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High Court of Australia Transcripts |
Sydney No S225 of 2002
B e t w e e n -
NEAT DOMESTIC TRADING PTY LIMITED
Appellant
and
AWB LIMITED
First Respondent
AWB (INTERNATIONAL) LIMITED
Second Respondent
GLEESON CJ
McHUGH J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 14 NOVEMBER 2002, AT 10.25 AM
Copyright in the High Court of Australia
MR S.J. GAGELER, SC: If the Court pleases, I appear with my learned friend, MR J.K. KIRK, for the appellant. (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 respondent. (instructed by Allens Arthur Robinson)
GLEESON CJ: Yes, Mr Gageler.
MR GAGELER: I propose to deal first with the facts and then with the statute. The critical findings of fact your Honours will find in volume 4 of the appeal book at page 724 in paragraphs 119 to 122 of her Honour's judgment. Those findings must be read in the light of her Honour's discussion of the evidence, particularly the references to the Pars Ram affair at paragraphs 88 to 94, and the cross-examination of the two AWBI officers who considered NEAT's six applications, that is Mr Gomersall and Mr Richardson, that cross-examination being recorded at paragraphs 108 to 118.
What your Honours will see in the cross-examination of Mr Gomersall, beginning at paragraph 109, is that in the final sentence as her Honour recorded it, Mr Gomersall denied "that his refusal of the applications was automatic."
In paragraph 110 he denied that preservation of "the single desk marketing system" was the only "factor in his decision-making". In paragraph 113 he maintained that concern about "vomitoxin levels was not a genuine ground for refusing" the fifth of the applications and in paragraph 115 he said that the current market environment was something that "was susceptible to change on a daily basis". Contrast Mr Richardson's evidence recorded in paragraphs 117 to 118. Your Honours will see at about line 37 on page 723 that:
Mr Richardson conceded that in July 1999 AWBI had a policy against the granting of bulk export permits.
Line 42:
Mr Richardson agreed that he knew about this policy - - -
KIRBY J: What page is that, I am sorry?
MR GAGELER: Page 723:
and that it did not alter while he was dealing with bulk export permits. He also agreed that it was for his seniors, not himself, to determine whether there had been a change in the current market environment which would justify a departure from AWBI's normal policy. In other words, the policy which prohibited the grant of bulk export permits was to remain in place unless and until Mr Richardson's seniors at AWB "decreed that there had been a change of circumstances to justify departure from the policy". This did not occur during the period between November 1999 and March 2000.
Ultimately, Mr Richardson agreed with Mr Hughes that the "real reason" why he rejected both applications -
he considered two of them -
was because of the existence of the policy against bulk export permits and the fact that his seniors had not notified a change of market conditions justifying departure from the policy.
In the light of that evidence her Honour's finding at paragraph 109 was that she was satisfied that the effective reason for AWBI's refusal to approve NEAT's application in each case was the existence of its policy against bulk permits for the export of wheat and, 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, one, AWBI had a policy against approving the bulk export of wheat; and, two, AWBI rejected NEAT's applications in pursuance of this policy. The existence of the policy - - -
KIRBY J: Could you help me. I am looking at the orders and relief you seek on 777. This is all happening several years ago now. Now, what would be the practical consequence of the relief that you are seeking? I mean, what happens? You do not get damages but you get relief from the decisions and a requirement that they be remade, but it is a long way in the past? What happens, is this to correct the future, effectively, is it, or what?
MR GAGELER: Your Honour will see - - -
KIRBY J: You declare them void, set them aside and order the costs, but you do not - - -
MR GAGELER: Your Honour will recall that the way in which the proceeding comes to the Court is as a preliminary question for determination in proceedings which, as originally constituted - - -
KIRBY J: That is right, yes.
MR GAGELER: - - - relied upon two causes of action. One was simply a cause of action, if I can call it that, under the AD(JR) Act 1989 seeking to have the decisions of AWBI and the consequent decision of the Wheat Export authority in each case set aside and remade.
KIRBY J: Yes. You remind me the respondent points out that even if you were to succeed, it has to go back to the Federal Court. That is in their submissions.
MR GAGELER: Yes, that was one cause action which had meaning when there was still a buyer for this particular wheat. It rapidly ceased to have any utility - - -
KIRBY J: Yes, the weevils would get it, I assume. Maybe not, maybe with the drought the wheat is very valuable now; if you carefully packed it away, it might have gone up in value.
MR GAGELER: There are physical weevils and economic weevils that are eating away, your Honour, but we accept and we no longer press the claim based on the AD(JR) Act insofar as what was originally sought was a remaking of the decisions. The other aspect of the claim was a cause of action based on breach of section 46 of the Trade Practices Act. Now, to make out the claim under section 46 of the Trade Practices Act it is necessary to show that what was done by AWBI was not authorised, or not specifically authorised, by section 57(3)(b) of the Wheat Marketing Act so as to be immune from the operation of section 57(6).
There are two bases upon which we say that section 57(3)(b) is not invoked. One is that on the proper construction of that provision it prevents the application of a rule or policy without regard to the merits of the case. The other is, separately and in any event, it is a decision under an enactment and is therefore liable to be set aside, ab initio, if a ground is made out under the AD(JR) Act, one of those grounds being where a decision of a discretionary nature is made in pursuance of a rule or policy without regard to the merits of the case.
KIRBY J: How does that second way of putting it square with your abandonment of your AD(JR) Act?
MR GAGELER: I do not abandon the entirety of the AD(JR) Act claim.
KIRBY J: You keep it alive as a basis of this qualification of the exemption from the Trade Practices Act?
MR GAGELER: Yes, exactly. I no longer seek a remitter of the matter which is one of the orders that can be made under section 16 of the AD(JR) Act. I still seek under section 16 of the AD(JR) Act that the decision be set aside or quashed and I seek a declaration which could be made either under section 16 or, relevantly, under the Federal Court Act or the Trade Practices Act.
KIRBY J: A bare declaration under the AD(JR) Act. That seems a - - -
MR GAGELER: That is not a bare declaration, a declaration consequent upon setting aside or quashing the decision.
KIRBY J: That would leave it open to the respondent to make any fresh and lawful decision.
MR GAGELER: Well, what it does for my cause of action under section 46 is that it gives me conduct that occurred at a particular point in time that caused damage to my client that is not immune from the operation of section 46 of the Trade Practices Act by virtue of the combined operation of section 51 of that Act and section 57(6) of the Wheat Marketing Act. I was drawing your Honours' attention to paragraph 119 - - -
GLEESON CJ: The Wheat Export Authority is not a party to these proceedings?
MR GAGELER: No. It was originally but it is no longer necessary for the purposes of the ultimate relief being sought, which is related to the claim under section 46 of the Trade Practices Act.
KIRBY J: But it knows of the proceedings and could, if it had wished, have intervened to protect any interest that it had in the administration of the Acts. Does it know of the proceedings? Because at least potentially it has a contingent obligation, does it not?
MR GAGELER: There is no right of the Wheat Export Authority that continues to be an issue in the proceedings.
GLEESON CJ: And there is no decision of the Wheat Export Authority - - -
MR GAGELER: And there is no decision - - -
GLEESON CJ: - - - that is sought to be set aside.
MR GAGELER: Exactly, yes. The existence of the policy her Honour then turns to at paragraph 120, page 724, where her Honour identifies the policy somewhat more precisely as being that:
AWBI had a policy that, "in the current market environment", no bulk export permits would be approved.
What her Honour there says needs to be read with her Honour's more full discussion of the policy at paragraph 132 and following. What her Honour says in paragraphs 139 and 140 is that the addition of the words, "the current market environment", relevantly added nothing to the statement of the policy. Her Honour's finding, line 20, page 730, was that that expression:
referred to major international market conditions which were unlikely to change in the short-term and which did not change during the relevant period.
GLEESON CJ: Was there evidence as to the structure of the world wheat market?
MR GAGELER: There were some internal documents of AWB and AWBI that made reference to the structure of the world market. I will take your Honour to one of those in a moment.
KIRBY J: Will you take us in due course to why the Parliament set up this somewhat curious, as it were, delegation to a private organisation?
MR GAGELER: I certainly will, yes.
KIRBY J: Presumably - and you may clarify this - it is because of the inequalities of the international wheat market and the desire to ensure that in such an unequal market Australia could speak with one voice and speak for the majority interest of wheat growers in this country?
MR GAGELER: In broad terms, that is correct, but I will take your Honour to that. I will do that once I have cleared away these preliminary facts. I will go to the statute, including the statutory history. Your Honours might note in that discussion at paragraph 137 on page 729 her Honour discerned from disparate sources AWBI's reason for maintaining the policy, and insofar as it is AWBI's reason, we accept it as a fair distillation of the way AWBI perceived it, and that was, as your Honour will see, that the grant of bulk export permits might well benefit individual growers who sell their wheat under the permits, but this will be at the likely expense - and we emphasise "likely expense" - of growers who deliver their wheat to the national pool. One of the documents her Honour relied upon to discern that policy her Honour identifies in paragraph 136, and I will go to it in a moment. That was a confidential document of 31 March 2000. So far as the application of the policy is concerned her Honour deals with that at page 729.
KIRBY J: Why was it confidential and do we have it?
MR GAGELER: Your Honours do have it.
KIRBY J: Is it confidential to the World Trade Organisation - - -
MR GAGELER: Well, if I could say, your Honour, the question would be better directed to Mr Robertson who claimed confidentiality in respect of it, but I did want to draw your Honours' attention to it, not only for its content but for two other reasons. One is that, although the clearest articulation of the reasons for the policy, it is a document that was, one, confidential and that, two, post-dated the events with which we are concerned. That is perhaps nothing more than a forensic flourish but it does put in context the nature of this policy and the difficulty that any trader in wheat had with dealing with an organisation in order to administer it.
GLEESON CJ: Policy may operate at several layers in a situation like this. At a higher level, there is the policy of the Parliament in requiring that the decision of the Wheat Export Authority have the approval of an organisation representing people with a financial interest in the outcome of the decision.
MR GAGELER: Yes. The application of the policy at page 724, paragraph 121, your Honours will see very clear findings that in her Honour's view the evidence overwhelmingly indicates that it was this policy and this policy alone which dictated the rejection of each of NEAT's applications. Mr Gomersall said that the existence of the policy was but one of a number of considerations which he took into account when declining to approve NEAT's applications. In this regard, his affidavit and that of Mr Richardson set out a number of factors, which were said to have been taken into account in protecting the various applications. Some of these considerations were specific to the particular application and some were of a more general nature. Insofar as specific or individual considerations were concerned, I have difficulty in accepting that they played any realistic part in the rejection of the applications.
KIRBY J: Were these witnesses called to give oral evidence?
MR GAGELER: Absolutely, and cross-examined at length, and Mr Gomersall was disbelieved. At line 12 in the same paragraph:
But I cannot accept that they were in fact given any realistic consideration at that stage.
Then in paragraph 122, the last two lines:
the assessment of each case on an individual basis was a meaningless exercise. AWBI's assurance that this would occur was a hollow one in these circumstances.
GLEESON CJ: In exercising its statutory power to approve or not approve, was the company entitled to simply address the financial interests of those it represented and make a decision as to whether to approve or disapprove on the basis of a view as to where their financial interests lay?
MR GAGELER: What the company had to do, in our submission, is have regard to the merits of the individual application before it and taking account - - -
HAYNE J: Why?
MR GAGELER: Why?
HAYNE J: Yes, why?
MR GAGELER: Your Honour, I will come to the statute in just a moment; I wanted to clear away the facts.
HAYNE J: In due course, because you should not assume that I accept that the power concerned is a statutory power.
MR GAGELER: That is why I am here, your Honour. The reasons for the policy - I had mentioned the document of 31 March 2000. That is a document that your Honours will find in volume 3 of the appeal books, page 654 and following. That is a document in respect of which confidentiality is no longer claimed by the respondents - it was claimed at the trial. Your Honours will note that there are some yellow documents in the appeal books and I think that they are the only documents for which confidentiality is sought to be maintained.
KIRBY J: Is it 650 or 654?
MR GAGELER: Pages 654 through to 658. I am sorry, I am told that none of the documents is now sought to be claimed as confidential.
KIRBY J: I am sorry?
MR GAGELER: I had wrongly informed your Honours that the yellow documents in the appeal books were claimed to be confidential. That is no longer the case. Your Honours will see at page 655, in partial answer to your Honour the Chief Justice's earlier question to me, a reference at about line 27 to the structure of the industry. Indeed, under the heading "Broad Bulk Permit Issues" on that page, a very broad statement as to the reasons for maintaining what is there described as a "Single Desk marketing" policy.
GLEESON CJ: Just going further up the page, Mr Gageler, to line 15, it is said:
the Wheat Export Authority (WEA) must consult with AWB (International) Limited.
AWB (International) Limited is an organisation that represents growers, is it not?
MR GAGELER: It is a corporation incorporated under the Corporations Law, some shareholders of which are growers, some are not. There are A class shares owned by the growers.
GLEESON CJ: Consulting AWB (International) Limited is simply a more efficient means of consulting wheat growers, is it not?
MR GAGELER: My answer to your Honour's question was wrong but, probably immaterially, it is AWB that is owned in part by wheat growers. AWBI is its wholly owned subsidiary. The answer to your Honour's question is a qualified yes and it is qualified in this way: the persons being consulted are wheat growers who own shares effectively in AWBI.
GLEESON CJ: Yes, but it is a mechanism for what in another context might be called "industry consultation".
MR GAGELER: It is a very peculiar mechanism for industry consultation.
GLEESON CJ: Yes.
MR GAGELER: Because it is not all players in the industry who have a voice. It is a particular player in the industry. That particular player being in competition with others.
KIRBY J: What does AWBI do with its profits, and what does AWB do with its profits? Could that be checked and you can tell us what the scheme of the memorandum is?
MR GAGELER: Yes. Since these proceedings, AWB has been floated. There are two classes of shareholders. There are the A class shareholders who are the growers. There are B class shareholders who effectively have the financial interest. I believe that it is only the B class shareholders who get dividends.
CALLINAN J: It is a little unusual, Mr Gageler. Most commodity boards in Australia have traditionally provided for a direct form of consultation with all growers and producers who actually have a vote; first at a local level and often on a State or national level.
MR GAGELER: Yes.
CALLINAN J: The interposition of a company which does not embrace a shareholder as everybody is unusual.
MR GAGELER: Yes. I admit that.
KIRBY J: This is all part of privatisation and outsourcing of what used to be governmental activities.
MR GAGELER: Well, it is a particular transitional phase, your Honour, where one has a hybrid, one has a company incorporated under the Corporations Law with the obvious commercial incentives that necessarily apply to such a body, but one has conferred upon that body a peculiar statutory power. The existence of the power is undenied. The ability to use it for the commercial interests of the corporation upon which it is conferred is undenied. The question is what rights and obligations attend the exercise of the discretionary power.
KIRBY J: You say undenied. Undenied by the respondent in these proceedings, because you will not forget Justice Hayne's question that there is an issue as to whether this company is floating out there all on its own as a private corporation or whether it is - - -
MR GAGELER: The short answer to that, your Honour, is that floating out there as a private corporation it can pass any resolution it wishes. There is no effect on my client. It is because of the operation of section 57(1) and section 57(3B), and only because of that, that what is done in this context has any operation or effect. It is, therefore, in my submission - I will come to it more directly - a decision made under an enactment for the purposes of the AD(JR) Act as her Honour found and in respect of which there is no notice of contention.
GLEESON CJ: Now, I would like to understand a little better the part you took us to on 655 at line 30.
MR GAGELER: Yes.
GLEESON CJ: It says:
Because of the structure of the Australian wheat industry, AWB(I) is obliged to undertake an annual export marketing program of approximately 16 million tonnes.
What does that mean exactly?
MR GAGELER: That would be an overstatement of the position. The obligation of AWBI under section 84 of the Wheat Marketing Act is to accept wheat that is offered to it for inclusion in a pool operated by that company, and it meets the standards required by the company. There is no obligation on the part of AWBI to establish any particular pool.
GLEESON CJ: Does it mean, in a practical sense, that AWBI is obliged to accept and purchase wheat provided by wheat growers up to a level that will enable it to maintain a plan or program to market about 16 million tonnes a year by export?
MR GAGELER: That is not a matter of legal obligation on the part of AWBI.
GLEESON CJ: It depends what mean by the legal obligation. There is a legal obligation to accept wheat delivered to it, is there not?
MR GAGELER: No, there is a legal obligation to accept wheat delivered into a pool that it has established.
GLEESON CJ: Yes.
MR GAGELER: It has no legal obligation to establish a pool and one of the problems here, your Honour, as the evidence indicates, is that durum wheat was a very peculiar and costly commodity, that is, that the cost to grow durum was higher than the cost to grow softer wheats. It was also a commodity that commanded a higher price, generally, from the softer wheats, yet AWBI had, at the relevant time, no pool for the particular lower grade of durum wheat with which we were concerned here, which is ADR feed wheat.
It had a general soft wheat pool into which any of the growers could have sold their commodity but at an extremely low price. That is one of the problems.
HAYNE J: You referred to some statute as bearing on - - -
MR GAGELER: I am jumping ahead of myself, your Honour, but it is the Wheat Marketing Act which your Honours - - -
HAYNE J: Yes, and you said section 4, I think.
MR GAGELER: No, I said 84.
HAYNE J: Section 84, was it, thank you.
MR GAGELER: Yes.
CALLINAN J: Mr Gageler, is there any material to show why there was not a pool for the more valuable durum wheat?
