Grain Pool of WA v Commonwealth of Australia & Anor P34/1998 [2000] HCATrans 166 (12 April 2000)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P34 of 1998

B e t w e e n -

THE GRAIN POOL OF WA

Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

First Defendant

CULTIVAUST PTY LTD

Second Defendant

Directions hearing

GLEESON CJ

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE AND ADELAIDE BY VIDEO LINK TO CANBERRA

ON WEDNESDAY, 12 APRIL 2000, AT 4.29 PM

Copyright in the High Court of Australia

MS W.A. HARRIS: If it please the Court, I appear on behalf of the Grain Pool. (instructed by Mallesons Stephen Jaques)

MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth: If it please the Court, I appear for the first defendant. (instructed by the Australian Government Solicitor)

MR A.L.K. TOKLEY: May it please the Court, I appear for the second defendant, with MR H.M. HEUZENROEDER. (instructed by Corsers)

HIS HONOUR: Yes, Mr Tokley.

MR TOKLEY: Your Honour, we are seeking an order for costs.

HIS HONOUR: Yes, there are two matters that I understand need to be attended to. The first is the matter of costs and the second is the future progress of the action, is that correct?

MR TOKLEY: Yes it is, your Honour.

HIS HONOUR: And is it convenient to deal with the question of costs first? It just occurs to me that it may be that the appropriate order for costs would need to be considered in the light of the future of the action. Do people mind if we deal with the second matter first and then come back to costs? Are you happy with that, Mr Tokley.

MR TOKLEY: Yes, your Honour.

HIS HONOUR: Ms Harris, are you happy with that?

MS HARRIS: If that is convenient, your Honour?

HIS HONOUR: All right, let us have a look at the future, then. There is a question of remitter, as I understand it, is that right? Who is applying for the remitter?

MS HARRIS: Well, your Honour, I do not think it is me. I suspect that it must be Mr Tokley.

HIS HONOUR: Mr Tokley, do we have a bid from you?

MR TOKLEY: Your Honour, we are not applying for a remitter of the proceedings. As far as we are concerned, the proceedings have been concluded as a result of the orders made by the Court on 23 March this year.

HIS HONOUR: Well, you mean the answers to the questions?

MR TOKLEY: Yes, your Honour. But, by way of assistance to your Honour, in October last year the plaintiff, I believe, filed in the courts a document called "Outstanding Issues" which seems to suggest that, at the end of the matter, there may be some further factual issues to be dealt with by the plaintiff, or at least in respect to the plaintiff's interest.

HIS HONOUR: Let me ask Ms Harris what she says, Mr Tokley. Ms Harris?

MS HARRIS: Yes, your Honour.

HIS HONOUR: Does your client desire to continue with this action in the light of the answers that were given to the questions?

MS HARRIS: The short answer, your Honour, is yes. Perhaps I can explain that by reference to the statement of claim and the prayer for relief. Does your Honour have the statement of claim?

HIS HONOUR: Yes. The statement of claim has never been amended, has it?

MS HARRIS: No, it has not.

HIS HONOUR: So, I can proceed on the document attached to the writ of summons?

MS HARRIS: That is right, your Honour, yes.

HIS HONOUR: Yes, I have that.

MS HARRIS: That I think was in the questions reserved. Perhaps, before I get to the prayer for relief, I can take your Honour to, conveniently paragraph 33 of the statement of claim and you will see there that in view of the foregoing matters we pleaded that the Plant Breeder's Rights Act and the Plant Variety Rights Act were each invalid.

HIS HONOUR: That has been decided now against you.

MS HARRIS: That is right, your Honour, that was turned against us, that is right. Then if you go on to paragraphs 34, your Honour, and 35, these are the matters which are not yet determined, as we say.

HIS HONOUR: That was my understanding. That is what I thought were the outstanding issues.

MS HARRIS: That is so, your Honour, yes.

HIS HONOUR: And do you desire to press for a resolution of those issues? Do you wish to pursue those issues?

MS HARRIS: Yes, they are my instructions, your Honour.

HIS HONOUR: All right. So you want to pursue the issues raised by those parts of the statement of claim that have not already been resolved adversely to you by the orders made in October, and those issues specifically appear to be those raised in paragraphs 34 and 35 of the statement of claim?

MS HARRIS: Yes, that is right, your Honour, which is the subject of paragraph (d) of the prayer for relief.

HIS HONOUR: Yes, all right. Well, we understand that. Now, what do you say about that, Mr Tokley?

