CPB Contractors Pty Limited v Celsus Pty Limited (formerly known as SA Health Partnership Nominees Pty Ltd) (No 2) [2018] FCA 2112 (6 December 2018)

FEDERAL COURT OF AUSTRALIA

CPB CONTRACTORS PTY LIMITED
(First Applicant)

HANSEN YUNCKEN PTY LIMITED
(Second Applicant)

V

CELSUS PTY LIMITED (FORMERLY KNOWN AS SA HEALTH PARTNERSHIP NOMINEES PTY LTD) AS A BODY CORPORATE AND AS TRUSTEE OF THE CELSUS TRUST (FORMERLY KNOWN AS THE SA HEALTH PARTNERSHIP TRUST)
(First Respondent)

THE MINISTER FOR HEALTH OF SOUTH AUSTRALIA
(Second Respondent)

STATE OF SOUTH AUSTRALIA
(Third Respondent)

JUDGE: Lee J
FILE NO: NSD 1312 of 2017
DATE OF HEARING: 5 & 6 December 2018
DATE OF JUDGMENT: 6 December 2018
REGISTRY: NSW
CATCHWORDS: ARBITRATION – application to vacate temporary stays granted in support of a mandatory stay pursuant to s 8 of the Commercial Arbitration Act 2010 (NSW) – where applicant seeks all issues to be determined by an existing arbitrator appointed as a referee to inquire into and report upon non-arbitral issues
PRACTICE AND PROCEDURE – where non-arbitral matters are ancillary to matters the subject of the mandatory stay – whether appointment of a referee is consistent with the facilitation of the overarching purpose and appropriate in circumstances of legally complex allegations made of serious wrongdoing against the Crown – application for lifting of temporary stays and appointment of referee dismissed
CONSTITUTIONAL LAW (CTH) – Judicial power of Commonwealth – Constitution, Ch III – whether a referee appointed under s 54A of the Federal Court of Australia Act 1976 (Cth) would be impermissibly exercising the judicial power of the Commonwealth – whether the Court in adopting or otherwise acting upon the report would be exercising judicial power or acting inconsistently with its status as a repository of federal jurisdiction

 

THE COURT ORDERS THAT:

1. The interlocutory application be dismissed.
2. The second, third and fourth respondents pay any costs associated with the constitutional issues agitated on the interlocutory application. The balance of the costs of the interlocutory application, being the costs relating to discretionary matters, be paid by the applicants.
3. Any application for leave to appeal be extended to the later of:

(i) 14 days after publication of revised reasons for judgment; or
(ii) 7 February 2019.

REASONS FOR JUDGMENT
Revised from the transcript

LEE J:

A THE STORY SO FAR

1. There is something about the Advent season which apparently stirs these parties to have an argument about the mode or means by which parts of the controversy concerning the building of the Royal Adelaide Hospital ought to be quelled.
2. In CPB Contractors Pty Limited v Celsus Pty Limited (formerly known as SA Health Partnership Nominees Pty Ltd) [2017] FCA 1620; (2017) 353 ALR 84 (judgment), I set out, in very considerable detail, the issues that arose in relation to delays and defects in the construction of the Royal Adelaide Hospital and the arbitral proceedings that had been commenced. The judgment arose against the background of interlocutory applications filed by the first respondent, the special purpose corporation created for the project (Project Co), the second and third respondents, being the Minister for Health of South Australia and the State of South Australia (collectively, the State) and the fourth respondent, being the independent certifier for the project (IC), seeking a stay of the totality of claims made by the applicants (Builders) pursuant to s 8 of the Commercial Arbitration Act 2010 (NSW) or otherwise on a discretionary basis.
3. There is no need to repeat the history of the disputation on the arbitration up to the date of my previous orders which is set out in detail in the judgment, particularly at Sections A and B.
4. The present application filed by the Builders seeks orders which would have the effect of vacating the temporary stays granted in December 2017 of the claims made by the Builders against the State and the IC (as currently outlined in the Builders’ originating application and amended statement of case (ASOC)) and appointing the Hon Kevin Lindgren AM QC as a referee to: (a) hold an inquiry into the claims against the State and the IC in conjunction with the arbitrations currently before Dr Lindgren; and (b) provide a report to the Court in relation to those claims.
5. The interlocutory application is opposed by the State and the IC who assert: first, that there is a want of power to grant the relief sought; and secondly, even if there is power, a range of discretionary factors require the course proposed by the Builders to be rejected.
6. The initial question of power is one of some importance which transcends the interests of the parties. On 20 November 2018, a notice pursuant to s 78B of the Judiciary Act 1903 (Cth) was filed by the IC. The notice identifies two issues which are said to give rise to a matter arising under the Constitution or involving its interpretation. The first is whether a referee, in exercising power pursuant to the suggested referral, would be impermissibly exercising the judicial power of the Commonwealth. The secondis whether the Court, in adopting or otherwise acting upon the report following an inquiry by the referee, would be acting inconsistently with its status as a repository of federal jurisdiction, would not be exercising judicial power, “and/or would otherwise be acting in a manner inconsistent with the requirements of Chapter III [of the Constitution]”.
7. Before coming to the issues of power and discretion, the logical starting point is to provide some context to the application by making findings as to what has occurred in the year that has elapsed since these parties last interrupted their pre-Christmas preparations to engage in interlocutory disputation. Although I am aware of the general caution that the court should avoid the determination of a constitutional issue unless necessary (Attorney-General (NSW) ex rel Tooth and Company Limited v Brewery Employees’ Union of New South Wales [1908] HCA 94; (1908) 6 CLR 469 at 553-554 (Isaacs J)), this is not the first time an argument as to referees such as the present has reared its head, and there is merit in it being the subject of adjudication. Apart from anything else, lengthy written submissions have been filed and hearing the oral argument has taken considerable time requiring the Court, shortly before the long vacation, to sit late into the evening. Additionally, its disposition is relevant to the question of costs on the application.
8. I propose to deal with the issues that arise on the application under the following headings:

B Post-judgment events and other factual findings
C The issue of power – the constitutional questions
D The principled approach to the exercise of discretion