MR GAGELER: No. There is material - - -
CALLINAN J: Is there any evidence from which an inference could be drawn as to why there was not a pool? Because it does not appear, immediately, to be directly competitive with the respondents - - -
MR GAGELER: That is part of my point.
CALLINAN J: There is no assertion anywhere or nothing at all to indicate that it is or how - - -
MR GAGELER: That it is competitive?
CALLINAN J: Yes.
MR GAGELER: Yes, I think in one of the affidavits, either of Mr Gomersall or Mr Richardson, there is an assertion that insofar as wheat was sought to be being exported to Italy the AWBI was negotiating with an Italian buyer for the sale of a higher grade of durum, ADR6, and that a sale of ADR feed may have had some effect on those negotiations. I will find that evidence in a moment, your Honour.
KIRBY J: Is 6 the highest? I thought 1 was the highest.
MR GAGELER: No, 1 is the highest and it goes down to 6 and then below 6 there is feed.
CALLINAN J: What is feed used for?
KIRBY J: Pasta.
MR GAGELER: Feed means feeding to animals.
GLEESON CJ: Stock feed.
CALLINAN J: That is what I thought.
MR GAGELER: Generally, yes.
GLEESON CJ: Stock feed. It is the higher grade that goes into the making of pasta.
MR GAGELER: The point is that the Italian buyer was prepared to accept ADR feed for making pasta.
GLEESON CJ: Yes. When you are talking about feed, you are talking about stock feed.
MR GAGELER: I am talking about the grading system. Your Honours will see - - -
KIRBY J: There is a serious deterioration in Italian restaurants.
CALLINAN J: I was going to say you have to be careful where you ate.
KIRBY J: Or a great praise of Australian durum.
MR GAGELER: If your Honours look in volume 3 at page 680, what your Honours will find is a table that sets out the various grades, the highest grade being ADR1, going down to ADRL. I cannot tell your Honours what that is but it must be bad.
GLEESON CJ: It is probably what chooks get.
MR GAGELER: Yes, probably. I was at volume 3, page 655. I wanted to draw your Honours' attention to the entirety of that page. This is the main document, I think, that her Honour drew the reason for the policy from. Your Honours will note the last paragraph on page 655 it is said:
Whilst AWB(I) assesses each bulk permit application on a case-by-case basis, in general, the issuing of bulk permits would mean that AWB(I) would lose control of a number of critical advantages that the Single Desk provides which would, in turn, negatively impact on our ability to maximize returns to growers who deliver to the National Pool. These advantages - - -
GLEESON CJ: What do you say would or should be involved in the assessment of such an application? You referred earlier to the merits of an application. What sort of considerations are involved in the concept of merits?
MR GAGELER: Can I answer that question by taking your Honours to the documents relating to the fifth application. I do that because it is the one which was referred to by Justice Heerey at pages 756 to 757. Your Honours will find the relevant documents in volume 3. At page 579 your Honours will find a redacted version of the application. The full set of documents your Honours could trace in our chronology, but can I take your Honours to the critical ones. That is a redacted version of the application. It was for 50,000 tonnes of ADR feed to be exported to Italy during the period February to April in bulk. It was accompanied by some notes that your Honours will find at page 573. Another version is at 581 and your Honours will see that that was a version that was faxed to Mr Richardson at AWBI, but those notes set out some very particular circumstances surrounding those proposed shipments.
What is said is that:
A group of NEAT's grower clients from -
a particular area -
has approached NEAT to export durum on behalf of the group.
1. The group is holding significant tonnages of durum on farm with varying levels of protein and fungal staining. Samples of this grain have been assessed by Graincorp as ADR Feed however the combined characteristics of the parcel of a sound and millable product. The durum has a high protein content -
et cetera.
2. A significant portion of this tonnage is stored on the ground in uncovered stacks. These stacks are exposed to the weather and are at risk if there is further rain.
3. Local Graincorp silos are either full or shut. Growers are therefore unable to deliver durum that is stored on the ground to local Graincorp silos.
4. NEAT can offer the group a significantly higher price for ADR Feed compared with the price AWB Limited -
Now this is the domestic company -
is bidding the group for ADR Feed.
That is, AWBI is not in the market, there is no pool; AWBL is bidding on the domestic market, but at $35 per tonne lower than NEAT could offer. Paragraph 7:
NEAT's Italian buyer specifically wants to purchase ADR Feed from NEAT following the inspection of samples NEAT has sent to it from clients -
in the particular area -
NEAT's buyer does not want to buy commingled stocks that have been taken into the Graincorp system -
8. NEAT's buyer only has a very limited time frame in which it can use ADR Feed. It will also take NEAT a significant time to move 50,000 tonnes of ADR Feed to port by road transport.
Importantly, next sentence:
NEAT's buyer currently has US Feed durum offered to it and it will buy US Feed durum unless NEAT can confirm it has obtained a permit for ADR Feed in the very near future.
GLEESON CJ: Now they look to me like a variety of reasons in support of the proposition that it is in the financial interests of NEAT's grower clients to be permitted to export wheat. What do they amount to beyond that?
MR GAGELER: They also support the proposition that the peculiar circumstances of this proposed transaction, with a particular Italian buyer, are, on one view - and it is only one view - unlikely to have an effect on the overall marketing strategy that can be legitimately pursued by AWBI. I am not saying it would, your Honour - - -
GLEESON CJ: So the merits amount to a combination of two reasons: one, it is in our financial interests to export the wheat and two, we are not going to do any significant harm to anybody else?
MR GAGELER: Well, particularly to AWBI, yes.
GLEESON CJ: So it all comes down to a financial proposition. We ought to be permitted to export this wheat, because it will be profitable for us and it will not cause financial harm to anybody else?
MR GAGELER: Your Honour, I cannot embrace that because it is at too high a level. It is very fact specific, very fact specific.
CALLINAN J: Is there not a third factor, that you would be compelled to deal with the party that is effectively preventing you from exporting it? You would be compelled to sell to it at a much reduced price.
MR GAGELER: Yes. Your Honour can actually see that that is the way it worked out because there is evidence from one of the growers, Mr - - -
CALLINAN J: That is apparent from 4 anyway, is it not, paragraph 4.
MR GAGELER: Yes, it is, yes. But can I show your Honour directly the evidence from Mr Heathcote, volume 1, page 135. He was one of the group of growers. His affidavit begins at 135 but at 136 he says, about line 19, line 20:
The only alternatives I had were to sell fungal stained durum for stock feed at a very low price or deliver the durum to AWBI feed wheat pools.
That is, not ADR feed because that did not exist, but the soft wheat pools -
At that time AWBI was not even offering a pool for ADRF.
GLEESON CJ: That is why I am endeavouring to come to grips with the concept of merits and what it involves in a context like this. Presumably, these people would not be applying for permission to export wheat unless they had made up their own minds that it was in their financial interests to do so. So what are they trying to do, persuade the Wheat Export Authority that they are right about that?
MR GAGELER: No, what we are - - -
KIRBY J: To exercise their discretion according to law, I suppose.
MR GAGELER: What they are seeking to do, obviously, is to gain a permit so that they can enter into a commercial transaction. What they are seeking to persuade the Wheat Export Authority to do is to grant them their permit because it is in their interests and because, by doing so, the national interest, which the Wheat Export Authority undoubtedly is to have regard to, will not be damaged but, rather, furthered.
GLEESON CJ: That is getting closer to the mark.
MR GAGELER: Yes.
GLEESON CJ: I have myself some problem with the notion of people who are willing to risk their money in a business transaction having to persuade some authority, governmental or otherwise, that it is wise for them to be permitted to rest their money. It is their business because it is their money, so what they are really trying to persuade the authority is the second part of what you are saying, is it not, that is, that it is not contrary to the national interest that they be allowed to pursue their own financial interest?
MR GAGELER: Or that it is positively in the national interest that they be allowed to do so.
GLEESON CJ: Yes, but why would they have to try and persuade the Wheat Export Authority that they are right in their assessment that this is a good deal for them?
MR GAGELER: Because the Wheat Export Authority is charged by Parliament - again, I am jumping ahead slightly - with the management of the monopoly in the national interest.
GLEESON CJ: I understand completely why they have to try and persuade the Wheat Export Authority that permission to export is not contrary to the national interest. I have difficulty in understanding why they have to try and persuade the Wheat Export Authority that permission to export is in their own interests, that is, the applicant's interests.
KIRBY J: Is that because the more that they can show profit to an Australian operator, that that is part of the national interest?
MR GAGELER: Yes.
GLEESON CJ: Why is it the business - - -
MR GAGELER: I am sorry, your Honour. It is not just NEAT; it is the durum growers. One is talking about a large section - well, a significant, although regionally concentrated, section of the industry.
GLEESON CJ: But if the durum growers have made a commercial assessment that it is in their interest to export wheat, why do they have to persuade the Wheat Export Authority that their assessment is correct?
MR GAGELER: Your Honour, the Wheat Export Authority has published some guidelines as to the exercise of its own administrative discretion. Those guidelines are at pages 265 to 279 of volume 2 of the appeal book. I may have given your Honours a wrong reference there.
GLEESON CJ: Is it 265?
MR GAGELER: Yes. I fear that I have given your Honour a wrong reference, but I will - I am sorry, it is at 280 and following. What your Honours will see at page 283 and following, for example, are some considerations that might legitimately and appropriately be brought to bear on individual proposed exports.
GLEESON CJ: Right. Well, the next thing I wanted to ask you is this: is it being assumed in your argument that the considerations that are legitimate for the Wheat Export Authority to take into account in deciding whether to give its approval are identical with the considerations that it is legitimate for AWBI to take into account in deciding whether to exercise its power of veto?
MR GAGELER: That is no part of my argument, no. I accept fully that AWBI can take into account its own commercial charter, its own constitution, the interests of - - -
HAYNE J: To the exclusion of all other interests?
MR GAGELER: No. That is the point.
HAYNE J: Why not? They are a commercial entity, incorporated under corporation statutes. Why are they concerned with anything more than their narrow commercial interest?
MR GAGELER: Your Honour, my point is a relatively narrow one. It is not that AWBI could not adopt a policy that says - as many of the statements of the policy suggest that it is - "Generally, in the interests of growers who deliver their wheat into the pools, we will not grant consent, we will not grant approval, to bulk export permits". What AWBI must, in our submission, do is consider the merits of each application that are placed before it and determine on a case-by-case basis whether that general proposition, for which there may be good grounding, ought apply to the merits of the case before it. That is the vice of the policy in the present case.
HAYNE J: Well, now, it needs unpacking.
McHUGH J: Where do you get this from? Why is it not just an absolute veto, that they can just veto for any reason they like, including the fact that they do not like the look of you? Where do you get anything in the statute which says that they even have to consider your application?
MR GAGELER: I will come to that, and can I come to it through the legislative history, then directly to the statute. The legislative - - -
HAYNE J: You want us to come to the words with a bit of baggage in hand, do you, Mr Gageler?
KIRBY J: Understanding the purposes of - - -
MR GAGELER: I want to guide your Honours through the thicket.
HAYNE J: Thank you so much. And that is not at all in the narrow commercial interests of your client, is it? It is with a much broader picture in mind.
KIRBY J: It used to be usual to start with the statute and then toss in the second reading speech in case it might help, but now - - -
MR GAGELER: There is a story to be told, your Honour, and the statute here is part of a transitional process.
KIRBY J: It is a very unusual arrangement to, as it were, use a private corporation in this way. Is there any precedent or is there any analogy in any other marketing arrangement that you are aware of, or is this unique?
MR GAGELER: A provision such as 57(3B) I think does not exist elsewhere in Commonwealth statute law.
KIRBY J: It is a big thing for the Parliament of this nation to grant to a private corporation such a power.
MR GAGELER: Yes, that is right. The question is how is that power to be construed.
McHUGH J: You keep referring to it as a power. Why is it not just simply a condition precedent which you must obtain and if they refuse to give approval, then 57(6) validates what they have done for the purpose of the Trade Practices Act 1989 , but why - - -
MR GAGELER: I am defeated, your Honour. I am coming to the statute straightaway.
GLEESON CJ: Where is the most convenient place for us to find that, Mr Gageler?
MR GAGELER: Your Honours have been provided with it together with our written submissions.
GLEESON CJ: Part of it?
MR GAGELER: It should be annexed to our written - - -
GLEESON CJ: Yes, we have part of the statute.
MR GAGELER: No, your Honour should have the whole of the Wheat Marketing Act - - -
CALLINAN J: I have the whole of it, Mr Gageler.
MR GAGELER: - - - as amended, on and from 1 July 1999.
McHUGH J: I do not have all of it. I have different sections.
MR GAGELER: No, your Honour. It is a funny looking statute because most of it has been repealed. That is it. That is the entirety of it.
GLEESON CJ: So, for example, the statute goes straight from section 57 to section 84?
MR GAGELER: Yes, and it goes straight from section 16 to section 57.
KIRBY J: And it is Reprint 2 that we should be working on?
MR GAGELER: We did not provide your Honours with a reprint - - -
HAYNE J: You gave us a SCALEplus version as at July 1999?
MR GAGELER: Yes.
HAYNE J: I take it, the date, July 1999, is the critical time.
MR GAGELER: Yes. I am sorry, your Honours, this is probably a breach of the practice direction, but what I have not done is check whether the reprint contains anything different from the version as at July 1999.
KIRBY J: This is the one we should work - - -
MR GAGELER: Yes, I will have that done and we will tell your Honours. Section 57, your Honours will find at page 14 - I will come back to the history, if I may. What your Honours find in subsection (1) is that it expressly prohibits the export - - -
KIRBY J: Could not we start with the beginning of the Act and see what its title is and - - -
MR GAGELER: Yes. To put section 57 in context, your Honour ought look at section 5 - - -
KIRBY J: Its long title is "relating to the export of wheat".
MR GAGELER: Yes.
KIRBY J: There would be no doubt of the constitutional power to so provide and it is not governed by section 92?
MR GAGELER: No, it is section 51(i).
KIRBY J: But there is nothing that restricts the federal power over such a matter?
MR GAGELER: Not any more.
KIRBY J: And there is no section 92 argument as to the consequences of it within Australia, and that is not run, anyway. We are not concerned with it.
MR GAGELER: Since Cole v Whitfield, no. Section 5, your Honour should have regard to and your Honour ought also look at section 84.
GLEESON CJ: Well, nominated company B is AWBI, is that right?
MR GAGELER: That is correct, yes.
KIRBY J: Was there a nominated company A originally?
MR GAGELER: Your Honour, I really need to take your Honours to the legislative history. It makes it very difficult.
KIRBY J: It is.
MR GAGELER: The legislative history your Honours will see set out in her Honour's judgment, volume 4 at page 687 to 690 - and I have not forgotten your Honour Justice McHugh's question. I will just take a moment to answer it.
McHUGH J: No, that is all right.
MR GAGELER: At page 687 at line 30 her Honour sets out section 57(1) of the Act of 1989 as it existed between the passing of the Act in 1989 and 1 July 1999 and your Honours can see from an extract from the second reading speech for a 1992 amendment, the details of which do not currently matter, the export monopoly sustained by section 57(1) was labelled "the single desk". Your Honours will see many references throughout the materials to "the single desk".
Bearing that in mind, what your Honours need to be aware of is that in fact the single desk did not mean that the Wheat Board was the only exporter and it did not equate to an inflexible policy being adopted by the Wheat Board against the export of wheat by anyone else. Your Honours can see that most clearly in the appellant's chronology which ought to be attached to our written submissions. Your Honours can see page 1 of the appellant's chronology shows, simply by reference to NEAT's own experience, that there were a number of occasions, including as late as January 1999, when the Wheat Board consented to the export of wheat in bulk by NEAT under section 57(1).
GLEESON CJ: What does Justice Mathews mean on page 687 line 17 where she says that until 1989 the Wheat Board had a monopoly over the export wheat market?
MR GAGELER: She is doing nothing other than give a label really to the effect of section 57(1) because her Honour found at paragraph 85 of her judgment, in accordance with the chronology that I have just taken your Honours to, that is that the Wheat Board in fact granted approvals to NEAT on various occasions. Then at page 688 her Honour says that:
In 1997 the Act was amended, as the first part of a two-phase process -
this was a transitional regime, the details of which are extremely complex. It was applicable and indeed itself changed during the period between 1 June 1997 and 1 July 1999. Relevantly it involved the establishment under the Corporations Law of two corporations, one being described as "nominated company A", which became Australia Wheat Board Limited; the other being "nominated company B", Australian Wheat Board (International), or AWBI, to be a wholly-owned subsidiary of AWB, AWB being a grower-owned company, with this qualification, that there were class A shares and class B shares. The class A were the growers' shares; the class B were the financial shares. It was class B shares that carried the dividends.
Then if I could again ask your Honours to look at the chronology, your Honours will see that it was just at the end of that transitional period and just before the new Act was to come into force on 1 July 1999 that your Honours will see that AWB, that is AWB Limited, sends out a letter to NEAT that says, "We've been reviewing the policy and from now on in the current market environment, there won't be any permits".
GLEESON CJ: Mr Gageler, would your argument be any different if the power of veto was vested not in nominated company B but in, for example, a large grower of wheat; let me suppose Elders Pastoral Company Limited?