MR TOKLEY: In my respectful submission, those matters would be more properly dealt with in the Federal Court but it would not be necessary for your Honour to remit these proceedings to the Federal Court. There are proceedings on foot in the Federal Court in which the same point can be taken and Tasmania is not a party to the proceedings in the High Court. If the plaintiff wishes to challenge the grant of PBR, it would have to do so with Tasmania as a party to the proceedings. Tasmania is a party to the Federal Court proceedings on foot at the moment. So, in my respectful submission - - -

HIS HONOUR: It is possible that I have in the past been told about those Federal Court proceedings but, if I have, I have forgotten what I was told about them, but do I infer from what you say that there is nothing to stop the plaintiff raising the issues in paragraphs 34 and 35 of this statement of claim in the Federal Court and the Federal Court proceedings would be a more convenient set of proceedings in which to raise those issues because of the matter of parties to which you have just referred?

MR TOKLEY: Yes, your Honour, that is correct.

HIS HONOUR: Well, I will see what Ms Harris says about that. Yes, Ms Harris.

MS HARRIS: Your Honour, it is true - let me just perhaps say that the proceedings in the Federal Court are still at a preliminary stage. No defence has yet been filed by the Grain Pool so these points have not been taken. It is, no doubt, possible for the Grain Pool to take those points in that proceeding and that would not be an inconvenient course. Perhaps there are two options open, either the proceedings can....be remitted and then the Federal Court can sort out what, if anything, happens to the two proceedings once it has it before them. In my submission, that is the most convenient course, your Honour, for your Honour to remit the proceedings to the Federal Court and then the Federal Court can deal with the two proceedings as it sees fit in the light of the pleadings as they eventually fall out.

HIS HONOUR: I will see what the Solicitor-General has to say about that. Yes, Mr Solicitor.

MR BENNETT: If your Honour pleases, if I might take your Honour to paragraph 34 which is said to have the remaining issues. The first two of those issues cannot arise because the legislation has been held to be valid under the patents power and, therefore, the question of whether or not a particular grant would or would not have been supportable under the external affairs power is just irrelevant.

So, all that remains really is 34(c). Section 34(c), presumably, is intended to pick up section 10(b) of the PBR Act and the corresponding section of the PVR Act which refers to the breeding constituting an invention for the purposes of that section.

Your Honour, that is something which is specifically provided for in the legislation. Under section 54 of the PBR Act, as under the Patents Act, a person sued for infringement can counterclaim with a challenge to validity and that is the appropriate course for Ms Harris' client to take. Her client is sued for infringement and if it wishes to make the allegation in paragraph 34(c) the appropriate way to do it is as a counterclaim in the infringement action as provided by the Act. There is also a procedure under which they can apply to the Secretary to have an existing grant revoked but that is an alternative procedure available.

In neither case would there be the slightest utility in the Court making a declaration, nor would it be appropriate for the Court to make a declaration of the type referred to in section 34 in the light of those sections. The result is that the proceedings, once remitted, are inevitably doomed to be struck out or dismissed and, in my respectful submission, the appropriate course is for your Honour to save the parties the costs of that and do that now, bearing in mind that does not interfere in any way at all with the rights of the Grain Pool to make either of the two challenges which are the appropriate challenge for it to make.

HIS HONOUR: Yes, Ms Harris.

MS HARRIS: Can I respond to perhaps the second of what the learned Solicitor-General has put to your Honour. Mr Bennett has referred to section 54(2) of the Plant Breeder's Rights Act, which provides that:

A defendant in an action for infringement of PBR in a plant variety may apply, by way of counterclaim, for revocation of that right on the -

grounds set out. Can I say two things about that. Firstly, the section is.....not mandatory. It is not the only way in which PBR in a plant variety can be challenged and there is nothing in that section which would stop the Grain Pool from bringing an action, as it has done in the High Court, for a declaration that the grant of PBR or PVR is invalid and it should be remembered that the Grain Pool's action is not simply for a declaration that the grant of PBR was invalid but also that the original grant of PVR was invalid and, secondly, section 54(2) provides that the defendant may bring an action "by way of counterclaim, for revocation" on the grounds therein set out.

The second matter relates to what the learned Solicitor-General has put to your Honour about paragraphs 34(a) and (b) of the statement of claim. Dr Bennett has submitted to your Honour that they now effectively become redundant by virtue of what the Court has held on the questions reserved. In my submission that is not correct. Paragraph 34(a) and (b) derive from sections 5 and 10 of the Plant Variety Rights Act and the Plants Breeder's Rights Act, respectively. Perhaps I can take your Honour to section 10 of the Plant Breeder's Rights Act. What has been determined, in my submission, by the High Court on the questions reserved is the constitutionality of the legislation itself and the Full Court has held that the legislation is valid.

There is a separate question, and one must have recourse to section 10 to determine that question, whether the particular grant of plant variety rights or plant breeder's rights is valid by reference to section 10 and section 10 provides the criteria which disjunctively must be fulfilled in order that plant breeder's rights be valid.

