NEAT Domestic Trading Pty Limited v AWB Limited & Anor S198/2001 [2002] HCATrans 265 (31 May 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S198 of 2001

B e t w e e n -

NEAT DOMESTIC TRADING PTY LIMITED

Applicant

and

AWB LIMITED

First Respondent

AWB (INTERNATIONAL) LIMITED

Second Respondent

Application for special leave to appeal

McHUGH J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 31 MAY 2002, AT 2.58 PM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC: If the Court pleases, I appear for the applicant. (instructed by Withnell Hetherington)

MR A. ROBERTSON, SC: May it please the Court, I appear with my learned friend, MR A.I. TONKING, for the respondents. (instructed by Allens Arthur Robinson)

McHUGH J: Do not sit down, Mr Robertson.

MR ROBERTSON: Your Honours, the reasons why special leave should not be granted in this case really fall into three categories. Could I take the Court first to page 49 of the application book. This is the reasons for judgment of her Honour Justice Mathews and what her Honour's conclusion was, stated over two or three pages - and I am beginning at paragraph 149 on page 49 - was that:

The sparse material which was sent by the WEA -

that was originally the first respondent, the Wheat Export Authority, the statutory decision-maker -

to AWBI -

which is presently the second respondent -

in relation to NEAT's various applications contained nothing which could be expected to deflect AWBI from applying its policy against bulk export permits.

McHUGH J: That is the point, is it not, as to whether or not it should have such a policy?

MR ROBERTSON: No.

McHUGH J: I mean, it just has this, in effect, blanket policy.

MR ROBERTSON: No, it does not, your Honour, with respect, and her Honour did not find and it was not in issue, if I can take up your Honour Justice McHugh's point, that the policy itself which her Honour earlier described was an unlawful policy. The policy is set out on page 41 in paragraph 120, the third or fourth line, that is that:

AWBI had a policy that, "in the current market environment", no bulk export permits would be approved.

What her Honour said at pages 49 and following was that:

No attempt was made, so far as I can ascertain, to address AWBI's primary concern, namely that the grant of a permit might provide benefits for those growers -

that is, the subject of the application -

but at the possible detriment of growers who supplied their wheat to AWBI's pools.

That is paragraph 150 on page 49. So it was not a case, your Honours, with respect, where the policy was said to be unlawful. What was said to have been wrong from an administrative law perspective was that it was an inflexible policy or, more particularly, because that statement contains an ambiguity, it was said to be that the policy had been applied without regard to the merits of the particular cases.

Now, your Honours would have seen that in the judgment at first instance and in Justice Heerey's judgment on appeal the factors that the two officers took into account in relation to the applications - some of them, in any event - are, for example, set out at page 24, if I can take your Honours to that. This is in relation to, I think, three of the applications, but how many it was does not matter for present purposes. At page 24, one of the officers says:

I considered the applications and decided that they should not be approved. My reasoning was as follows:

and there is set out a number of paragraphs. Now, that is not a case that could be adequately or properly described as applying the policy without regard to the merits. Now, her Honour did say and, with respect, perhaps - - -

CALLINAN J: Would not what is said in (g) always exclude consideration of the merits? If that is an important consideration, it would always be present, would it not?

MR ROBERTSON: Not necessarily, not in relation to a particular application. It may be that in relation to a particular application AWBI was not in that market at all.

CALLINAN J: I thought that the applicants here wanted to export an entirely different grade of wheat from what was being sold at the time by the Board. Am I wrong about that, am I?

MR ROBERTSON: No. No, there was some evidence that durum, there was no separate pool maintained by AWBI, it was part of another pool, but that is not the same thing as saying that AWBI did not sell that product at all, with respect, your Honour. But can I take your Honours then back to page 41 and what her Honour has done perhaps in a slightly confusing way is to treat the causative reason for rejecting the claim, that is, the policy, as involving the suggestion that therefore the merits of each case were not looked at because her Honour says:

it was this policy, and this policy alone, which dictated the rejection of each of NEAT's applications.

But, of course, to say that the policy is the causative element is not the same thing as to say it is a policy that has been applied without regard to the merits and, indeed, that becomes clear where her Honour says that this case falls within the first category of Lord Justice Bankes' decision in Kynoch and the reference there is to page 50, paragraph 154:

If it were necessary for the resolution of this case -

I am sorry, I should go back to page 49, paragraph 151:

Bankes LJ in Kynoch contrasted the position where a body says that it will apply policy unless there is something exceptional in the individual case -

that is the first class -

and, on the other hand, where the body says that it will not hear any application by whomsoever made.

Now, her Honour said at 154:

If it were necessary for the resolution of this case . . . I would place them -

the decisions -

within the first category.

That is, where the body says it will apply policy unless there is something exceptional in the individual case. Of course, that ties in directly with her Honour's finding that NEAT, the present applicant, put nothing to AWBI, there was no substantial argument presented urging a change of policy, that is, it was just a clash.