B POST-JUDGMENT EVENTS AND OTHER FACTUAL FINDINGS

9. As is evident from the judgment, at the time I made orders granting: (a) a mandatory stay in respect of the claims brought by the Builders against Project Co; (b) a temporary stay in respect of direct claims between the Builders and the State; and (c) a temporary stay in respect of direct claims between the Builders and the IC, the State, Project Co and the Builders were involved in a set of four arbitral proceedings before Dr Lindgren. These four arbitral proceedings related to certain defect claims raised by the State and passed through to the Builders by Project Co (described in the judgment as the Defects Arbitration and the Defects Compensation Arbitration, together the Consolidated Arbitrations). Additionally, after the commencement of the Federal Court proceeding by the Builders, but prior to the determination of the stay applications, as referred to in the judgment at [32], [117]-[123], an arbitral proceeding was commenced by the State against Project Co seeking declarations that claims foreshadowed by the Builders in a document entitled “Notice of Claimed Entitlements” were without merit. Project Co then, in turn, commenced an arbitration against the Builders which sought to pass through those claims for declarations (NOCE Arbitrations).
10. For reasons that will emerge, it is unnecessary for me to wade into what appears to an outsider to be the almost impenetrable brume of the details of the individual arbitrations. Annexure A to this judgment is a document that was marked “MFI 1” on the interlocutory applications. It describes the relationship between the arbitrations which predated the granting of the stays together with two developments that have occurred since the granting of the stays. I will come back to those developments shortly. What matters is that for present purposes, Annexure A is instructive in identifying (in a way in which the parties agree), the various claims made in this proceeding by the Builders and how the claims, and the factual matters which underlie those claims, are the subject of the various arbitral proceedings. As I found in my earlier judgment at [39], [113], [124] and [126], there is a very substantial overlap of factual matters to be determined in the various arbitral proceedings and those which are the subject of this proceeding.
11. I referred above to the two developments reflected in Annexure A which have occurred following the granting of the stays; it is necessary for me to explain those developments in a little more detail. On 6 June 2018, the Builders served on Project Co a notice of arbitration commencing the “Builders’ Claims Arbitrations”. On 4 July 2018, Project Co served on the State its notice of arbitration between Project Co and the State by which Project Co “passed on” the Builders’ claims to the State. Dr Lindgren, as is reflected in Annexure A, was appointed to hear these arbitrations. Again, as noted above, there is almost a complete overlap between the claims made by the Builders against the State in the ASOC and in the Builders’ Claims Arbitrations.
12. About a month before (on 10 May 2018), Project Co commenced an arbitration against the IC, which sought to pass through to the IC those parts of the claims made in the Builders’ Claims Arbitrations which related to the IC (IC Claims Arbitration). It was suggested that this was done in accordance with the process required under cl 5.4 of the construction contract whereby Project Co had subcontracted to the Builders the design and construction of the Hospital (see the judgment at [11(b)]).
13. The second development was of some significance for the purposes of the present application. Notwithstanding that Project Co were content for Dr Lindgren to be appointed the arbitrator in the IC Claims Arbitration, the IC disagreed. I was informed by senior counsel for the IC that the view was taken that Dr Lindgren would be unsuitable because the Consolidated Arbitrations had been run and heard during 2018 (with the award being currently reserved), and the IC was not a party to, nor did it participate in, the Consolidated Arbitrations before Dr Lindgren. As a consequence, the IC contends that it did not have the opportunity to cross-examine relevant witnesses in relation to the defects or address the arbitrator in relation to them. Apparently, because of this, decision makers within the IC thought it would occasion an unfairness for the IC Claims Arbitration to be conducted by Dr Lindgren. It is very far from self-evident to me why this would have been the case, but it is unnecessary to pursue the underlying merit or helpfulness of the view taken by the IC for present purposes.
14. In any event, given that Project Co and the IC were unable to agree on Dr Lindgren, Professor John Sharkey was appointed as the arbitrator in the IC Claims Arbitration. Project Co made an application to Dr Lindgren under s 27C of the Commercial Arbitration Act 2011 (SA) seeking to have the IC Claims Arbitration consolidated with the other matters before Dr Lindgren so all claims and proceedings could be heard in the one place at the same time and by the same arbitrator. Consistently with the approach the IC had previously taken, the IC brought a jurisdictional challenge against Project Co’s commencement of the IC Claims Arbitration. The challenge was subsequently heard and upheld by Professor Sharkey (who concluded that he had no “jurisdiction” (that is, power) to determine the disputes because the notice of arbitration had not been given jointly by Project Co and the State, thus rendering it invalid). The State was only informed of the basis for this challenge after the determination had been made. The State had not previously been approached to issue such a notice against the IC.
15. Senior counsel for the State indicated that the reason why the State would not consent to commencing an arbitration against the IC jointly in its present form is revealed from the terms of the notice of arbitration served on the IC. Amongst other things, in the notice of arbitration dated 10 May 2018, various contentions are set out, including the serious allegation that the IC’s engagement with the State on the project “has been improper and has fundamentally caused the [IC] to lack the independence and fail to act with the honesty, reasonableness and impartiality its role requires … At times, the [IC] has acted more like the agent of the State than as an independent reviewing party”. Given the nature of these allegations, in September 2018, the State advised that it was not in a position to agree to the issuance of a joint notice. It was asserted by the State that the claims made by Project Co in the notice of arbitration (as well as the notices of dispute and notices of arbitration served by the Builders and Project Co in other arbitral proceedings), were lacking in substance and, to the extent that they were discernible, were “unmeritorious and deficient”.
16. Notwithstanding this, the State indicated a willingness to meet to discuss the proposal to issue a joint notice further, including exploring whether a joint notice in some other form could be agreed. It appears that the correspondence on this topic has rested. As I understand it, leaving aside any agreement following further discussion, the position taken by the State is that it contends that Project Co should have used the dispute process contained in the IC Agreement (being an agreement between Project Co and the State which engaged the IC) as a means to resolve the dispute between the State and Project Co (and, as such, to facilitate Project Co commencing a dispute against the IC unilaterally if need be).
17. From the Builders’ perspective the practical effect of all of this, was, however, problematical. The upshot being, according to the evidence filed on behalf of the Builders, that as matters presently stand, Project Co is unable to advance an “IC Claims Notice” as required by the construction contract which will potentially impact upon the Builders’ claims against Project Co and may mean that Project Co is only able to advance the claims it makes against the IC through litigation (presumably by way of cross-claim in this proceeding or by way of separate curial proceedings).
18. More generally, the Builders submit that the orders sought, if made, will facilitate achieving the manifestly desirable result of all parties pursuing all claims inter se in an efficient, timely and orderly manner while minimising the risks of inconsistent outcomes and findings.
19. The position taken by the Builders in the previous interlocutory dispute was that this desirable end should occur by quelling all disputes curially in this proceeding. Having been unsuccessful in achieving this desired outcome by the orders made following the judgment, the Builders are now seeking to fashion a similar end by the use of different means.
20. Having identified the background, I now turn to the issues raised by both the IC and the State as to the power of the Court to grant the relief sought by the Builders. That relief is in the following terms:
    1. An order, pursuant to section 23 of the Federal Court of Australia Act 1976 (Cth), that Order 2 of the orders made by the Court on 12 December 2017 be vacated.
    2. Orders, pursuant to section 54A of the Federal Court of Australia Act 1976 (Cth) and/or rules 28.61 and 28.65 of the Federal Court Rules 2011 (Cth), that:

(a) the claims made by:

(i) the Applicants against the Second, Third and Fourth Respondents as outlined in the Originating Application and the Applicants’ Amended Statement of Case dated 12 September 2017; and
(ii) by the First Respondent against the Fourth Respondent in ACICA Case No. 2018-115,

be referred to a referee for inquiry and report;
(b) Dr Lindgren AM QC be appointed as the referee;
(c) the inquiry be conducted in parallel with:

(i) ACICA Case No. 2017-110;
(ii) ACICA Case No. 2017-111;
(iii) ACICA Case No. 2018-119; and
(iv) ACICA Case No. 2018-124,

(collectively, the Consolidated Arbitrations), with evidence in the Consolidated Arbitrations to be treated as evidence in the inquiry (and vice versa); and
(d) Dr Lindgren to provide his written report to the Court at the conclusion of the Consolidated Arbitrations.

C THE ISSUE OF POWER – THE CONSTITUTIONAL QUESTIONS

C.1 Introduction

21. Whatever else the power contentions of the IC and the State lacked, they did not lack ambition. The consequence of accepting the submissions in their full amplitude would amount to a radical departure from currently accepted understanding relating to the use of referees by the Federal Court, other federal courts, and also state courts exercising federal jurisdiction. The logical end point of the acceptance of the arguments would mean, in a very large number of cases, that both this Court and supreme courts while exercising federal jurisdiction, have, contrary to constitutional requirements, purported to determine disputes otherwise than in accordance with Chapter III of the Constitution.
22. It is convenient to address the issues by reference to the two constitutional propositions advanced by the IC which I have identified at [6] above. The position taken by the State initially at [42]-[43] in its written submissions was that:

The State supports and relies upon the matters raised by the IC in its submissions in relation to the constitutional law issues. The referral of the proceedings to a referee has the consequence of significantly altering the nature of a hearing that will be afforded by a Chapter III court …
Whatever the practical benefits of reference out may be in a given case, the judicial power of the Commonwealth may not be outsourced either to acting judges or referees.

23. During the course of oral submissions, the position taken by the State was refined. At best, the State diffidently embraced some of the IC’s submissions. It is useful to focus on the way the IC put the two propositions which are interrelated. The question of whether a referee would be impermissibly exercising the judicial power of the Commonwealth necessarily relates to the question of whether the Court, in acting upon such a report, would be acting inconsistently with the requirements of Chapter III.
24. It is convenient to commence by examining some relevant history and making some general observations about how the process of appointing referees proceeds in this Court. I will then examine whether or not the two propositions advanced in written submissions (and the more refined argument developed orally) have any merit.

C.2 Referees Generally

Relevant History

25. In Kadam v MiiResorts Group 1 Pty Ltd (No 4) [2017] FCA 1139; (2017) 252 FCR 298 at Section E [35]-[56] I set out, at some length, the history and relevant statutory framework of the appointment of referees in this Court. It is unnecessary to repeat that excursus for present purposes. Given the arguments advanced by the IC, however, it is necessary to go back to the history in somewhat more detail than was required in Kadam.
26. An office like that of the modern referee has long antecedents in Chancery. This includes the practice, dating from the 18th century, of referring matters of detail or account “ad computandem” to a master or an arbitrator. As is explained in a thesis submitted to the Department of Law of the London School of Economics by M P Reynolds (Case Flow Management: A Rudimentary Referee Process 1919-70 (London, July 2008)), prior to 1873, references were used in the Court of Chancery and also at common law under the Common Law Procedure Act 1854 (UK). Indeed, prior to the Judicature Act 1873 (UK) reforms, there were also references made by the Judicial Committee of the Privy Council in cases in which Sir Roundell Palmer (who later became Lord Selborne) and Sir Hugh Cairns were involved as counsel, and Lord Chelmsford was presiding.
27. All of these notable figures and, in particular, Lord Selborne (who became Lord Chancellor in 1872), became involved with the development of the modern notion of referees at the same time as the blending of common law and equitable practice, occasioned by procedural fusion in the United Kingdom (see Reynolds at 42). This timing is not coincidental. The First Report of the Judicature Commissioners (Parliamentary Papers, Session 10 December 1868 – 11 August 1869, No 41340, Vol XXV, 25 March 1869), not only addressed the constitution of courts and the separation and division of jurisdictions, but also made recommendations for the “speedy economical and satisfactory despatch of the judicial business transacted by the courts” (at 4 n 5; see also Reynolds at 40, 47). The Judicature Commissioners had been aware of the more developed practice in equity of referrals and had made brief mention of it in their First Report (Hansard, House of Lords, 13 February 1873, Col. 334-336). As is well-known, Lord Selborne championed the Supreme Court of Judicature Act 1873 (UK); indeed, he described it in his book Memorials Personal and Political 1865-1895 (London, 1898) as “the work of my own hand”: at 298. What is perhaps less well-known is that he referred to the notion of a referee in his speech in the House of Lords on the second reading of the Judicature Bill (see Reynolds at 50). That proposal, which was based on efficiency, cheapness, simplicity and uniformity, was to create a new officer of the Court. In speaking of the office of referee, his Lordship said (Hansard, House of Lords, 13 February 1873, Col. 346):

Your Lordships know that there is a class of cases which the parties may take to the Assizes, and in some instances must take there, and which are yet totally unfit to be tried by a jury at all. The result is that the parties are compelled to take such cases out of court and submit them to arbitration; and as no provision has been made by law for the conduct of these arbitrations, the consequence is that very great expense frequently arises out of them. It was a very valuable recommendation of the Judicature Commission that public officers, to be entitled “Official Referees”, should be attached to the Court, to deal with cases of this kind, and to whom such cases should be sent at once without the useless expensive form of a jury trial.
The Bill proposes that such cases should be sent to reference, even if the parties do not consent, and also provides for the appointment, where the parties may desire it, of special referees. The proposal of the Bill is that they shall determine all questions of fact or account, leaving questions of law to be determined by Divisional Courts. I venture to think that will be found a valuable and important provision.