In relation to the first question, the High Court has not determined whether section 10(a) has been fulfilled in relation to any grant of PBR or whether section 5(b), which is the corresponding provision in the Plant Variety Rights Act has been fulfilled in relation to plant variety rights or whether it has been fulfilled in relation to the grant of plant breeders' rights.

Secondly, the Court has not determined whether or not section 10(b) has been fulfilled. The Court held that a plant variety having the particular characteristics set out in the legislation would be registrable under the Act and would be an invention, but the Court did not determine whether the breeding of the plant variety in question in this case constituted an invention for the purposes of the Constitution.

Both of those questions are still alive. In particular, the first question raises issues about the effect of the transitional provisions in section 82 of the Plant Breeder's Rights Act, which provides that if plant variety rights were granted in the plant variety and those rights were in force before the commencement of this Act, then the rights have effect, despite the repeal of the Plant Variety Rights Act, as if the Plant Breeder's Rights Act had been in force at that time and the rights were being granted as PBR, plant breeders' rights in the variety.

HIS HONOUR: Ms Harris, may I interrupt you to ask, is the order that you seek an order that I remit to the Federal Court of Australia so much of this matter as has not already been determined by the decision of the Full Court of this Court on 23 March 2000?

MS HARRIS: Your Honour, in my submission that is the only convenient course.

HIS HONOUR: Is there anything you wish to add, Mr Solicitor?

MR BENNETT: No.

HIS HONOUR: Is there anything you want to add, Mr Tokley, on that question?

MR TOKLEY: Your Honour, may I respectfully adopt what Mr Bennett has said to you? But may I also respectfully say that the question really is the most convenient vehicle for these questions to be determined. Given the nature - - -

HIS HONOUR: Mr Tokley, my present thinking, at the moment, subject to anything you say, is that I am minded to leave that up to the Federal Court. The Federal Court has before it these other proceedings. The Court can take into account the considerations that have been urged by the Solicitor-General and by you, but it seems to me that the most expedient course to take at the moment is to send so much as remains in this matter down to the Federal Court so they can make their own decision on what is the most practical course to adopt from here on.

MR TOKLEY: I am happy for that course to be adopted, your Honour.

HIS HONOUR: All right. Well, on the assumption that I take that course, what do you say about costs?

MR TOKLEY: In my respectful submission, the defendants should receive the costs of the hearing in the High Court because that aspect of the matter has been completed and it is an easily quantifiable, or readily quantifiable, matter to deal with.

HIS HONOUR: The only possible qualification that occurred to me - and I would invite your comment on this - is that the order that I should make is that the costs of the proceedings to date in the High Court should be the defendants' costs in the proceedings in the Federal Court after remittal to the Court. In other words, if the plaintiff should succeed in the Federal Court on the issues remaining unresolved in this action, a possible point of view is that they should not have to pay the costs of the argument that they have lost. I will see what you and the Solicitor want to say about that, then I will ask Ms Harris what she says.

MR TOKLEY: Thank you, your Honour. In my respectful submission, that would not be an appropriate order, your Honour, for this reason. The plaintiff sought unsuccessfully to challenge the validity of the Commonwealth legislation on that application, or on that point. They have failed totally. The other issues are discrete issues that could have been raised in Federal Court proceedings and did not need to be raised in the High Court and, in fact, were not pressed, nor could they have been pressed in the High Court proceedings.

HIS HONOUR: Incidentally, Mr Tokley, I did not deal with this matter before it went to the Full Court, but are there reserved costs of these proceedings before the costs of the proceedings in the Full Court?

MR TOKLEY: So far as I am aware, no, your Honour.

HIS HONOUR: Perhaps I could make an order that would refer to any reserved costs that would cover that.

MR TOKLEY: Thank you, your Honour.

HIS HONOUR: Yes, Mr Solicitor.

MR BENNETT: I ask for costs also, your Honour, and I am in a stronger position than Mr Tokley because the primary purpose of joining my client was the matter which was dealt with in the High Court, although we may have an interest in the second part of it.

HIS HONOUR: Ms Harris, what do you say about the matter of costs?

MS HARRIS: I am sorry, I missed the last bit of what the learned Solicitor-General just said, but I apprehend that he opposes an order in the terms that your Honour has suggested. Your Honour, in my submission, the most appropriate course would be to make an order in the terms that your Honour has proposed for this reason: that if the proceedings had not been dealt with in two parts, as it were, and the plaintiff had succeeded at the end of the day in having plant variety rights in Franklin barley held invalid, then an appropriate costs order might be that it would get all or most of its costs. The fact that the matter is being dealt with in two parts - - -

HIS HONOUR: Ms Harris, the Solicitor-General says that that might be right as far as Mr Tokley's client is concerned, but it has got nothing to do with the Commonwealth. The issue that remains unresolved in this case, as I understand it, is purely, what might be called, a private issue.

