Cultivaust Pty Ltd & Anor v The State of Western Australia A11/1998 [2001] HCATrans 213 (23 May 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A11 of 1998

B e t w e e n -

CULTIVAUST PTY LTD and THE STATE OF TASMANIA

Plaintiffs

and

THE STATE OF WESTERN AUSTRALIA

Defendant

Application for joinder and to amend statement of claim

Application for remittal

GLEESON CJ

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY AND PERTH BY VIDEO LINK TO CANBERRA

ON WEDNESDAY, 23 MAY 2001, AT 4.30 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC: If your Honour pleases, I appear with my learned friend, MR A.L. TOKLEY, for the applicant plaintiffs, who are also the respondents to an application. (instructed by Corsers Solicitors)

MR R.M. MITCHELL: If it please the Court, I appear for the defendant. (instructed by the Crown Solicitor for Western Australia)

MR R.L. HOOKER: May it please the Court, I appear for the proposed added defendant. (instructed by Mallesons Stephen Jaques)

HIS HONOUR: Mr Jackson, is it convenient if we deal with the applicant for remitter first?

MR JACKSON: Yes, your Honour.

HIS HONOUR: Yes, Mr Mitchell.

MR MITCHELL: Your Honour, I would ask that the affidavit of Michael Grant Lundberg sworn on 23 April 2001 be taken as read. We have also filed - - -

HIS HONOUR: Are there any objections by counsel to any of the affidavits?

MR JACKSON: No, your Honour.

MR MITCHELL: Not on our part, your Honour. We do note there is some material which is perhaps more in the nature of submission than pleading of fact, but we do not wish to take objection to that.

HIS HONOUR: I have read the affidavits of Mark William Kurtze of 11 April 2001, Michael Grant Lundberg of 23 April 2001 and Mark William Kurtze of 8 May 2001.

MR JACKSON: There is one further affidavit of Mr Kurtze of 26 November 1999 which deals with the earlier application for leave to amend and other related matters.

HIS HONOUR: Thank you, Mr Jackson. I have read that also. Yes, Mr Mitchell.

MR MITCHELL: Yes. Your Honour, there have been two significant changes since this matter was last before the Full Court, both of which, we say, favour a remittal of this matter to the Federal Court. The first change is that there has now been a pleading out of the plaintiffs' case or claim against the Grain Pool and the constitutional questions in this action, as we understand it, have always been asked in order to facilitate the resolution of that dispute.

What we say in summary is that now that this pleading has been undertaken it is apparent that a ruling on the validity of the Grain Marketing Act 1975 cannot finally resolve the dispute between the plaintiffs and the Grain Pool. It is also apparent that the final resolution of that dispute will not necessarily require the courts to determine the validity of the Grain Marketing Act. If I can explain why we say that is so.

Your Honour, as we understand the claim which the plaintiffs seek to make against the Grain Pool, it has three aspects. Firstly, there is a claim that the Grain Pool has infringed plant breeder's rights in Franklin barley. Secondly, there is an alleged breach of an alleged contract. Thirdly, there is an alleged breach of fiduciary duty. On the pleadings as they appear in the Federal Court at present, the claims being essentially the same in this Court and the Federal Court, the validity of the Grain Marketing Act is relevant potentially in only two ways.

The first way in which it is relevant is in relation to a limitation defence that has been pleaded by the Grain Pool. What the Grain Pool says in part is that section 47A of the Limitation Act is available to it, and that provision provides for a shorter limitation period for actions in respect of acts "done in pursuance or execution or intended execution of an Act". The plaintiffs raise a number of matters in response to that pleaded defence, including that they do not admit that the Grain Marketing Act is a valid Act to which section 47A could apply. I will not take your Honour to the pleadings but they are at paragraphs 54 to 56 of the amended defence in reply in the Federal Court proceedings respectively.

The second question to which the validity of the Grain Marketing Act may be relevant is the assessment of damages. In the Federal Court proceedings Cultivaust pleads it has suffered loss by reason of the conduct of the acts or actions of the Grain Pool and part of that loss it claims is due to its inability to sell or export Franklin barley.

