which the power in s 87(4) is exercised did not render the power “administrative in character”. They said that the task of the Tribunal was to adjudicate whether the statutory preconditions in s 87(4) were satisfied, each criteria being “an objective standard capable of judicial application”.

The contradictors submitted, referring to Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 36; [1943] HCA 13 (Peacock), that the requirement that the Tribunal act in accordance with “equity, good conscience and the substantial merits of the case” did not “exclude the application of rules of law”, but simply provided for aspects of the Tribunal’s procedures. They said that the fact that the Tribunal was not bound by the rules of evidence was relevant, but not determinative.

The contradictors submitted that the power to dismiss proceedings contained in cl 10 of Schedule 4 to the NCAT Act was “not significantly different” from a court’s power “to dismiss proceedings or make other orders following non-compliance with directions, or for abuse of process”. They also submitted that the judicial character of the Tribunal’s processes was “not materially undermined” by the restrictions on legal representation or the fact that non-legally qualified members of the Tribunal could hear and determine applications. They submitted that the “critical point” was that a member was “bound to decide an application under s 87(4) of the [RT Act] by applying the legal criteria set out in [that section] to the facts”.

In an oft-cited passage in the judgment of Griffiths CJ in Huddart, Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357; [1909] HCA 36, judicial power is described in the following terms:

It is clear that, in many cases, it will not be obvious whether the power being exercised by a tribunal is in the nature of judicial or administrative power. In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 373; [1970] HCA 8, Kitto J explained that it was not possible to frame an exhaustive definition of judicial power. His Honour made the following comments:

However, after explaining that it was correct to say that many administrative powers must be performed with “judicial fairness and detachment”, his Honour described what was generally involved in the exercise of judicial power in the following terms at 374-375:

In Brandy at 256, Mason CJ, Brennan and Toohey JJ explained that the “exercise of power by a tribunal to enforce its own orders has sometimes been seen as an essential element in the exercise of judicial power”, while Deane, Dawson, Gaudron and McHugh JJ stated at 268 that there was “one aspect of judicial power which may serve to characterise a function as judicial when it is otherwise equivocal”, namely, the “enforceability of decisions given in the exercise of judicial power”.

In the present case, the power exercised by the Tribunal was the power conferred on it by s 87 of the RT Act. The exercise of that power involved the Tribunal: first, determining whether a residential tenancy agreement was in existence; second, whether that agreement was breached; and third, whether the breach was sufficient to justify the termination of the agreement, taking into account the matters referred to in s 87(5).

In determining the existence of the contract which constituted the residential tenancy agreement, whether that contract was breached, and whether that breach of contract was sufficient to justify termination, the Tribunal was exercising what has been traditionally thought to be judicial power: see Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 175; [1926] HCA 58; Brandy at 258-259; Attorney-General (Cth) v Breckler (1999) 197 CLR 83; [1999] HCA 28 at [40].

To this must be added the power conferred on the Tribunal by s 121 of the RT Act to enforce its own orders. I should add that it does not seem to me that the right conferred on a person in whose favour an order has been made to approach the Tribunal to seek further orders under cl 8 of Schedule 4 to the NCAT Act, to which I have referred at [110] above, alters the position. That power does not seem to permit reopening of the decision of the Tribunal, but rather, is a mechanism to seek further orders, presumably in aid of enforcement.

In these circumstances, the Tribunal, in exercising powers under s 87 of the RT Act, was exercising judicial power.

That conclusion is consistent with authority. In Silk Bros, it was held that the power vested in a Fair Rents Board to deal with recovery of premises was a conferral of judicial power contrary to Chapter III of the Constitution. The National Security (Landlord and Tenant) Regulations 1941 (Cth) prohibited the recovery of possession by a landlord except upon an application to the Board following the issue of a notice to quit in the prescribed form.

As Latham CJ pointed out at 8, the effect of the regulations was that, if they were valid, then the landlord had no right to terminate the tenancy. His Honour stated at 9 that the power “to make an order in favour of a landlord against a tenant for the recovery of the possession of leased land is plainly a judicial power according to any definition of judicial power which can be suggested”. Rich and McTiernan JJ agreed with the Chief Justice, while Starke J, with whom Williams J agreed, stated at 21 that the power “to decide controversies between landlords and tenants relating to the right to possession of premises and to order the issue of orders for recovery” was a “typical instance of judicial power”.

In Odzic and Datillo, which were two decisions of the Full Court of the Federal Court, similar conclusions were reached. Commonwealth legislation provided that the RT Act was to apply to residential tenancy agreements under which the Commonwealth was a lessor and conferred jurisdiction to determine disputes arising in respect of such leases on the Federal Circuit Court. In Odzic at [101]-[104], the Full Court of the Federal Court held that the conferral of a power to make orders under s 85 of the RT Act to terminate a periodic residential tenancy agreement did not involve the conferral of non-judicial power contrary to Chapter III of the Constitution.

Similarly, in Dattilo, the Full Court held that the power conferred on the Federal Circuit Court under s 94 of the RT Act to terminate a long term tenancy if considered appropriate in the circumstances of the case did not amount to the conferral of non-judicial power contrary to Chapter III of the Constitution. The Court noted at [115] that, “as a matter of history, landlord and tenant disputes were heard and determined by the ordinary courts for many decades”. The Court stated at [124]-[125] that the power to make orders “appropriate” to the case did not involve “purely subjective notions of what is appropriate” and excluded the “application of extralegal standards in order to determine the case”. The Court rejected the proposition that “findings as to the competing need of the lessee’s and lessor’s interests” indicated that the determination was not of a legal character.

It is true that Odzic and Dattilo related to the termination of a residential tenancy agreement under different provisions to those in question in the present case. However, it would be unusual for the Tribunal to be exercising either judicial or non-judicial power depending upon the section of the RT Act under which the application was made; all the more so if the application was made in the alternative.

Contrary to the applicant’s submission, I do not think that the width of the discretion conferred by s 87(4) of the RT Act alters the conclusion that judicial power is being exercised by the Tribunal. The discretion conferred would need to be exercised for the purpose for which it was conferred, namely, to properly adjust the respective rights of the parties, which, for example, courts have traditionally done in considering whether or not to grant relief against forfeiture. Nor do I consider it relevant that there are powers conferred on the Tribunal by the RT Act other than the making of termination orders which might be held to be administrative in nature.

In considering the submission that the Tribunal was not enforcing existing rights since the landlord has no right to terminate a residential tenancy agreement, but only the right to approach the Tribunal to seek a discretionary termination order, it must be remembered that a residential tenancy agreement is subject to provisions of the RT Act. Such an agreement, in conjunction with the RT Act, gives the landlord the right, upon breach of the agreement, to issue a termination notice and to seek an order from the Tribunal that the agreement be terminated. The position is quite different to that in Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542; [2008] HCA 2 (Alinta) and Precision Data Holdings Ltd v Wills (1991) 173 CLR 167; [1991] HCA 58 (Precision Data), in which the Takeovers Panel and its predecessor were held not to exercise judicial power for the reason, among others, that they were creating a “new charter of rights and obligations of the parties” which could be enforced by a separate court: see Alinta at [2], [96]; Precision Data at 191.

Nor does it seem to me that the position is affected by the requirement in s 38(4) of the NCAT Act that the Tribunal is to act in accordance with “equity, good conscience and the substantial merits of the case”: see Peacock at 36. Further, the fact that an appeal lies to the Appeal Panel of the Tribunal on a question of law demonstrates that the Tribunal is required to exercise its powers according to law. In addition, the fact that it was not “bound by the rules of evidence” is not inconsistent with the exercise of judicial power: Sue v Hill at [42].

For these reasons, the Appeal Panel was correct in concluding that the Tribunal was exercising judicial power in the Gatsby v Gatsby proceeding.

The applicant, referring to the judgment of Spigelman CJ in Skiwing at [52], [59]-[65], submitted that the “essential feature of a ‘court’, as that word is used in Chapter III, is that it is an institution composed, or at least predominantly composed, of judges”. He submitted that s 72 and s 79 of the Constitution assumed that “federal judicial power will be exercised by courts composed of judges”.

The applicant submitted that, as pointed out by Kenny J in Commonwealth v Anti-Discrimination Tribunal (Tas) (2008) 169 FCR 85; [2008] FCAFC 104 at [238] (Tasmanian Anti-Discrimination Tribunal), the foundation of the decision of Spigelman CJ that the Administrative Decisions Tribunal was not a “court” was that its members were appointed for a “renewable term of three years”, might be removed by the Governor for “incapacity, incompetence or misbehaviour”, many were not legally qualified, and to the extent that it mattered, were not called “judges”: see Skiwing at [27]. The applicant submitted, referring to Skiwing at [47], that the “judges in substance” concept adopted by the Appeal Panel “undermines, and is inconsistent with, the ‘high degree of similarity’ required in the institutional characteristics of the component parts of the Australian judicial system”.

At the hearing, the Solicitor General for New South Wales, representing the applicant, pointed out that term members of the Tribunal were appointed for a renewable term of five years, and referred to statistics concerning the membership of the Tribunal. These statistics were obtained in a letter from the principal registrar of the Tribunal dated 22 March 2018, annexed to an affidavit of Ms Gemma Namey dated 3 April 2018 which was read in these proceedings without objection. These statistics showed that, as at 30 June 2017, of the 239 members of the Tribunal, 8 members were permanent or acting judicial officers and 151 members were lawyers of at least seven years’ standing, although some other members were qualified lawyers. They also showed that there were 17 full-time members and 222 part-time members.

