James Farmer

Legal Commentary

The High Court in Review

Monday, October 08, 2012

As I will return to at the end of this column, there is a quiet revolution going on in the administration of the High Court.  Problem areas are being acknowledged and addressed.  In particular, there are far fewer delays in obtaining fixtures.  Indeed, the delays that do occur are more attributable to gaming by lawyers – a phenomenon that will never be eliminated – than to court management.

To me, the major problem that remains is the over-written nature of litigation.  This is a familiar topic – it encompasses written briefs (I have just read a brief of evidence that is over 800 paragraphs), the requirement to file and serve written submissions in advance of hearings (including interlocutory hearings) and memoranda in respect of Judicial conferences.  The formal nature required of memoranda also adds unnecessarily to expense.  In all other respects, the world expresses itself by email.  Why not memoranda to and from the Court?

One other tiny grumble.  Some Judges are directing lawyers in multi-party cases to form a consensus and file a joint memorandum.  From the Judge’s point of view, this appears efficient but the reality is that an enormous amount of time and cost is usually spent in trying to achieve a consensus.  The joint memorandum may not express it.   My experience is that where counsel can readily find consensus they will do so of their own accord in the interests of expediency.

The issue of specialisation in the High Court has continued to be debated (as it should) but of late has taken a rather sour turn.  The National Business Review reported (on-line) an unfortunately immoderate interview with Tony Molloy QC, who is best known as a tax and trusts barrister and for his book published several years ago “Thirty Pieces of Silver”, which was an equally immoderate attack on Russell McVeagh and its involvement in advising on tax schemes[1].

The issue of specialisation and in particular whether commercial cases should be heard only by High Court Judges with a background in and experience of commercial cases remains with the Law Commission but my understanding is that it has also been the subject of internal discussion and debate within the Judiciary.  The Law Commission favours a panel of High Court Judges from whom Judges would be selected to hear particular commercial cases.

I have myself previously advocated a Commercial Court (so-named) which would be similar to the existing Commercial List, except for a major change (which many have argued should have been there from the inception of the List) – namely, that cases in the List would be tried by a Commercial List Judge rather than the case going back into the general list once interlocutories are completed with the possibility of any Judge of the High Court being allocated for the trial.

My stated reason for preferring a Commercial Court has in essence been a marketing one.  The High Court should, in my view, be sending a clear message to the commercial community that there is an absolute guarantee that commercial cases will be heard by Judges who are best qualified to hear them.   The situation exists where those who are offering their services as arbitrators (which, as a body, includes a number of retired High Court Judges) have been fairly successfully marketing themselves as commercial law specialists.  That is a claim that they can justifiably make but there are also several sitting High Court Judges who have come from a commercial law background. 

Molloy has put a lot of emphasis on a case in which, he says, a High Court Judge being required to apply the law of trusts had no knowledge of that body of law and where consequently, he says, the outcome was patently wrong.  Not knowing what case he is referring to makes it rather difficult to assess whether that is a legitimate complaint.  However, what his comment does raise is the question of how specialised we can, practically speaking, make the High Court.

Many areas of commercial law hardly require great expertise.  Every High Court Judge would, for example, have had exposure in their legal practices to contracts (commercial or otherwise) and the legal rules around the interpretation of contracts (once again, commercial or otherwise) are not that much of a mystery, notwithstanding that the Supreme Court felt the need to give leave in the Vector case to restate them.  

I would suggest also that (Molloy’s view notwithstanding) all High Court Judges would have had more than a passing acquaintance with trust law and that once again the need for a specialist Equity Division in a small country can be overstated.  From my experience for 10 years at the Sydney Bar, I agree that the Equity Division of the Supreme Court of New South Wales works very well but the bulk of its work is probably company law rather than the pure law of trusts.  Indeed, there were many cases of a “commercial equity” nature that could just have legitimately be filed in the Commercial List (part of the Common Law Division) or the Equity Division or, for that matter where a Commonwealth Statute could be brought in as one cause of statute, the Federal Court (relying on that court’s ancillary jurisdiction to give it power to apply the rules of common law or equity).

One often hears specialist lawyers – say in the area of intellectual property – advocating for specialist IP Judges in the High Court.  Similar claims are made by competition and regulatory lawyers (of whom I am one).  As contrasted with contract law, the law of trusts, company law and other general areas of commercial law, I agree that these are highly technical areas of the law that also require more than a passing acquaintance with other disciplines such as economics.  It is for that reason that the Commerce Act has provision for lay members with appropriate qualifications and experience in those other disciplines to be appointed to sit with a High Court Judge hearing an appeal from say the Commerce Commission or a case in which a breach of the Commerce Act is alleged.

Recently, I have been appearing as counsel in the input methodologies appeals that are being heard in the High Court.  This series of appeals involve very complex regulatory issues relating to the pricing of major natural monopolies such as energy companies and airports, the outcome of which will have significant effects throughout the whole economy and impacts on prices paid by consumers.  The appeals are being heard by a High Court Judge with a strong commercial background and assisted by 2 economists who currently also sit on the Australian Competition Tribunal.  That Tribunal hears regulatory and competition appeals from the ACCC, the equivalent of the Commerce Commission.

It does seem to me that, given the importance of regulatory and competition law to the economy, there is a very good case that can be made for ending the debate around specialisation in the High Court in that area by establishing a similar specialist appeal tribunal in New Zealand.  The Australian Tribunal does though have a small number of Federal Court Judges who are nominated as presidents of the Tribunal and who are therefore available as needed to hear appeals, at other times carrying on their normal Federal Court duties.  For myself I would like to see that in New Zealand.  A similar case could also be made for an IP appeal tribunal to deal with appeals from regulatory decisions under trade marks or patent legislation.  These appeal tribunals would operate outside the High Court, though (as just said) using specialist High Court Judges as required.

Because there would still be cases of breach, that are not in the nature of appeals, there is still however a need for the High Court to have an originating jurisdiction to hear such cases.  That is where the need for a Commercial Court (or equivalent) remains.  But what I am suggesting is that there is no need for every case that is a dispute that has arisen in a commercial context to go into that list and we should give credit to all of our High Court Judges as being more than competent  and experienced enough to deal with contract and trust cases except where they have some very special and unusual dimension to them where the need for special expertise can be demonstrated.

To finish then on a positive note.   Things are definitely on the way up in the High Court.  There have been a lot of new appointments of young(ish) Judges in the last few years and that brings with it a fresh approach and enthusiasm.  The Court management and administration also seems, at least where I see it, to be constructively helpful and willing to make the system more efficient.  Credit should be given where it is deserved.

7 October 2012


[1] As my CV shows, I was myself a partner at Russell McVeagh but before the period analysed by Molloy in his book.

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