HIS HONOUR: Mr Mitchell, can I interrupt you to ask a question? It really goes to the relationship between this action No A11 of 1998 and the action that is currently on foot in the Federal Court. What is the difference between the two actions or, to put it bluntly, why are there two actions?

MR MITCHELL: I am not sure that I am the best person to answer that. As I understand it, on the pleadings, the claim against the Grain Pool is essentially the same. There are some minor differences in pleading but nothing of real consequence. In this action, the plaintiffs also seek declarations as to the validity of the Grain Marketing Act, both in its current form and in the form it was before it was amended in 1997. As to why Cultivaust has seen it necessary to bring two actions, it is probably best I leave that for Cultivaust's counsel to answer.

HIS HONOUR: But am I right in thinking that the substance of the dispute concerns marketing of a certain type of grain in and from Western Australia?

MR MITCHELL: That is correct, and we say the matter, which is the subject of the two proceedings, is the same in each case. It is a claim by Cultivaust and Tasmania against the Grain Pool seeking an account of profits of damages in respect of conduct of which the Grain Pool has allegedly undertaken in relation to Franklin barley. So, in terms of the substance of the matter in dispute, we do not see that there is any difference between this matter and the matter in the Federal Court, or the proceedings in the Federal Court, which is one of the reasons - - -

HIS HONOUR: Perhaps I will interrupt you, Mr Mitchell, to see what Mr Jackson has to say specifically in answer to that question.

MR MITCHELL: Yes, your Honour.

HIS HONOUR: Yes, Mr Jackson? Why are there two actions?

MR JACKSON: There are two actions, your Honour, because in the first place these proceedings were instituted in the Court for various declarations and other relief. That is the matter your Honour is currently hearing. I do not recall now whether it was exactly the same time or afterwards, an action was brought in the Federal Court with a view, essentially, to resolving issues that do not involve constitutional questions. There have been some defences raised in those proceedings relying on the validity of the Western Australian Act and in response to that one then sees in that court that there is some attack on the enactments, the validity of which - - -

HIS HONOUR: Am I right in thinking that whilst there are numerous issues, there is only substantially one controversy and that is a controversy about rights to market a certain kind of grain in and from Western Australia?

MR JACKSON: Your Honour, that is so, but one does see to deal with that aspect in the Federal Court would require considerable reconstitution of that action. Can I put it this way: one sees, for example, in paragraph 26 of the proposed pleading that we have in this Court that one of the things that we seek to challenge is the validity of the provisions of the current Grain Marketing Act which purport to allow the Grain Marketing Board to control the marketing of the grain that is to be, for example, exported or sold for export from the Commonwealth, and there are matters of that kind. I will not go into them one by one but it really goes beyond a narrow case in which we seek to resolve matters in respect of the past. We seek to obtain declarations as to the validity of the State enactment in the future as well.

HIS HONOUR: One of the things that is put against you, as I understand it, is that a decision as to the validity of the Western Australian legislation would not be conclusive of the litigation at all. What is your response to that?

MR JACKSON: Your Honour, I would say two things about it. The first, your Honour, is this, that it would effectively fill it out, if I could put it that way, a very large part of any defence that might be based upon the exercise of statutory powers including, if one went, I suppose, to the Federal Court action, an attempt to rely upon limitation periods. The other feature of it is that the only aspects that would be left of the case in this Court would be ones that might give rise to some money claims and in respect of any aspect of those, we would then be perfectly happy for the matter to be dealt with by the Federal Court.

Your Honour, all we seek to have resolved by this Court - and if I could add one thing in relation to that in just a moment - ultimately, is to have the constitutional issues about the validity of the State enactment determined. The only reason, your Honour, why we have put in the current proposed statement of claim, claims that, in any event, go perhaps to the general law is because we invited, as your Honour will see from the last affidavit of Mr Kurtze, the other sides to take the view that they could be dealt with in the Federal Court and this action deal only with the constitutional issues and that approach was rebuffed.

HIS HONOUR: I would like to hear you fully on your answer to the argument that the matter should be remitted because, as I would understand it, what is proposed is that if the action were remitted to the Federal Court, your proposed addition of a defendant and amendment to the statement of claim would be then dealt with in the Federal Court.