The applicant referred to the statement by Gleeson CJ in Forge at [41] that the question of whether a body is a court of the State may be approached by assessing whether it is sufficiently independent and impartial. However, the applicant accepted, referring to Bradley at [30], that “no exhaustive statement of what constitutes that minimum in all cases is possible”.

At the hearing, the Solicitor General for New South Wales submitted that the requirement referred to by Gleeson CJ “may only be a variant of the requirement that a Court be comprised predominantly of judges”, and also submitted that this was reflected by what was said by Gummow, Hayne and Crennan JJ in Forge at [73]. In that passage, he noted the statement made by their Honours to the effect that the Supreme Court must be predominantly composed of judges was “immediately followed” by the statement that the court must be institutionally independent and impartial.

The Solicitor General for New South Wales stated that the matters referred to in the applicant’s written submissions indicated that the Tribunal was not a “court”. He emphasised, in particular, that the Governor may remove a member other than the President for “incapacity, incompetence or misbehaviour”, and contrasted this with the provisions governing the holders of judicial offices under Part 9 of the Constitution Act 1902 (NSW).

The Solicitor General for New South Wales then referred to Director of Housing v Sudi (2011) 33 VR 559; [2011] VSCA 266 at [201] (Sudi), where Weinberg JA held that the Victorian Civil and Administrative Tribunal was not a “court of a State” because its non-presidential members had insufficient tenure to “enjoy judicial independence”, given that they were appointed for renewable terms of up to five years. He submitted that this approach was not inconsistent with what was said in Forge.

A similar submission was made in the applicant’s written submissions, in which he stated that reliance by the Appeal Panel on Forge was “misplaced”. He submitted that Forge made it clear that “the appointment of acting judges to the Supreme Court had to be considered against the relevant institutional arrangements and safeguards”, which “differ significantly in the case of the Tribunal”.

The Solicitor General for New South Wales also referred to the balancing exercise undertaken by this Court in Orellana-Fuentes v Standard Knitting Mills Pty Ltd (2003) 57 NSWLR 282; [2003] NSWCA 146 at [37]-[52] and in Skiwing at [26]-[29]. In that context, he referred to the indicia set out in the applicant’s written submissions at [77]-[83] and submitted that, when those indicia were balanced, the Tribunal could not be considered a “court of a State” for the purpose of Chapter III of the Constitution. However, he emphasised that the most important factor was the composition of the membership of the Tribunal.

The Solicitor General for New South Wales also pointed out that the Tribunal was not designated as a “court of record”, and referred to the fact that, in s 73(2) of the NCAT Act, which dealt with questions of contempt, the Tribunal is referred to in “contra-distinction” to a “court of law”. He submitted that the absence of the designation of the Tribunal as a “court of record” is a “good indication of statutory intention and a better indication than the existence of a power to punish contempt in the face of or in a hearing of the Tribunal”.

The Commonwealth submitted that the Tribunal was not a “court of a State” for the purpose of Chapter III of the Constitution. The Solicitor General for the Commonwealth submitted that, in considering that issue, the “starting point” must be the “constitutional text and structure”.

The Solicitor General for the Commonwealth submitted that the word “court”, as it appears in each of s 71, s 77(i) and s 77(iii) of the Constitution, has a “constant meaning”. Referring to Harris v Caladine (1991) 172 CLR 84 at 92; [1991] HCA 9, he submitted that the word “court” means “an organisation for the administration of justice, consisting of judges and with ministerial officers having specified functions”.

The Solicitor General for the Commonwealth accepted that Chapter III of the Constitution does not require all courts to have the same characteristics. He stated that a “court of a State” was “obviously” not required to consist of judges appointed in accordance with s 72 of the Constitution, and that a “court of a State” could exercise judicial as well as non-judicial functions. He also accepted that a State could confer judicial power on bodies that were not “courts”.

The Solicitor General for the Commonwealth submitted that it followed that “the capacity of a State to confer judicial power on a tribunal logically means that one can’t reason from the fact that a State body exercises judicial power to the conclusion that it is a Court”. He submitted that this was recognised “in plain terms” by Spigelman CJ in Skiwing at [21], where he said that “the exercise of judicial power is a necessary but not a sufficient condition for the characterisation of a decision-making body as a court”.

The Solicitor General for the Commonwealth said that it followed that, once it is apparent that a State legislature has “a choice of receptacle of judicial power”, then whenever a State creates a new body, the “critical factor” is to identify what choice the State legislature made between the available options, and that this question was to be assessed by reference to “the construction of the legislation that created the relevant body”.

The Solicitor General for the Commonwealth submitted that there were “three most important indicators” on this question. He submitted that the first was what the body was to be called. The second was what the persons who are to constitute the body were to be called. The third was whether the body was established “to exercise at least some measure of judicial power”. He submitted that, in relation to the third matter, when the State chooses to establish a “court”, while the State legislature is not subject to s 72 of the Constitution, once established as a “court”, it must be “a fit repository for federal judicial power invested under s 77(iii) and that means it must [satisfy] what have been called the minimum standards of independence and impartiality”.

The Solicitor General for the Commonwealth submitted that, “if the objective legislative intention discerned from the legislation is to create a Court”, then it is necessary to consider whether the “constitutional requirements” are met. He submitted that, if they were, then the body is “validly constituted as a Court”, but, if they are not, then “either the body is invalid or by a process of severance or reading down the offensive features of the legislation can be dealt with in such a way that the body might be able to be validly constituted”.

The Solicitor General for the Commonwealth submitted that a State legislature cannot create a court which does not comply with the constitutional requirements of Chapter III of the Constitution. He submitted that this approach was supported by what was said by the High Court in K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501; [2009] HCA 4 at [150]-[154] (K-Generation), where the majority canvassed the consequence for the constitutional status of the Liquor Licensing Court of South Australia if s 28A(5) of the Liquor Licensing Act 1997 (SA), which required the Court, on the application of the Commissioner for Police, to maintain the confidentiality of information classified by the Commissioner as “criminal intelligence”, was invalid.

The majority noted at [152] the submissions made by Queensland and Western Australia that the effect would be that the Liquor Licensing Court would no longer be a “court of a State” which might exercise federal jurisdiction. The majority rejected that submission, and stated at [153] that, consistently with Chapter III of the Constitution, “States may not establish a ‘court of a State’ within the constitutional description and deprive it, whether when established or subsequently, of those minimum characteristics of the institutional independence and impartiality identified in decisions of this Court”.

The Solicitor General for the Commonwealth also referred to what was said by Gageler J in Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7 at [183] (Pompano) that a “State or Territory law that undermines the actuality or appearance of a State or Territory court as an independent and impartial tribunal is incompatible with [Chapter III of the Constitution] because it undermines the constitutionally permissible investiture in that court of the separated judicial power of the Commonwealth”.

The Solicitor General for the Commonwealth submitted that, while the labelling of a body as a court or tribunal would not be “decisive”, it would be “properly regarded as a very weighty indicator of legislative intention”. In the present case, he submitted that the legislature could have designated the Tribunal as a “court”, and it could have provided for the appointment of “judges”, and the fact that it did not do so was an “obvious” indication of legislative intention. In that context, he referred to K-Generation at [80]-[84], [219].

On the issue of construction, the Solicitor General for the Commonwealth referred to s 7 of the NCAT Act, in which he submitted that there was no suggestion of the Tribunal being a “court” or a “court of record”. He also submitted that the “deeming language” in the contempt power in s 73 suggested that the legislature “recognised that it was not creating a court of law”. He also referred to the fact that only the President was required to be a judge by s 13(1). He also relied on s 54(1), which he accepted “distinguishes in the same sentence [between] tribunals and courts”, and adopted the suggestion of Leeming JA that it was “odd” for a body which was said to be a “court” to be expressly required to apply a decision on a question of law which it had referred to another court.

At the hearing, Mr Kennett referred to the four characteristics referred to by French CJ in Pompano at [67] as “non-exhaustive” indicators that a body was a “court”. He noted that the first was “the reality and appearance of decisional independence and impartiality”. The second was the “application of procedural fairness”. The third was “the adherence as a general rule to the open court principle”. The fourth was the requirement for the “provision of reasons for the courts’ decisions”. He submitted that all of those factors were present in the case of the Tribunal.

Mr Kennett submitted the notions of independence and impartiality were “at the heart of the notion of a court”. He accepted that “many tribunals satisfy those requirements” and that “some of them have also a level of independence and institutional impartiality which would allow them to be described as courts if a question were to arise as to the vesting of federal judicial power in them”.

Mr Kennett stated that his submissions drew heavily on Forge and what he described as the “Kable line of country”: see Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; [1996] HCA 24. He submitted that this was appropriate because those cases concerned the “minimum requirements of a court”, which he submitted was a “stable concept” throughout Chapter III of the Constitution. In that context, he referred to what was said by Gleeson CJ in Forge at [41], that “for a body to answer the description of a court it must satisfy the minimum requirements of independence and impartiality. This is a stable principle, founded on the text of the Constitution”.

Mr Kennett submitted that the question, as put by the Commonwealth, namely, whether a body has been “established as a court”, was the wrong question because a body “either is or isn’t a court by virtue of the application of constitutional principle and that can’t depend on whether the State legislature … has purported to select one outcome or the other”.

Mr Kennett accepted that the State legislature had a “choice about how to frame the legislation”, but he submitted that, when one comes to “the constitutional character of the body thereby created, that’s not a matter for legislative choice”. He submitted that one “looks to the State legislation … in order to understand what kinds of powers were intended to be conferred, how they were intended to be exercised, what sort of protection from dismissal the members of the body were intended to have”, but submitted that it was “not a relevant question” whether the State legislature “wanted” the body to be a “court”, or otherwise.