MR GAGELER: No. The answer is no. The legal argument would be no different, but we are here concerned with a unique legislative scheme. Your Honour would be proposing another unique legislative scheme. Page 688 then there is the reference at the bottom of the page to that second set of legislative amendments coming into effect, those being introduced by the 1998 Amendment Act. Your Honours have been provided with a folder called "Appellant's bundle of legislative materials". Because it is of some relevance to construction, may I take your Honours briefly to some parts of that.
Your Honours will see the 1998 Bill as introduced into the Parliament, behind tab 5, with the amendments then proposed to section 57, appearing at page 14. Your Honours will see then the Bill as enacted - or the Act as it emerged from Parliament, behind tab 8, with the relevant amendments, that is to section 57 at pages 14 and 15.
KIRBY J: This is behind tab 5?
MR GAGELER: Tab 5 as the Bill is introduced, and I draw your Honours' attention to that because I want to take you to the second reading speech and one has to accept that there was a slight adjustment and the Bill as enacted, tab 8 pages 14 and 15, and without going into the detail for the moment your Honours might note that what changed during the course of the Parliamentary consideration of the Bill was that the proposed subsection (3C) which had a sunset provision as at 1 July 2004 for the power with which we are now concerned, was deleted and in its place was inserted subsection (7) which had the authority reviewing and reporting to Parliament on the exercise of power by nominated company B. There was also a small but I think relevantly inconsequential change to subsection (6) which separated it out but relevantly added in paragraph (6)(a), with which we are not currently concerned. The second reading speech - - -
KIRBY J: I have lost that on pages 14 and 15. Where is subsection (6)?
MR GAGELER: Is your Honour looking at tab 5 or tab 8?
KIRBY J: I was looking at tab 8.
MR GAGELER: Tab 8 will be on page 15.
KIRBY J: Page?
MR GAGELER: Page 15.
McHUGH J: Item 13.
MR GAGELER: Item 13, "At the end of section 57".
KIRBY J: I see, yes, I am sorry.
MR GAGELER: Tab 6 is then the second reading speech for the 1998 Amending Act. It is a short speech but I will draw your Honours' attention to some parts of it. The top of the right-hand column it is said:
The bill before the House completes the legislation necessary for the restructure of the Australian Wheat Board -
and addresses three points, the second one being that which is critical to the present case.
That second point is then addressed on the next page, page 3332, left-hand column under the heading:
Provision of the Wheat Export Monopoly
The bill also provides for the retention of the wheat export monopoly from 1 July 1999. Specifically, the bill provides for an independent statutory authority, to be known as the Wheat Export Authority, to manage the export monopoly on wheat. To give growers the certainty that they have been asking for, the bill also provides that a new grower company pool subsidiary, called company B, have an automatic right to export wheat for five years. Requests to export wheat from other than the grower company pool subsidiary, as currently happens, will be managed by the Wheat Export Authority in consultation with the grower company pool subsidiary. The Wheat Export Authority will also oversight the pool subsidiary's use of the export monopoly -
Then, the explanatory memorandum. Your Honours will see several versions of it. The details of its slight evolution do not matter. I will take your Honours only to the first version behind tab 7. Some of the general outline is useful to put the transition in its context, but can I take your Honours particularly to paragraph 18, the second sentence:
from 1 July 1999 . . . the only ongoing Government involvement . . . in wheat marketing will be in relation to the export monopoly on wheat which will be managed, from that time, by a small independent statutory body.
Your Honours should note paragraph 19, which would be in partial answer to your Honour the Chief Justice's I think initial question to me.
KIRBY J: Is there somewhere here where someone describes the ancient history of the Wheat Board, you know, how we have done this over - presumably it has been done over a very long time, wheat being one of our major exports for a very long while.
MR GAGELER: Yes.
KIRBY J: Is there any sort of general historical description of - - -
MR GAGELER: Paragraph 17 through to 20 really trace the position back to 1939.
KIRBY J: I see, that is it, 1939.
MR GAGELER: If your Honours would be assisted by that, we could do that work. I think much of it would be probably in Ubergang v Australian Wheat Board.
McHUGH J: Well, Ubergang and Nelungaloo.
MR GAGELER: Nelungaloo, yes.
GLEESON CJ: I thought that there was a question mark over some of the information that was provided in Ubergang.
McHUGH J: Yes.
CALLINAN J: It has been very controversial. The Court received a whole lot of written material after the argument and relied upon it.
MR GAGELER: Yes, and it mattered for some of their Honours and not for others.
GLEESON CJ: It was handed by the Chief Justice to the associate when it was handed up and then it appeared in some of the judgments and some commentators on the judgments - - -
KIRBY J: Have not been kind.
GLEESON CJ: - - - suggested that it was not necessarily completely accurate, having been perhaps formulated in counsel's chambers.
MR GAGELER: Yes. I was not aware of that last point, your Honour.
HAYNE J: But the general thesis revealed in paragraph 18 of the explanatory memorandum appears, does it, that the export monopoly is to be managed:
by a new grower owned and controlled Corporations Law company - - -
MR GAGELER: No, quite the opposite.
HAYNE J: The opposite?
MR GAGELER: The opposite. It was going to be managed by a small independent statutory body and that that is so is then borne out by the more detailed discussion at paragraph 27 and following that:
The options considered for providing the export monopoly included:
. Legislate the monopoly for all wheat exports to the grower
company;
. Legislate the monopoly for bulk wheat exports to the grower
company, with a separate mechanism to manage exports by other than the grower company - - -
GLEESON CJ: The grower company, or the grower company subsidiary, did not need the approval of WEA, did it? It automatically had the right to export?
MR GAGELER: That is right.
GLEESON CJ: The statutory scheme then was that other people who wanted to export needed the approval of the Wheat Export Authority but the power of veto was vested - - -
MR GAGELER: The Wheat Export Authority, yes. That is right. Your Honours will see that there are three options set out. The third option, paragraph 27, the one that was ultimately accepted, was:
. Legislate the monopoly to an independent statutory body -
that is, Parliament is choosing here to say the monopoly is going to be administered by this statutory authority known as the Wheat Export Authority -
to manage, with a legislative requirement that wheat export rights reside with the new grower company for a prescribed period.
So that was the model. Importantly, paragraph 28, the first option, was rejected. The second option, which your Honours will recall is to legislate the monopoly for bulk wheat exports to the grower company with a separate mechanism to manage exports by other than the grower company, was considered and it was rejected as well in paragraph 29. It was said that the second option raised difficulties in providing an acceptable level of accountability and it was therefore excluded as an option.
Now, one problem with the adoption of a blanket rule or policy by the grower company, nominated company B, AWBI, is that it effectively converts option 3 that was chosen back into option 2 that was rejected. Your Honours ought look at paragraph 30 and 31 and relevantly also, although they perhaps shed very little light on the current issues, your Honours should look at paragraph 98, which deals specifically with consultation and the right of veto, and paragraph 102, which deals with section 57(6), the immunity provision where it is recognised that the operation of section 57(3B) raises a very serious issue about the operation of Part IV of the Trade Practices Act to the conduct of nominated company B.
So, your Honours, with that background, can I come to your Honour Justice McHugh's question, noting that section 57 then takes its place within that historical context and within the context of a much truncated amended Act applying from 1 July 1999. Section 57(1) expressly prohibits the export of wheat without the prior consent of the authority and, by implication, a necessary implication, but implication nonetheless, grants power to the authority to give consent to the export of wheat.
HAYNE J: That being Mayer's Case 157 CLR, I think, which establishes that.
MR GAGELER: Yes. Your Honour, I was going to refer to Browning's Case but, effectively, it is the same point, prohibition with an ability to consent to lift the prohibition impliedly grants power under the statute to give that consent. If your Honours look at subsection (3B), what one finds is exactly the same structure. What one finds is expressly a prohibition on the authority giving its consent "without the prior approval in writing of nominated company B" and by necessary implication, by exactly the same process of reasoning, one gets to the point of nominated company B being empowered by subsection (3B) to grant or withhold its consent.
HAYNE J: Why? Nominated company B is not a creature of statute, whereas the Wheat Export Authority is.
MR GAGELER: Yes.
GLEESON CJ: Is there anything corresponding to subsection (3E) that applies to the nominated company?
MR GAGELER: No, there is not, but what - - -
McHUGH J: I noticed in the paragraph 38 of the explanatory memorandum that the Minister said that the decision of the Wheat Board was subject to AD(JR) examination. There is no mention of the nominated company B. Why is this not just a United Nations Security Council-type veto, thumbs down, or the veto that used to be on the Law Council in respect of reciprocal admissions much utilised by the Queensland - - -
CALLINAN J: After full consultation.
HAYNE J: With its own interests.
CALLINAN J: All the members were consulted.
KIRBY J: Nominated company B is a statutory concept. It is in a statute of the Parliament of Australia.
MR GAGELER: Yes, and it is a defined expression.
KIRBY J: It is not just a pure company. It is something which has been mentioned, specified and has a statutory status.
MR GAGELER: Yes.
HAYNE J: What is the status it has, Mr Gageler?
MR GAGELER: It has the - - -
HAYNE J: It is mentioned in the statute. That, of course, is evident, but what is the status it has? What is the power it is given by statute?
McHUGH J: The Minister himself said it was a Corporations company.
MR GAGELER: It is a Corporations Law corporation.
HAYNE J: Why is this not, in administrative law terms, simply the jurisdictional fact, namely, consent, upon which statutory power then falls to be exercised?
MR GAGELER: Your Honour, that is - I am struggling to find the words, your Honour, but that is - - -
HAYNE J: You are so shocked and horrified, are you, by the proposition that is put to you? I know that. Well, I want to know why it is shocking and horrifying.
MR GAGELER: If your Honours were to look back at the judgment of Justice Kitto in the Tasmanian Breweries Case - and I am sorry I do not have it before me - there is a discussion of the nature of executive decision making, that is, the nature of an executive decision, as distinct from a judicial decision, and - - -
HAYNE J: This is not the executive that is making the relevant decision.
MR GAGELER: What is said there is that the way in which an exercise of discretionary power under a statute ordinarily operates is that the statute picks up and operates upon the decision that is made by the decision-maker nominated in the statute. That is the ordinary way in which an exercise of discretionary power under a statute takes effect. That basic structure is then reflected in the language and structure of section 57(1).
GLEESON CJ: Well, in relation to the structure of section 57, does "nominated Company B" have to follow the guidelines issued by the authority, under subsection (3E)?
MR GAGELER: No. What your Honour sees is the same structure in (3B), both of those occurring in this context. The context is that the consideration is triggered by an application being made under subsection (3D). There is then a requirement for consultation to occur, under (3A). There is then the statutory power of AWBI under (3B), and the statutory power of WEA under subsection (1). They are all - - -
KIRBY J: It is all integrated.
MR GAGELER: - - - part of an integrated process. One does not have something that exists dehors the statute entirely, like a Security Council resolution, which has its own force and effect and meaning.
McHUGH J: Well, let us come a little closer then. The Attorney-General of the Commonwealth has to consult the Attorney-Generals of the State in relation to an appointment to this Court. Now, why cannot the States veto anybody? They do not have to exercise a power, or the Attorney-General of a State is not subject to review, is he? It is just a veto or a power.
KIRBY J: That depends on what the word "consult" means. In India, it has been construed to mean, it has to be real, genuine. Other views might be that it is just ask them, and then move on.
MR GAGELER: One can see the same thing in the jurisprudence of the Court of Appeal of New South Wales, your Honour, that is, that consultation is generally a substantive process, that requires a true attempt at meaningful interaction by reference to the merits of the case.
GLEESON CJ: But when the authority consults nominated company B, why cannot nominated company B respond by consulting its own view of its own interests?
MR GAGELER: I do not deny that, your Honour, I do not deny that, but what nominated company B must do within this structure is to consider the application that is made and about which it is consulted by reference to considerations that legitimately include its own interests.
GLEESON CJ: That is why I was concerned with your reference to the merits of the application earlier.
MR GAGELER: Yes.
GLEESON CJ: What might constitute the merits of the application from the point of view of the export authority might be something quite different from what might constitute the response of nominated company B to the application, having regard to its own interests.
MR GAGELER: I accept that, your Honour, I fully accept that, but what nominated company B must do is look at the particular application about which it is consulted and form a view, taking into account its own interests, by reference to that particular application.
GLEESON CJ: You mean form a view on the merits?
MR GAGELER: Yes.
GLEESON CJ: Why does it have to form a view about anything other than its own interests?
MR GAGELER: Form a view as to its attitude towards that particular application being granted by reference to its own interests and the impact on its own interests of the particular circumstances of that transaction, as - - -
GLEESON CJ: But is it entitled to act only on the basis of its view of its interests?
MR GAGELER: Ultimately it is allowed to make a decision, the determining factor in which is its own interests. What it is required to do in reaching that decision is to consider the application in its entire factual context.
HAYNE J: And that is forms and solemnities rather than substance, Mr Gageler. If at the end of the day it can make its own interests the determining factor, you are requiring it to go through a process which has form but no content.
KIRBY J: Not necessarily. By going through the process it may alert itself to something it actually should and does take into account.
MR GAGELER: And what your Honour has to take into account is what Mr Gomersall said in his affidavit that he did and Mr Gomersall said in his affidavit that he had regard to six or eight specific factors and when he weighed those up - - -
McHUGH J: Yes, but the judge really did not give them any real consideration at all; for practical purposes he did not give them - - -
MR GAGELER: Absolutely, and this is the point, your Honour. I am not saying that he could not have come to the same conclusion if he had really come to grips with the merits of the application, using merits in a particular way.
CALLINAN J: You say he just inflexibly applied a pre-conceived policy.
MR GAGELER: Absolutely.
CALLINAN J: Mr Gageler, can I ask you another question though, arising out of something Justice McHugh asked you before. He drew attention to paragraph 38 on the explanatory memorandum in which the Minister said that the authority's decision could be reviewable, but did not refer to any other decisions.
MR GAGELER: Yes.
CALLINAN J: Looking at section 5 of the Act and section 57(3B), what possible decisions would there be of the WEA and the authority that anybody would want to review?
MR GAGELER: Well, your Honour, it would be a good job sitting on an authority that never had to make a decision because there was a veto at an earlier stage of the process.
CALLINAN J: Well, is that not right? Are there any decisions relevantly that the authority makes? The authority either acts on the veto or it does not, it effects a veto or it does not. Is there anything else?
MR GAGELER: No, to be fair, your Honour, the veto applies only to bulk export. There is - - -
CALLINAN J: So there are decisions that could be reviewed other than - - -
MR GAGELER: Decisions to export wheat in bags or containers. That is, to export very small quantities of wheat.
CALLINAN J: So effectively, the only non-reviewable decision, if you lose, will be export decisions in bags or containers.
MR GAGELER: Yes, the ones that really do not matter very much at all.
KIRBY J: Why do they not matter?
MR GAGELER: Because export in bulk is the way in which to move - - -
KIRBY J: Only where you can deal with this cheap product; this is the lower end of the scale.
MR GAGELER: Yes.
KIRBY J: They just pour it into the hulls of ships.
MR GAGELER: That is the most economic way to export.
CALLINAN J: Mr Gageler, just one other question I was going to ask you: is it the effect of section 84 that there is no obligation now on anybody to purchase your client's wheat, if it be offered to nominated company B. Is that the effect of it now?
MR GAGELER: It all depends on nominated company B establishing a pool at the relevant time. Nominated company B had a general feed wheat pool into which the wheat could have been put.
CALLINAN J: I was looking at section 84(3).
MR GAGELER: I am sorry.
CALLINAN J: Section 84(3)?
MR GAGELER: Yes, I am sorry, your Honour.
CALLINAN J: Subsection (1) does not apply to any offer made after section 57(1) commences to apply?
MR GAGELER: I am sorry, your Honour is absolutely right, yes.
CALLINAN J: So that you could not compel anybody in Australia to buy your wheat. Is that right?
MR GAGELER: Yes, your Honour is right. I am sorry, I should have drawn that to the Court's attention.
KIRBY J: If we have a choice between a view of the statute that has nominated company B being a private corporation outside the requirements of administrative law or inside the requirements, it would seem as a matter of principle, seeing as it is mentioned in the Act, highly desirable that it should be subject to administrative law, otherwise we have created an Alsatia whereby simply by creating a private corporation, they remove themselves entirely from the requirements of administrative law, and that notwithstanding the fact that they are given a status by an Act of the Australian Parliament?
MR GAGELER: Absolutely, and the fact that the Act establishes, at least to some extent, a monopoly, is a reason, in our submission, for adopting a strict construction - or at least a traditional construction that says that an exercise of statutory power - that is a power for which provision is made and which is given effect only in the statute - ought be subject to limitations implicit in the statute.
McHUGH J: You keep asserting it is an exercise of a statutory power. At the moment, you have not persuaded me that it is?
MR GAGELER: Well, your Honour, I think I may have fired every bullet that I have in that respect.
KIRBY J: Keep firing, Mr Gageler, keep firing, sometimes they miss and sometimes they hit.
McHUGH J: You have not dented my Army arm yet.
KIRBY J: Sometimes the Army arm is too thick.
CALLINAN J: Look for an attempt to find a chink rather than - - -
MR GAGELER: Yes. The decision to grant or withhold approval is a decision that has no meaning but for the statute, that is, not only is it provided for in the statute but it would be an irrelevant and interesting thing for AWBI to do but simply irrelevant for the purposes of effecting any right or obligations of any other person but for the statute.
HAYNE J: Power to grant the approval, where do you root that, how do you root that in the statute?
MR GAGELER: Section 57(3B) is a power to grant or withhold approval, and if your Honour will just pause for a moment, I will seek to make that good by reference to section 57(7).
