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3 December, 2009  
Kable barks at ex parte

IFTC v NSW Crime Commission ... High Court’s thinking on ex parte procedures … When ex parte proceedings are converted to proceedings on notice duty of full disclosure evaporates … Why should that be so?

imageAccording to the Australian Law Reform Commission the High Court, in the Kable case, said:

”[A]ny state law that grants a state court functions that are incompatible with the exercise of the judicial power of the Commonwealth is invalid.”

The Constitution does not define how judicial power ought to be exercised.

There is no guidance on whether the judicial power calls for “lawyer run” non-truth seeking adversarial procedures, or “judge run” truth seeking inquisitorial procedures.

According to the ALRC:

“A dual system operates in Australia of courts, emphasising more traditional adversarial proceedings, and tribunals, which provide a mix of adversarial and inquisitorial procedures.”

The Criminal Assets Recovery Act 1990 NSW establishes regimes for the “freezing” and confiscation of the property of criminals.

imageOn November 12, in the International Finance Trust Company case, a 4:3 majority of the justices of the High Court, which included Chief Justice French (pic), invoked the Kable principle, and accepted the argument that s.10 of the CAR Act “was designed to engage the Supreme Court in activity which is repugnant to the judicial process in a fundamental degree”.

They said s.10 was unconstitutional.

The other three justices asked themselves:

“Do the statute’s requirements … require the Supreme Court to engage in activity repugnant to the judicial process to such a degree that the statute is beyond the legislative power of the State? ... These reasons will demonstrate that this question should be answered ‘no’.”

It can be argued that judges are not well qualified to decide “constitutional” questions.

Robert J. Spitzer is Distinguished Service Professor of Political Science at SUNY Cortland. His most recent book is Saving the Constitution from Lawyers: How Legal Training and Law Reviews Distort Constitutional Meaning. He says:

“We tend to think that lawyers, by virtue of possessing a law degree (including maybe a course or two in constitutional law along the way), are qualified as experts who can tell us what the Constitution means. But not so fast. For there are two profound problems … The first is their training, and the second is the outlet for legal writing – law reviews. Unlike every other academic discipline, lawyers are trained for advocacy, not objective examination. Their foremost obligation is to their client, not the truth.”

Nor are they particularly respectful of the wider public good.

A non-lawyer who read the CAR Act looking for stuff that is “incompatible with the exercise of the judicial power” might well gag on the bit that says judges can dish out to the lawyers acting for the criminals a generous slice of the criminally acquired property – s.10(5).

Of course, the section says “reasonable legal expenses”, but that isn’t much of a constraint. What about the victims? Why should the criminals’ lawyers rank ahead of them?

The IFTC case revolved around desirable procedures for ex parte applications to a court.

Ex parte applications are ones where the “other side” is not informed that there is going to be a court decision until after the decision has been made.

There is nothing wrong with that procedure because sometimes if the “defendant” is tipped off there is a risk that assets will get hidden before the court can freeze them.

A non-lawyer who started wondering how the judicial function is exercised in ex parte applications (compared to situations where the other side is informed in advance and is present at the hearing) would be struck by the judicially sanctioned difference of approach.

In an ex parte application the lawyer (obviously there is only one side present) must behave ethically and honourably.

This is well established by case law and professional rules. For example rule 24 of the New South Wales Barristers’ Rules says:

“A barrister … in an ex parte application must disclose to the court all matters which … are within the barrister’s knowledge … [and all matters that] ... the barrister has reasonable grounds to believe would support an argument against granting the relief or limiting its terms adversely to the client.”

The barrister must tell the court all the bad stuff as well as all the good stuff – in other words the whole truth. Under rule 24A effectively the court must also be told if the client refuses to waive privilege.

In the IFTC case the majority’s main complaint was that judges had no power to order that the “other side” be informed of the ex parte proceedings, before they were heard.

The New South Wales Parliament immediately fixed that (if it needed fixing). The Sydney Morning Herald reported on November 26:

“The NSW Crime Commission will still be able to freeze the assets of suspected criminals without notifying them first, but a Supreme Court judge will be able to order that the owner of the assets be notified ‘if it thinks fit’.”

Once ex parte proceedings are converted to proceedings on notice, rule 24 doesn’t apply any more.

In other words, lawyers can start acting adversarially and not disclose unfavourable evidence or weak points about their case.

A judge who orders that ex parte proceedings be converted into proceedings on notice is effectively switching from a regime where one lawyer has to tell the judge everything he or she knows, to a regime where both sides are probably each hiding stuff from the court and at least one of them is trying to mislead it.

How good a way to exercise judicial power is that?


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