Mr Kennett accepted that it was not “entirely irrelevant” that the body was not described as a “court”, but he submitted that it was relevant “only at the level of statutory construction and not at the level of constitutional characterisation”.

In dealing with the Commonwealth’s submission based on what was said by the majority in K-Generation at [153], which I have noted at [156] above, he submitted that what was being conveyed in that paragraph was that, “if a body has the attributes or characteristics of a court including critically, independence and impartiality [and is thus] an element in the federal judicial system”, then it is “not open to the States to confer on that body [a] function that’s incompatible with that status”. He submitted that this did not mean that the State “couldn’t change the entity itself in a way that changed its constitutional character”. He submitted that K-Generation “doesn’t provide a foundation for the conceptual framework that the Commonwealth seeks to impose on this case” and that “the express designation of a body as a court or as something else is no more than an indicator from a statutory construction point of view of how the State intended the body to operate”.

Similarly, Mr Kennett submitted that the description of the members of the body as “judges” is no more than a “label” which might be “useful for statutory construction purposes but can’t dictate the answer to a constitutional question”. In any event, he submitted that to describe a court as a body composed of “judges” raises the question about what a “judge” is. He submitted that, to the extent that the expression “constituted by judges” adds anything, it should be construed as a requirement that a body consists of persons who exercise judicial power by applying the law and are not controlled by the Crown.

Mr Kennett submitted that what was involved was a question of institutional independence as well as personal independence. He submitted that it was clear that, in the present case, the Tribunal was “required to decide each case on its merits and according to law, notwithstanding that it’s required to act with as little formality as possible, [it] still must decide matters on their merits and according to law” and that, except in the administrative review jurisdiction, there is no role for the application of general policy.

Mr Kennett submitted that, at the personal level, the key issues were tenure and remuneration of members, and that other matters, such as whether members took an oath on appointment, were “peripheral”. He pointed out that remuneration could not be reduced during the term of a member under cl 5(3) of Schedule 2 to the NCAT Act. He submitted that the fact that members were appointed for a term was no different to the position of acting judges in the Supreme Court. He submitted that the “key point is that during [their] term and during the performance of their functions, the judges or members of a court aren’t subject to removal by anybody because they have displeased them”. He submitted that the provision for removal should be read as only providing for removal in “good faith” and that any removal would be subject to the supervisory jurisdiction of the Supreme Court.

Mr Kennett accepted that the term of the appointment is an important factor, but not the only factor. He submitted that the “whole of the institutional context is relevant”, and submitted that it was noted in Forge at [82]-[85] that the independence and impartiality of inferior courts and tribunals could be secured, at least in part, by the supervisory and appellate jurisdiction of the Supreme Court.

Mr Kennett submitted that the designation of an entity as a “court of record” has the consequence, “at least ordinarily”, that it has the power to punish for contempt. He submitted, based on what was said by Blackstone in his Commentaries on the Laws of England, that the converse, namely, the existence of a power to punish for contempt implying that the body is a “court of record”, was “apt”.

As was apparent from the summary of the submissions which I have set out above, each of the parties approached the question of whether the Tribunal was a “court of a State” for the purpose of Chapter III of the Constitution in a somewhat different fashion. The applicant and the Commonwealth approached it as a matter of construing the legislation which established the body, while the contradictors suggested that, if all the indispensable features of a “court” were present, then it was a “court of a State” for the purpose of Chapter III of the Constitution irrespective of whether the State legislature intended to create it as such.

In the present case, I do not think that the different approaches yield different results. It will be unusual to find that the legislature created a body with all the essential characteristics of a “court” for the purpose of Chapter III of the Constitution while not intending it to be a “court” in some other sense.

In Pompano at [125], the majority stated that “independence and impartiality are defining characteristics of all of the courts of the Australian judicial system”. Similarly, Gageler J emphasised at [182]-[183] that, for a court to be able to act judicially, it “must have institutional integrity: it must ‘be and appear to be an independent and impartial tribunal’”, citing Forge at [78]; Bradley at [29].

However, there are three things to be noted in this context. The first is that, as was pointed out in Bradley at [30], “no exhaustive statement of what constitutes [the minimum standard] in all cases is possible”. The second is that it is clear that a “court of a State” does not have to be solely constituted by judges with the same terms of appointment as s 72 of the Constitution provides for judges of federal courts: see Commonwealth v Hospital Contribution Fund of Australia (1981) 150 CLR 49 at 61; [1982] HCA 13 (Hospital Contribution Fund); Forge at [40]-[41].

The third matter is this. The fact that the Tribunal has some of the “trappings” or features of a court does not necessarily mean it is a “court of a State” for the purpose of Chapter III of the Constitution. In this context, in Skiwing at [22], Spigelman CJ referred to the following statement by Viscount Dunedin in Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530 at 543-544:

In Harris v Caladine (1991) 172 CLR 84 at 92; [1991] HCA 9, Mason CJ and Deane J pointed to the fact that, in Hospital Contribution Fund, the Court held that “court” in s 77(iii) of the Constitution means “a court as an institution being ‘an organisation for the administration of justice, consisting of judges and with ministerial officers having specified functions’”. In K-Generation at [115]-[116], the majority, in concluding that the Liquor Licensing Court of South Australia was a “court of a State” within the meaning of s 77(iii) of the Constitution, took into account that it was a “court of record” constituted by judges who had some form of security of tenure, ensuring there was “no scope for purely arbitrary removal by the Executive”. The majority also noted at [134] that its powers and processes were “plainly judicial in nature”.

In Skiwing at [52], Spigelman CJ stated that, “in order to be part of the constitutionally required integrated judicial system, a tribunal must be able to be characterised not only as a court, but as a court of law”. He said that one aspect of this was that the body was comprised “probably exclusively although it is sufficient to say predominantly, of judges”. His Honour also stated at [51] that “the absence of the word ‘court’ in the constitutive statute is indicative”.

Spigelman CJ’s comment that a court must be constituted “predominantly” of judges must be understood in light of what the High Court said in Forge. In that case, Gleeson CJ stated at [42] that State legislation empowering the Governor of a State to appoint acting judges “does not, on that account alone, deprive the body of the character of a court, or of the capacity to satisfy the minimum requirements of judicial independence”. The plurality made the following remarks at [73] and [84]:

In Tasmanian Anti-Discrimination Tribunal at [227], Kenny J noted that, while it “may be impossible, and certainly difficult, to define, in an affirmative way, all the characteristics of a court of a State” for the purpose of Chapter III of the Constitution, “independence and impartiality is the irreducible minimum for a court of a State”. Her Honour accepted at [228] that much will “depend on the powers and functions of the body, the provisions for appeal and review of its decisions” and the “nature of the constitutional or legislative ‘institutional arrangements and safeguards’ for securing independence and impartiality”. Her Honour reconciled Skiwing with Forge in the following manner at [237]-[238]:

In Sudi at [201], Weinberg JA concluded that the Victorian Civil and Administrative Tribunal (VCAT) was not a court on the basis that “its members, apart from the President and Vice-Presidents, do not enjoy judicial independence”. His Honour pointed out that they were appointed for fixed terms, and a particular concern was the fact that they were eligible for reappointment, as a consequence of which his Honour found that “there will always be a perception that VCAT as a whole is comprised of members beholden to the government”.

A similar conclusion was reached by Perry J in Qantas Airways Ltd v Lustig (2015) 228 FCR 148; [2015] FCA 253 (Lustig). Her Honour noted at [65] that VCAT “resembles a court exercising judicial power” in that it “decides controversies between parties by the determination of rights and duties based on existing facts and the law”, and that it had “broad powers to grant remedies akin to those which a court might grant”. As a result, her Honour accepted that VCAT was vested with State judicial power.

However, her Honour held at [67] that such matters were “not necessarily determinative of whether a Tribunal is a court of a State”. Following Skiwing, Sudi and Tasmanian Anti-Discrimination Tribunal, she held that VCAT was not a “court of a State”, relying in particular on three matters at [71]-[73]. First, that VCAT was “not established as a court in its enacting legislation”. Second, VCAT did not satisfy the “minimum requirements of independence and impartiality”, including the fact that members were appointed for a term. Finally, VCAT’s members were “not limited to judges and the office held by them is not described as judicial office”.

Applying these principles to the present case, I am of the view that, although the Tribunal has many of the features of a “court” and can, in a number of areas, exercise State judicial power, it is not a “court of a State” for the purpose of Chapter III of the Constitution. My reasons are set out below. While none of these may be decisive individually, in combination, they lead to the clear conclusion that the Tribunal is not a “court of a State”.

First, the Tribunal is not designated as a “court of record”. I do not think that the existence of the limited contempt power in s 73 of the NCAT Act detracts from the force of this consideration, particularly having regard to the terms of s 73(2), which provides that a person is “guilty of contempt of the Tribunal if the person does or omits to do any thing” which would constitute a contempt “if the Tribunal were a court of law” (emphasis added). That provision clearly draws a distinction between the Tribunal and a “court of law”.

More importantly, it could not be said that the Tribunal is composed “predominantly” of judges. As the applicant submitted, the members of the Tribunal included a considerable number of non-lawyers, and many of the members, including the lawyers, were part-time appointments. The fact that, from time to time, the members of the Tribunal may exercise judicial powers and might colloquially be described in those circumstances as “judges in substance”, does not alter the fact that the Tribunal is not “predominantly” composed of judges in the sense described in the authorities.