Your Honour will note the terms of section 57(7)(b)(ii). That is, amongst other things:
Before the end of 2004, the Authority must conduct a review . . . and give the Minister a report on the review . . .
(b) the conduct of nominated company B in relation to . . .
(ii) the granting or withholding of approvals for the purposes - - -
HAYNE J: "for the purposes of".
MR GAGELER: Yes.
GLEESON CJ: That is the form of accountability that the legislature provides in relation to nominated company B.
MR GAGELER: I am sorry, did your Honour say "a form" or "the form"?
GLEESON CJ: That is the form of accountability that the legislature provided in relation to nominated company B, bearing in mind the absence of any reference in relation to nominated company B of a provision like section 57(3E). If you add to that what I understand to be your acceptance of the fact that nominated company B can make its decision on the basis of its view of its own interests, then that form of accountability is appropriate, is it not? It is political accountability; it is accountability in the form of a report to Parliament about the way nominated company B has been behaving.
MR GAGELER: Your Honour, I can say yes insofar as what your Honour puts involves Parliament providing for a form of accountability. I do not accept what your Honour puts as it being the only form of accountability. What Parliament has done is lay down a legislative structure and both the WEA and AWBI are to act within that legislative structure. Indeed, accountability to Parliament was traditionally a reason that inhibited the growth of administrative law principles. One does not read statutes in that way any more. One reads the grant of statutory power which confers a discretion prima facie as conferring a true discretion to be exercised by reference to the particular circumstances of the case from time to time as occasion requires.
I was beginning to list my responses to your Honour Justice McHugh. I had made one. Two is the analogy in the structure of subsection (1) and subsection (3B). Three is the statutory process that begins with an application that involves consultation in relation to the application and then has the two steps involving both AWBI and the Wheat Export Authority. Finally, your Honours, there is the general principle which one applies prima facie to any grant of statutory discretion, that it is a discretion that is to be exercised from time to time as occasion requires, that it is to be exercised as a discretion and is not to be fettered in advance of its particular application.
McHUGH J: So you contend then that (3B) imposes a duty as well as a power on the nominated company B to consider - - -
MR GAGELER: A duty compellable by mandamus to consider, yes.
McHUGH J: And to comply with the rules of natural justice, for example?
MR GAGELER: Yes.
McHUGH J: What about bias?
MR GAGELER: All of the limitations are to be determined by reference to the subject matter, scope and purposes of the statute. There may be extremely little scope for the rules of natural justice to have any significant application, but they might. The process of consultation is perhaps in part a substitute for the common law operation of natural justice, but it cannot be ruled out entirely, your Honour.
HAYNE J: Is it fair to describe the way in which 3(B) operates as conditioning the exercise of executive power by the authority arm of the executive upon the consent of what relevantly is a private person not part of the executive.
MR GAGELER: Not entirely, your Honour. To describe the Wheat Export Authority, which is a representative body itself, as part of the executive is somewhat difficult. It is a statutory authority upon which statutory powers are conferred. To describe AWBI as if it were entirely a corporation divorced from the history to which I have taken your Honour and divorced from its representative nature would be incorrect.
HAYNE J: But, therefore, the argument you make would be different if, for example, it provided the authority must not give a bulk export consent without prior approval in writing of say Elders Limited - - -
MR GAGELER: No. Well, if it did say Elders Limited, your Honour, then presumably the history would be different. We would be concerned with the construction of a slightly different statute, but the basic principle would remain the same, that is, if Elders would have a duty in those circumstances - I take the same provision but substituting Elders for AWBI - Elders would have a duty to consider each application and form an opinion in respect of each application, yes.
HAYNE J: Thus the shareholding structure, the history of company B, although it is there and it is part of the history to which no doubt we have to have some regard, is not an essential element in the argument you make. The argument you make would still run, you say, regardless of the shareholding structure, regardless of the history that lies behind company B.
MR GAGELER: Your Honour, the argument that I am now seeking to make is an argument as to the construction of the statute. If one took away the history and one was presented with section 57 and nominated company B without the legislative history then the argument would not be precisely the same but it would be to the same effect, that is, a number of the elements of the argument would fall away, but the basic argument would be made, yes.
HAYNE J: Because you said that the provision was one for which you could find no analogy elsewhere in the statute book.
MR GAGELER: Yes.
HAYNE J: And it follows from that, does it not, that you are necessarily seeking some extension, some analogical extension of existing principle.
MR GAGELER: No.
HAYNE J: No?
MR GAGELER: Not an - - -
HAYNE J: Because what distinguishes this Act is this injection of this Corporations Law company, is it not? Is that not the distinguishing feature which makes the search for an analogy in the statute book fall down?
MR GAGELER: Yes, but do I need an analogical extension of existing principle to deal with it? Answer, no.
KIRBY J: Well, why do you not say yes? That it is just something new and you have to deal with it but you deal with it in a principled fashion.
MR GAGELER: Yes. What I am seeking to say is that the standard principles of statutory interpretation can and ought be brought to bear on this particular exercise of statutory power.
HAYNE J: By applying to a Corporations Law company, concepts developed in respect of statutory decision-makers; decision-makers who owe their existence to statute.
MR GAGELER: By applying to a particular statutory power of Draconian consequence conferred upon a particular decision-maker the standard principles of administrative law which take their colour and their content from the context in which they operate.
Now, there is no room to say that the structure does not allow nominated company B to take its own interests, its own constitution, its growers' interests, into account. I do not attempt to put any such proposition. But what is clear from the statutory structure is that nominated company B is expected to deal with and consult about and make a decision about each individual application. To fail to do that, to adopt the blanket policy, is to subvert the option chosen by the Parliament, option 3, and turn it back into option 2.
GLEESON CJ: Mr Gageler, you may have explained this to us before, but what is the significance of that date, 2004, in section 57(7)?
MR GAGELER: I do not think I clearly did. There is no doubt an Industries Assistance Commission report in the background - - -
KIRBY J: Is that a remnant of the sunset provision?
MR GAGELER: Yes. Your Honour will recall that it was originally envisaged that the power of veto would cut out on that day and that the modification that was introduced during the parliamentary - - -
McHUGH J: Somewhere I thought I saw a reference to that it was expected that a report would continue to recommend the wheat monopoly.
HAYNE J: There were about 43 of the explanatory memorandums, I think.
MR GAGELER: If your Honours would allow me, I will find out what the position is. It will be on the public record.
GLEESON CJ: The reason for my question was I am wondering whether, amongst the other peculiarities of this legislative scheme, it is in the nature of a transitional scheme, or potentially transitional scheme.
MR GAGELER: Yes, one has to accept that.
McHUGH J: You kept mentioning questions of the ordinary principles of statutory construction, but as a matter of ordinary construction, the words "without the prior approval in writing" strike me as a condition on the exercise of the powers of the authority rather than a conferral of a duty or a power in the case of nominated company B. Now, are there any cases that you can point to which would suggest that it falls into the latter category?
MR GAGELER: Justice Hayne perhaps mentioned a better case than the one I had in mind, but the case I had in mind was Browning (1947) 74 CLR 492.
McHUGH J: It is not a case that is likely to be decided in the same way these days, is it?
MR GAGELER: At page 505 - what I was trying to do was pick up the precise provision, but I am not sure I can easily. Yes, the provision was at page 494. It began - perhaps this is not the best case, your Honour.
McHUGH J: No, because it was the Commission itself. The application was to - - -
MR GAGELER: Yes, but the structure was, except with the consent of the Commission, something could not be done. But why it is not the best for me is that it then goes on to say that:
The granting or refusing of any such application shall be entirely in the discretion of the Commission."
The structure of having a prohibition with a lifting of the prohibition where a consent is given is ordinarily, in our submission, to be read as conferring, by force of the statute, a power.
HAYNE J: Mayer [1985] HCA 70; 157 CLR 290 was not all that far from it. The provision was the early form refugee provision of the Migration Act, that "an entry permit shall not be granted" unless, among other things:
he is the holder of a temporary entry permit which is in force and the Minister has determined, by instrument in writing, that he has the status of refugee - - -
MR GAGELER: Thank you, your Honour.
HAYNE J: The question was, did that give the Minister the power to determine that the person had the status of refugee? Answer, yes. That is as close an analogy - - -
MR GAGELER: That is better.
HAYNE J: - - - as I could find, but what troubled me about it, in applying it to your case, is that we were there concerned with a Minister. We were not concerned with this Corporations Law entity, which has its own powers, derived elsewhere, in the context of a statute where, as Justice McHugh has said, a reading of it - at the moment, perhaps, a very natural reading of it - is, well, is this condition precedent? Once that happens, statutory powers can then be engaged, but absent the condition precedent, nothing happens.
MR GAGELER: All I can say about that before coming to a particular point at page 505, about point 3, in Browning, was after Justice Dixon referred to the discretion being unconfined - very familiar terminology - there is a statement:
No doubt the Commission is placed under a duty to consider an application for consent to a transfer and to grant or to refuse or withhold consent.
KIRBY J: Yes, but that, again, is the public authority, the Commission and what we have to ask ourselves here, it seems to me, is where this most peculiar provision is granted to a private corporation. It is really the proper construction that that is to be interpreted as giving a private corporation, according to its own uncontrolled power, the veto over a public body made by the Parliament of Australia? I would need a lot to be driven to such a conclusion.
MR GAGELER: I am not, of course, seeking to drive your Honour to that conclusion.
KIRBY J: No, I know you are not, but I think it has been hinted here that that is how the statute is to be construed and if we have a choice as construing it one way but makes sure that the integrated scheme with preconditions for the exercise of public power in accordance with the statute of the Parliament of Australia is subject to scrutiny by administrative law provisions and another way that says it is not, well, I think there are very powerful reasons to favour the former over the latter.
McHUGH J: So the argument that is put against you is the Posnerian view that most statutes are not passed in the public interest of this type of statute, that they are product of compromises by interest groups and here you have a powerful interest group, namely the growers, who want a monopoly. They are given a monopoly on the export of wheat and the legislature said, "Well, we will give the authority a general discretion, but if there is a veto by this grower body, well, that is it."
HAYNE J: But a grower being the body to which, as the explanatory memorandum says, all commercial aspects of wheat marketing are to be taken over.
MR GAGELER: Well, can I take up one aspect of Posnerian analysis - and I will come to another aspect which is the regulation of monopoly power in a moment - but taking up your Honour's point: the explanatory memorandum, paragraph 27 and following, to which I took your Honours quite deliberately, shows that in that negotiation three options were considered. Option 2, which involved allowing the AWBI in effect to regulate itself in relation to bulk export permits was considered and rejected. Option 3, which involved giving the Wheat Export Authority the management of the monopoly, was the one that was taken up. To adopt the policy that was adopted by AWBI is a subversion of the outcome of that process.
GLEESON CJ: Mr Gageler, my memory may be playing tricks with me, but I have a recollection of reading in the judgments in this case a reference - perhaps more than one reference - to what was called the constitutional charter of AWBI. What is that a reference to?
MR GAGELER: Yes. it is simply the Constitution under the Corporations Law.
GLEESON CJ: You mean the memorandum and articles of association?
MR GAGELER: Yes, well, now it is called the constitution, but yes.
GLEESON CJ: It is in evidence, is it?
MR GAGELER: It is in volume 2 at page 243. This is the constitution of AWBI, the wholly-owned subsidiary.
GLEESON CJ: Thank you.
MR GAGELER: Relevantly, at page 252, your Honours will see article 13.2(a). I think this is the only relevant article which is that:
In the exercise of their powers the Directors must ensure that the business of the Company is managed in a manner which complies with Article 3.1(b) of the Parents' Constitution.
That is AWB. That is in volume 1 at page 164 and your Honours might note page 173, the object of the company, bottom of the page.
KIRBY J: Which page?
MR GAGELER: Page 173, 2.1, at the bottom of the page, 2.2 and then 2.3. But the relevant article picked up in the constitution of the subsidiary company is at page 175, the subsidiary company being designated here "the Pool Subsidiary" and it says - I am sorry this is:
3.1 In the exercise of their powers the Directors -
of AWB -
must ensure that:
(b) the business of the Pool Subsidiary is managed with the objective of:
(i) maximising the net pool return for Growers who sell wheat into the pools run by the Pools Subsidiary - - -
GLEESON CJ: What I wanted to ask you was whether or not there is any power in a corporation such as AWBI to do anything other than pursue the interests of its members.
MR GAGELER: Such a power is assumed, for example, in - if your Honour turns back to 174, 2.3(c) one of the objects of AWB is to participate in providing services to grain growers generally.
GLEESON CJ: Yes, so their object is to maximise the returns to their members and to provide services to their members.
MR GAGELER: Yes.
GLEESON CJ: What right has a corporation to act in the interests of somebody else unless that indirectly advances the interests of the members of the corporation?
MR GAGELER: Well, it depends on the constitution of the corporation, obviously.
KIRBY J: Is not the answer that if by statute they are required to do something, the fact that their private arrangements provide otherwise cannot speak against the statute?
MR GAGELER: That was one of the things I wanted to say about the constitution, yes. Another thing I wanted to point out was that the particular article, Article 3.1(b), could at any time be changed in accordance with the constitution.
GLEESON CJ: Yes, but the question for decision is what the statute provides, and relevant to the question of what the statute provides is the nature of the entity about whom it is speaking, is it not?
MR GAGELER: I accept that, yes, and therefore I do not say, and I sought never to say, that AWBI could not, acting in accordance with the statute, take its own interests into account. The point is - and it is a very simple and short point - it is obliged by the statute to consider each application that is put before it; it has a duty to do so.
GLEESON CJ: I have not understood whether you have acknowledged that in making a decision it could take its own interests into account exclusively.
MR GAGELER: No, I do not go so far as to say it could take its own interests into account exclusively; it must take into account the circumstances of the particular application placed before it.
GLEESON CJ: Must it take into account the interests of anybody else?
MR GAGELER: It is obliged to exercise a discretion.
GLEESON CJ: Must it take into account the public interest?
MR GAGELER: No, your Honour, I think I would not go so far as to say it must take into account, in the sense that it is compelled by the statute to take any particular considerations into account. That is, may I go back to Sir Owen Dixon's often repeated words in Browning, that it is only where the subject matter, scope and purposes of the statute would allow the Court to say that some particular consideration taken into account is extraneous, that one would say that it has acted outside the scope of power and taken something in particular into account. But what it must do is exercise a discretion by reference to the circumstances of the individual case.
CALLINAN J: Mr Gageler, I notice that voting, and therefore control, would ultimately depend upon production, so that the structure of the two corporations and the voting rights contemplate that the biggest producers will ultimately have a form of control. That seems to follow from 6.4(c) on page 183, under which additional voting power is conferred depending upon how much grain you deliver.
MR GAGELER: Yes.
CALLINAN J: So that really is another indication perhaps that self-interest is to prevail and that may be acceptable equanimity; I do not know.
MR GAGELER: Yes.
CALLINAN J: That was.....form of a constitution when the legislation was enacted.
MR GAGELER: Yes, but, your Honour, there is a difference between self-interest prevailing and a proper examination of where self-interest or other interests lie in the circumstances.
CALLINAN J: It is basic to your argument - - -
MR GAGELER: The basic point, and, your Honours, to illustrate this - and I will not ask your Honours to turn to it now - only need to look at what in their affidavits the officers of AWBI who purported to examine the applications said they took into account to see what a proper examination and exercise of discretion might well involve, but that was not done.
KIRBY J: Well, one of their officers had only two things to say to them.
MR GAGELER: That was the boss, your Honour.
KIRBY J: "Good afternoon" and "You're not going to get it." That was a very insidious thing of you to put into your written submissions.
MR GAGELER: That is right, but nevertheless, I could not help it.
KIRBY J: I paused when I read that, to think somebody could say such a thing.
MR GAGELER: I began to take your Honours to the affidavit of Mr Heathcote, the buyer who was there at the time and heard it and he was shocked, because it was his wheat that was rotting on the ground.
KIRBY J: Yes, quite, and he is an Australian citizen. Where is that passage? I would like to read it in full in its context, and repeatedly.
MR GAGELER: It is in volume 1.
McHUGH J: It is at 137.
MR GAGELER: Thank you, your Honour.
KIRBY J: It had a little touch of arrogance about it which, if the person is a donee of any power from the Parliament of Australia which is derived from the people of Australia, is not legally permissible.
MR GAGELER: If I can put it in strong terms as well, your Honour, it makes a mockery of a process that involves the making of an application, the conduct of consultation, and in the making of a determination ultimately by a statutory authority that Parliament has said is to manage the export properly.
Your Honours, can I come then to the scope of the immunity conferred by section 57(6). That section refers, for the purposes of section 51(1) of the Trade Practices Act, to:
anything that is done by nominated company B under this section or for the purposes of this section.
In our submission, may I state the proposition and then seek to make it good on its proper construction. The words "anything that is done by nominated company B under this section or for the purposes of this section" are limited to things done by nominated company B acting within the authority granted by the section or acting incidentally to that grant of authority.
To understand section 57(6) it is necessary to understand the operation of section 51(1) of the Trade Practices Act, to which it refers, it having been held in relation to section 51(1) that conduct that is intra vires a statute is not thereby and without law to be regarded as conduct that is specifically authorised by the statute for the purposes of section 51(1) so as to be immunised from the operation of the Trade Practices Act.
GLEESON CJ: You get to the same result, do you not, by reading paragraph (b) as though in front of the word "done" there was a word such as "validly done" or "lawfully done", as distinct from "purportedly done".