28. Pausing here, it is important to note that the proposal of the Judicature Commissioners, reflected in the legislation as enacted, was to create two forms of referees, one “official” and the other “special”. An “official” referee was a paid and permanent officer of the court; the business referred to the official referees was distributed among them in rotation, unless a reference was directed to a particular referee (see Judicature Act s 83, 56 et seq); a “special” referee was one who was agreed on between the parties and remunerated by them, the amount being determined by the court (see Judicature Act s 57). As Reynolds notes at 29:

In naming the new court officer a “referee”, the Judicature Commission deliberately invented a new subordinate judge that would enable High Court judges to function more effectively. At macro-level, the referees reduced the High Court caseload and backlog. At micro level, they revolutionised the judicial process inventing a rudimentary form of caseflow management.

29. The first official referees were appointed under s 83 of the Judicature Act and following changes to the Rules of the Supreme Court 1883, were given powers equivalent, in many respects, to a High Court judge (including the power to hold a trial in any place, order discovery and production of documents, order costs at interlocutory and judgment stages and give directions: see Reynolds at 30-31; Rules of the Supreme Court 1883 O 36 rr 5, 48 and 50).
30. The history of the scheme for referrals which thereafter ensued both in the United Kingdom and in Australia has been the subject of detailed examination in a number of decisions, see, in particular, Buckley v Bennell Design & Constructions Proprietary Limited [1913] HCA 32; (1978) 140 CLR 1 at 15-18 (Stephen J); Astor Properties Pty Ltd v L’ Union Des Assurance De Paris (1989) 17 NSWLR 483 at 489-90 (Cole J). There is a tendency to see referees as a relatively recent innovation, responding to the demands of modern commercial litigation spurred on by the revolution in case management which has seen almost every Australian jurisdiction introduce a provision, by either legislation or by way of rules of court, setting out the “overriding” or “overarching” purpose of procedural rules: for more details as to these developments, see Kadam at [1]-[3]. But this would be ahistorical. As Reynolds explains, the creation of the now familiar role of a referee and connected reforms in the late 19^th century can be conceptualised as an early form of active case management. Although after its statutory creation, at least in this country, the development of the use of referees went through a prolonged period of stultification (see Buckley at 37 (Jacobs J)), it is no surprise that the process received renewed focus at a time of increased volume of litigation and at a time where the efficient allocation of public resources by courts has come under greater scrutiny.

Referees as Officers of the Court

31. It is unnecessary to dwell further on the historical evolution of referees in this country save for returning to one aspect of the history upon which the IC places much relevance for the purposes of its argument: the fact that referees (official or otherwise) were once “officers” or deemed to be “officers” of the court, and that is now no longer the case.
32. At the time of the publication of the first edition of Halsbury’s Laws of England (1907, Vol 1) there were “three official referees, who are barristers of ten years standing … appointed by the Lord Chancellor”: at 483. At the time of Federation, the Arbitration Act 1889 (UK) had restated the provisions relating to the appointment of referees and ss 13, 14 and 15 relevantly provided that any question arising could be referred to an official or special referee or arbitrator who would be, or would be deemed to be, an officer of the court. In this sense they were part of the court and, as was noted in Russell on the Power and Duty of an Arbitrator and the Law of Submissions and Awards (London, 1919, 10th ed) at 508:

Where the legislature has given power to the Court to refer cases or questions for trial, and so delegate its duties without the consent of the parties, it has taken care to restrict such powers not only to particular classes of cases, but to particular persons – viz. to official referees or officers of the Court – and excepting in such classes of cases and references to the officials referred to, to make the power of the Court dependent on the consent of the parties.
(Emphasis added)

33. The IC places reliance on the fact that referees occupied a position (either permanent or temporary), which, by reason of their status, had the character described by Dixon CJ and McTiernan J in R v Davison [1954] HCA 46; (1954) 90 CLR 353 at 363, as being:

… part of [the Court’s] official system and exercising the authority of an office in the Court.

34. This position as to the status of referees as officers was the position not only in England and Wales, but also in the Australian colonies. Prior to Federation, most colonies had accepted a process of referral which reflected the Arbitration Act 1889 (UK): see, for example, the Judicature Act 1883 (Vic) ss 29-31 and the Supreme Court Act 1890 (Vic); Arbitration Act 1891 (SA) ss 11-13; Arbitration Act 1892 (Tas) ss 15-18; Arbitration Act 1895 (WA) ss 16-19 and Arbitration Act 1892 (NSW) ss 12-20, the last of which had some bespoke variations.
35. There were no further changes to the position of referees as officers of the Court in New South Wales until 1984, when amendments were made which had the effect that a referee was no longer deemed to be an officer of the Court: see Xuereb v Viola(1989) 18 NSWLR 453 at 462-3, 465; Najjar v Haines (1991) 25 NSWLR 224 at 246 per Clarke JA.

Referees in the Federal Court

36. There was no express power for referees to be appointed in this Court until s 54A was inserted into the Federal Court of Australia Act 1976 (Cth) (Act) in 2009 by the Federal Justice System Amendment (Efficiency Measures) Act 2009 (Cth). More detailed regulation of the referral process is now contained in Div 28.6 of the Federal Court Rules 2011 (Cth) (FCR). Referees appointed under the Act are not officials, nor are deemed to be officials, of the Court.
37. As to how the reference provisions work, the position mirrors the process which had become common in all forms of commercial litigation, particularly in building litigation, in New South Wales over a generation. It provides a process in respect of which the Court retains control at all stages. The Court may appoint a person whom it considers to be appropriate as a referee (FCR 28.62). The Court may give directions about how the inquiry should be conducted on any matter arising in relation to the inquiry. The referee must conduct the inquiry in accordance with any directions given by the Court, but otherwise may conduct the inquiry in any way the referee sees fit, including by taking evidence under oath (FCR 28.65). The referee must provide the Court with a written report setting out the referee’s “opinion on the matter” referred and the reasons for that opinion (FCR 28.61, 28.66). Upon receipt of the report, and upon the application of a party, the Court may take certain steps, including the adoption or rejection of the report (FCR 28.67).
38. I will come back to the principles which govern the adoption of a referee’s report, as these feature centrally in the submissions made by the State. It is convenient now to turn to the two arguments identified at [6] above: first, that a referee exercising power pursuant to the suggested referral would be impermissibly exercising the judicial power of the Commonwealth; and secondly, that the Court, in adopting or otherwise acting upon the report, would be acting in a manner inconsistent with Chapter III.

C.3 The IC’s First Argument

39. It has been said that the judicial power of the Commonwealth is insusceptible of precise definition since it is difficult “to point to any essential or constant characteristic” of such power: see Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245 at 267. The essential elements of judicial power, like the essential characteristics of a court, “are not attributes plucked from a platonic universe of ideal forms”: see Assistant Commissioner Condon v Pompano Pty Ltd [2013] HCA 7; (2013) 252 CLR 38 at 72 [68] (French CJ). As the High Court explained in Precision Data Holdings Limited v Wills (1991) 173 CLR 167 at 188-189:

[M]any positive features which are essential to the exercise of the power are not by themselves conclusive of it. Thus, although the finding of facts and the making of value judgments, even the formation of an opinion as to the legal rights and obligations of parties, are common ingredients in the exercise of judicial power, they may also be elements in the exercise of administrative and legislative power.

40. What are described as the “typical features of an exercise for judicial power”, are the quelling of controversies between parties, the determination of existing accrued rights or incurred liabilities, and the conclusive nature of the decision so made in the exercise of the power: see Duncan v New South Wales [2015] HCA 13; (2015) 255 CLR 388 at 408. A consideration of the elements of the judicial process in any given context is informed by the specific judicial function to which the process relates, by common law requirements in relation to the discharge of that function and by the involvement of the courts in established statutory regimes regulating the performance of that function. The requirements of Chapter III cannot be considered only by reference to the characteristics of the function exercised. It is also necessary to consider the process adopted by the court, as well as the independent and impartial character of the court: see TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; (2013) 251 CLR 533 at 553 [27] (French CJ and Gageler J). It is, of course, open for Parliament to “prescribe the means by which the determination of the Court is to be obtained, and for that purpose may … adopt any existing method of legal procedure or invent a new one”: Re Judiciary Act [1921] HCA 20; (1921) 29 CLR 257 at 266 (Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ).
41. Obviously enough, there is no particular constitutionally-entrenched mode of fact finding by a Chapter III court. The notion that it is somehow necessary for a Chapter III judge to find facts breaks down at the most basic level: there are cases throughout the Commonwealth of state courts exercising federal jurisdiction every day where the tribunal of fact is a jury. That prospect also exists, of course, in this Court: see Parts III and VI of the Act. Although the argument of the IC accepts that it is not necessary for the licit exercise of judicial power that a judge make the finding of fact necessary to quell a dispute, the IC seeks to draw a distinction between the finding of facts by a judge or jury (as constituting the court) and a referee who under the Act (and now in New South Wales) forms no part of the court.
42. In making this argument, the IC places significant emphasis on the decision of the High Court in Harris v Caladine [1991] HCA 9; (1991) 172 CLR 84. Accordingly, it is necessary to examine this case in some detail.
43. Harris v Caladine was a case about the delegation of powers of a federal court. A provision of the Family Law Act 1975 (Cth) empowered the judges of the Family Court to make rules delegating all or any powers of the court to a registrar. The Family Law Rules delegated to registrars certain powers and provided that the court reviewing the exercise of that power was to proceed by way of a hearing de novo.
44. The appeal concerned a consent order for the settlement of property made by a registrar. The High Court by majority (Mason CJ, Deane, Dawson, Gaudron and McHugh JJ, with Brennan and Toohey JJ dissenting), held that the order was valid and that neither the challenged rule nor section contravened Chapter III of the Constitution. In doing so, Mason CJ and Deane J made a number of observations which are relevant for present purposes. After referring to the fact that judicial power is vested in courts and judicial power is exercisable by judges and not officers of those courts, their Honours noted at 91:

But the ways in which a court may be organized or structured for the purpose of exercising its jurisdiction, powers and functions admit of considerable variation. As Windeyer J. noted in [Kotsis v Kotsis [1970] HCA 61; (1970) 122 CLR 69 at 91], “[a]ccording to the tradition of the common law, a superior court of record is a court sitting in banc for the administration of justice”. However, as his Honour went on to point out:

“In the course of time it became settled that, for some purposes, the jurisdiction of a superior court of common law could be exercised by a single judge. For the due administration of justice courts had officers who in some cases were, and are, empowered to perform specified functions on behalf of the courts to which they belonged.”

45. After then referring to various developments relating to the appointment of masters, their Honours went on to say at 91-92:

Although they are developments which have taken place since 1900, they serve to confirm what we have already said, namely, that a court may be organized or structured in a wide variety of ways for the purpose of exercising its jurisdiction. A court may, for example, be authorized to refer a case or an issue to arbitration or to assessors for examination and report.
(emphasis added)

46. Later on in their reasons, in dealing with various matters relating to delegation, Mason CJ and Deane J went on to say at 95:

It seems to us that, so long as two conditions are observed, the delegation of some part of the jurisdiction, powers and functions of the Family Court as a federal court to its officers is permissible and consistent with the control and supervision of the Family Court’s jurisdiction by its judges. The first condition is that the delegation must not be to an extent where it can no longer properly be said that, as a practical as well as a theoretical matter, the judges constitute the court. This means that the judges must continue to bear the major responsibility for the exercise of judicial power at least in relation to the more important aspects of contested matters. The second condition is that the delegation must not be inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of their delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court. For present purposes it is sufficient for us to say that, if the exercise of delegated jurisdiction, powers and functions by a court officer is subject to review or appeal by a judge or judges of the court on questions of both fact and law, we consider that the delegation will be valid. Certainly, if the review is by way of hearing de novo, the delegation will be valid. The importance of insisting on the existence of review by a judge or an appeal to a judge is that this procedure guarantees that a litigant may have recourse to a hearing and a determination by a judge. In other words, a litigant can avail him or herself of the judicial independence which is the hallmark of the class of court presently under consideration.

47. As noted above, Brennan J dissented. But in doing so, at 109-110, his Honour also referred to the judgment of Windeyer J in Kotsis, where his Honour said at 68:

In my view what is not legitimate is for a Supreme Court invested with federal jurisdiction under the Constitution to entrust the determination of the rights of parties, in regard to any matter great or small, to persons who are not the court. The ascertainment of facts by the direction of the court is an essentially different thing from determining rights.
(Emphasis added).

48. Justice Brennan then went on to identify the possibility that it could be said his view imposed undue restrictions on the court’s power of delegation and an undue burden on judges. At 111, his Honour noted a reply to this criticism could be that “there are some remedies for alleviating the burden”. These included “the adoption of procedures of reference and report”.
49. Justice Gaudron, who, as noted above, constituted part of the majority, noted that delegation of judicial power can be effected only in a manner that is consistent with the structure and organisation of the court and with the power having been vested in the court. Her Honour noted, however, at 151, that it did not follow:

… that a power or function can be delegated only to a person who is part of the organizational structure of the court. Indeed, the taking of evidence on commission outside the jurisdiction is a familiar example of a function that is delegated to a person who is not a part of the organization of a court. Whether a power or function may be delegated to a person outside the court structure is a matter to be determined by a number of considerations, the most important of which are the subject matter and the nature of the power or function.

50. Two matters worth emphasising emerge from the above extracts from Harris v Caladine. The first is the narrower point, that even in Brennan J’s view, the notion of a reference was permissible notwithstanding the difficulties his Honour found with the delegation under the Family Law Act, the subject of the appeal.
51. The second is reinforcement of the broader notion that the requirements of Chapter III cannot be understood as a series of free standing axioms taken from previous cases which can be applied in a logical sequence in a different case in respect of a different piece of legislation: see also Pompano at 94 [137] (Hayne, Crennan, Kiefel and Bell JJ). Rather, it is necessary to have regard to the specific legislation in question and the historical context in which it sits.
52. Guarding against Judge Cardozo’s warning of “pushing a principle to ‘the limit of its logic’” (see Pompano at 94 [137] quoting The Nature of the Judicial Process (London, 1921) at 51), it is useful then to turn to a consideration of this broader principle in the specific context of the referee process. The logical starting point is the judgment of Mason P (with whom Gleeson CJ and Priestley JA agreed) in Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631, which considered whether the adoption of a referee’s report by the Supreme Court pursuant to what was then Pt 72 of the Supreme Court Rules 1970 (NSW), would be precluded by Chapter III in circumstances where the Supreme Court was exercising federal jurisdiction.
53. The appellants in Multicon sought to argue that the requirements of Chapter III meant that a hearing de novo on all issues of fact and law would be required. Mason P reviewed the decision in Harris v Caladine in some detail and noted that it was only McHugh J, as part of the majority, who stipulated that where there had been a delegation of judicial power by a Federal Court, there was a right to a hearing de novo before a judicial officer. Although not referring to the fact that in Harris v Caladine both Mason CJ and Deane J (in the majority) and Brennan J (in the minority) had referred approvingly to procedures of “reference and report” (at 91-92 and 111 respectively), Mason P at 641-642 observed:

The upshot is that, even if [Harris v Caladine] applies to State courts, it is doubtful whether the [principles regarding the adoption of a report] would contravene its mandate. It is to be remembered that a referee’s opinion has no effect unless and until the court chooses to adopt it: Najjar v Haines (1991) 25 NSWLR 224 at 246 and 270. And [Super Pty Ltd v SJP Formwork (Australia) Pty Ltd (1992) 29 NSWLR 549] emphasises the breadth of the power of “review” implicit in the power to reject … There is much to be said for the view that Pt 72 – r 13 in particular – effectively modifies the common law of judicial evidence, albeit in a manner consistent with fair procedure and the proper exercise of Federal judicial power: cf Peacock v Newtown Marrickville & General Co-operative Building Society No 4 Ltd [1943] HCA 13; (1943) 67 CLR 25 at 35-36, 46, 55-56; Milicevic v Campbell (1975) 132 CLR 307; Sorby v Commonwealth [1983] HCA 10; (1983) 152 CLR 281 at 298-299, 308. It follows that, when one turns to the application of Super in this particular case, it is far from clear that any breach of the principles in [Harris v Caladine] would be involved even if Rolfe J had been sitting as a judge of the Federal Court.