Of equal, if not greater, importance, as pointed out in Skiwing, Sudi, Lustig and Tasmanian Anti-Discrimination Tribunal, is the absence of security of tenure for members of the Tribunal comparable to that held by judges under the Act of Settlement 1701 (UK) and its statutory or constitutional equivalents. Apart from the President, members of the Tribunal are appointed by the Minister. The term of appointment cannot exceed five years, but a member is eligible for reappointment. There are no restrictions on the other activities which can be undertaken by a part-time member, which presumably could include employment by a government department or agency. That does not seem to me to be ameliorated by the regulation-making power relating to disclosure of pecuniary or other material interests in cl 13(a) of Schedule 2 to the NCAT Act, or the power contained in cl 13(b) to make regulations dealing with the participation by members in proceedings where there is a conflict of interest. Indeed, regulation of the latter matter by the Executive seems to me to be contrary to the necessary requirement of independence for a body to be a “court of a State”.

In addition, the appointment of general members under s 13(6) of the NCAT Act on the basis that they are “capable of representing” a “group of persons” in respect of “any one or more classes of matters in respect of which the Tribunal has jurisdiction” appears to me to be contrary to the basis on which appointments of judges to a court are made and directly raises questions of impartiality.

Finally, members other than the President can be removed from office by the Governor for “incapacity, incompetence or misbehaviour” under cl 7(2) of Schedule 2 to the NCAT Act. This can be contrasted with the position of judges, who can only be removed by the Governor “on an address from both Houses of Parliament in the same session, seeking removal on the ground of proved misbehaviour or incapacity”: see Constitution Act 1902 (NSW) s 53(1). While it is true that a decision to remove a non-presidential member might be reviewable, the fact remains that it does not provide the same protection as that conferred on judges.

The combination of these factors means that, in my view, the State legislature did not intend the Tribunal to be a “court of a State” for the purpose of Chapter III of the Constitution and that the Tribunal did not have the necessary degree of independence and impartiality to constitute such a court. Thus, irrespective of the approach adopted, the same conclusion is reached.

It is not necessary to decide whether this decision conflicts in any way with the decision of the Queensland Court of Appeal in Owen v Menzies, which concluded that QCAT was a “court of a State” for the purpose of Chapter III of the Constitution. While it may be that, in some respects, the reasoning in that case is inconsistent with Skiwing, Sudi, Lustig and Tasmanian Anti-Discrimination Tribunal, the case can be distinguished on the basis that QCAT was expressly designated in its establishing legislation as a “court of record”.

In these circumstances, I am of the opinion that the Tribunal was not a “court of a State” for the purpose of Chapter III of the Constitution or s 39 of the Judiciary Act 1903 (Cth).

In his reasons, Basten JA raises the issue of whether there was a “matter” before the Tribunal in either the Gatsby v Gatsby or Dibbin v Johnson proceedings for the purpose of s 75 and s 76 of the Constitution.

This question was not an issue raised by the parties to the present proceedings or the intervener or contradictors and, in my opinion, it is not appropriate for it to be raised now. This is not only because the parties did not choose to raise it, but also having regard to the fact it would require further submissions to be made on the question and further notices to be given to the Attorneys General for the States and the Commonwealth under s 78B of the Judiciary Act 1903 (Cth), as the question was not encompassed in the original notices. This would inevitably add to further delay in the proceedings.

Further, the interests of the underlying litigants must be taken into account. They are no doubt desirous of having their somewhat simple claims heard as expeditiously as possible. In those circumstances, it seems to me inappropriate to express any view on the issue, particularly having regard to the terms of s 78B of the Judiciary Act 1903 (Cth).

In the result, I would make the following orders:

BEAZLEY P: I have had the advantage of reading in draft the reasons of the Chief Justice. I agree with his Honour’s reasons and proposed orders. I also agree with the additional reasons of Leeming JA.

McCOLL JA: I have had the benefit of reading in draft the reasons of Bathurst CJ, Basten JA and Leeming JA. I agree with Bathurst CJ’s reasons and the orders his Honour proposes. I add the following observations.

As Gageler J explained in Palmer v Ayers, [1] Kitto J’s statement in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd [2] of what is generally involved in the exercise of judicial power is “the paradigm case of an exercise of judicial power”. I agree with Bathurst CJ that the power exercised by the Civil and Administrative Tribunal of New South Wales (NCAT) falls squarely within Kitto J’s description of the exercise of judicial power. Each case before the NCAT involved a decision settling for the future, as between the landlord and tenant, a question as to their respective rights pursuant to the residential tenancy agreement, by reference to whether, as the contradictors submitted, the statutory preconditions in s 87(4) of the Residential Tenancies Act 2010 (NSW) (RTA) were satisfied, each criteria being “an objective standard capable of judicial application”.

The discretion s 87(4) of the RTA conferred on the NCAT is of the nature of that which courts have traditionally exercised in considering whether or not to grant relief against forfeiture. It was by reference to an historic examination of what “courts have done” that Kitto J undoubtedly formulated his statement as to the concept of judicial power. [3]

As to the second issue, of greatest significance to my mind in the conclusion that the NCAT is not a court of a State is the fact that NCAT members do not enjoy the independence and impartiality essential to a finding that the NCAT is a court of a State.

“For a body to answer the description of a court it must satisfy minimum requirements of independence and impartiality.” [4] These requirements “connote separation from the other branches of government, at least in the sense that the State courts must be and remain free from external influence”. [5] Those minimum requirements at least include being susceptible to removal only by the Governor on an address of both houses of parliament. [6]

In contrast, as Bathurst CJ has explained at [188], members of the NCAT do not have security of tenure comparable to that held by judges under the Act of Settlement and its statutory or constitutional equivalents. Rather, apart from the President, members of the NCAT are appointed by the Minister, their term of appointment is for a period not exceeding five years, and they are eligible for reappointment. In addition, members other than the President can be removed from office by the Governor for “incapacity, incompetence or misbehaviour”, [7] rather than, as I have said, in the case of members of the judiciary, by the Governor on an address of both houses of Parliament.

These matters demonstrate that the NCAT does not have the defining characteristics of a court.

In addition, as Leeming JA has explained at [291]-[292] below, this Court held in Trust Company of Australia Ltd v Skiwing Pty Ltd [8] that the Administrative Decisions Tribunal (ADT) was not a court for the purposes of s 77(iii) of the Constitution and the NCAT is the successor, at least, to the ADT. I also agree with Leeming JA’s reasons concerning the effect of the new Pt 3A of the NCAT Act at [293]-[305] below.

BASTEN JA: These proceedings concern a finding by the Appeal Panel of the New South Wales Civil and Administrative Tribunal (NCAT) that it had jurisdiction to make orders in two disputes under the Residential Tenancies Act 2010 (NSW), each involving one party resident in another State when the proceedings were commenced. [9] The decision was handed down on 14 February 2018. It was then accepted, on the basis of the judgment of this Court in Burns v Corbett, [10] subsequently affirmed by the High Court on 18 April 2018, [11] that if NCAT were (a) exercising “judicial power” and (b) not a “court of a State” (for the purposes of being invested with federal jurisdiction pursuant to s 77(iii) of the Constitution) it lacked authority to determine these disputes. NCAT held that it was exercising “judicial power” and was a court for the purposes of Ch III of the Constitution. [12]

The hearing before the Appeal Panel proceeded on a limited basis. In each appeal, the Appeal Panel answered separate questions as follows:

The Attorney General sought leave to appeal from these rulings. He also brought proceedings in the supervisory jurisdiction of this Court seeking (i) an order setting aside the answer to question (b), and (ii) a declaration that NCAT is not a court of the State. As explained below, while NCAT is not a court of the State, neither, arguably, was it dealing with a “matter” for the purpose of s 75 of the Constitution. The authority conferred on it by the Civil and Administrative Tribunal Act 2013 (NSW) and the Residential Tenancies Act was not to determine “matters”, because it was not exercisable by a court. On that basis, it had power to make orders as provided by the relevant State laws. However, the only answer available in these proceedings is that NCAT is not a court of this State. The relief sought in the summons for judicial review is available but unnecessary and does not resolve the authority of NCAT; it should be refused on discretionary grounds.

At the heart of this case lies a dilemma created by the combination of two constitutional principles. The first is the adoption of what has been called the “autochthonous expedient”. [13] The Constitution vests federal jurisdiction in federal courts and permits the Parliament to vest federal jurisdiction in courts of a State. The Parliament has exercised that power by enacting s 39(2) of the Judiciary Act 1903 (Cth).

The second principle is the separation of powers doctrine, as construed by the High Court in relation to the basic elements of judicial power. [14] These elements do not apply, or do not apply inflexibly, with respect to State judicial power and State courts. Further, Ch III of the Constitution distinguishes between State Supreme Courts and courts of a State; the latter category will include courts in the hierarchy below a State Supreme Court. Different characteristics attach to each category.

It follows that federal jurisdiction may be exercised either by a federal court subject to, for example, strict requirements as to independence from the executive and legislature, or by State courts not directly subject to those strictures. State courts, being the creation of State constitutions and State legislation, may not meet the requirements of a properly constituted federal court. Nevertheless, there are principles enunciated by the High Court which constrain departures from the traditional characteristics of a Supreme Court and may affect the class of bodies falling within the term “any court of a State” which can be invested with federal jurisdiction pursuant to s 77(iii) of the Constitution. Absence of the conventional curial characteristics may prevent a particular body established under State law being an available repository of federal judicial power.

The limits of powers which can be conferred on a State Supreme Court, which lack the usual characteristics of the judicial function, were addressed in Kable v Director of Public Prosecutions (NSW). [15] Kable, as later explained in Fardon v Attorney General (Qld), [16] held that a State Parliament cannot confer on a State Supreme Court “a function which is incompatible with the Court's position, under the Constitution, as a potential repository of federal jurisdiction, the function being repugnant to the Court's institutional integrity.”