MR GAGELER: Yes, exactly, and that is the natural reading of it, as for example your Honours would find in the Darling Casino Case [1997] HCA 11; 191 CLR 602 at 635, where almost in passing - your Honours will see that natural construction given to very similar language, at about point 3.
GLEESON CJ: Did anybody hold against you on this point?
MR GAGELER: No.
KIRBY J: How does this fit into your argument? Could you just explain?
MR GAGELER: I am sorry. If your Honour will accept that the granting or withholding of consent is something that is done under the statute, not dehors the statute, that is my first point, that the statute is conditioned upon the granting or withholding of consent being a true exercise of discretion by reference to the circumstances of the individual case, then your Honours would find that what was done in the circumstances of these cases was something that was not authorised by the statute, that is something not authorised by section 57(3B).
McHUGH J: Ironically, the cases on which you rely, Ardouin's Case and Newman's Case in a real sense are against you, the actual decisions, because they hold that you do not need any power under the statute to do the things. In Hudson v Venderheld you did not need any power. The council did not need any power to drive a truck along the roadway.
MR GAGELER: No.
McHUGH J: That is all against you.
MR GAGELER: No, they are very much in my favour.
McHUGH J: They do not need power in this statute.
KIRBY J: What, to stop you selling your gain?
MR GAGELER: Your Honour does not need a specific grant of statutory power to drive a car along a road. Your Honour does need a specific grant of statutory power to stop my client from exporting wheat.
McHUGH J: But they are not - it is the statute that does that.
MR GAGELER: Of course it is the statute, yes.
McHUGH J: We are talking about consent of the nominated company B. They do not need any power under a statute to say no.
MR GAGELER: But it means nothing. It is irrelevant if they say no, without the statute.
KIRBY J: What is a private corporation. They are blowing in the wind. How can they stop another private individual from selling their grain? Unless they pick up statutory power, and when they pick up statutory power they must conform to the law.
MR GAGELER: Not only is it a decision that fits within a statutory framework and for which provision is specifically made in the statute, but it has no force or effect whatsoever except by reason of the statute.
HAYNE J: What stops them selling their grain is 57(1), is it not?
MR GAGELER: It is section 57(1) which is subject to - - -
HAYNE J: No. Section 57(1) is what stops them. Is that not right?
MR GAGELER: I am prepared to accept that. That is not the end of the story though.
HAYNE J: And that is dependent on the authority.
MR GAGELER: It is dependent upon the authority granting consent which is dependent upon the AWBI giving approval. They are interrelated.
KIRBY J: It is a question of whether you look at in bits and pieces or whether you see it as integrated.
MR GAGELER: Yes.
McHUGH J: You see, on this part of your argument you throw all the weight of your argument on the words "under this section", but why is it not done pursuant to its general law powers for the purposes of this section?
MR GAGELER: Your Honour, what I said was that "under this section" is a reference to acting under the authority granted by the section. I read the words "for the purposes of this section" as acting incidentally to that grant of authority. That is a natural construction but it is also supported by the principle in Ardouin's Case, that is that grants of these sorts of immunities are to be jealously construed as relevantly applied in a decision of Justice Gummow when on the Federal Court in Suatu Holdings 86 ALR 532. Can I take your Honours to that? I perhaps should not attempt to overstate the effect of the decision but it is useful in that it is concerned with the application of a provision of the Postal Commission Act, which your Honours will see at page 537, to a claim for damages for breach of section 52 of the Trade Practices Act and it was held that section 104 did not prevail against such a claim. The short passage I wanted to refer to is at page 541, line 36, where it is said:
Secondly, a statutory limitation or exclusion provision such as s 104 is to be strictly construed for it protects the interests of a statutory authority which is given privileges in the nature of a monopoly for provision of a public service, at the expense of what otherwise would be individual justiciable rights -
Now, I do not want to overstate the point but it is - - -
KIRBY J: Where is that, I am sorry? I have missed it.
MR GAGELER: It is 541, line 36 and following. Any immunity ought be jealously construed and immunity conferring a monopoly ought be construed - - -
KIRBY J: What lies behind that thought? Is it that monopolies are, prima facie, against public policy or contrary to the purposes of the law or unfair to other people, or - - -
MR GAGELER: Yes, as has been recognised in the common law and has been - - -
KIRBY J: And contrary to the Trade Practices Act, unless it is excluded.
MR GAGELER: Exactly - specifically dealt with in the Trade Practices Act.
KIRBY J: And inefficient to the economy.
MR GAGELER: Yes.
CALLINAN J: Mr Gageler, can I just raise another practical matter with you. Going back to that provision in the constitution at 183, which conditions or which quantifies your voting rights according to what quantity of grain you have delivered to the Australian Wheat Board Group, is it? Page 183.
MR GAGELER: Yes.
CALLINAN J: What is the Australian Wheat Board Group, the AWB Group? Would you just refresh my memory about that.
MR GAGELER: AWB Group is defined at page 169 - - -
CALLINAN J: I will tell you why I ask. If, in fact, AWB Group is under the control of either of the respondents, then, by virtue of section 84 you might never be permitted to deliver to them so you can never improve your voting power. You can never effect a change. Is that the practical effect.
MR GAGELER: Your Honour, I would have to consider that more carefully. Can I take that on notice, your Honour.
CALLINAN J: We might get some - - -
MR GAGELER: Your Honours, we have in our written submissions - - -
KIRBY J: Could I ask you a factual matter that worries me? If the company acting properly considers that Australia is in an international market with peculiarities about it and decides that the best interests of the aggregation of all wheat growers in Australia is to do it this way - not to have grain exports in ships to require, control and so on - what more, if that is the general policy, which has been thought through and considered and reached on an aggregation of the interests of all Australian citizens who are wheat growers, could an administrative decision-maker take into account, in a particular case, that might lead it to change its mind of a particular batch of this durum wheat?
MR GAGELER: That is why I took your Honours to the particular circumstances of the fifth batch of durum wheat where, amongst other things, there was a particular buyer in Italy who had a sample of this particular wheat, was prepared to take this wheat and waiting in the wings was a particular American seller, who would sell to that particular buyer if the buyer did not take this particular wheat.
KIRBY J: No, there were five or six decisions that were challenged.
MR GAGELER: That is right.
KIRBY J: Now does that affect all of them or - - -
MR GAGELER: No, your Honour, and I have deliberately taken your Honour to the one that best makes my case, but, your Honour - - -
KIRBY J: You say, if it could happen there, it could happen in others, and it is an illustration of the need to keep your mind open as somebody who is receiving power which is ultimately derived, you say, from an integrated federal statutory scheme, to keep your mind open, to exercise it with an open mind in each individual case.
MR GAGELER: Yes. Your Honours we have in our written submissions gone to some care in articulating arguments, which I have not attempted to restate orally, but we do rely on the totality of those submissions in-chief and reply. Subject to that, those are our submissions.
GLEESON CJ: Thank you, Mr Gageler. Yes, Mr Robertson.
MR ROBERTSON: Your Honours have been taken to the provisions of the Wheat Marketing Act. If I can briefly revisit some of those provisions. There is only three or four that we would submit are fundamental: one is, section 5(1) whereby the Wheat Export Authority has, as one of its functions:
(b) to monitor nominated company B's performance in relation to the export of wheat and examine and report on the benefits to growers that result from that performance.
So that the relationship between, say, a would-be exporter is directly with the Wheat Export Authority, which has the obligation to monitor, report upon the activities of AWBI, and relevantly as well for the question of section 57(6), anything that is done by nominated company B under this section, or for the purposes of this section - and this goes back to an observation your Honour Justice McHugh made a few moments ago - one can see, in 57(7), that one of the things that WEA is to report on is (7)(b)(ii):
the conduct of nominated company B in relation to:
. . .
(ii) the granting or withholding of approvals for the purposes of subsection (3B).
Now, we cannot put total weight on that proposition, but it looks as though the Parliament regarded the two expressions in 57(6)(b) as operating distributively and that, in relation to "the granting or withholding of approvals" under (3B), the Parliament had in mind that that would be within the closing words of (6)(b), that is, "for the purposes of" section 57.
KIRBY J: It is scarcely consistent with your theory of the Act, which is that this private corporation is set up and it just floats away and does what it likes. Parliament has indicated it is keeping the private corporation within its sights.
MR ROBERTSON: Exactly. The issue that it goes to, with respect, is not as your Honour was perhaps putting it to my learned friend, that it floats around in an uncontrolled way. The issue is, by whom and by what means AWBI is controlled, or how is its behaviour to be monitored or supervised.
KIRBY J: You interpret subsection (7) to mean that Parliament considers it sufficiently important to require a report and therefore it is something which engages the public concerns of Parliament, but (b), that you leave it completely loose until 2004. That does not seem a very rational interpretation.
MR ROBERTSON: No, your Honour. I was making perhaps two or three points at once, but 5(1)(b) does not leave it at large. Section 5(1)(b) subjects it to the monitoring of WEA.
HAYNE J: What does that mean, beyond simply taking a note in the notebook?
MR ROBERTSON: Well, it can mean a number of things - - -
HAYNE J: Monitoring is all very interesting, but it does not achieve much, does it?
MR ROBERTSON: It depends on what WEA does, but at the level of the relationship between the entities, the point that I am submitting, your Honour, is that it is WEA that has a role - one is not presently engaged on what it does exactly in pursuance of the monitoring and/or the reviewing and reporting, but that is the structure of the provisions so far as - - -
GLEESON CJ: I must admit that when I read 5(1)(b), I thought it was referring to something rather different. The "performance in relation to the export of wheat" I thought was a reference to its own commercial performance in relation to the export by it of wheat.
MR ROBERTSON: That may be so, your Honour, but they are not unrelated concepts because, of course, the position of AWBI is that it does not have to have the consent of the WEA to export the wheat.
GLEESON CJ: Quite.
MR ROBERTSON: Can I also, while looking at the statute - I may have misunderstood what your Honour Justice Callinan said about or asked about section 84, but section 84 obliges AWBI - adding that expression instead of nominated company B:
must purchase all wheat that:
(a) is offered to the company for inclusion in a pool operated by the company; and
(b) meets the standards required by the company.
(2) The purchase price must be calculated by reference to the net return -
and then subsection (3), as we would read it, your Honour, is that that obligations ceases if and when 57(1), that is, the prohibition, applies to AWBI. So that when - - -
KIRBY J: But that again is inconsistent with the "float-away" theory. Parliament is saying you fit into two regimes. You fit into an 84 regime or a 57 regime, and if you fit into a 57 regime, we do not need 84, because by 57 you are integrated into the decision making which is a precursor to the export.
MR ROBERTSON: That is the point that I am making. I may have misunderstood what Justice - - -
CALLINAN J: All I wanted to know was, could the appellant, or anybody else in the appellant's position, compel your client or clients to purchase grain from, and it cannot, can it?
MR ROBERTSON: That is what I though your Honour was putting and section 84(3) says, if I can put it in different words, is that if and when 57(1A) is repealed so that 57(1) then does apply to AWBI, that is AWBI has to get the consent of the WEA to export wheat along with everybody else, then the obligation on AWBI to purchase all wheat that is offered for inclusion in a pool operated by it and meets the standards, ceases.
CALLINAN J: Is that not the practical effect though, that the applicant could never compel nominated company B to purchase grain from it?
MR ROBERTSON: No. We may be at cross-purposes, your Honour, but - - -
HAYNE J: Could they not compel acquisition of the wheat in a pool - they would say an inappropriate pool because it would be largely soft wheats, but could they not compel acquisition by tender for inclusion in a pool operated by the company, subject of course to quality standards?
MR ROBERTSON: Yes, that is what I am putting, your Honour. Taking out the negatives, yes. I am not sure whether I have your Honour's point.
CALLINAN J: I think that is an answer.
MR ROBERTSON: Section 84(3) has perhaps two negatives implicit in it but what it means is that there is that obligation while soever AWBI has the - - -
CALLINAN J: Administers a pool.
MR ROBERTSON: Or to put it another way, has the single desk because 57(1A) is the legislative reflection of the single desk, as so-called for shorthand purposes.
KIRBY J: Where does this expression "single desk" come from? Is it like the commodities market, is there, that there was a wheat desk in the old days?
MR ROBERTSON: I think so, your Honour. That would be in volume 1 in the constitution, if I can use that word, of - - -
KIRBY J: I was just interested in the history of it. I know they use it, but - - -
MR ROBERTSON: The history of it I think is that there were perhaps a number of desks in a trading room.
KIRBY J: Probably in London, somewhere in some cobwebbed - - -
CALLINAN J: It is really a reference to a cartel, is it not? Selling or a buying cartel?
MR ROBERTSON: I am dealing with "desk" as a concept. Single desk as one can see on 178 of volume 1 in the constitution of AWB which says -this is for the purposes of article 3.8:
the Pools Subsidiary will cease to be the holder of the Single Desk -
so I am answering, in a sense, your Honour Justice Kirby's question as well I think when one actually sees the expression where "the Pools Subsidiary", that is AWBI:
ceases to be the person who has the sole right to lawfully export wheat from Australia without the consent of the Wheat Export Authority.
Putting that in other terms, if 57(1A) were repealed then, for the purposes of that provision, the pool subsidiary would cease to be the holder of the single desk.
KIRBY J: The problem with wheat is that, though there would be different grains, Federation and so on, that within their markets of particular grains it is really not an easy market, one would think, to control internationally unless you interpose all sorts of regulations. The nature of the product is such that you cannot differentiate it and, therefore, it is difficult to secure advantages for particular submarkets and, therefore, the particular submarkets introduce their own rigidities into the marketing in order to advance their own particular interests. That presumably is what lay behind the original Australian Wheat Board and then the current schemes to advance the Australian market in a product which is not easily differentiated from the same product sellable everywhere in the world.
MR ROBERTSON: Yes. I am just looking as well, your Honours, in relation to section 84. There is a paragraph in the explanatory memorandum that we provided with our submissions. In paragraph 108, which is under tab 7 of the appellant's bundle, there is an explanatory memorandum there which your Honours have been taken to and paragraph 108 of the Senate explanatory memorandum, which is the second of the two - - -
KIRBY J: Do they tell the different Houses different things, do they?
MR ROBERTSON: They tell, depending on what time it has happened - some of them get more information, I think, your Honour, but if your Honours - - -
KIRBY J: Maybe they do not have to tell the House too much.
MR ROBERTSON: If your Honour would look at paragraph 108 on page 14 of the Senate explanatory memorandum - this is in a sense only a footnote, but it explains why the new section 84 is inserted. Do your Honours see that - page 14 paragraph 108:
to require Company B to purchase all wheat offered to it for inclusion in a pool operated by that company, provided the wheat meets the standards set by the company . . . Company B will be required to pay a price . . . This obligation to purchase wheat is a consequence of Company B holding an automatic right to export wheat under the proposed new section 57(1A) . . . The requirement will no longer apply after Company B's automatic right to export wheat ceases from 1 July 2004 -
Your Honours will recall that sunset provision had been converted into a review provision in 57(7).
CALLINAN J: The problem has been that Australia of its commodities has tended to have to be a price taker rather than a price maker, and all of this sort of legislation was designed to improve that position if possible.
MR ROBERTSON: And to prevent, if I can put it that - - -
CALLINAN J: And to deal equally with overseas buying cartels.
MR ROBERTSON: Exactly, and that is referred to in the materials as the overseas cartels distorting the market, and agreeing with what your Honour Justice Gummow put to me, no doubt otherwise being able to pick off individual suppliers and play them off against each other. That seemed to be the politics of it.
McHUGH J: The explanatory memorandum refers to the interventionists' policies of the United States and the European Union.
MR ROBERTSON: Yes, it does, your Honour.
KIRBY J: Yes, but Mr Gageler says, "I accept all that. There's no problem with that whatsoever. All I say is keep your mind open for the occasional Italian buyer. Don't have a policy that is stuck in concrete."
MR ROBERTSON: I know he says that, your Honour.
KIRBY J: Which is not a bad point.
MR ROBERTSON: What of course he does not say, and nobody has suggested this so far and could not suggest it, but in relation to these particular proposed exports - nobody has said that NEAT was not in or proposed to be in direct competition with AWBI. That was what the officers looked at.
KIRBY J: I will have to remember not to say, "Good afternoon" to you when we depart at quarter to one.
MR ROBERTSON: I will have to come back to that, your Honour, because that had nothing to do with the decision-makers and her Honour did not find that it did.
GLEESON CJ: Mr Robertson, how long do you think you will require for your submissions?
MR ROBERTSON: I think I might be maybe an hour and a half, your Honours.
GLEESON CJ: We will resume at 2 pm.
AT 12.47 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.00 PM:
GLEESON CJ: Yes, Mr Robertson.
MR ROBERTSON: Thank you, your Honours. Before the luncheon adjournment I had got to the point of looking at what the position was under the statute and there is a proposition in paragraph 30 of my learned friend's submissions that what was being done was in some sense confidential or undisclosed and I wanted to take your Honours briefly, if I may, to volume 2 at page 473. This is a letter from the Wheat Export Authority.
KIRBY J: What is the proposition? What is this for?
MR ROBERTSON: The proposition is perhaps best articulated in paragraph 30 of the appellant's submissions, that is, that the adoption of the policy and the reasons underlying the policy was:
articulated only in documents for which commercial confidentiality was claimed -
That is the proposition in paragraph 30 of the appellant's submissions -
never stated publicly - - -
KIRBY J: What is your proposition?