The next point, if I may go on to it, your Honours, is that this case, between Justice Mathews' decision and the Full Court's decision, changed its character because the statutory decision-maker, by which I mean originally the first respondent, that is, the Wheat Export Authority, dropped out of the proceedings. In other words, the appeal to the Full Court was not brought or was not maintained against the decision of the Wheat Export Authority to not give its consent to the export of wheat under section 57(3) of the Act. So the Wheat Export Authority's refusal of consent was no longer under challenge.

If your Honours have section 57 available - and I think it was part of my learned friend's materials - your Honours will see that - and I should just add to what I have already said - the change from being an administrative law case to a case where the only claim that was made or would be made in the future was a claim for damages for breach of section 46 of the Trade Practices Act 1974 . Your Honours will have picked that up in the judgment of Justice Heerey at page 71, paragraph 6:

NEAT no longer sought any administrative law relief against the Authority -

Now, there are two things about section 57, if I may mention to your Honours. One is section 57(6) which provides that:

For the purposes of subsection 51(1) of the Trade Practices Act, the following things are to be regarded as specified in this section and specifically authorised by this section:

(b) anything that is done by nominated company B -

AWBI -

under this section or for the purposes of this section.

My submission in relation to that point is this, that apart from bare invalidity in an administrative law sense, which goes back to the policy point, there was never any suggestion that what AWBI had done was done for some purpose other than section 57. So a hurdle in my learned friend's path to the claim for damages, which is what this case now is, is that he would have to say that what AWBI had done was not done for the purposes of section 57. As I have submitted, there was no suggestion, apart from bare invalidity, that what AWBI had done was not for the purposes of section 57, no suggestion it was done for some other purpose or in bad faith or dishonestly or anything like that.

The other matter that I wish to refer to your Honours is that a claim for damages in relation to breach of section 46 would have to be, of course, causally related to the conduct and, assuming everything else in the applicant's favour, the fact is that these administrative law proceedings will not get into the position where either he has an approval from AWBI or, perhaps more relevantly because AWBI is no longer a party, these proceedings will never get him to the position where WEA has consented to the export of this wheat. WEA is no longer a party. So that if it is to be said that he suffers damages by reason of the conduct of AWBI, the short answer would be that he never had a consent to export. That is no longer an issue. That lack of consent by WEA is no longer attacked in these proceedings and that is a gap - we would submit a large gap - in the causal link linking any damages claim to anything that was done by AWBI.

So, your Honours, we would submit that this is not a case of an unlawful policy. It is not a case where the policy has been applied without regard to the merits of the case. We would further submit that, in any event, this now being a section 46 Trade Practices Act case, it cannot be said that what AWBI did was not done for the purposes of section 57 of the Wheat Marketing Act and, furthermore, that there is a gap in the causal chain as I have explained, that is, WEA and its lack of consent is no longer an issue and no longer challenged by the applicant. If your Honours please.

McHUGH J: Yes, Mr Gageler.

MR GAGELER: Your Honours, this was always a case under section 46 of the Trade Practices Act when there was still utility in pursuing it. It was also a case which sought administrative law remedies, that is, it sought that the decision of the Wheat Export Authority be set aside. That was, of course, when there was some utility in attempting to have the applications for particular parcels of wheat processed. That time has long gone. The case is now necessarily, by reason of the passing of time, a case that is concerned with damages for past wrongs.

In relation to the construction of section 57, the argument for the applicant comes down to this, that the immunity granted by subsection (6) is relevantly limited to things done within the scope of the power conferred by subsection (3), and incidental to that power, the words "For the purposes of", in our submission, are to be strictly construed, that argument presented to your Honours, of course, not being a point touched upon in any of the judgments below. If that is then the proper construction of subsection (6), that it is concerned with valid actions of AWBI, then one has to ask what is the scope of the power conferred by subsection (3B), the power purportedly exercised, in our submission, read by reference to general principles of statutory construction, read by reference to the context and read by reference to the principle that a power creating monopoly ought not be widely construed.

CALLINAN J: I do not know when you are talking about a single selling desk for commodities.

MR GAGELER: Well, that is what AWBI was talking about, a single selling desk for a commodity. That is not what the statute provides for.

CALLINAN J: If you look at the other terms of the statute, I do not know whether that is so, Mr Gageler.

MR GAGELER: Well, it certainly allows AWBI to export without the need for approval. It then allows AWBI to veto anybody else seeking approval from the Wheat Export Authority. It is only by the adoption of a blanket rule or policy that one translates that necessarily into a single selling desk, and that really goes to the nub of the complaint that we have, your Honour.

CALLINAN J: Did the explanatory memorandum talk about single selling desk?

MR GAGELER: The explanatory memorandum usefully talks about a positive role for the Wheat Export Authority. There is this Authority that is set up for the purpose of approving or not the export of wheat by applicants for the export of wheat. It is required to promulgate guidelines, which it has done. It is required to consult with AWBI, which it seeks to do. The statutory scheme set up by Parliament is made a mockery of if AWBI just has a blanket rule or policy that says in every case there will be a refusal. There is not doubt that that - - -

McHUGH J: That is what puzzles me a bit. Mr Robertson said there is no suggestion that this policy is unlawful.