The High Court has held that an essential characteristic of a State Supreme Court is its supervisory jurisdiction with respect to State courts, tribunals and administrative bodies. [17] However, that jurisdiction is exercisable with respect to both judicial and executive (and indeed legislative) powers. The logic of a national integrated judicial system is satisfied by that characteristic.

In Federated Sawmill, Timberyard and General Woodworkers' Employes' Association (Adelaide Branch) v Alexander [18] Griffith CJ said that, for the purposes of investing federal jurisdiction in State courts, the Commonwealth took the courts as it found them. In Le Mesurier v Connor [19] the High Court held that the Commonwealth had no power to change the membership of a State court, or its internal structure. [20] Federal jurisdiction vested in a State Supreme Court may, pursuant to the organisation of that Court, be exercisable by a Master, not a judge. [21] Those propositions are not contradicted by Kable. They are, however, subject to the curious and somewhat ambiguous power conferred by s 79 of the Constitution permitting the Parliament to prescribe the number of judges who may exercise federal jurisdiction. [22]

In Forge v ASIC, [23] the High Court upheld the validity of orders made in federal jurisdiction by an acting justice of the Supreme Court, but without indicating the extent to which the use of persons not having conventional judicial tenure would lead to a State Supreme Court no longer being a “court of a State” for the purposes of s 77(iii). The joint reasons stated “a premise that a court, or at least the Supreme Court, of a State must principally be constituted by permanent judges”. [24] The premise could also be stated “at a higher level of abstraction: that the courts, and in particular the Supreme Court, of a State, must be institutionally independent and impartial.” The latter was seen as covering the former. The Court further stated:

In a rare High Court case dealing with the status of a State court other than a Supreme Court, K-Generation Pty Ltd v Liquor Licensing Court, [25] the joint reasons of Gummow, Hayne, Heydon, Crennan and Kiefel JJ stated:

The reference to “minimum characteristics of the institutional independence and impartiality identified in the decisions of this Court” may have been to Kable, or to cases dealing with Ch III courts, or to both. However, earlier in the joint reasons express reference had been made to Courts of Petty Sessions in the following terms:

Despite the inconclusive first sentence, it appears that the propositions which followed were accepted, although no similar deficit in security of tenure applied to the Liquor Licensing Court then under consideration. [28] In similar vein, the joint reasons dismissed the need for a power to punish for contempt:

In K-Generation, French CJ stated:

However, the scope of these characteristics has not been addressed with respect to State courts generally. Section 77(iii) must be read in context; its effect is complex. Section 77(i) allows the Parliament to define the jurisdiction of federal courts (other than the High Court), which means conferring on them authority to exercise judicial power. Although the term “federal jurisdiction” is only used with respect to State courts (in ss 71, 73(ii) 77(iii) and 79), the jurisdiction conferred on federal courts is “federal jurisdiction”. The federal jurisdiction conferred on federal courts can be made “exclusive of” the jurisdiction of State courts: s 77(ii). It is not in doubt that the concept of federal jurisdiction is used with one meaning throughout s 77; it follows that the Parliament can only determine under s 77(ii) the extent of the federal jurisdiction of a State court, subject to the implied limitation recognised by a majority in the High Court in Burns v Corbett. [31]

The extent to which constraints identified with respect to State Supreme Courts apply to other State courts is still unclear. Whether a body which is called a “court”, whether by tradition or by its constituting statute, must satisfy certain mandatory criteria to be a “State court” for the purposes of s 77(iii), and hence s 39(2) of the Judiciary Act, regardless of nomenclature and regardless of its operation in exercising State judicial power, or State administrative power, or some hybrid of the two, is unclear.

This last proposition suggests that the first question posed by the Appeal Panel in this case is misconceived and not able to be answered in its terms. The real question is whether the functions being exercised by NCAT involved an exercise of federal jurisdiction; that is, an exercise of federal judicial power. That question ought be framed in the language of Ch III.

To determine whether a body is a State court, one must consider the structure, membership and functions of the body, as defined by State law. One consideration will be its title, [32] but that is not necessarily determinative for constitutional purposes. If the body does not satisfy the substantive criteria for a State court under s 77(iii), it may not be a State court merely because it is called a “court”, or even a “court of record”, under its constituting statute. [33] The fact that NCAT is described as a “tribunal”, not a “court”, is not irrelevant, but its relevance is as a signal that Parliament was establishing a body without some characteristics conventionally associated with a court.

Nor is this a matter of mere semantics; the objects of the Civil and Administrative Tribunal Act demonstrate that, as was the case with many of the 22 tribunals and other bodies which were combined to create NCAT, [34] a significant purpose of the creation of NCAT was to provide an alternative mechanism for dispute resolution, allowing persons with disputes in particular categories to obtain a resolution outside the formal court structure. Thus, the first object was to establish a tribunal to provide a single point of access “for most tribunal services in the State”; the third object was to ensure that the Tribunal “is accessible and responsive to the needs of all of its users”, and the fourth was to enable the Tribunal to resolve “the real issues in proceedings justly, quickly, cheaply and with as little formality as possible”. [35] There are other objects, but the intention to provide a tribunal separate from the court system is nevertheless manifest.

On the other hand, taken alone this consideration is not decisive. Provisions removing the restraints imposed by laws of evidence, and requiring that disputes be determined according to their substantial merits and good conscience without regard to legal forms or technicalities, have been held not to be “inimical to the exercise of the judicial power of the Commonwealth”. [36]

Secondly, although the President is required to be a judge of the Supreme Court, and other presidential members must be lawyers of at least seven years standing or persons who have held or hold judicial office, [37] three factors demonstrate an intention that the government should retain a degree of flexibility in moulding the composition of the Tribunal from time to time, consistently with the efficient provision of “tribunal services in the State”. Those factors are (i) the terms of appointment (not to exceed five years); [38] (ii) many appointees are part-time members and (iii) general members do not require legal qualifications. There is no reason why a court should be comprised solely of judges; indeed, most are not. Nor have all members of courts enjoyed tenure subject to removal by Parliament for misbehaviour or disability. However, there is a clear difference between a court comprised generally of judges and one which has a small percentage of persons who are, have been or are qualified to be, judicial officers. [39] Further, these factors significantly entrench on the degree of independence expected of courts constituted by judicial officers, however designated. Tenure, subject to removal for misbehaviour, is not an essential element of judicial office; but a body whose members must apply for reappointment at best every five years and possibly annually lacks a large element of apparent independence from the executive arm of government.

So far as NCAT’s functions are concerned, it is true that some have traditionally been exercised by courts, but it is also true that there has been a major growth in the number and nature of tribunals in recent decades upon which Parliament confers jurisdiction in lieu of conferring jurisdiction on established courts. The fact that some specialist bodies are expressly designated as courts (such as, in this State, the Land and Environment Court, Industrial Court, District Court, Drug Court, Children’s Court and Local Court) emphasises the distinction drawn by Parliament between courts and tribunals. While NCAT, upon its establishment, took over the functions of a multitude of other bodies, none of those which were amalgamated into NCAT was described as a court.

For these reasons, I would be content to conclude that NCAT was not a court within the meaning of s 77(iii) of the Constitution. However, it does not seem to me that the present cases turn on that conclusion. Rather, they turn on the question whether NCAT was exercising federal jurisdiction pursuant to s 75(iv) of the Constitution. For that purpose, it would be sufficient to assume that NCAT was not a State court. (Were the contrary true, it would be able, concededly, to exercise diversity jurisdiction invested in it pursuant to s 39(2) of the Judiciary Act.)

Arguably, the critical question for present purposes is whether the cases under the Residential Tenancies Act involved “matters” for the purposes of s 75 of the Constitution. Section 75, in identifying the constitutionally mandated areas of federal jurisdiction relevantly provides:

Section 76 similarly identifies federal jurisdiction which may be conferred by the Parliament in terms of “matters”. In dismissing a submission that the High Court had original jurisdiction to give an advisory opinion as to the constitutional validity of certain provisions of a Commonwealth law, the High Court stated in In Re Judiciary and Navigation Acts: [40]

This approach was consistent with that of the Court in State of South Australia v State of Victoria, [41] a case involving a dispute as to the boundary between the two States. If there were a “matter” the jurisdiction of the High Court was conferred by s 75 of the Constitution. The question was whether the jurisdiction being invoked was “judicial and not political”, so as to be “justiciable under the Constitution.” [42] The Chief Justice, holding that there was a justiciable claim stated: [43]

Barton J agreed with the Chief Justice. O’Connor J stated: [44]

The question raised by these statements of principle, for present purposes, is whether every form of dispute which might fall within ss 75 and 76 of the Constitution, sought to be resolved by exercise of federal governmental power, must involve the exercise of federal judicial power. No authority supports that meaning; rather, in the language of Re Judiciary and Navigation Acts, “matter” is used to describe “the subject matter for determination in a legal proceeding”. That is, the statute conferring authority to resolve a class of disputes must intend that it be done in exercise of judicial power. It may be that some subject matters, such as criminal prosecutions or the exercise of the supervisory jurisdiction, can only be determined by the exercise of judicial power, but NCAT is given no such authority. Other disputes may be the subject of determinative resolution by non-curial means.