MR ROBERTSON: My proposition is that if your Honours look at 473 in particular, which is a letter to NEAT from the Wheat Export Authority and attached to it the guidelines, your Honours will recall looking at section - - -
KIRBY J: But do we not have a bit of a problem here? Justice Matthews who saw the witnesses formed an impression and said that she would accept, having seen the witnesses, that the policy was really what overwhelmed everything and was the real reason for the decisions of your client.
MR ROBERTSON: I will come to that, your Honour. I have not quite reached that point yet.
GLEESON CJ: You are seeking to contradict an assertion of fact, as I understand it, by demonstrating that on page 473 they wrote a letter to NEAT about the matter?
MR ROBERTSON: Annexing, at 475, the guidelines under 57(3E) which your Honour the Chief Justice was talking about this morning:
In exercising its powers -
that is, WEA -
under section 57 of that Act, the following matters will be taken into account by the Wheat Export Authority:
* whether granting the permit would jeopardise sales -
I will not read it all out, but your Honour can see an articulation at some length of the rationale of the position taken. That is the only point I am making.
KIRBY J: There was a guideline which said that the cases would be decided on their own individual facts, but that sounded as though that might have been read with an eye to legal obligations rather than the reality.
MR ROBERTSON: Well, again, I will come to that, your Honour, but there is a difference. What I will come to is exactly what her Honour meant from time to time when she said, "Look, the real reason" and, in our respectful submission, to say that something is a real reason is not the same thing as saying "and you never looked at anything else" because - - -
KIRBY J: Do you accept that if the conclusion is reached that it was the real reason, that is to say, that the real reason for the refusal in each of the decisions involved was the policy, that that is fatal for you?
MR ROBERTSON: No, not in the least. Not in the least because, of course, we do not accept in the first place that those public law considerations apply in any event.
KIRBY J: Yes, but if they do, is it fatal to you?
MR ROBERTSON: If the relevant public law principle that you had to have regard to the merits applied and if her Honour's judgments was to be construed as meaning that AWBI did not have regard to the merits that were put up, then they would be fatal. But, of course, there were no merits put up, and I will come to that in a moment. Having mentioned that point and perhaps reminding your Honours that the mandate, or the direction, to AWBI was, as my learned friends have taken your Honours to, to exercise the powers so as to maximise the returns to growers who were delivering to the pool. Your Honours were taken to that before - that is picking up Article 3(b) of AWB's constitution. The relevant pages are 252 of volume 2 for AWBI's constitution and 175 for AWB's and we would also make the point, of course, that it is AWBI's constitution that is important and AWBI's constitution directs that the powers be exercised to maximise the returns to growers who deliver to the pools.
GLEESON CJ: Most of those guidelines, as I read them, refer to the interests of AWBI.
MR ROBERTSON: Quite so. There is also a point made, if I can touch on it briefly, your Honours, in paragraph 8 of the appellant's submissions in reply about what the word "monopoly" means in this context and it is said that it goes to the heart of the case. Her Honour dealt with the nuances surrounding the word "monopoly" at volume 4, 726 in paragraph 126 where her Honour says:
It is clear that the legislature always intended that AWBI, and before it the Wheat Board, should have a monopoly on the export of wheat from Australia. This was referred to repeatedly . . . what was meant by the word "monopoly" is not entirely clear. This word can denote both the capacity to control a market as well as the actual exercise of that control.
There is no doubt differing uses of the word from time to time but it is not a matter that advances the appellant's case.
KIRBY J: They say that you would not strain to give this legislation of the Commonwealth construction that advances, protects and coddles monopolies. You would not do that because of both the statute and the common law
MR ROBERTSON: Well, your Honour, the answer to that must be, you have to look at the statute and if the statute - - -
KIRBY J: What is put to us as advancing the appellant's case is that it puts into your mind a reason for not succumbing to your blandishments.
MR ROBERTSON: Your Honour, perhaps on an abstract level, that might be so, but one has to - and this must be common ground - construe the statute with what assistance one gets from the mischief to which it is directed in traditional terms and plainly the mischief here was that in the absence of, I call it a single desk or a monopoly, that the interests of Australian wheat growers, and, in particular, so far as AWBI was concerned, those that deliver to the pool, would be adversely affected on the overseas market given the defects in the overseas market that I was touching on and, I think, Justice Callinan was touching on before the luncheon adjournment.
KIRBY J: It is hard to see how that would be relevant to stopping your client from exercising its power or discretion in the Italian case to continue its general policy, but to keep its mind open that there will be particular cases where there are reasons for protecting the rights of other grain growers.
MR ROBERTSON: Your Honour, one has to look at the facts, but the facts here that were found - and we would submit her Honour found nothing to the contrary - was that there was a direct clash between competitors or would-be competitors. Now, I will come to that straightaway. This is illustrated, having dealt with those guidelines at 473, 475, again at 473, so as to give your Honours an indication of what, in real terms, the respective conditions of the parties were, if your Honours go back to 473, the letter to NEAT Domestic Trading - and this is dealing with a shipment that your Honours are not particularly concerned with, but the principle applies - the third full paragraph says:
An option for taking this matter forward in the immediate future may be for the WEA to act as a facilitator in negotiating with the AWBI and representatives from your organisation for a commercially advantageous outcome on your application. I would envisage that any such negotiations would involve the discussion of commercially sensitive material not normally made available to the AWBI by the WEA.
And that is restated at page 580 in volume 3. This is January 2000 and this is one of the applications to the WEA that was one of the six that your Honours are concerned with. Mr Howard was advised various things, and then in the penultimate paragraph:
It was clarified with Mr Howard that any additional information provided to the WEA in applying for a wheat export consent was used only by the WEA unless the applicant had specifically requested in writing that the additional information be made available to the AWB (International) Ltd . . .
The offer was made to Mr Howard that if he wished to provide written agreement for additional information to be made available . . . the WEA would request a reconsideration . . . of the application for export consent.
GLEESON CJ: Mr Robertson, do we find an expression of and justification, right or wrong, of the policy in the letter that appears at page 476? As I read that letter - but I may be wrong - it looks to me like the famous policy.
MR ROBERTSON: There is on page 477, your Honour - and her Honour, I think, reproduced this in paragraph 95 of her Honour's reasons for judgment - a statement that - and this was written in September 1999:
AWB seeks to avoid situations where the wheat may compete with Australian wheat in an overseas market.
And goes on to explain - - -
GLEESON CJ: ADPC represent the people who were dealing with NEAT, do they not?
MR ROBERTSON: Australian Durum Producers' Co-operative.
GLEESON CJ: Australian Durum Producers' Co-operative are the people who were selling to NEAT and whose wheat NEAT wanted to market overseas.
MR ROBERTSON: Yes, I think so, your Honour.
GLEESON CJ: In this letter we find, do not we, for better or for worse, AWBI explaining the reason for the tension that existed between them and ADPC?
MR ROBERTSON: Yes, that is - - -
GLEESON CJ: And tension that the Minister had at one stage intervened to try and resolve?
MR ROBERTSON: Yes, that is fair to say, your Honour.
GLEESON CJ: Is this the policy?
MR ROBERTSON: This is what underlies the policy, as her Honour found. The rationale for the policy was to avoid this competition, where, as it says, premiums which would otherwise be captured and returned to growers are competed away.
KIRBY J: Is the policy articulated in any short document that was, in a sense, the instructions from the superiors to which one of the witnesses referred?
MR ROBERTSON: No, your Honour, and indeed - although we would say, immaterially, there was a slightly different approach between Mr Gomersall, who dealt with four of the matters, and Mr Richardson, who dealt with two, as to what "the current market environment" might involve. But although it would be common ground - and her Honour so held that there was no change in the market environment during the period that your Honours are concerned with - that, in our respectful submission, does not make the policy an unlawful policy.
GLEESON CJ: But do we not find the policy in the third last paragraph on page 477?
MR ROBERTSON: Beginning with, "The single desk"?
GLEESON CJ: No:
Although the ADPC has stated on numerous occasions that they do not wish to undermine the integrity of the single desk, we believe that any alternative arrangement to that which we have proposed would do exactly that.
McHUGH J: That picks up the first sentence in the previous paragraph:
With the single desk as the preferred system of marketing Australian wheat overseas, AWB seeks to avoid situations where Australian wheat may compete with Australian wheat - - -
MR ROBERTSON: I would accept that, your Honours, and I would make the further point, however, that what - and I will come back to it shortly - her Honour refers to as the general considerations that underpin the policy, and which were relevant to the decision making by the two officers, is precisely this question. Would this proposed export of wheat adversely impact on the competitive position of AWBI?
GLEESON CJ: Well, you can use labels like "merits" and "policy", but this is the explanation of what was going on, is it not?
MR ROBERTSON: Of course. It would be one thing if an applicant were to say, "Look, what I propose is to export a minimal amount - or some amount - to a place or to a market which would not impact on AWBI's position at all". But, of course, what we had here, in the six applications, is a direct impact, as the two officers found. They were already in the market in Italy, and, in one of the cases, they were already selling to the same buyer.
McHUGH J: But these considerations just seem to me to strengthen the conclusion that the requirement about prior approval in writing from your client is simply a condition precedent, and is not an exercise of a statutory power by them. Because if it is an exercise of statutory power, at the moment, I do not think you have a feather to fly with. It just seems you have a blanket policy, and that is what has happened here in this particular case. You have never taken into consideration all the aspects of the case.
MR ROBERTSON: Well, your Honour, we, of course, do not accept - - -
McHUGH J: No, I know.
MR ROBERTSON: - - - that that is what her Honour found.
KIRBY J: It sounds like it.
MR ROBERTSON: I am sorry?
KIRBY J: It sounds like it. She said, all sorts of excuses were offered, but she thought it was really the policy.
Her Honour said that the effective reason for the refusal was the policy, which no doubt it was. But the policy, contrary to what was in the pleading of the applicant and so on, the policy was that AWBI was against bulk permits for the export of wheat in the current market environment. It was not a blanket policy, and her Honour not only said that in paragraph 120 on page 724 but her Honour also said that in paragraph 132 on page 728.
GLEESON CJ: Would it be a fair statement of the policy to say that AWBI were not going to agree to anything they thought would undermine the integrity of the single desk system?
MR ROBERTSON: Yes, in the sense that the single desk system involved maximising the returns to growers selling to the pools.
GLEESON CJ: Well, that is just the reason for the policy. That is their motive. They had a policy of maintaining the single desk system and of not agreeing to anything that they thought would undermine the single desk system.
MR ROBERTSON: For the reason that I have articulated, and which your Honour has described as underlying the policy. But the point - - -
KIRBY J: Mr Gageler says, "That's fine. Have your general policy, as long as you keep your mind open". You seem to run into the findings of the primary judge on that.
MR ROBERTSON: Your Honour, the findings of the primary judge, in my respectful submission, are entirely consistent with the proposition that the two officers looked at the applications to the extent to which was necessary to see that what was proposed would adversely impact on the market position of AWBI. If I can illustrate that for a moment. Her Honour sets out part of Mr Gomersall's evidence in paragraph 116. Indeed, she repeats it later, and I will come to that shortly. What Mr Gomersall said, if your Honours look at page 723 - perhaps I should take you to the transcript. I will give your Honours a note that it is at page 52 volume 1 - and the question set out there, line 25 :
At the time when you were dealing the four bulk export applications . . . did you act no the belief that permits could not be assessed against AWB's position on a contract by contract basis, but rather must take into consideration the broader objectives of AWB International in maximising the return to growers over the life of the pool . . .
A. Yes, I mean I assess a permit, not on a, specifically relating only to the instances for that, that one sale, but a marketing strategy, and what I have to, how I have to maximise returns over a 12 to 18month period.
Her Honour at paragraph 157 at page 734 says in the second line:
AWBI was, as Mr Gomersall conceded, concerned more with its overall marketing strategy than with the merits of individual cases.
That is, in my respectful submission, entirely permissible. To say that you are concerned more with an overall marketing strategy - or, to use another word, a policy - than with the merits of individual cases is not the same thing for this principle of public law as saying that the merits have been entirely ignored so that there is a constructive refusal to exercise the discretion.
In my respectful submission, although her Honour found that the effective reason at paragraph 119 was the existence of its policy, what that tends to obscure is the point of time at which the real reason, the effective reason, operates. If somebody says, "I have a blanket policy to refuse all applications", looks at a document, sees it is an application and puts it to one side, then plainly, if public law principle is applied, that would be denying the discretion.
If, however, the decision-maker says, "I have this policy. Let me see how this application measures up. How does it mesh or otherwise with the reasons underlying the policy?", there would be no refusal to embark upon the exercise of the discretion. It would be an exercise of the discretion even though at the end of the mental process the effective reason is the policy. The difference is illustrated, in my respectful submission, from saying that the real reason - I think that is an expression that Mr Richardson accepted - that is the dispositive reason, for rejecting an application is a policy, which, in my submission, is entirely acceptable - if public law principles apply - as opposed to that was all you looked at, or that was the only reason and you arrived at that position before even considering any part of the application.
Her Honour did not say - perhaps I will come back to this in a moment - but the debate or the dispute about what Mr Gomersall said was exactly what is obscured by what I have just put. That is, whether the existence of the policy excluded the consideration of the matters that he deposed to considering at the beginning of the process, which he said it did not, as opposed to what I have put as the alternative and what her Honour did find, which was that at the end of the process the existence of the policy dictated the rejection of the applications.
McHUGH J: But why should policy have anything to do with it? Why should we be bound by what English judges, one can guess acting in deference to Whitehall bureaucrats, allow them to make policies which fetter their discretion and that is an exercise of the power unless they depart from it? It is one thing for a government department or somebody vested with a power to say, "There is a particular factor that I think is of great weight in most cases". That is a factor, but why should not the proper approach be that every case has to be considered on its merits?
MR ROBERTSON: I do not dissent from that, your Honour.
KIRBY J: But policy itself can lead to consistent, rationaled, principled decision making.
MR ROBERTSON: Of course, and that - - -
KIRBY J: Did not this Court in Daniels - this was in the context of the Minister's policy - it said that that was all right so long as the policy was lawful and so long as - - -
MR ROBERTSON: Justice Stephen's decision, Daniels v Green?
McHUGH J: Green v Daniels.
MR ROBERTSON: Green v Daniels. Yes, that was where the statute - the Social Security Act said - I am paraphrasing, but, "You are to be entitled to unemployment benefit", I think it was, "where you can show that you have been searching for work, and other matters", and the departmental policy was, and was given effect to by saying to Ms Green, it must have been, "Come back. We are not receiving this application. We have a policy that we are not going to receive it for school leavers until the three months, so take your application and bring it back in three months" and, essentially - - -
McHUGH J: But it is the use of the term - I am sorry.
MR ROBERTSON: I am sorry, your Honour. In a sense, nothing could be clearer than that which was to say, "I deny that I have any present discretion".
McHUGH J: But it is the use of the term "policy" that seems to me to invite error in this field because the way it is loosely translated is, "We have a policy of refusing to do this or of doing this, unless". Now, that seems to me to burden the discretion and it is a different thing to say, "In considering these decisions, we place great emphasis on factor A or factor B or the pair of them in combination" and then it is a weight you give, overall. So you reach your decision. But, factors and policies are two different things.
MR ROBERTSON: It must depend on the nature of the power but it has been accepted, and I think by this Court in variously called, either Clarkson or Moore; Ex parte Australian Telephone and Phonogram Officers' Association that applying Kynoch - - -
McHUGH J: Yes, I know, and there is probably no harm in talking about a policy of taking factors into account but what happens in practice is it is not a policy of taking factors into account, it is a policy of reaching a decision on particular grounds and that seems to me where the vice creeps in in these cases. You say, "Our policy is to refuse this application, unless".
MR ROBERTSON: If it could be shown in a particular case that there was a broad discretionary power and that a matter had been put before the decision-maker which, at the beginning of the exercise - whether because of a policy or not, but a relevant matter that at the beginning of the exercise the decision-maker had excluded, then probably the conclusion - almost certainly the conclusion would be that the discretion had been denied.
HAYNE J: If we root it back into the AD(JR) and 2(f), 5(2)(f), 6(2)(f), et cetera:
an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case -
The fulcrum about which that turns is:
without regard to the merits of the particular case - - -
MR ROBERTSON: Yes, exactly so, your Honour.
HAYNE J: It is the demonstration of deciding "without regard to", the fact that it may conform with, be in accord with a general rule or a general policy is interesting but by no means determinative.
MR ROBERTSON: It cannot be the universal solvent because one has to ask, as your Honour suggests, were there relevant matters, were there merits that were excluded? I mean, "merits" is another word, in my submission, for "relevant matters". If the matter that is put up is not a relevant matter, then the ground cannot be made out. If I can give your Honours a reference to - just perhaps as a slight modification of what your Honour Justice McHugh put to me, it is not entirely foreign judges, but in [1982] HCA 5; 148 CLR 600 at 612, albeit in the context of the Conciliation and Arbitration Commission, Chief Justice Gibbs referred with approval to Kynoch and, in particular, to what Lord Justice Bankes had said, that is at page 612, and at the foot of that page and over on to 613 to what Lord Reid said in British Oxygen, which plainly both of those cases form the background to 5(1)(e) and 5(2)(f) of the Judicial Review Act. That statutory provision plainly reflects what the common law up to that point - - -
GLEESON CJ: Take an example of a fairly well-known policy. There was for a long time in this country what was called a two-airline policy and that policy had considerable influence on the granting of government permits, for example, importation of aircraft and the like. Now, as I recollect it, in Ipec Air what this Court said was that when you confer upon a politician, a Minister in that case, the capacity to make a decision about a particular issue, you assume that that person will take policy considerations into account and the two-airline policy, as I say, would have been one of the most prominent examples in this nation's history of a policy that had enormous impact on administrative decisions.