MR GAGELER: With respect to Mr Robertson, your Honour, that is the nub of the case. That is what we said from beginning to end, that we are here concerned with a blanket rule or policy, the adoption - - -

CALLINAN J: Is it a blanket rule, Mr Gageler?

MR GAGELER: Absolutely.

CALLINAN J: Was it not subject to the qualification that it was in the current environment?

MR GAGELER: Her Honour dealt with that. Your Honour, the clearest statement of it is Mr Flugge at the top of page 36:

I have two things to say to you - - -

CALLINAN J: Yes, we read that and that might be why you were not called on first because of - - -

MR GAGELER: That is not qualified. If your Honours go to the finding at page 41 - your Honours have to understand this in the context of all of the evidence presented by the respondents saying that there was not such a policy - and her Honour says, page 41, line 22:

In spite of Mr Gomersall's protestations that the existence of the policy was only one of a number of relevant factors, the evidence overwhelmingly indicates that -

and here it is -

* AWBI had a policy against approving the bulk export of wheat -

Now, her Honour notes in the next paragraph that the words, "in the current market environment" - - -

McHUGH J: We do not want to hear you any further. Yes, anything in reply, Mr Robertson?

MR ROBERTSON: Yes, your Honour.

McHUGH J: You never give up, Mr Robertson.

MR ROBERTSON: No, certainly not, your Honours. I do not want your Honours to be led into a factual case under the guise of some issue of principle.

CALLINAN J: We sometimes have to do factual cases.

MR ROBERTSON: I know, your Honour, but never when unnecessary I hope. What Mr Flugge said - and her Honour makes no finding about these particular issues - was the subject of affidavit evidence by the two officers and - it is not set out in the reasons - they said, "At no time have I been instructed by Mr Flugge or anyone else never to approve the granting of a consent." They said that one of them was at the meeting, one of them was not and they said, "That is not the policy that we applied." So however eye-catching it may be for what Mr Flugge said to be taken out of context, there is no finding by her Honour that that was the policy that was applied.

McHUGH J: But her Honour said specifically that AWBI had a policy against approving the bulk export of wheat.

MR ROBERTSON: Yes, your Honour, but you cannot take that out of context because that is, if I may say so, the first bullet point in paragraph 119, "had a policy", but you cannot read that separately from the lines that immediately follow it, that is:

during the whole of the period which is relevant to this case, AWBI had a policy that, "in the current market environment", no bulk export permits would be approved.

But, in any event, that is not really the point. The point is whether there is a policy that is applied without regard to the merits of a particular case and there is no finding whatever - and, indeed, it was not even put to Mr Richardson, one of the officers - that the detailed matters that he said he had taken into account in what he had written on the applications was not taken into account. So the case turns on its facts. The fact is that NEAT gave no cause, put nothing forward in the attenuated information that became available to my client. There was nothing put forward to depart from the policy. Regard was had to the merits and, however strictly one construes section 57(6) of the Wheat Marketing Act, what was done here by AWBI obviously was done for the purposes of the section. There was no suggestion that it was not done - - -

McHUGH J: It all depends in point of law whether it can be said to be done for the purpose of the section. The courts have had 100 years of experience of dealing with these limitation-type provisions and they have always read them down.

MR ROBERTSON: Your Honour, they have never, with respect, read a provision that says anything done for the purposes of the section as not applying where there is no suggestion that there was another purpose.

McHUGH J: That may be but - - -

MR ROBERTSON: But the other point I would wish to correct is that the issue between the parties was never whether there was a policy. It was quite plain that there was a policy. The policy was mentioned in various documents. That was not the issue between the parties. The issue between the parties was whether or not the merits, that is, the details of the particular case, had been looked at by the two officers. What makes this case a particularly unsuitable vehicle is that your Honours will see from the reasons for decision that her Honour was forced to speculate as to what it was that was the material that AWBI had before it. Could I ask your Honours in conclusion to look at page 48. It is to be recalled that WEA was originally the first respondent and her Honour says in paragraph 145, line 17 or so:

The evidence does not indicate whether this letter was sent only to the WEA or to both the WEA and AWBI. It is appropriate in the circumstances to assume the latter.

Then her Honour makes the same point in relation to the third and fourth applications and the fifth application. So that there were no details made available to my client because, of course, as her Honour held, the applicant was a competitor or a would-be competitor of AWBI and there were discussions between the parties and the present applicant said, "No, I do not want details of what I propose to do to be supplied to AWBI." So it is a case that turns on its particular facts and, as I have also already submitted, it is an inappropriate vehicle because of the case now being entirely a section 46 case, but the decision of WEA not to give consent no longer being challenged. If your Honours please.

McHUGH J: There will be a grant of special leave in this case.

AT 3.23 PM THE MATTER WAS CONCLUDED