Were it otherwise, every dispute involving the government itself would require litigation in a Ch III court, because it would engage s 75(iii) or s 76(ii) of the Constitution. It would then be necessary to find some presently unidentified basis to justify the constitutional validity of all federal tribunals, including the Administrative Appeals Tribunal, the former Refugee Review, Migration Review and Social Security Appeals Tribunals. [45]

In Bushell v Repatriation Commission [46] Brennan J identified a distinction between proceedings before the Administrative Appeals Tribunal and those before a court on the basis that the former “may sometimes appear to be adversarial when the Commission chooses to appear to defend its decision or to test a claimant’s case but in substance the review is inquisitorial.” [47] The issue in Bushell was whether the applicant was entitled to a pension under the Veterans’ Entitlements Act 1986 (Cth). That depended upon the proper application of the statutory criterion of entitlement. That in turn required a determination of the facts and the application of the law to the facts. If the Tribunal erred with respect to the law its decision was subject to appeal to the Federal Court. [48] There is no doubt that a dispute as to such a statutory entitlement could readily be the subject of proceedings in a court. The very fact that the function of resolving such a dispute has been conferred on a tribunal may result in the function being classified as not an exercise of judicial power and therefore as not involving a “matter”.

As Mason J stated in The Queen v Hegarty; Ex parte City of Salisbury: [49]

The conventional view (that not every dispute capable of judicial resolution must engage federal judicial power) derives from a number of authorities, which must apply equally (or a fortiori) to State bodies.

In Abebe v Commonwealth of Australia [51] the question was whether the Commonwealth Parliament could validly confer jurisdiction on the Federal Court to exercise powers of judicial review in circumstances where the available grounds did not include all those which would be available at common law and under s 75(v) of the Constitution. After addressing the authorities discussed above, Gleeson CJ and McHugh J stated:

The last sentence in this passage accepts that, at least for rights, duties and liabilities derived from statute, the statute may prescribe the extent to which they are enforceable in a court. It is only to that extent that the mandate of ss 75 and 76 is engaged.

TNT Skypak, referred to in the footnote to the passage set out above from Abebe, was a judgment of Gummow J in the Federal Court sitting on a taxpayer’s appeal from the Administrative Appeals Tribunal, the proceedings in the Federal Court being restricted to an appeal “on a question of law”. [53] Gummow J stated: [54]

This passage was consistent with the reasoning of Gleeson CJ and McHugh J in Abebe; the reference to TNT Skypak by way of comparison arose from a further suggestion by Gummow J that in cases where jurisdiction was conferred by reference to subject matter, rather than statute, it might not be possible for the Parliament to confer jurisdiction with respect to only part of a matter, a view Gummow and Hayne JJ adopted in Abebe in dissent. Nevertheless, their joint reasons in Abebe affirmed the opinion expressed in TNT Skypak that resolution of factual disputes did not engage the judicial power of the Commonwealth, if not conferred on a court. Thus Gummow and Hayne JJ stated in Abebe:

Returning to the majority reasoning in Abebe, Gleeson CJ and McHugh J continued:

The other members of the majority in Abebe were Kirby J and Callinan J. Kirby J stated:

Callinan J stated:

These principles were recently reaffirmed by Kiefel, Keane, Nettle and Gordon JJ in Palmer v Ayres: [67]

It must follow that, where the relevant “matter” is defined by a State statute, the content of the “matter” will depend upon that statute. If a statute does not confer jurisdiction on a State court, there will be no “matter” arising under that statute and therefore no occasion to consider whether any particular paragraph of s 75 of the Constitution is engaged. As explained by Gummow and Hayne JJ in Abebe, the legal right which the parties to proceedings before NCAT may enforce in a court is to have NCAT act according to correct legal principle. Thus when an “appeal” is taken to the Supreme Court in a matter involving residents of different States, the Supreme Court will be exercising federal jurisdiction (actually original jurisdiction in terms of judicial power).

The rights, duties and liabilities in issue before the Tribunal arose under the Residential Tenancies Act. Provisions for termination of a residential tenancy agreement by a landlord are contained in Pt 5, Div 2 of that Act. Thus, pursuant to s 87, where there has been a failure to pay rent, a landlord may give a tenant a non-payment termination notice. [75] Recovery of possession of the premises by the landlord is governed by Pt 6 of the Act; it depends upon the Tribunal (NCAT) having made a termination order, for example pursuant to s 87(4) in the case of a breach by the tenant of a residential tenancy agreement. A term of a residential tenancy agreement is void to the extent that it purports to exclude, limit or modify the operation of the Act: s 219(1). Finally, the power to recover possession of premises otherwise than pursuant to the procedures established by the Act is precluded by s 119 which is in the following terms:

It therefore follows that there was no right, duty or liability established by the Residential Tenancies Act which was enforceable by a court, until NCAT had ruled on the landlord’s application. Accordingly there was no “matter” for the purposes of s 75 of the Constitution whilst the dispute was before NCAT. For this reason the constraint on the jurisdiction of NCAT for which the respondents in the Tribunal contended did not arise. [76]

A contrary conclusion as to the scope of a matter would require a finding as to what State court would have jurisdiction to grant a landlord’s application under an Act which denies jurisdiction to any State court. Further, if a State court were identified, it would be exercising federal jurisdiction, so that the applicable law would be State law picked up by s 79 of the Judiciary Act. However, that section applies as federal law those laws of a State “in all cases to which they are applicable.” In Solomons v District Court of New South Wales [77] Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ noted that there are “three relevant limitations in the text of s 79”, namely:

What s 77(iii) permits the Parliament to vest in a court of a State is federal jurisdiction. Federal diversity jurisdiction created by s 75(iv) depends upon there being a “matter” arising under State law. To the extent that State law creates rights not enforceable in a State court, there is no “matter” to engage s 75(iv). Section 75 assumes the existence of a class of such matters; it does not create it. If residential tenancy disputes are not resolved in a State court, the class of such matters from which the Constitution would extract the sub-class of disputes between residents of different States does not exist. Accordingly s 75 is not engaged.

There are a number of other factors which tend to support this approach to the constitutional requirements of Ch III. First, it is desirable to construe the terms of ss 75 and 76 of the Constitution so as to avoid a possible conflict with s 117, which states:

It is by no means clear how a landlord resident in Queensland (not being a corporation) could enforce his or her rights under a residential tenancy agreement with respect to premises in New South Wales, if precluded from engaging the powers of NCAT. An out-of-state landlord would then clearly be under a disability and subject to discrimination, as compared with a resident of New South Wales in such circumstances.

Although the underlying purpose of the diversity jurisdiction component of s 75(iv) is unclear, it has never been suggested that a purpose was to impose a disability or discrimination on a resident of another State. As noted in Cowen and Zines, referring to United States experience, “[t]he traditional explanation of diversity jurisdiction emphasises the necessity for protection of out-of-State litigants against local prejudice in State courts.” [78] If that were so, one might expect the establishment of a national court system independent of State courts, and the conferral of a choice on the out-of-State litigant as to which system to engage. The fact that in 1903 federal jurisdiction was vested in State courts, as envisaged by s 77(iii) of the Constitution, denies the first possibility; the creation of federal jurisdiction without choice denies the second. In any event, Cowen and Zines further notes: [79]

Arguably, there is no constitutional principle or underlying policy which conflicts with the reasoning set out above. Indeed, the absence of a clear rationale for the diversity jurisdiction provision in s 75 supports a constrained approach to its operation, not only to avoid creating a potential conflict with the non-discrimination requirement of s 117, though one might think that an important factor.

Secondly, the approach set out above is supported by principles governing statutory interpretation identified by the majority in Abebe. Thus, Gleeson CJ and McHugh J stated:

Kirby J, also in the majority, adopted the following approach to the question of constitutional interpretation:

Thirdly, it would appear to be inconsistent with the reasoning of all members of the Court in Abebe who addressed the issue [87] to conclude that all disputes involving legal rights must be determined, even under federal statutes, by a court. That is, no such requirement is to be found in the use in s 75 of the term “matter”. In accordance with principles enunciated in Kirk v Industrial Court, it may well be that a State law which purported to exclude judicial review of a decision of the Tribunal, in the absence of any appeal on a question of law, would, to that extent, be invalid. There is no such provision in the Civil and Administrative Tribunal Act, nor in the Residential Tenancies Act. Nor was any challenge brought to the constitutional validity of any provision of either Act. Indeed, there is provision for an appeal on a question of law from NCAT to the Supreme Court, [88] being the basis of one set of the proceedings now before this Court. When the jurisdiction of this Court is engaged by way of an appeal, or proceedings in the supervisory jurisdiction, this Court will be, and is now, exercising federal jurisdiction.

In short, the constitutional form of the rule of law in Australia requires that there be an independent and impartial court available to ensure that all other arms of government adhere to the law. It does not require that fact-finding be undertaken only by a court, nor that only a court can make binding orders.

There are three objections which may be raised to determining the cases on the basis that they involved no “matter”. The first is that the issues were not presented by the parties in this way; there were no submissions addressed to the scope of the term “matter” in s 75. Although the Attorney originally challenged NCAT’s conclusion that it was exercising judicial power, that challenge was not on the basis set out above, and was later abandoned. This objection is capable of being addressed by allowing the parties a further opportunity to be heard, or by simply refusing to answer the questions as formulated.

Secondly, the notice given under s 78B of the Judiciary Act was limited to the question whether NCAT is a “court of a State” for the purposes of Ch III of the Constitution. This objection would prevent reliance on the discussion of the scope of the term “matter” without an adjournment, the service of further notices and a further hearing. It would also prevent the Court relying on this reasoning to refuse to answer the questions as formulated.