MR ROBERTSON: Yes.
KIRBY J: Taking it into account and being blind to any other consideration is the area of debate, I think.
MR ROBERTSON: But, if I may say so, your Honour, it does all hinge on and must all hinge on when it is in the decision-making process that it is said that the alleged relevant matter was put out of account. That must be putting it at its highest against my clients, but certainly - - -
HAYNE J: In this case that occurred at the outset, did it not? The policy was single desk, "What you want to do is something inconsistent with single desk, therefore, no."
MR ROBERTSON: No - well, we would respectfully submit that that is not what her Honour held because if one goes to, for example, one of the paragraphs that my learned friends have taken your Honours to, at the foot of 724, paragraph 121 of the judgment, the last four lines on page 724:
In this regard, his affidavit -
that is Mr Gomersall -
and that of Mr Richardson, set out a number of factors which were said to have been taken into account in rejecting the various applications. Some of these considerations were specific to the particular application and some were of a more general nature. In so far as specific or individual considerations are concerned, I have difficulty in accepting that they played any realistic part in the rejection of the applications. The evidence indicates that these factors probably did exist. If considered, they would no doubt have provided further grounds for declining to approve the applications. But I cannot accept that they were in fact given any realistic consideration at that stage.
Her Honour does not say quite at what stage.
The applications were bound to be rejected -
and then her Honour says, and this is important, in my respectful submission:
The situation is different in relation to the more general considerations which were said in the affidavits to have been taken into account when the applications were rejected. I accept that these considerations were instrumental in the formulation of the policy and were therefore indirectly, if not directly, relevant to AWBI's rejection of the application in each case. I shall be discussing these considerations shortly.
But can I illustrate the nature of the task. Perhaps if I can just finish one thing about the nature of the information and go on to a specific case, but if your Honours look at page 660. Some 10 or 15 minutes ago I was explaining the competitive position and what material was, in fact, provided by NEAT, in this case, to WEA, and your Honours will recall the pages I referred to when WEA said to NEAT, "If you want to advance this, if you want to get involved in the details, if you want us to tell AWBI anything more, then we need something in writing from you to authorise us to do that, because, as you know, generally we do not." And at page 660, in the typed text, your Honours will see at line 30:
to assist with the processing of consulting with AWB (International) Ltd -
this is April 2000, but there is nothing to suggest that this was not the position right throughout -
you may wish to consider making available to AWB (International) Ltd additional information. Such as:
. net returns to grower(s) for this wheat;
. the price paid by the buyer(s) for this wheat;
. the use of the wheat;
. the benefits of bulk shipment vs containers or bags in this
instance.
Provision of this information to AWB(I) may assist consideration of your application. Should you wish to make this information available to AWB (International) Ltd please provide your authorisation in writing, stating precisely those details that may be released to AWB (International) Ltd.
And at the top of the page:
Peter Howard advised verbally that he wasn't prepared to provide info to AWB(I).
Not surprisingly, of course, because they were actual potential competitors. Your Honours have been taken to a lot of material about what people said, what people thought, but if one looks at exactly what it is that a decision-maker had before him, could I take your Honours to pages 614 and 615 - 615 perhaps first. This is in relation to the sixth application. Your Honours, of course, have to deal with these applications as if they were six separate decisions, but at 615 is the material that was available to the decision-maker, who knows nothing about who the applicant to WEA was. All that he knows is it is "ADR Feed", "25,000 tonnes", "Italy", "February 1999 - April 2000", "Bulk".
McHUGH J: But did not Justice Mathews assume that they had more than this?
MR ROBERTSON: Well, she did assume - and no doubt there was different information, but certainly with the early decisions the evidence was that there was just these two pages or their early equivalent, but if I can just develop the point. Page 615 is what the decision-maker has, does not know who it is and then a blank form, page 614, which is sent to AWBI by WEA, "AWB (INTERNATIONAL) LIMITED EXPORT PERMIT APPROVAL FORM", and then the decision-maker - this is Mr Richardson - says "No", under "Approved (Y/N)", "Conditions (if any)" and he gave some oral evidence about this or he translated what he had written at 132:
AWB currently negotiating with DRF customers and DR6, this permit would have potential to impact business opportunities into export markets and single desk selling requirements.
And then what went from AWBI to WEA in this respect is at pages 612 to 613:
Approval is not granted on the basis that:
. AWB (International) Limited
Mr Richardson gave evidence that he had approved this letter -
is currently negotiating with customers in Italy for sales of both ADR Feed and ADR6.
The issuing of this permit would potentially:
. have a negative impact on these and any future business
opportunities in this market:
. jeopardise the long term marketing strategy adopted by AWB
(International) Limited in this marked:
. reduce or completely erode any premiums which AWB
(International) Limited extracts in this market:
. adversely impact on the net returns received by growers -
This is not, we would respectfully submit, anything that looks like an automatic rejection without regard to the merits, the merits being no more than somebody wants to, in bulk, export 25,000 tonnes of ADR Feed wheat to Italy. What the officer is looking at is the particular reasons why, in his opinion, that would adversely impact on the position of AWBI and how it would be inconsistent with the mandate in AWBI's constitution because it would not maximise returns to the growers selling to the pool.
Now, if I can make this further point, your Honours. Mr Richardson - if I could ask your Honours to turn to volume 1. What I am doing is trying to put in context what it is that her Honour was dealing with. He, Mr Richardson that is, swore an affidavit, which begins at 147 and at page 148 he sets out in fuller detail what his reasoning was. If your Honours see paragraph 10:
(a) The country of destination was Italy . . .
(b) I was aware that AWBI had recently completed business with buyers in Italy and was actively discussing further business -
et cetera -
(d) I was concerned that if a trader supplied more wheat to buyers in the same markets, that would see Australian wheat competing with Australian wheat which would bring prices down -
and then over the page:
(e) Therefore, as part of my duty to maximise returns to growers . . . I recommended that the approval be denied.
Now, it is an interesting matter, in my respectful submission, going to what her Honour meant in those paragraphs of the judgment, that all that was ever put to Mr Richardson in cross-examination, relevantly perhaps, was that the real reason - I will take your Honours perhaps to three or four pages so that your Honours can see what her Honour had mind. But if I can take your Honours to say 121 in volume 1, and this is a question at line 2:
Having read that letter, you were well aware, would you agree, that in the current market environment -
this is the question -
that in the current market environment, AWB will not issue permits for the shipment of wheat other than in containers and permits will only be issued for the export of wheat in containers at the discretion of AWB Limited? - - -Yes.
Now, having read that letter, not long after it was written, you had it clearly in mind, didn't you, that in current market environment there were to be no bulk export permits for wheat? - - -In the assessment of the current market, correct.
Then the questions further down the page:
Would you agree that it was for your seniors, not for you, to determine whether there had been a change in the current market justifying a departure from the policy of no bulk permits? - - -I guess ultimately correct.
There are other questions and answers. I will not take your Honours to them. At 126, her Honour says, at line 3:
Do you understand the policy that Mr Hughes is referring to, Mr Richardson? - - -My understanding of the policy is that there was no bulk permits in the current market environment or at that time.
MR HUGHES: Yes, that's right? - - -And that was the overriding fundamental to be assessed on each application that crossed the desk.
Then a question about:
was a matter for your seniors, is that right? - - -Well, technically no.
But realistically, yes, would you not agree? - - -The seniors would be acting on the recommendation of the person assessing the policy, the application.
In the middle of 127, there is an answer:
- - -I was saying in the current environment of that time, there would be no permits issued, yes.
You were saying in substance, the policy was there, no bulk export permits to be granted because there has been no change in the market environment?
and the answer to that was, "Yes". In the middle of 128:
You'd been notified of no change of market environment by your seniors, so that you simply had to refuse? - - -Those decisions and the other things that are written on the application itself.
The things that are written on the application itself? - - -On the document that I completed.
Which is what I have taken your Honours to. At the top of 129:
The effective reason for your decision to refuse was the existence of the policy, wasn't it? - - -The assessment of the market.
But it wasn't for you, was it, as you've already agreed, to determine whether there had been a change in the market environment to warrant a departure from the policy? - - -It was up to us to assess the market and recommend any changes required, but that was it.
Then, at the foot of 129:
Does it not follow from your previous answers that the real reason why you refused application number 254 upholding Mr Gormesall was the existence of the policy? - - -I guess so, yes.
Over at 130, at line 17:
the real reason why you refused that approval, and I'm not saying this critically of you, you understand, was the existence of the policy and the fact that your seniors had not notified a change of market conditions justifying departure -
Now, in re-examination, he went into a little more detail about how the change to market conditions was to be determined. At that same page, 130, he talks about:
that information would be provided by the marketer in these approval forms to note why that marketer denied or approved an export permit.
At 131, line 36, he was asked about application 254:
you referred as part of your answer to the assessment of the market and I was asking you did that assessment appear in the documentation? - - -Did I provide it in respect - - -
Yes? - - -Yes, it's written under the Conditions area.
And he read that out on page 132. This is the last reference, your Honour, but 133, Mr Richardson's last answer, to the question, what did he mean by "at a higher level" - that is, the determination of the change. He says:
What I was referring to was that the seniors would again defer to the operational market person or merchant to discuss whether there had been any change in market conditions so at a higher level the policy may be that in the current market environment or at that time there was no permit.
Now, in my submission, it is significant that at no point was it put to him - that is, Mr Richardson - that he had not taken into account the matters that he had set out in his contemporaneous document, and later in his affidavit, as being the matters that he had taken into account. The highest that it was put, of which he agreed with, was that the real reason was the existence of the policy, but that does not, in my respectful submission, exclude the merits - if there were any merits - and also, in my respectful submission, her Honour did not find that he had excluded these -what her Honour referred to as - more general considerations by which, we would submit, her Honour must mean the matters underlying the policy. I will just remind your Honours that that is at 725 in paragraph 121 where her Honour said:
I accept that these considerations were instrumental in the formulation of the policy -
and it is not immaterial, in my respectful submission, that in the passage from Mr Gomersall's evidence, that her Honour set out twice, Mr Gomersall was not saying, "I ignore `the merits'", what was he saying was that the year-and-a-half strategy - year-and-a-half being the life of the pool - was the matter - I am just looking for the reference to that. Yes, at paragraph 116 of the judgment 723:
I assess a permit, not on a, specifically relating only to the instances for that, that one sale, but a marketing strategy . . . how I have to maximise returns over a 12 to 18 month period."
Other parts of the evidence that her Honour sets out, without any apparent rejection of it, was that, for example, in paragraph 109 of the judgment, Mr Gomersall:
spent fifteen to twenty minutes considering the first two combined applications.
That in itself is entirely inconsistent, we would submit, with the idea that there was at the beginning of a process a rejection of what had been put up, if anything, as going to the merits. So there is no finding by her Honour that the refusal that is automatic, and as I have said, that was not put to Mr Richardson, although it was to Mr Gomersall. There is no finding that there was a refusal to consider. It is perhaps implicit, in any event, in paragraph 152 that the AWBI's officers would have looked at any substantial argument against the approach. Her Honour, of course, said, and found, that there was no such argument, and of course, it was never put to either Mr Gomersall or Mr Richardson that to approve a consent would not jeopardise AWBI's marketing strategy. That has never been suggested that any of these applications would not have had that effect. When I say "jeopardise the marketing strategy" and, as well, adversely impact on the net returns received by growers, and at - - -
GLEESON CJ: Well, it is possible to think of factual cases - and I do not know whether there is any evidence about this - where a particular application would not jeopardise the strategy.
MR ROBERTSON: Quite so.
GLEESON CJ: Suppose, for example, that an applicant had, for personal reasons, entrée to a particular market to which the AWB did not have entrée, so that there was no potential competition between them.
MR ROBERTSON: I have no difficulty with that, your Honour, and similarly perhaps, one might say - although in a slightly different field -the evidence was that nearly 90 per cent of the container applications were approved by AWBI. So that, if one has a proposed export, a proposed sale, that would not adversely affect the position, I would quite accept what your Honour put to me.
GLEESON CJ: That is the sort of thing that I would have in mind when thinking of the merits of an application. A meritorious application, I would have thought, would at least include an application where to grant the export permit would not jeopardise the marketing strategy of AWB.
MR ROBERTSON: I would fully accept that, your Honour, and there was nothing suggested in any of the material that was put to AWBI. Could I give your Honours one or two other references. I am still trying to deal with what her Honour had in mind, that is whether it was a rejection out of hand so as to deny the discretion. At page 733 in paragraph 154 her Honour says between lines 40 and 45:
Accordingly, the grant of bulk export permits was perceived to be against AWBI's constitutional charter. It was for this reason that -
if I can break it up, (a) -
it set its face against issuing bulk export permits, and -
(b) -
that it refused each of NEAT's applications.
Those were the considerations, so at the very least, in my respectful submission, her Honour is saying that the applications were considered to the extent to which it was necessary to realise that if they were approved, that is if AWBI approved WEA's consent, that that impact would be adverse. In my respectful submission, that is what her Honour had in mind by the more general considerations.
McHUGH J: That hardly squares with what her Honour said at paragraph 122. How do you get over 122? Mr Richardson in his letter said that the shipments:
would be considered on a case by case basis. But in the next sentence he continued: "in the current environment, AWB will not approve the issuance of permits for the shipment of wheat other than in containers".
MR ROBERTSON: Your Honour, in my respectful submission, they are not inherently contradictory at all.
McHUGH J: That is what her Honour thought.
MR ROBERTSON: I know she did, but it is a confusion, in my respectful submission, to say that if you have a policy against the issue of permits for the shipment of wheat in the current market environment, it does not follow that all applications are going to be refused because it is open to the applicant to say - and I am adapting what his Honour the Chief Justice was putting to me - "The current environment refers to current market conditions. I can show you how, although the current market conditions in Italy might be such-and-such because that's where you're selling, but in Chile you're not there at all". So the market conditions would not - the rationale of the policy would not be adversely affected.
GLEESON CJ: An exporter might say, "I have an association with a Japanese trading house and because of that association I can export to Japan. You can't. You have no such association. My export is not taking any bread out of your mouth".
MR ROBERTSON: That would be permissible and that would be entirely within the policy in terms of what is meant by "in the current market environment".
McHUGH J: Yes, but let us look at the realities, what happens, where you are in a market, as in Italy where you were negotiating. Your policy there was you would not approve the issuance of permits for the shipment of wheat other than in containers. If this is a power that you have to exercise, how can that possibly be a proper exercise of the power? It is like a Minister saying, "I am only going to pay social service to people who are over two metres high", and then said, "Well, I spent 25 minutes examining whether you are over two metres high".
MR ROBERTSON: Well, your Honour, we would not accept what your Honour puts. Here, assuming that this is a broad power, it is given to this entity so that its constitutional position may be maintained or advanced. What its officers do is to say, "I have read the material, scant though it may be", and her Honour finds that there was barely any, "and there is nothing put which would suggest to the contrary and everything that I have just read suggests that if I granted this permit for this quantity of material to this market where I am, the adverse consequence would follow". We would respectfully submit that there is nothing that her Honour said to deny the proposition that that is what the officers were looking at and - - -
GLEESON CJ: But it all comes down to the question of what is a relevant consideration and what is not a relevant consideration, does it not, in other words, where the merits lie?
MR ROBERTSON: Yes, it must do.
GLEESON CJ: Your client, rightly or wrongly - and on your opponent's argument, wrongly - approached the matter on the basis that the overriding relevant consideration was the financial interests of the wheat growers who were members of AWB.
MR ROBERTSON: And selling to the pool.
GLEESON CJ: Yes, and acted as though their ultimate form of accountability was to a room full of wheat growers justifying or not being able to justify granting permission to somebody who was a competitor to sell against them. That is the way they behaved. Now, the question is whether that was a relevant consideration, I would have thought, because the case against you seems to proceed upon the assumption that the merits, as they are called, are to be looked at from the point of view of the interests of the applicant. Here is a conflict of interest.
MR ROBERTSON: Exactly so and what her Honour held - and I will find the passage - was that there was no merits, in a sense, standing outside a clash of interests, that is - - -
GLEESON CJ: But if your approach was justifiable, then what would constitute a meritorious application was one that would demonstrate that it was not harmful to the interests of AWB's wheat growers - - -
MR ROBERTSON: Exactly so.
GLEESON CJ: But your argument and your opponent's argument, if I may say so, are like two ships that pass in the night because your client, rightly or wrongly, is proceeding on the assumption that its role is to protect the interests of the wheat growers who are its members and your opponent's argument is that your client was obliged to consider the legitimate financial interests of people who were their potential competitors.
MR ROBERTSON: Where the ships perhaps meet would be if it were a case where one could do both those things, that is, ensure that the sellers to the pool's interests were not adversely affected by granting or looking at the merits, to use your Honour the Chief Justice's expression, where there was no adverse - - -
GLEESON CJ: But what the legislature has done here is to confer a power of veto upon people who quite likely and often almost certainly will have their own financial interests affected or potentially affected by the application they are considering.
MR ROBERTSON: And that is why WEA was required to consult AWBI - to put it in shorthand, and as one can see from those guidelines I took your Honours to, not treating them as a statute, obviously, but the question posed is, "Would this adversely affect your interests?" and the answer in each case was, and there could not be any doubt that that was so, and really nothing has been suggested to suggest that it was not so, that this is the market that we are in.