MR JACKSON: Well, it would be, of course, your Honour, but it is a separate action from the action that is currently there. It is a matter that would be - I suppose in the end, no doubt, anything can be consolidated or heard together, but it is a separate action and what we would seek to say about it, your Honour will see in our written submission, I think in paragraphs 13 and following. Could we say this, your Honour, that in reality, in our submission - and I am referring particularly to paragraphs 15 and 16 of that written submission, what we would seek to say is that it is really premature to remit the matter to the Federal Court and the reality of the case is that there is not likely to be any substantial dispute about the allegations in the statement of claim.

Could I pause to say, your Honour, in relation to that, that if one goes through the statement of claim, it largely alleges two things. One of those things consists of assertions as to the construction of the legislation or as to the validity of the legislation, the ordinary types of matters one sees alleged in constitutional cases. The second is that if your Honour goes to Mr Kurtze's last affidavit of 8 May and to paragraph 9 of that and to the document to which he refers, in that paragraph - it is exhibit 2 to that affidavit - your Honour will see from it that the facts that are alleged in the draft statement of claim are ones that fundamentally have been admitted or are not in contest in the proceedings in the Federal Court in the statement of claim. It has been deliberately drafted in that way in order to avoid there being any significant controversy as to fact. Your Honour, I will not go through the statement of claim paragraph by paragraph but if one does, we would submit it is fairly clear that there is hardly likely to be anything that is seriously in contest.

Your Honour, the other thing, of course, is that this case is part heard, in a sense, in the Court on the case stated that was before the Court earlier. Your Honour, what we would submit is that it is really premature to remit the case to the Federal Court at this point. We recognise though at some point it may be that aspects of it or the remaining aspects of it would go to the Federal Court but they are, we would submit, likely to be matters with which the Court would not be troubled in any event. Your Honour, that is our submission.

HIS HONOUR: Mr Hooker, in Western Australia, I understand you support Mr Mitchell's submissions in relation to this matter of remitter?

MR HOOKER: That is so, and for like reasons, your Honour, we oppose the joinder of my client, the Grain Pool, to the proceedings as presently constituted in this Court.

HIS HONOUR: But if the matter were remitted, that would be a question to be decided by the Federal Court.

MR HOOKER: Yes, indeed, your Honour.

HIS HONOUR: Very well. Thank you, Mr Hooker.

In this matter it appears to me that the just and efficient resolution of the controversy between the parties will best be promoted by making an order for remittal of the kind sought by the defendant, the State of Western Australia, in matter A11 of 1998. In reaching that conclusion, I have had particular regard to the pendency in the Federal Court of existing proceedings relating to the same controversy; to the fact that there are disputes between the parties to the proceedings in this Court about the form of the statement of claim and the proposed amended statement of claim; to the fact that the resolution of the question as to the validity of the Grain Marketing Act (WA) would not resolve all the issues in controversy between the parties; and to the circumstance that amendments proposed to the statement of claim raise certain disputed questions of fact appropriate for determination by a trial court.

In the circumstances, I propose to make the order sought in paragraph 1 of the summons of the defendant dated 26 April 2001, that is, I propose to order that the matter be remitted to the Federal Court of Australia and that the costs of this application be costs in the cause. It will follow from that order that the application to join a defendant and the application to amend the statement of claim will be matters to be taken up in the Federal Court when it becomes seized of the case.

Mr Mitchell, in the order that you sought, you asked for the matter to be remitted to a particular registry of the Federal Court. That is a matter for the internal administration of the Federal Court, is it not?

MR MITCHELL: Yes, I am content with that. Your Honour, the only reason we specified that registry was that was where the Federal Court action is currently pending, but I am content with just a remittal to the Federal Court.

HIS HONOUR: I make an order for remittal of the matter to the Federal Court; costs of this application to be costs in the cause. It will be for the Federal Court to decide matters of administration of that kind. Is there anything further any party wish to put to me?

MR JACKSON: Will your Honour certify it is a proper case for counsel to attend?

HIS HONOUR: Yes, I so certify.

MR MITCHELL: Nothing further for our part, your Honour.

HIS HONOUR: Very well then, I will adjourn.

AT 4.48 PM THE MATTER WAS CONCLUDED