MS HARRIS: Your Honours, I admit most of what the learned Solicitor-General said, that there is force in that submission and perhaps that is the basis for dealing with the costs as between the Grain Pool and the Commonwealth on a slightly different basis to the costs of between the Grain Pool and Mr Tokley's client, Cultivaust.

MR BENNETT: Yes. I should make clear, your Honour, that we do not eschew any interest in the remaining part of the case, although it clearly is not the reason that we were joined in the first place.

HIS HONOUR: Yes.

MR TOKLEY: Could we be briefly heard on that?

HIS HONOUR: Yes, Mr Tokley.

MR TOKLEY: I am sorry, your Honour. I should have perhaps said it earlier that the relief that is sought in the paragraphs referred to by Mr Bennett, paragraphs 34(a), (b) and (c) are really directed towards the State of Tasmania. Cultivaust is only a licensee of Tasmania under the legislation, so that in so far as there is a distinction sought to be drawn between ourselves and the Commonwealth, that distinction is perhaps appropriate in another context, but in this context we were joined to the proceedings when there was no realistic possibility of getting relief in respect of those paragraphs against a licensee, but there might have been against Tasmania had it been joined.

HIS HONOUR: I am not sure why you seek to attach significance to that, on the question of costs, Mr Tokley?

MR TOKLEY: For this reason, your Honour, that, as I understood it, a distinction was sought to be drawn between the Commonwealth and Cultivaust in terms of the nature of the relief being sought against Cultivaust as opposed to Commonwealth. If I can perhaps put it another way, in respect of the hearing before the High Court on the question of the validity of the Commonwealth legislation, we were joined as a party presumably because ultimately our rights depended upon that legislation, but we are not the grantee of those rights in a direct or literal sense. We are merely a licensee of the grantee of those rights. So that if there was ever going to be an opportunity or an attempt to argue that the giving of the grant was not appropriate to give effect to Australia's international obligations, then Tasmania would have had to have been joined to the proceedings.

HIS HONOUR: Yes, thank you, Mr Tokley. Ms Harris, it appears to be the case that as this statement of claim was framed, it inevitably was going to raise a distinct question as to the validity of the Commonwealth legislation. Is there any reason you can advance in addition to what you have already said as to why in those circumstances the defendants should not have their costs of defending the validity of that legislation?

MS HARRIS: Your Honour, perhaps the only - the question of the validity of the legislation is to an extent bound up, although it was severable for the purpose of the question reserved, bound up in the question whether there is a valid grant of PVR at all, plant variety rights or plant breeder's rights at all. It is only one of a number of arguments which the Grain Pool advanced to say that Cultivaust, as the licensee of the supposed rights, is not entitled to perform acts such as those set out in paragraph 36 of the statement of claim.

The validity of the legislation was just one of the reasons why the Grain Pool said they are not entitled to enforce those rights and it was convenient to have that particular question dealt with by the High Court but it is part of a wider case and, in my respectful submission, costs should recognise that.

GLEESON CJ: Very well.

In this matter I remit to the Federal Court of Australia so much of the matter as has not already been determined by the decision of the Full Court of this Court made on 23 March 2000. As to the question of costs, the statement of claim raised a distinct challenge to the validity of the Commonwealth legislation upon which the second defendant relies to support the rights it claims. It was predictable and almost inevitable, I should have thought, that the question of the validity of that legislation would be dealt with separately by the Full Court in the manner that, in fact, occurred.

In those circumstances it seems to me that the appropriate order to make is that the costs of the defendants of the questions reserved should be paid by the plaintiff. Any previous costs that might have been reserved by the Justice hearing this matter before it went to the Full Court and the costs of today's proceedings should be costs in the proceedings as remitted to the Federal Court of Australia and in respect of today's proceedings I certify for counsel.

MR BENNETT: If the Court pleases.

HIS HONOUR: Is there anything else I need to attend to?

MR BENNETT: There is one minor matter, your Honour, and that concerns the question of venue. I know it is not normally the practice to refer to venue in an order, but if the parties are in agreement, it may be convenient for your Honour to do so for this reason: that the action in the High Court was commenced in the Perth office of the registry whereas the other Federal Court proceedings which have been referred to are in the South Australia district registry of the Federal Court. South Australia is probably more convenient for the parties. I note that the plaintiff has Melbourne counsel; the second defendant has South Australian counsel and the Commonwealth, of course, has counsel in the eastern States, so it may be more convenient, if the parties consent, for something to be said about the matter being remitted to South Australia rather than Western Australia.

HIS HONOUR: I would normally leave that to be dealt with as a matter of the administration of the Federal Court, Mr Solicitor.

MR BENNETT: Yes, if your Honour pleases.

HIS HONOUR: Very well. Anybody else want to say anything? Then I will adjourn.

AT 4.57 PM THE MATTER WAS CONCLUDED