54. I stressed above the need to have regard to consideration of the proper exercise of judicial power in the particular statutory context in which consideration of the principled exercise of judicial power takes place. As I have already explained, the appointment of referees and the adoption of their reports was an established feature of courts both in the United Kingdom and in the Australian colonies prior to Federation. It is unnecessary to dwell in this case on the differences between various regimes for reference (one approach, for example, was for matters to be referred to referees and arbitrators to be “tried” with the resulting award or report taking effect unless set aside by the court: see s 66 of the Supreme Court Act 1935 (SA); other regimes, including that considered by Mason P in Multicon and that mandated by s 54A of the Act, provide that a report resulting from a reference is not considered binding in any sense and does not take effect as an order of the court).
55. What presently matters is that the Act (and the FCR created pursuant to the Act) create a procedure, which has as a central aspect, the necessity for the Court to control and delimit the process and the further necessity for the report of the referee to be adopted in whole or part before it has any legal effect. Put another way, the process provides for the referee, under the control of a judge, participating in a “special mode of trial” (see Hogg Law of Arbitration (1936) cited in Buckley at 15 (Stephen J)). The procedure reserves to the Court a discretionary power to determine whether the Court should accept a referee’s findings. The principle emerging from the cases (to which I will return below), that the Court will generally show a degree of deference to a referee in respect of factual findings in particular, does not detract from the proposition that the Court remains, at all stages, in control of the proceedings.
56. The statutory regime with which we are concerned under the Act is not simply a provision allowing the “delegation of the trial”. The more proximate progenitor of the provisions relating to referees in the Act (and the time when the deeming provision for referees to be “officers” was removed in relation to references in New South Wales) is the regime introduced by the Supreme Court (Commercial Arbitration) Amendment Act 1984 (NSW). In Xuereb v Viola (1989) 18 NSWLR 453 at 462, Cole J explained that under the previous provisions relating to the appointment of referees, references “by the court to referees were properly regarded as a delegation of the trial or an issue in the trial for a person who is regarded as an officer of the court”. Whereas the reference process following the 1984 legislative change, had a number of characteristics which merit identification. These included that: (a) the statutory provision made “no reference to a trial by the referee” at 565G; (b) the referee is “not bound by the rules of evidence” but may conduct the reference as the referee sees fit: at 465G-466A; (c) “there is no longer any provision which equates the opinion of the referee to the finding of a jury”, rather “the court must consider whether to adopt, vary or reject the report in whole or part”: see 466D-E; (d) “the report is of no legal consequence unless and/or until it is adopted”: see 466D-E; (e) “it is the court which makes finding of fact in law, either explicitly or implicitly, by adopting the report”: see 466D-E; (f) the referee was not required to conduct the inquiry as if it were a trial by a judge (see 466D-E); and (g) “the referee is not making a finding of fact or law and is not determining any issue”: see 466D-E.
57. When these characteristics of the process (as replicated in the Act) are understood, the flaw in the first argument advanced by the IC becomes evident.
58. The IC contends that the real ratio of Harris v Caladine is that the Parliament could validly authorise the conferral of Commonwealth judicial power on a registrar who was an officer of the relevant Court even though those officers do not have the tenure protections of judges appointed under s 72 of the Constitution. It further asserts that Harris v Caladine does not stand for the proposition that Commonwealth judicial power may be vested in a person who is neither a judge nor an officer of a court referred to in s 71. This latter assertion may be accepted, but for this argument to be decisive, it presupposes that what is happening is the vesting of judicial power in the referee.
59. This is simply not so. The task undertaken by the referee lacks the most basic characteristic of the exercise of judicial power, that is, quelling a controversy between parties by determining rights or liabilities in a manner that is authoritative, conclusive or binding (although upon adoption it may be the basis of the ultimate judgment or orders of the Court): see Najjar v Haines (1991) 25 NSWLR 224 at 246G per Clarke JA, 269C per Rogers AJA.
60. As noted above, at all stages of the process, the referee is not a delegate. The referee is, however, required to comply with the directions of the Court and, although the referee is allowed a latitude in the way in which he or she conducts the process, is the subject of control and directions by the Court. It follows that the referee does not exercise judicial power, whether delegated or otherwise. It cannot be the case that forming views or expressing opinions on matters of fact or law which may be germane to the resolving of the controversy means judicial power is necessarily being exercised: see Luton v Lessels [2002] HCA 13; (2002) 210 CLR 333 at 345 [21] per Gleeson CJ; Albarran v Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23;(2007) 231 CLR 350 at 360-362 [25]- [29] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ.
61. The process merely constitutes a licit alternative procedure by which the court may receive evidence and make findings of fact or law implicitly through the adoption of the report. When this is appreciated, the point made by the IC that referees were previously either officers of the court or deemed to be so, does not have any real significance, as the referee is not conferred with judicial power in a manner consistent with Chapter III.
62. Moreover, for the sake of completeness, it is worth mentioning that the fact referees had a particular status needs to be understood in the historical context. Unlike in the United Kingdom, in New South Wales, at least, there were no official referees, and the legacy in the court rules of some of the various states referring to “special referees” reflects the fact that referees, although deemed to be an officer of the court, were persons who were not of the court. The provisions in legislative regimes in the various states deeming a referee as an officer of the court were described by Stephen J in Buckley as meaning they were simply “part of the machinery of the court” (at 18). They reflected the fact that under those regimes the references were “nothing more than a delegation of the trial to an officer of the court; hence the need, where the delegate was not already such an officer, to deem him one”: see Buckley at 18.

C.4 The IC’s Second Argument

63. The IC and the State also assert that the Court, in adopting a report, would “act inconsistently with its status as a repository for Federal jurisdiction” and would not be exercising judicial power, but, rather, acting inconsistently with the requirements of Chapter III.
64. Of course, the examination of the merit of this second argument starts from the logical premise that I have already rejected the first proposition. I have determined that this Court, in dealing with a report under s 54A of the Act, exercises judicial power and does so in a manner consistent with its role as a Chapter III court. As I have explained, there is nothing the Court does in making an order which purports to give the referee’s report, by its own force, a status as an order of the court or to operate such as to bind the parties. It follows that the broad contention that adopting a report would require this Court to act inconsistently with its status as a repository of federal jurisdiction must be rejected.
65. It is then necessary to deal with the more refined and attenuated argument which emerged in oral submissions by the State as a variant of the way in which the second proposition was initially put in the written submissions.
66. The argument went somewhat like this: even if the reference process does not necessarily amount to a referee illicitly exercising judicial power as a matter of constitutional theory, the principles that have arisen in relation to the adoption of reports, prior to the introduction of s 54A of the Act but since applied by this Court, have meant that the implicit finding of facts contemplated by the process of adoption, is one which is inimical to the principled exercise of judicial power.
67. The IC and the State make the point that s 54A(3)(a) of the Act, which provides for the “adoption” of the report and the procedure mandated by FCR Div 28.6, needs to be read in a particular context. When those provisions were introduced into the Act and enacted as part of the FCR, the nature of what was meant by “adoption” was well known. That process had various characteristics, which had been identified in Super Pty Ltd v SJP Formwork Pty Ltd (1992) 29 NSWLR 549 and other cases, and which were the subject of collection and summary by McDougall J in Chocolate Factory Apartments v Westpoint Finance [2005] NSWSC 784 at [7]. They are as follows:

(1) An application under Pt 72 r 13 is not an appeal either by way of hearing de novo or by way of rehearing.
(2) The discretion to adopt, vary or reject the report is to be exercised in a manner consistent with both the object and purpose of the rules and the wider setting in which they take their place. Subject to this, and to what is said in the next two sub paragraphs, it is undesirable to attempt closely to confine the manner in which the discretion is to be exercised.
(3) The purpose of Pt 72 is to provide, where the interests of justice so require, a form of partial resolution of disputes alternative to orthodox litigation, that purpose would be frustrated if the reference were to be treated as some kind of warm up for the real contest.
(4) In so far as the subject matter of dissatisfaction with a report is a question of law, or the application of legal standards to established facts, a proper exercise of discretion requires the judge to consider and determine that matter afresh.
(5) Where a report shows a thorough, analytical and scientific approach to the assessment of the subject matter of the reference, the Court would have a disposition towards acceptance of the report, for to do otherwise would be to negate both the purpose and the facility of referring complex technical issues to independent experts for enquiry and report.
(6) If the referee’s report reveals some error of principle, absence or excessive jurisdiction, patent misapprehension of the evidence or perversity or manifest unreasonableness in fact finding, that would ordinarily be a reason for rejection. In this context, patent misapprehension of the evidence refers to a lack of understanding of the evidence as distinct from the according to particular aspects of it different weight; and perversity or manifest unreasonableness mean a conclusion that no reasonable tribunal of fact could have reached. The test denoted by these phrases is more stringent than “unsafe and unsatisfactory”.
(7) Generally, the referee’s findings of fact should not be re-agitated in the Court. The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee enjoys an appropriate expertise. Thus, the Court will not ordinarily interfere with findings of fact by a referee where the referee has based his or her findings upon a choice between conflicting evidence.
(8) The purpose of Pt 72 would be frustrated if the Court were required to reconsider disputed questions of fact in circumstances where it is conceded that there was material on which the conclusions could be based.
(9) The Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee such evidence and submissions as they desire.
(10) Even if it were shown that the Court might have reached a different conclusion in some respect from that of the referee, it would not be (in the absence of any of the matters referred to in sub para (6) above) a proper exercise of the discretion conferred by Pt 72 r 13 to allow matters agitated before the referee to be re-explored so as to lead to qualification or rejection of the report.
(11) Referees should give reasons for their opinion so as to enable the parties, the Court and the disinterested observer to know that the conclusion is not arbitrary, or influenced by improper considerations; but that it is the result of a process of logic and the application of a considered mind to the factual circumstances proved. The reasoning process must be sufficiently disclosed so that the Court can be satisfied that the conclusions are based upon such an intellectual exercise.
(12) The right to be heard does not involve the right to be heard twice.
(13) A question as to whether there was evidence on which the referee, without manifest unreasonableness, could have come to the decision to which he or she did come is not raised “by a mere suggestion of factual error such that, if it were made by a trial judge, an appeal judge would correct it”. The real question is far more limited: “to the situation where it is seriously and reasonably contended that the referee has reached a decision which no reasonable tribunal of fact could have reached; that is, a decision that any reasonable referee would have known was against the evidence and weight of evidence”.
(14) Where, although the referee’s reasons on their face appear adequate, the party challenging the report contends that they are not adequate because there was very significant evidence against the referee’s findings with which the referee did not at all deal, examination of the evidence may be undertaken to show that the reasons were in fact inadequate because they omitted any reference to significant evidence.
(15) Where the court decides that the reasons are flawed, either on their face or because they have been shown not to deal with important matters, the court has a choice. It may decline to adopt the report. Or it may itself look at the detail of the evidence to decide whether or not the expense of further proceedings before the referee (which would be the consequence of non adoption) is justified.