The third objection, if valid, would preclude reliance on this reasoning, without the opportunity of avoidance by further procedural steps. That objection is that the High Court has already considered the issue and reached a contrary conclusion. This objection finds its source in the recent decision of the High Court with respect to the jurisdiction of NCAT in Burns v Corbett. [89] That case involved complaints made by Mr Burns to the Anti-Discrimination Board (NSW), alleging that statements made by the respondents, Ms Corbett and Mr Gaynor, contravened the homosexual vilification prohibition in the Anti-Discrimination Act 1977 (NSW). The complainant was a resident of New South Wales; the respondents were resident in Victoria and Queensland respectively. The issues, and their resolution, were summarised in the joint reasons of Kiefel CJ, Bell and Keane JJ in the following way:

Importantly, however, the joint reasons also noted which factors were “common ground” and the nature of the specific issue in dispute:

The first element of “common ground” was the specific issue discussed above: accordingly, not being in issue, it cannot have been determined by that case. There is, however, a question as to whether the reasoning of the Court implicitly accepted that assumption, or whether other passages merely reflected the assumption without investigating it. For example, the joint reasons noted:

What followed was a discussion of cases which denied the power of a State law to detract from the High Court’s functions under Ch III. Nothing relied upon above would challenge that reasoning.

Gageler J provided, by way of background, an indication of the meaning of terms used in ss 77 and 73(ii) of the Constitution. He stated:

Fencott was also referred to by Gleeson CJ and McHugh J in Abebe, but was not considered to cast doubt on the reasoning adopted in that case. [94] Blakeley concerned the scope of federal jurisdiction invested in the Supreme Court of Victoria: the joint reasons in that case noted that “[t]he constitutional requirements for the existence of a matter were not in issue in this appeal.” [95]

I do not understand Gageler J’s reference in Burns v Corbett to “a controversy about legal rights” as meaning that no such controversy can be resolved independently of the exercise of judicial power, unless it is intended to refer only to controversies as to the law. Even the minority in Abebe accepted that Parliament could provide for factual controversies to be resolved finally by a body other than a court. That is, resolution of a factual dispute need not involve an exercise of federal judicial power.

Of the majority in Burns upholding the implied limitation approach, Kiefel CJ, Bell and Keane JJ held that any State law that purports to confer “jurisdiction with respect to any of the matters listed in ss 75 and 76 of the Constitution on a tribunal that is not one of the courts of the States is inconsistent with Ch III of the Constitution, and is, therefore, invalid.” [96] The joint reasons also addressed the fact that s 77(ii) of the Constitution empowers the Parliament to define the extent to which “the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States”, but confers no power on the Parliament to make laws with respect to any authority vested in a tribunal of a State. The joint reasons noted a submission by the Commonwealth Attorney, “that it is not to be supposed that the scheme for the adjudication of matters listed in ss 75 and 76 of the Constitution by the Federal Judicature established under Ch III might be subverted by a conferral by State law of adjudicative authority in respect of such matters on an administrative body of the State.” [97] The Attorney argued that “s 77(ii) itself assumes that, if adjudicative authority is to be exercised by any State body in respect of any matter listed in s 75 or s 76, that body must be a State court.”

That submission was accepted by the plurality. [98] On the other hand, the language of s 77, limited as it is to “court” and “courts” reflects the language of the chapeau, referring to “any of the matters” mentioned in ss 75 and 76. That language addresses disputes which are to be determined, according to State (or federal) law by exercise of judicial power. The finding does not reflect any implicit adoption of the correctness of the common assumption.

The other member of the Court who relied on the implied limitation approach was Gageler J, who stated:

The reasoning of those members of the Court was consistent with the common assumption that the disputes before the Tribunal in fact fell within the scope of s 75(iv). The other members of the Court, each writing separately, did not accept that such a constraint on State legislative power arose by implication from Ch III of the Constitution. Rather, such a constraint arose as a result of the enactment of ss 38 and 39 of the Judiciary Act, which, by operation of s 109, invalidated any conferral by a State Parliament of “State diversity jurisdiction” upon a body other than a State court. [100]

It was not doubted in the present cases that it was open to the parties to agitate the second assumption in Burns, namely that NCAT is not a “court of a State”. I see no reason why it is not open for this Court to address the first assumption, namely that the disputes were “matters between residents of different States, within the meaning of s 75(iv) of the Constitution.”

The first assumption was not merely implicit in the reasoning, it was essential to it, especially for the judges who accepted a constitutional implication based upon the terms of Ch III. All members of the Court relied upon the power under s 77 for the Parliament to define the jurisdiction of a federal court with regard to that invested in courts of the States (s 77(ii)) and the power to invest any court of a State with federal jurisdiction (s 77(iii)). These powers can only be exercised with respect to the “matters” referred to in ss 75 and 76. The absence of any discussion of what constitutes a “matter”, subject to passing reference by Gageler J, as dealt with earlier in these reasons, demonstrates that the Court was simply not concerned with those issues, as indeed they did not need to be, given the common assumption. Had they been, there would undoubtedly have been reference to the principles recently articulated in Palmer v Ayres, set out at [245] above.

For these reasons, in my view it would be open to this Court to address the scope of the “matters” upon which these cases turn, if the necessary procedural steps were taken.

In my view those steps should be taken. While it is important to dispose of individual cases on the issues raised by the parties, the consequences of reaching a conclusion that NCAT lacks jurisdiction in a particular matter may have far reaching consequences, both for other cases and other State tribunals. Such tribunals deal with an extraordinary range of disputes including consumer claims, licensing decisions, disciplinary matters, administrative decisions by government officers, building disputes, retirement village disputes, guardianship matters and retail shop lease disputes. NCAT has jurisdiction conferred on it (otherwise than under the Civil and Administrative Tribunal Act) by some 146 State statutes. It disposes of about 67,000 applications a year. [101] The Appeal Panel stated that “[h]undreds of Tribunal matters each year are between parties who are individuals resident in different States.” [102]

Similar figures will apply to other State tribunals, such as VCAT and QCAT. Although a relatively small number of applications may involve one individual party from another State, the issues at stake are undoubtedly large and of great public importance. They should not be resolved in a way which disrupts the orderly disposal of such disputes without addressing what is arguably a critical issue.

As that is a minority view, I would make the orders proposed by the Chief Justice with respect to the appeal, for the reasons set out above under the heading “Is NCAT a State court?”

The summons seeking judicial review was otiose and should be dismissed, with no order as to costs.

LEEMING JA: I have had the considerable advantage of reading the judgments of Bathurst CJ and Basten JA in draft. I agree with Bathurst CJ, for the reasons his Honour gives, that NCAT was exercising judicial power in the Gatsby proceeding. I further agree with the conclusion which Bathurst CJ and Basten JA have each reached, namely, that NCAT was not a “court of a State” for the purposes of s 77(iii) of the Constitution. My reasons may be stated concisely, as also may my reasons as to this Court’s jurisdiction. Those reasons do not repeat the legislative provisions, factual and procedural background or parties’ submissions unnecessarily.

The threshold question is this Court’s jurisdiction. That there is even an issue as to jurisdiction reflects what I respectfully regard as a flawed procedure employed by NCAT.

In the course of performing its duty of determining the internal appeals, NCAT was obliged to consider the extent of its own jurisdiction. In order to do so, NCAT identified two questions in two pending internal appeals for separate hearing: whether there had been the exercise of judicial power, and whether it was a “court of a State” within the meaning of s 77(iii). But if the answer to the second question was that NCAT was not a “court of a State”, then that question was not one which could be determined by NCAT, because it involved the determination of a matter in federal jurisdiction arising under the Constitution. Only a superior court can pronounce authoritatively on the limits of its own jurisdiction. At best, all that NCAT could do was to form and express an opinion, in accordance with what Brennan J had said, sitting as President of the Administrative Appeals Tribunal, in Re Adams and the Tax Agents’ Board (1976) 12 ALR 239 at 242:

The fact that a legally binding answer to one of the questions could only be given by NCAT if it were answered in one way, and not the other, suggests that a procedurally flawed course was taken. At the practical level, it was also on the cards that in the event that NCAT determined, contrary to the Attorney General’s submission, that it was a court, the matter would go further (as had occurred when the Administrative Decisions Tribunal had, wrongly, determined that it was a court in Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185). That said, I am also conscious that, in accordance with what was held in Sunol v Collier (2012) 81 NSWLR 619; [2012] NSWCA 14, NCAT was unable to avail itself of the course of referring a question of law to the Supreme Court pursuant to s 54 of the NCAT Act, and that the course taken by NCAT gave this Court the benefit of its considered reasons on the question. But the most straightforward approach would have been, as the contradictor submitted in this Court, for an application for a declaration and an order in the nature of prohibition to have been made in this Court’s supervisory jurisdiction pursuant to s 69 of the Supreme Court Act 1970 (NSW).

The procedure adopted by NCAT matters because an issue now arises as to this Court’s jurisdiction. The answers to the questions posed by it were formally embodied in what were styled as two “orders”. The contradictor submitted that no appeal lay from the orders made by the Appeal Panel embodying its answers:

I do not accept the submission. First, it matters not whether NCAT was exercising any “express” power. It has long been established that a court is able in its inherent jurisdiction to hear and determine a case in separate phases, aside from the separate question procedure authorised by modern rules of court: see Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 427 and O’Connor v State of New South Wales [2017] NSWCA 335 at [17], both referring to the fact that the English Supreme Court Practice has long contained the following note: “Apart from these rules, the trial judge has inherent jurisdiction to try any separate issue or question before the others”. I see no reason why the Appeal Panel of NCAT could not take the same course, irrespective of its status as court or tribunal. The power conferred upon the Tribunal by s 38(1) of the Act to determine its own procedure for which no provision is otherwise made, to be exercised in accordance with the obligation to give effect to the guiding principle of facilitating the just, quick, and cheap resolution of the real issues in the proceedings (see s 36(1) of the Act) sufficed to empower the Appeal Panel to act as it did. In my view whether that is “express” or otherwise is beside the point.

Secondly, the Appeal Panel was doing more than “signalling” its future determination of the proceedings. Rather than merely expressing its reasons and conclusions, the Appeal Panel made orders answering questions, which conveyed a concluded determination on the questions it had identified. It does not matter that the “orders” were not such as to give rise to a directly enforceable obligation. What matters is that they formally recorded a concluded determination on two legal issues.

Thirdly, the right of appeal conferred by s 83 of the NCAT Act is, like all appeals, a creature of statute. One aspect of that principle is that the metes and bounds of the appeal are determined by statute. The difficulty that arises in some cases from appeals being expressed to lie only from judgments or orders has been avoided by s 83, which extends to appeals on a question of law “against any decision made by the Tribunal in the proceedings”. The right of appeal conferred by s 83 is narrow insofar as it is confined to a question of law and qualified by the requirement of leave. However, it is broad insofar as it extends to “any decision”, rather than, as is common, “any judgment or order”.

Fourthly, I see no reason why the broader language of “decision”, reinforced by the word “any”, does not extend to the answers to separate questions embodied in the Appeal Panel’s orders. Those orders were the Appeal Panel’s “decision” on the issues identified for separate determination. There is nothing in the Act to detract from the words “any decision” being given a broad meaning. Indeed, there is a very wide definition given to “decision” in s 5 (although it may be that that applies only to decisions which are the subject of review by NCAT, rather than the s 83 decision of NCAT; it is not necessary to determine whether that is so). For present purposes it suffices to say that nothing in s 5 or elsewhere in the Act cuts down the meaning of “any decision”, and there is no reason to read that broad language narrowly, so as not to extend to the answer to a question.

Fifthly, contrary to a further submission made by the contradictor to the effect that “at least ordinarily a decision on a separate question is subject to appeal either by virtue of a specific provision ... or on the basis that the decision is embodied in an order”, nothing turns upon the absence of a separate grant of a right of appeal from an answer to a question (such as in s 103 of the Supreme Court Act 1970 (NSW)) when once it is borne in mind that the right of appeal granted by s 83 is broader and extends to any decision.

It follows that this Court has jurisdiction to hear and determine the Attorney’s appeals.

There may be cases at the margins when an elaborate analysis is called for in order to determine whether a body is a “court of a State” for the purposes of s 77(iii) of the Constitution. I do not regard the present case as other than clear. That is a consequence of the history of the legislation constituting NCAT.

First, it had been established by Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77; [2006] NSWCA 185 that the Administrative Decisions Tribunal was not a court for the purposes of s 77(iii). Skiwing was applied in that respect in Sunol v Collier. I am unaware of the proposition that the Administrative Decisions Tribunal was not a court for the purposes of s 77(iii) ever thereafter being doubted.

NCAT is the successor to the Administrative Decisions Tribunal (although it is also the successor to a number of other tribunals), in the sense that NCAT has succeeded to its jurisdiction, each former presidential or other member became a member of NCAT (NCAT Act, Schedule 1, cl 5) and part heard and pending proceedings in the Administrative Decisions Tribunal were deemed to be part heard and pending proceedings in NCAT (NCAT Act, Schedule 1, cll 7 and 8). Yet there is nothing in the NCAT Act which suggests that NCAT, or the Appeal Panel of NCAT, was to be, unlike its predecessor, a court of a State for the purposes of s 77(iii). The limited power to punish for contempt in s 73 of the NCAT Act does not materially detract from the bulk of provisions, to which the Chief Justice has referred, which point to it being a tribunal. To those I would add subs 54(4) which prevents NCAT from proceeding in a manner or making a decision which is inconsistent with the opinion of the Supreme Court on a question of law referred to it. If NCAT were a court, it would be within the curial hierarchy of NSW and would therefore be bound as a matter of precedent to proceed consistently with the determination of the Supreme Court. Section 54(4) is thus entirely otiose unless NCAT is not a court. The subsection would appear to be directed to the issues which can arise in determining whether a tribunal is bound (see for example Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1 at 11-12; [1987] HCA 19). No answer was made by the contradictor to that point, which was raised in oral submissions and adopted by the Commonwealth Attorney-General, who observed that subs 54(4) “is a very odd provision if the tribunal is a court.”

Secondly, and to my mind dispositively, new Part 3A was inserted into the NCAT Act by the Justice Legislation Amendment Act (No 2) 2017 (NSW), commencing on 1 December 2017, following this Court’s decision in Burns v Corbett (2017) 96 NSWLR 247; [2017] NSWCA 3. The new Part is titled “Diversity proceedings”.

New s 34A defined “authorised court” to mean the District Court or the Local Court – two bodies which are unquestionably courts for the purposes of s 77(iii) and which are authorised, subject to their jurisdictional limitations, to decide matters in federal jurisdiction.

New s 34B empowers a person with standing to make an original application or external appeal, with the leave of an authorised court, to make the application or appeal to the court instead of the Tribunal. Section 34B(2) provides that:

New s 34D provided that the provisions of Part 3A prevailed to the extent of any inconsistency between those provisions and any other provisions of this Act or other legislation.

The purpose of Part 3A is plain. The former exclusive authority of NCAT to determine classes of disputes is now qualified, insofar as those disputes are matters in federal diversity jurisdiction. To that extent, new provisions permit parties to make application to a court which unquestionably does have jurisdiction to hear and determine those disputes.

The contradictor accepted that the entirety of that new Part would have no operation if, as NCAT held, it was a court. That concession was properly made.

To my mind, the 2017 amending legislation constitutes the clearest legislative statement that NCAT is not a court for the purposes of s 77(iii). The legislation was addressed directly to the precise point in issue – whether NCAT was a court for the purposes of s77(iii). The premise of the legislation is that NCAT lacks authority to determine “diversity proceedings”, which is to say, it is not a court for the purposes of s 77(iii).

The Appeal Panel mentioned the legislation at [39]-[41], but only briefly, because neither the Attorney nor the contradictor had relied upon it. (Of course, when the matter was heard, the legislation had not commenced, and might never commence, although the bill had been enacted.) The Appeal Panel reasoned as follows:

I disagree with that reasoning. First, the need for Part 3A did not turn on what was established by Burns v Corbett. The Appeal Panel, with respect correctly, considered that Burns v Corbett did not establish a proposition which was common ground between the parties. But the need for Part 3A turns not on what this Court’s decision established (as opposed to what had been common ground), but on whether disputes between residents of different States which might be commenced in NCAT could be determined by NCAT. That is directly relevant to whether NCAT is a “court of a State”, rather than whether Burns v Corbett established that NCAT was a “court of a State”. As the State Attorney rightly submitted:

Secondly, it is not the case that new Part 3A does not relate to the “nature, functions or processes” of the Tribunal. It creates a new dispensation whereby applications which otherwise would be within the exclusive jurisdiction of NCAT may be made, with leave, to an authorised court. To that extent, it detracts from NCAT being the only forum where certain classes of disputes can be determined.

Thirdly, as will be elaborated below, the proposition that the amending legislation does not relate to “the extent to which NCAT meets the requirements for a Ch III court” discloses what I regard as the key error in the reasoning process of the Appeal Panel.

Fourthly, the Appeal Panel’s reasoning puts to one side the powerful effect that legislation may have upon courts’ freedom to alter the law. The most recent example of this may be seen in a decision of the High Court delivered (coincidentally) on the same day as its own decision. In Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; 92 ALJR 248 at [52], the High Court referred to two pieces of legislation which did not directly bear upon the construction of the Security of Payments Act as held in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394. The High Court said that “it would have been a strong thing for [the Court of Appeal], as indeed it would be for this Court to have taken any other course” than following Brodyn. They added that the failure to legislate so as to alter the effect of Brodyn was “a powerful reason for rejecting any suggestion that the understanding of the legislation adopted in Brodyn, and given effect in the decision of the Court of Appeal in this case, was other than a faithful reflection of the intention of the legislature.”

True it is that these appeals do not formally involve the question whether Skiwing and Sunol were wrongly decided. These appeals concern NCAT, the successor body. However, the principle in Probuild continues to apply. Plainly the Legislature proceeded on the basis that NCAT, like its predecessor the Administrative Decisions Tribunal, was not a court for the purposes of s 77(iii). This Court should not now alter the course of authority in Skiwing and Sunol upon which the Legislature has now enacted.

I return to the third point mentioned above, to explain why in my respectful view the Appeal Division fell into error. The jurisprudence relating to independence and impartiality was largely formulated by challenges to State legislation conferring incompatible functions upon bodies which otherwise were unquestionably courts of a State in which federal jurisdiction otherwise might be invested. The question in the present case is quite different. As Mr Donaghue QC for the Commonwealth Attorney-General submitted, the State has a legislative choice to create an independent, procedurally fair and impartial Tribunal to exercise judicial power, or to create a court to do the same thing. The substantial error in the reasons of NCAT was to rely upon indicia which, in a polity which lacks a strong notion of separation of powers, fall well short of being dispositive of whether the body is a court or a Tribunal.

For those reasons, I would allow each appeal, set aside the answer to question 1(b) in each proceeding and instead answer that question “No”. I agree with the Chief Justice that declaratory relief should issue and that in the absence of argument and notices under s 78B of the Judiciary Act it is inappropriate to address whether there was a “matter” before NCAT. I agree with the orders proposed by the Chief Justice.