68. What is suggested by the IC and the State is that these principles, collected from a number of earlier authorities, were well established and regarded as authoritative at the time of the introduction of s 54A of the Act. Hence, like the position in New South Wales, although this Court has a discretion in relation to the adoption of a referee’s report, there is a strong disposition in favour of adoption. That is said to be problematical because the approach to fact finding does not reflect a conscientious effort by a judge exercising judicial power to determine “the truth of the matter”, but, rather, merely accepting uncritically a finding made by another unless the finding has established attributes of unreasonableness or misapprehension. Such a mode of fact-finding, it is said, is inimical to the principled exercise of judicial power.
69. It is beyond the scope of this judgment to address large philosophical questions as to the role of truth in the adversarial system. Having said that, one might be forgiven for tarrying a moment to quote a judgment which Lord Selborne described as “one of the ablest judgments of one of the ablest Judges who ever sat in this Court” (Minet v Morgan (1873) 8 Ch App 361 at 368), by Vice Chancellor Knight-Bruce who, in Pearse v Pearse [1846] EngR 1195; (1846) 1 De G & Sm 12 at 28-29; [1846] EngR 1195;63 ER 950 at 957, famously said:

The discovery and vindication and establishment of truth are main purposes certainly of the existence of Courts of Justice; still, for the obtaining of these objects, which, however valuable and important, cannot be usefully pursued without moderation, cannot be either usefully or creditably pursued unfairly or gained by unfair means, not every channel is or ought to be open to them. The practical inefficacy of torture is not, I suppose, the most weighty objection to that mode of examination … Truth, like all other good things, may be loved unwisely – may be pursued too keenly – may cost too much.

70. The notion that it is necessary that a court should strive for objective truth by a judge determining all facts himself or herself may be considered laudable in the abstract, but it is tempered by the nature of the adversarial process in civil proceedings, by which the parties choose the evidence marshalled and also by the reality that the common law process has long adopted different modes of fact-finding other than a judge deciding all issues of fact and law. It cannot be correct that there is some sort of constitutionally entrenched requirement for a judge to consider subjectively all evidentiary material or hear argument on every issue relevant to determining a controversy.
71. There is nothing odd or ahistorical about the fact that a court would have a disposition in implicitly finding facts found by a referee in a report unless it reached a particular level of satisfaction that it ought not to so find. One of the curiosities of the argument on this application, was that the State of South Australia asserted, in effect, that a state court exercising federal jurisdiction could not adopt a process of finding facts such as provided for under the Act and yet an analogous procedure adopted by the Supreme Court of South Australia, involved less de novo scrutiny in adopting awards of an “arbitrator”. At the time the Supreme Court Act 1935 (SA) was introduced, s 67 provided that an award following a referral to an arbitrator was equivalent to the “verdict of a jury”. As noted at [54] above, the current s 66 of the Supreme Court Act 1935 (SA) deals with trial of issues by an arbitrator and provides, by s 66(4), that “(t)he court will, unless good reason is shown to the contrary, adopt the award of the arbitrator as its judgment on the action or issues referred”.
72. To digress for a moment, there have been a number of references in previous referral provisions (including those provisions which had an existence prior to the High Court’s decision in Harris v Caladine) that provided, in effect, that the report of a referee ought to be treated in the same way as the verdict of a jury. The High Court must have been aware of such provisions when, as noted above, references were made in that case to the notion that the referral of issues to a referee and later adoption by the court was not inconsistent with the requirements of Chapter III. Needless to say, notions of perversity which are bound up with rejecting the verdict of a jury (see, for example, Hall v Swan [2009] NSWCA 371) are, to say the least, no more restrictive to the ascertainment of some notion of objective truth than what might be described as the Chocolate Factory approach to implicit fact-finding.
73. Returning to the argument advanced by the State and the IC, a further contention was advanced based on FCR 28.67(2), which provides that in proceedings on a report, a “party must not adduce in the Court evidence given in an inquiry”. This was said by the IC at “the very least” to “manifest a policy that, ordinarily, evidence that was before the referee would not be adduced at an adoption hearing” and that even if it were open to the Court to grant leave to overcome that prohibition, such a discretion to grant leave, would be one exercised “in light of the policy that normally evidence is not permitted to be adduced”. As I noted during the course of argument, for my part, I very much doubt that FCR 28.67(2) can be valid (or at least have any operation) in circumstances where the adduction of evidence as to what was before a referee on an inquiry was relevant to a fact in issue on the adoption hearing. An example might be that there was an alleged patent misapprehension by the referee because evidence existed which demonstrated a particular fact relied upon by the referee in forming an opinion did not, in truth, exist, and uncontested evidence was before the referee to that effect. Such evidence would clearly be admissible pursuant to s 56(1) of the Evidence Act 1995 (Cth) which provides that “[e]xcept as otherwise provided by [this] Act, evidence that is relevant in a proceeding is admissible in the proceeding”. Apart from this, in an appropriate case, even assuming the rule was valid, if it was necessary that such evidence be adduced in order to fulfil the judicial task of dealing with an issue raised on an adoption hearing, compliance with FCR 28.67(2) could be the subject of dispensation: see, for example, FCR 1.32 or 1.34.
74. There is nothing about the procedure of adopting a report which requires this Court to act inconsistently with its status as a repository of federal jurisdiction. It follows, in my view, there is no substance in either of the constitutional arguments raised by the IC and the State. Having concluded that there is no inhibition on the power to grant the relief sought by the applicant, I now turn to the issue of whether that relief should be granted in the principled exercise of discretion.

D THE PRINCIPLED APPROACH TO THE EXERCISE OF DISCRETION

D.1 Relevant Discretionary Factors and Consideration of their Weight

75. In Kadam at 312 [57]-[58], I said the following:

It follows that in considering whether to make … a reference, the starting (and in many cases the finishing) point will be the consideration of the overarching purpose. Of course, s 37M(2) gives some guidance as to how this is done by setting out a number of objectives which, without limiting s 37M(1), comprise the following:

(a) the just determination of all proceedings before the Court (s 37M(2)(a)) (Justice Factor);
(b) the efficient use of the judicial and administrative resources available for the purposes of the Court, and the efficient disposal of the Court’s overall caseload (ss 37M(2)(b)-(c)) (Efficiency Factor);
(c) the disposal of the proceedings in a timely manner (s 37M(2)(d) (Timeliness Factor); and
(d) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute (s 37M(2)(e)) (Cost-effectiveness Factor).

As can be seen, these four factors reflect what might be described as both party-centric and the macro considerations in relation to the administration of justice… They are not, however, exclusive considerations and the considerations in s 37M(2) should not be treated as ‘tick box’; a wider evaluative process is to be undertaken: see Irwin v Irwin [2016] FCA 1565 at [37] per Charlesworth J.

76. The submissions of the Builders were appropriately directed to these factors. In particular, it was submitted that the referral sought will provide for: (a) the just determination of this proceeding, alongside the allied issues to be resolved currently before Dr Lindgren; (b) the efficient use of judicial administrative resources and the disposal of the proceeding in a timely manner, as it would enable the dispute to be determined at the same time as the arbitration, rather than having to be determined much later by the court; and (c) the resolution of the proceeding in a cost effective manner, as there will be cost efficiencies in having all matters, including all issues between the Builders and other parties, the subject of findings by Dr Lindgren.
77. In addition, it was said that the possibility of an order being made to refer issues to Dr Lindgren as a court-appointed referee was raised by the Court during the stay application proceedings in December 2017 and that the Builders had foreshadowed the application with Dr Lindgren, who indicated that he would consent to an appointment if so ordered.
78. In short, given the factual and legal overlap evident from Annexure A to these reasons, it is asserted that it makes great sense for the various claims which find reflection in both the ASOC and the various arbitrations to all be before Dr Lindgren. It is said that the only exceptions to the case maintained by the Builders in the proceeding which are not the subject of issues already required to be determined by Dr Lindgren in the extant arbitrations, are the negligent misstatement case summarised in the ASOC at [63]-[77] and the unconscionable conduct case summarised at ASOC [69] and, in any event, that the underlying factual matters relevant to the determination of those claims overlap, to a very great extent, with the factual contentions which arise in relation to various other claims before Dr Lindgren.
79. In response, there are a range of arguments advanced on behalf of the IC and the State. The first is what is said to be a procedural obstacle, and then the IC and the State point to a range of substantive issues which are said to be powerful discretionary considerations militating against the relief sought.
80. Dealing first with the procedural issue, all parties accept the broad notion that the temporary stays were interlocutory orders which can be revisited if there is a fundamental, or at least material, change in the basis upon which the stays were granted. However, the State submits that in order for the stay of the claims to be lifted, the Builders must show that there is “a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the court on the hearing of the original application”, that would justify the stay being lifted: see Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46; Waters v Commonwealth of Australia (Australian Taxation Office)[2017] FCA 312 at [50]- [53]. It is said that in the present case the Builders have not satisfied either of the requirements of Brimaud or otherwise advanced a proper justification for the temporary stays to be lifted and, indeed, there is no such justification. Additionally, it is asserted that the issue of a referee could have been raised at either the earlier hearing or, alternatively, an application could have been made prior to the commencement of the Consolidated Arbitrations in front of Dr Lindgren.
81. Although there does need to be some change of circumstance and there has been no compelling explanation proffered by the Builders as to why this application could not have been made somewhat earlier, if not immediately after the issue relating to the IC Claim Arbitration arose, it seems to me the question of whether or not I should grant the relief is one which should be approached by reference to the duty of the Court to facilitate the just resolution of this dispute according to law and as quickly, inexpensively and efficiently as possible: see s 37M(3) of the Act.
82. It follows that if I was otherwise of the view that it was in accordance with the overarching purpose to now lift the temporary stays, I would not regard it as an insuperable barrier that there has been a failure to establish that there was a change of circumstances of particular significance or there was some tardiness in making the application (conscious though I am of the hesitancy of the court to revisit earlier interlocutory decisions except for where there is a sound reason).
83. Turning to the substantive issues raised in resisting the referral, the State makes a number of arguments which can, conveniently, be placed into seven categories.
84. First, and importantly, it is said that the Builders’ claims against the State are ancillary to the matters the subject of Project Co’s stay (see judgment at [111(a)], [122]). This remains the case and no application has been made to have that permanent stay lifted.
85. Secondly, the arbitrator’s award in those arbitrations which are currently before Dr Lindgren will be largely determinative of the claims made in this proceeding against the State (judgment at [111(b)], [122]). It was said that this factor has particular resonance in view of the fact that it is common ground that there is an “almost complete overlap” between the claims made against the State in the ASOC and those made in the Builders’ Claims Arbitrations. As I have already noted, this is evident from Annexure A. It is said in this respect that the Builders have not descended to the detail of identifying any significant factual assertions in the ASOC that remain for determination following the conclusion of the Builders’ Claims Arbitrations in relation to the claim made against the State.
86. Thirdly, it is said that there will be no costs or time savings in the lifting of the stay because all evidence relevant to the claims in the ASOC, including all expert evidence, will be heard and determinations in respect of it will be reached in the Builders’ Claims Arbitrations.
87. Fourthly, it is said, consistently with what had previously been found in the judgment, that a temporary stay of the monetary claim is unlikely to visit any significant prejudice on the Builders.
88. Fifthly, there is the willingness of the State to submit to the arbitral process and the fact that the Builders are able to pursue its claims in the Builders’ Claims Arbitrations and the parties have sought to progress these arbitrations together with the NOCE Arbitrations. This is said to point to the lack of utility of the stay being lifted.
89. Sixthly, it is said that the Court ought not to refer out the Builders’ claims as those claims have not been properly pleaded and if the stay is lifted are likely to be the subject of interlocutory arguments advanced by the State and also the IC.
90. Seventhly, any referral will cause the State prejudice because any referred proceedings and the arbitrations will be subject to two very different regimes post-hearing such that they may ultimately result in different outcomes. It is said that the final nature of the arbitration – subject to the rights of challenge in the South Australian Supreme Court under the Commercial Arbitration Act 2011 (SA) – can be contrasted with the ability of the Court to deal with the report following the referral “as it thinks fit”. It is conceivable inconsistent conclusions could be reached by the Supreme Court and this Court.
91. The submissions of the IC as to why discretion should not be exercised were somewhat more diffuse and in some respects broader. But it is convenient to mention them only to the extent that they do not already fall neatly within the categories I have already identified.
92. The first matter raised by the IC is that the proposed reference involves a novel issue of law inappropriate for the reference procedure. The second is that the proposed reference includes very serious allegations which are inappropriate for referral. The third is that the confidential nature of the arbitration makes a concurrent hearing of the arbitrations and reference unworkable. The fourth is that the proposed reference is contrary to what is described as the “open justice” principle. The fifth is that the proposed reference is inappropriate for proceedings that may involve witnesses seeking to invoke the privilege against self-incrimination. The sixth is that it is inappropriate for the reference to be heard concurrently with what is said by the IC to be “in substance a part-heard arbitration”. The seventh is that a reference is inappropriate where issues of proportionate liability might arise. The eighth is that the usual mode of trial in the Federal Court is by judge alone. The ninth is that the reference is not by the consent of the parties and it is objected to; and the tenth is that there is no evidence as to the speed with which the reference might be heard and determined.
93. It is convenient for me to sweep away those matters raised by both the State and the IC which I consider to be either irrelevant or of such marginal significance that they do not weigh heavily in the discretionary analysis. As to those raised by the State:

(1) First, it seems to me that the submission that there will be no cost or time savings in lifting the stay, is incorrect, at least as a matter of theory. If all factual and legal matters were able to be determined by Dr Lindgren, it is likely that the entire justiciable controversy between the parties is likely to be resolved at an earlier time and at less cost. Having said this, I accept that the vast bulk of factual issues at least between the State and the Builders will be resolved in the course of determining the extant arbitrations currently before Dr Lindgren. This is a matter to which I will return below.
(2) Secondly, as to the point that the temporary stays are unlikely to visit any prejudice on the Builders, this is true but somewhat misses the point. The fact is that the Builders seek to facilitate a regime where matters are resolved with the greatest degree of efficiency and that, really, is the whole point of the application. This consideration transcends the notion of prejudice to the parties (although prejudice would, of course, be a relevant factor in the evaluative assessment).
(3) Thirdly, as to the willingness of the State to undertake to submit to the arbitral process, and the fact that the arbitrations are ongoing and will resolve most issues, is clearly important and does bear upon the utility of the stay against the State being lifted, but that has more to do with the issues that will be determined, rather than the willingness of the State to participate in the process.
(4) Fourthly, the issue of the prejudice raised by both the State and the IC as to the possibility of the two different regimes post-hearing that may ultimately result in very different outcomes is not a matter which I regard as one of any real significance. As I raised during the course of oral argument, the notion that it will be necessary to bring an application under s 27J of the Commercial Arbitration Act in the Supreme Court of South Australia is one that I do not accept. If an application is to be made pursuant to s 27J, I do not understand why there is any inhibition in bringing such an application in a separate proceeding in the South Australian registry of the Federal Court. It is necessary to explain this conclusion in a little detail. Section 79 of the Judiciary Act 1903 (Cth) is intended to facilitate the exercise of federal jurisdiction by the application of a “coherent body of law” consisting of Commonwealth law and, where applicable, the laws of the States and Territories in which such jurisdiction is being exercised: Northern Territory of Australia v GPAO [1999] HCA 8; (1999) 196 CLR 553 at 588 [80] (Gleeson CJ and Gummow J). A fundamental component of all parties’ arguments in this court is that any controversy arising out of the arbitrations (including any dispute over an error of law) arises out of the same substratum of facts and which is to be quelled by either the arbitrations or in the exercise of Chapter III judicial power. Obviously enough, even though the provisions of the Commercial Arbitration Act refers to a “court” which, save in limited circumstances, is the Supreme Court of South Australia (see s 2 (1); Acts Interpretation Act 1915 (SA) s 4(1)), it is well established that a State cannot limit the way in which federal jurisdiction is to be exercised. There does not seem to me to be any reason why, in accordance with principle, the s 27J argument could not be determined by this Court exercising federal jurisdiction in South Australia: see Australian Securities and Investments Commission v Edensor Nominees Pty Limited [2001] HCA 1; (2001) 204 CLR 559 at 586-588 [55]- [59]. Accordingly, the prejudice seems to me, if it exists, to be very minor and related to the commencement of a separate proceeding and the logistical difficulty in having this proceeding transferred to the South Australian District Registry to be heard together with any such additional proceeding.
(5) Fifthly, as to the argument that this Court should not refer out the claims as they have not been properly pleaded, again this does not seem to me to be a real difficulty. If the matter was referred to Dr Lindgren, he would be required to ensure that any issues between the parties were determined in a way that afforded procedural fairness. To the extent that there needed to be further identification of the material facts and particulars relied upon to make out particular allegations, it would be within the power of the referee to make whatever directions he regarded as necessary and appropriate to facilitate procedural fairness being provided. This point was also raised by the State, at an earlier stage, as a reason why the hearing of this interlocutory application ought to be delayed. In my view, it would have been inimical to the overarching purpose for there to be an adjournment in order for the Builders to prepare a statement of claim in circumstances where it may be that, in the event the matter was referred, the referee would regard it as more cost-effective and appropriate for any pleading and particularisation to be done in a way which would best facilitate the joint conduct of the arbitrations and the reference.

94. Turning to the matters raised by the IC, which again I do not consider have any real substance:

(6) Sixthly, the notion of the proposed reference is inappropriate where proceedings before the referee may involve a privilege against self-incrimination, does not give sufficient account to the fact that a regime could be put in place whereby the referee could ensure that directions could be sought by the referee pursuant to powers conferred upon him if some unforeseen difficulty arose in this regard.
(7) Seventhly, the fact that there is a proportionate liability claim raised, does not seem to me to bear upon the matter at all. Each of the arbitration agreements make provision as to how the arbitrator is, to the extent permitted by law, to have regard to the proportionate liability legislation but, absent agreement, the position would be different in respect of the balance of the issues to the extent that they arise on the referred issues. Why this would cause some sort of insuperable problem was never really articulated.
(8) Eighthly, the fact that the reference is not by the consent of the parties is, in my view, of little weight. Although it might be appropriate for the court to give some weight to the fact that one or other party opposes the reference, ultimately the decision is guided by whether it facilitates the overarching purpose and recent developments have shown an increasing disinclination to place any significant emphasis on the attitude of the parties in such matters.
(9) Ninthly, although the usual mode of trial in the Federal Court is by judge alone and principles of open justice apply, it seems that there was somewhat of a tension between this argument advanced and the fact that the IC contends that the current parties to the arbitrations will be unlikely to agree to confidentiality being waived in relation to the current arbitrations. Open justice is an important principle, as is the usual mode of trial adopted in this Court. In Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2012] FCA 558; (2012) 203 FCR 520 at 530 [34], 534-535 [49]-[50], these considerations were the subject of consideration by Rares J, although the consideration of the issue of open justice considerations was heavily fact dependent.

95. I now turn to the issues which seem to me to be of more significance and, when taken together, are decisive on the application.
96. The reason why the temporary stays were ordered in the first place is that they were ancillary to the matters the subject of Project Co’s permanent stay. No application has been made to lift the permanent stay, although an order is sought that the claims made by Project Co against the IC in ACICA case number 2018-115 (being the IC Claims Arbitration) also be referred for inquiry and report. Although the factual matters underlying the claims as between Project Co and the IC, as I previously indicated, will be the subject of factual inquiry during the course of the arbitrations, the claims themselves, that is the claims as between Project Co and the IC, are not before the court in this proceeding or in any other proceedings. Additionally, while the claims were made in the proposed arbitration, the present position is that the arbitrator ruled that he had no jurisdiction to determine them. Although I have some sympathy for the pragmatism in trying to fashion a solution to the problem that has arisen by the State not consenting to commencing an arbitration against the IC in its present form, or a form containing all the claims which the Builders and Project Co seek to pursue so that the IC Claims Arbitration might proceed, this is ultimately the consequence of the particular detailed contractual regime which is a feature of this project.
97. The existence of this contractual regime is important. I dealt with the contracts and the arbitration agreements in Section B.1 of my judgment. They were structured in a deliberate way whereby there was no direct contractual obligations between the Builders and the State or the Builders and the IC to determine disputes between them by way of arbitration. This reflected the mutual contractual intention to put in place a process where the State contracted with Project Co to provide the project, leaving it to Project Co to arrange for the financing, design and construction and the provision of services.
98. These contractual arrangements have consequences. There is a bargain agreed between Project Co and the State whereby the issues that have arisen are to be worked out in accordance with the dispute resolution processes provided for in those agreements. In a way, the fact that Project Co has been unable to put in place the IC Claims Arbitration successfully is, as Mr Hyde submitted, more of a problem for Project Co than anyone else. In circumstances where there was no (and could be no) attempt to revisit the mandatory stay in respect of claims brought by the Builders against Project Co, this is an important factor in that the stays the subject of this application were ancillary to the granting of that mandatory stay.
99. Additionally, it cannot be gainsaid that this is a case of some real significance. As the IC submits, the Builders are relying on a novel legal point in seeking damages exceeding $795 million against the IC. In doing so, it has made an allegation in the following terms (ACOC at [83]):

…each of the State and/or the IC has caused economic loss to the builder (or, alternatively – the builder … by unlawful means and/or, alternatively, deliberately sought to inflict economic harm upon the builder …

100. As I previously indicated, the case made against the State is of unlawful conduct, being the intentional and wrongful infliction of economic loss on the Builders. These are not insignificant allegations, particularly made against the Crown.
101. It appears to be common ground that the High Court is yet to determine whether a stand-alone action for causing loss by unlawful means exists in Australia. The Builders accept that the law in this regard is “developing”. They are correct to do so. InConstruction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 348; (2014) 45 VR 571, the Victorian Court of Appeal referred to the cause of action proposed by the Builders and said at 577 [31]:

As already noted, the question of the existence of the broader tort has been the subject of consideration by the High Court. To date, that court has declined to decide whether the broader tort should be recognised as part of Australian law. The definitive decision which the appellant seeks – that the broader tort is not part of the common law of Australia – is a decision which could only be made by the High Court. That is especially so in view of the asserted corollary, that is, that rejection of the broader tort would entail the de-recognition of the tort of intimidation, the existence of which has been recognised by the High Court as recently as October this year.

102. Balanced against this is that the Builders point to the fact that the principles applicable in adoption hearings means that the court takes a somewhat different view in relation to adoption of findings of law to findings of fact. On any adoption hearing, the Court is likely to receive detailed submissions of law and will be required, in a judgment, to consider and determine these legal issues. Accordingly, an anterior reference would not result in any lack of analysis of legal questions (at primary judge level) if it later came to an intermediate appellate court or the High Court dealing with the novel cause of action in due course.
103. This point has substance up to a point. No doubt the court would be greatly assisted by reasons provided by someone of the eminence of Dr Lindgren, if he was to be appointed a referee as to legal questions as well as factual issues; but as intermediate courts and the High Court have repeatedly emphasised, it is the duty of a single judge to make such findings of fact as are necessary to ensure that there be an effective rehearing on appeal, if necessary, particularly in the context of there being developments in the law by the application of the law to those facts as found. There is an inevitability about both issues of fact and law relevant to the determination of this novel claim to be hotly contested. It seems to me, given this forensic reality, it is preferable that the facts be found by a judicial officer who will then need to apply them to the law in this novel and potentially complex area of legal discourse. This conclusion weighs in the discretionary balance against the relief that the Builders seek.
104. An even more significant factor, however, seems to me to be the seriousness of the claims made. This goes well beyond the quantum of the claim (although this is also a relevant factor); what is more significant, is the nature of what is alleged and against whom it is alleged.
105. I was referred to a number of cases which stood for the proposition that where there are allegations of serious wrongdoing, a court should be chary in referring matters to a referee. It is unnecessary to refer to all these authorities as I think the current practice is captured by Einstein J in CPC Energy Pty Limited v Bellevarde Construction Pty Limited [2006] NSWSC 1120 at [22], where his Honour said:

On the question of whether the hearing of the balance of the issues to be determined on trial should be referred out or determined by the Court, this is in truth a matter for the List Judge in case managing the proceedings. Having said that it must be acknowledged that as a general matter, there are particularly strong reasons why the Court would not refer out questions of fraud except in exceptional circumstances. However albeit rarely, the Court has exercised the discretion by referring even proceedings raising questions of fraud to a referee…

106. Of course, Rares J’s decision in Optiver, to which I have already made reference, is an example of this occurring. Having noted this, it is well to remember that were two factors present which made the case for a hearing before a judge in Optiver less compelling than might have otherwise been the case in other matters where allegations of serious wrongdoing were advanced. The first factor, not present here, is that a substantial part of the evidence in Optiver would have been required to be taken in either closed court or in circumstances where the subject matter of the evidence was said to be confidential (hence an observer or a member of the public would be left in the dark as to what points were being made). The second factor is, however, also present here, where the proposed reference is to an eminent former judge.
107. This is not to say that there is some inflexible rule that where serious allegations are made it is always inappropriate for such cases to be referred to a referee. I have recently referred in Australian Securities & Investments Commission v AMP Financial Planning Pty Ltd [2018] FCA 1708 to the possibility of a referee determining relevant facts in a civil penalty proceeding (albeit not the question of whether or not there has been the contravention of a norm giving rise to the civil penalty). On balance, however, the seriousness of the allegations made in the present case, weighs considerably against the granting of the reference.
108. Connected to this point are broader public interest considerations. Although not directly applicable to the orders sought on the present application, it is not insignificant that in Part VAA Div 2 of the Act (dealing with suppression and non-publication orders), the Court is required to take into account that a “primary objective of the administration of justice is to safeguard the public interest in open justice”. Open justice is basic to the functioning of this Court as an arm of government. Arguments concerning open justice seem to me to be brought into sharper focus the more serious the allegation; a fortiori when such allegations relate to governmental matters and, more particularly, concern a matter of such intense public interest as an allegation of wrongdoing by the executive government in relation to the State’s most significant and expensive infrastructure project. Although the adoption hearing will be in open court, for reasons I already explained, this will not amount to a rehearing of the evidence, and in the particular circumstances of this case, I do not consider this to be sufficient in a case of this type and, in particular, with the political dimension to which I have made reference.

D.2 Conclusion on the Exercise of Discretion

109. I have considerable sympathy for the attempt made by the Builders to attempt to fashion a pragmatic way in which all issues can be resolved efficiently. The fact is, however, that as the State submits, almost all of the factual controversy between the State and the Builders will already be the subject of findings by the current determination of the arbitral proceedings before Dr Lindgren. The perceived problem caused by the failure to be able to have the IC participate, so that the resolution of all issues is achieved in a way which will be binding on all parties, is one which is a function of the particular contractual regime which was agreed between the parties.
110. Having mentioned this last point, for the sake of completeness, I should deal with the point made that the IC was not a party to the Consolidated Arbitrations and did not participate in the arbitral proceedings that have already been heard before Dr Lindgren. As the IC submits, it did not have the opportunity to cross-examine relevant witnesses in relation to defects or address the arbitrator in relation to them. In such circumstances, it was submitted that a reference to a part-heard arbitrator of the Builders’ claims against the IC gives rise to an appreciable risk of denial of procedural fairness. As I have already touched on above, I think this argument is overstated. Obviously enough, it would be open to the referee to fashion a procedure which ensures that there is no want of procedural fairness occasioned to the IC. But the fact is that Dr Lindgren has now already proceeded to hear the Consolidated Arbitrations and heard submissions. It might be a somewhat clumsy process for the IC to go before Dr Lindgren and now be involved while not having participated in the earlier hearing, although I do not think this would be anything like an insuperable problem. This argument does not feature materially in the discretionary mix.
111. Ultimately, it comes back to an exercise of discretion having regard to the overarching purpose and the matters to which I have made reference in the previous section of these reasons. In my view, particularly given the matters referred to at [96]-[108], the proper exercise of discretion weighs against relief being granted to lift the temporary stays and refer out the matters identified in the interlocutory application to Dr Lindgren. In these circumstances, the appropriate course is to dismiss the interlocutory application and I will make orders accordingly. Given that these are lengthy ex tempore reasons delivered late in the evening and shortly before the long vacation, it is appropriate to extend time for any application for leave to appeal until after the delivery of revised reasons early in the New Year. I will now determine costs after hearing from the parties orally and for reasons which will be evident from the transcript.