GLEESON CJ: That is the point of departure between the two cases, is it not? Whether they were entitled or not to do so, your clients acted as though the purpose for which they were being consulted by WEA was to see whether the proposed application would be adverse to your client's interests.
MR ROBERTSON: Yes.
GLEESON CJ: If that is a legitimate approach, that produces one consequence. If that is an illegitimate approach, then your clients never even got anywhere near what your opponents called "the merits".
MR ROBERTSON: But there is also something to be teased out in relation to the merits, as I think your Honour the Chief Justice has been putting to me, and that is if this were a case where consistently with AWBI's charter or constitution an approval or a consent by WEA could be granted, then the position would be different.
GLEESON CJ: Quite right.
MR ROBERTSON: But what I am putting to your Honours on this merits point, where the point of the public law principle is what are the merits and were the merits excluded, there were not any merits.
GLEESON CJ: If the purpose of the legislation in section 57(3B) is to protect the financial interests of wheat growers who are members of the AWB, then it would still be consistent with that to show that a relevant consideration was that a proposed application could not adversely affect those interests.
MR ROBERTSON: Yes, and that such a proposal had been put up and had not been considered.
GLEESON CJ: Yes.
MR ROBERTSON: It had been rejected out of hand because the decision-maker had said, "My policy is to refuse all applications for bulk export, whoever they're from and whether I'm in the market or not".
GLEESON CJ: Now, what might be the reason for giving AWB a power of veto other than protecting the interests of members of AWB?
MR ROBERTSON: None at all. To answer your Honour's question a little more precisely, if one goes back to - and one can pick it up most easily from the end of, I think, volume 1 which is where the relevant part of the constitution appears to be found, one picks it up and says that - as if one reads the whole of the objective as being maximising the pool return for growers who sell wheat into the pools. That is what it is.
McHUGH J: But your case really comes to this, does it not, that the moment your client sees that the application is inconsistent with its interests, it does not have to give the application any more consideration?
MR ROBERTSON: That is so, and that is what they did, so, as a further rider on that, and that - - -
KIRBY J: So that the procedure of giving full and careful consideration to each individual application is a charade?
MR ROBERTSON: No, not in the least.
GLEESON CJ: It depends on what you think is the purpose for giving AWB a power of veto.
MR ROBERTSON: Exactly.
GLEESON CJ: One possible purpose is to protect the financial interests of AWB. What are the competing alternatives?
MR ROBERTSON: Well, my submission is, changing "AWB" in your Honour's question to AWBI - - -
GLEESON CJ: I am sorry, AWBI.
MR ROBERTSON: - - -that there is no other purpose and, indeed, it is hard to see how AWBI could say, "Look, if I approve this application it would not maximise the return."
GLEESON CJ: Well, presumably AWBI were not brought into the statutory scheme because they are some kind of independent experts - - -
MR ROBERTSON: No, of course not.
GLEESON CJ: - - -who would improve the decision making of the Wheat Export Authority by making their own contribution to it.
MR ROBERTSON: They were brought in - perhaps if I can put it the other way - so as to be able to protect, what they regarded, as their, and their gross, commercial interests. It is not a charade, we would respectfully submit, to have the relevant officers look at an application, as they did, we would respectfully submit - and her Honour did not find that they did not - and to say, we are in competition here.
HAYNE J: There are, at least, I think, three corollaries of the proposition that you have just articulated or accepted, which it is as well to tease out; they are these, I think: the financial interests of NEAT, as the applicant, you say, are not a relevant consideration; second, I think it follows from the proposition you have just accepted, that NEAT's view of the financial interests of AWBI are not a relevant consideration; and, thirdly, that NEAT's view of the interests of the wheat industry as a whole, or some smaller section of the wheat industry, likewise are not relevant consideration. That is, the positive proposition is, the only relevant consideration is AWBI's own view of its financial interests.
MR ROBERTSON: By relevant consideration, your Honour is speaking in administrative law terms, I assume?
HAYNE J: Consideration relevant to whether or not approval in writing will be given. Now, I cast it in terms of relevant consideration in ways that obviously engage administrative law concerns. I understand there is a whole separate area for debate about whether they are engaged at all.
MR ROBERTSON: Could I deal with those, your Honour. We would put it that the interests of NEAT are not a relevant consideration where they conflict, or where AWBI assesses them as conflicting, with AWBI's interests.
HAYNE J: It seems to me to be trying to have a middle ground where there is none to be had, Mr Robertson. I think you have to either grasp the proposition that NEAT's interests are irrelevant or reject it.
McHUGH J: One can perhaps test it this way. Assuming that you are exercising a power for administrative law purposes, would you be acting for an improper purpose if you took into consideration a purpose other than your client's financial interests in this industry?
MR ROBERTSON: AWBI could not ignore its financial interests. That is a mandatory relevant consideration. What I am perhaps grappling with is whether one can say that if that issue was not engaged, that is if there were no prospect on the facts that the pool return for growers was going to be adversely affected, whether a broader field of considerations could be taken into account, but that would mean, in my respectful submission, that if one is looking at the power the interests of NEAT would not be, at least in all cases, a relevant consideration and that would probably mean in administration law terms, given that there is one power on this assumption, that NEAT's interests would not be a relevant consideration.
GLEESON CJ: Well, would it be open to the AWBI to say, "Look, if this application is granted, it will mean a huge amount financially to NEAT and although it could possibly impact on us, the impact could be so marginal that we will grant the application"?
MR ROBERTSON: I think that would be a permissible mode of reasoning.
GLEESON CJ: Which is another way of saying, "Can we justify it to our growers?".
MR ROBERTSON: Yes. The question is step one, AWBI was put into the equation because of who it was and who it represented and what its constitution required it to do, and that controls what it does. Assuming it is a power, it must control what it does, in the same way that the donee of a power, the identity of the donee of a power, going back to Ipec-Air, is highly relevant to the content of the discretion, that is the Secretary of the Department of Transport I think it was, Mr Anderson, or he may have been the Minister, I am not sure, but anyway, one of the powers was vested in the Secretary, another of the powers was vested in the Minister, and the question on which the Court divided was to what extent could the former take into account the latter. But certainly it was regarded as highly relevant as to who the power was given to. Here it is, to put it in my own words, no accident - in fact it is entirely intentional - that, as we would put it, the qualification on WEA's power was given to AWBI.
HAYNE J: A corporation whose avowed purpose is to pursue its own interests. People talking about companies dance around the subject because it is not seen as seemly to point to the fact that companies are there to pursue their own interests and the interest of their corporators, period, and to do so, of course, then according to law.
KIRBY J: Unless they are peculiar companies with a particular statutory status.
MR ROBERTSON: Your Honour, it depends in a sense where one starts, but this - - -
KIRBY J: It certainly does. There is no corporation like this that I have ever heard of. This is a very peculiar corporation.
HAYNE J: Which brings me to this question, Mr Robertson. Why should the process requirements apt to public decision making not apply to a private decision-maker given veto over the exercise of power by a public decision-maker? Why should we not extend the principles?
MR ROBERTSON: For this reason, your Honour. The language of the section - and that is what it must all turn on at the end of the day - and the structure of the section - that is the division between governmental input, if I can use that expression on the one hand - vested in WEA and the qualification on that statutory discretion of a statutory officeholder is vested in the private company for, one must assume, a deliberate purpose - that is the division that the statute shows exists and which the extrinsic material shows was intentional between regulation on the one hand and commerce on the other. The next step is to say that commercial considerations were paramount and the reason that the qualification on the power or discretion of WEA was given to who it was in the terms in which it was in section 57(3B), I think it is, is so that the full effect could be given to its constitutional mandate.
HAYNE J: But why should not public requirements about process be applied when you get this private entity injected into what otherwise is a public process?
MR ROBERTSON: Because, in our submission, there is an immediate conflict between the principles derived in relation to and applicable to governmental discretionary powers and the position of a private corporation advancing its interests and the interests of its corporators.
McHUGH J: That does not really face up to the real issue, does it? Supposing the Wheat Authority failed to consult you. You would have a right to obtain relief by way of injunction, mandamus or otherwise. How would you get that right? You must get it under section 57. So you are not relying on private law rights.
MR ROBERTSON: But that in a sense underlies the distinction, in my respectful submission. That is that the statutory authority - I know that expression begs questions - the donee of the power owes public duties and in that instance one would construe the statute to show that AWBI had the relevant interest to enforce that statutory obligation.
McHUGH J: But it is the interest you get under the statute, is it not?
MR ROBERTSON: Yes.
McHUGH J: It is not an interest you get under the Corporations Law or under the general law; you get it under the statute. That is what gives you your standing.
MR ROBERTSON: It is all under section 57 plainly, but it is a different provision. One is a power, as we would say, and one is a qualification on the power.
GLEESON CJ: You can test it, cannot you? Suppose, to take a case that I understand to be far removed from the facts of the present case, an applicant for export approval came along and said, "We have access to a particular export market that will not deal with any Australian public authority. AWB has no access to North Korea, if you like, and can hope to have no access to North Korea. For a particular reason we have access to North Korea, so that the grant of this application can have no possible adverse affect on the single desk system or the financial interests of growers who are associated with AWB." In a situation like that, does the statute entitle AWB to reject the application without giving consideration to whether or not that proposition, being advanced on behalf of the applicant, is correct?
MR ROBERTSON: If our submission is correct that public law remedies do not apply to what it is that AWBI does, then the remedy - your Honour was using the word "entitlement", I think - but the remedy would not be in the applicant to the WEA seeking to enforce public law remedies against AWBI. I do not know whether that deals with your Honour's question.
McHUGH J: Oviously you can say, "We refuse approval because this is contrary to our interests." Can you say under the statute, "This does not affect our interests but nevertheless we refuse approval."?
GLEESON CJ: Or, "We are not going to consider our interests. We just do not like the way you part your hair"?
MR ROBERTSON: We would submit that, say, a refusal to consider the application, that is, the WEA consults nominated company B and says, "Can you look at this in order to give your prior approval?" and if nominated company B says, "I am not going to look at it at all" - which is the extreme case I think your Honours are putting to me - we would submit that it would not be a case for mandamus because that must follow from the nature of the - I hesitate to use the word "power" but the nature of the - - -
McHUGH J: Function?
MR ROBERTSON: Function, perhaps is a better word, and if I could - - -
McHUGH J: So even if you - and the Chief Justice's question was premised on the basis that you did not even consider. Mine was premised on the basis that you did consider, came to the view that it did not affect your interests, but you can you can still say, "We refuse approval" and there is no public law remedy against you?
MR ROBERTSON: No public law remedy, and the remedy would be the role that the authority has in relation to AWBI, and/or, perhaps, Corporations Law remedies or - - -
McHUGH J: It is hard to believe that Parliament could have intended to give you that much power; you consulted and you say, "Well, this does not affect us in the slightest. It has nothing to do with us. However, we are not giving our approval."
MR ROBERTSON: I take it your Honour is testing the position by extreme cases and the corollary and the logic, we would submit, of the proposition that no relevant power, no power to which public law principles and remedies applies must be that if there were a constructive refusal to exercise the function, a public law remedy would not apply and one would have to look elsewhere for remedies.
GLEESON CJ: This is of wide significance. For my part, I am afraid I do not know enough about the current detail of the schemes relating to marketing of primary products of various kinds to say that this is a very unusual scheme. In the past, schemes relating to marketing of milk products or wool or other primary products have from time to time, as I understand it, conferred large powers on authorities that were for practical purposes controlled by growers or by producers. What is happening here is a kind of amalgamation of concepts of public interest and private commercial interest and, as I say, I am not sure that it is all that unusual in relation to marketing of primary products.
MR ROBERTSON: Yes, I certainly do not know of any other Commonwealth statutory provision that has the structure that section 57 has and there is no reference in the extrinsic materials to any other structure that has been relied on for this purpose, but one thing that comes through with great clarity in the extrinsic materials and what one can see on the face of the statute is that the government wanted to retreat and have regulation only in the small statutory authority, I think the expression was, the WEA, and they wanted to divide and thought they were dividing regulation on the one hand and commercial interest on the other.
KIRBY J: You say that, but they ran into a couple of problems, one of which is that they ran into the Trade Practices Act and they had to find a way around that. By "government", I take it you mean the Parliament?
MR ROBERTSON: I am sorry, your Honour, yes.
KIRBY J: Secondly, they had to find a way of immuring a company given statutory relevance from the normal consequence which had considerable powers in relation to the process when by simply putting them into the statute, you at least arguably attract the ordinary administrative law remedies because you give it a statutory status. They were the two problems. The second is a pretty fundamental problem, it seems to me, because it is a rule of law problem. It is a bit like 75(v). You cannot get very far away in our constitutional arrangement from the supervision of the courts insofar as you are using donees of statutory power created by the Parliament.
MR ROBERTSON: One is talking though, your Honour, about a particular sort of supervision.
KIRBY J: Yes, it is particular but one view is, "Well, this is just one case and let it float away all on its own"; another is, "This is an early warning of what might become a pack of camels if it is put outside the discipline of the rule of administrative law of the Commonwealth".
MR ROBERTSON: I think your Honour and I are both talking about the same issue. The issue really is, is administrative law - administrative law remedies, public law remedies as I have been describing them - the available remedies in respect of the functions of this corporation, that is - - -
GLEESON CJ: What was the English case dealing with it, the Take-Over Panel?
MR ROBERTSON: Datafin.
McHUGH J: Datafin.
MR ROBERTSON: Yes. I will just add that citation for your Honours.
GLEESON CJ: Now, how long do you expect to take to complete your submissions?
MR ROBERTSON: I think probably 15 minutes, your Honour. Is that - I can make it shorter.
GLEESON CJ: Yes, thank you. I am anxious to see that we leave time for Mr Gageler's reply, that is all.
MR ROBERTSON: Do your Honours wish to rise - - -
GLEESON CJ: No, we will be rising at 4.15.
MR ROBERTSON: As your Honours please. In relation to this issue that your Honour Justice Kirby has raised with me can I mention two cases, one of which your Honour Justice Hayne referred to this morning which was Mayer's Case. Some months before Mayer was decided Justice Fisher of the Federal Court of Australia looked at a perhaps analogous problem, nothing to do, of course with private companies, but in a decision called Reid v Nairn [1985] FCA 137; 6 FCR 261, the - - -
KIRBY J: Was that Gordon Reid who had a parliamentary role, later Governor of Western Australia?
MR ROBERTSON: I do not think so.
KIRBY J: Anyway, you tell us about the case.
MR ROBERTSON: I do not think so, your Honour. It begins with a reference to the nature of the proceedings which Justice Wells said put him in mind of "a Greek tragedy" or the "works of the late Franz Kafka".
KIRBY J: That sounds a good - what, Greek tragedies and Franz Kafka - - -
MR ROBERTSON: It was obviously a bad case, your Honour.
KIRBY J: I will have to use that.
MR ROBERTSON: Your Honour could pick that up at page 262 of the report. But the question was whether the power under the Customs Act 235(6) where it is said that where the parties "consent" - and the relevant party was the DPP - then the court could deal with the matter "summarily" as opposed to on indictment. The argument was put that, in effect, what this was:
the consequence of a refusal of the prosecutor to consent to a summary determination is to "veto" the exercise by the magistrate of his discretion so to determine the matter.
His Honour Justice Fisher said at page 271:
However, this does not mean that the "power" to refuse consent must be found in s 235(6). That subsection merely indicates what in the circumstances is the consequence of the exercises of such a power.
We would respectfully submit that that is analogous to the position under 57(3B), that is it prescribes the consequences. It does not go to the nature of the power.
And, similarly - I am only giving your Honours that reference because we did not include it in our written submissions - I am just about to go to Mayer, but can I give your Honours the Datafin citation.
GLEESON CJ: Thank you.
MR ROBERTSON: Regina v Panel on Take-overs and Mergers, Ex parte Datafin [1986] EWCA Civ 8; (1987) 1 QB 815.
KIRBY J: I have a feeling that there have been some other cases of the extension of administrative law into the private sector in the privatisation sense in England. I think Sir Anthony Mason might have referred to them in that series of lectures he gave recently.
MR ROBERTSON: Yes, I had not looked at that for that purpose, but that is certainly one that we have referred to and I do not think Sir Anthony did, but as lying behind perhaps what his Honour Justice Gyles' approach in the Full Federal Court - although his Honour does not mention it - is the decision of the Privy Council, which is on appeal from New Zealand, in Mercury Energy v Electricity Corporation of New Zealand (1994) 1 WLR 521 at 529, where the judicial committee, in relation to a corporation controlled by the government, said its decisions in commercial matters - and it was a commercial matter, to terminate a contract, I think it was - would not:
be subject to the judicial review in the absence of forward, corruption or bad faith.
Now, that is in the same line of country, I think, as your Honour Justice Kirby.
KIRBY J: In a sense, if you have a corporation like Qantas and you set it free, then it is in the marketplace and the government may be a shareholder, but it is in a sense a completely free entity and it just competes and it is out of the public law area, but if you keep it with public law functions, then you cannot really complain that you are then subject to public law scrutiny and accountability.
MR ROBERTSON: But if, and we would say perhaps consistently with that, the discretion in 57(1) had remained in AWB, or its pool subsidiary AWBI, then that will be a clear example of what your Honour Justice Kirby had in mind, but, of course, that was vested in this new government body, WEA. So, in a sense - - -
KIRBY J: We are back to where we started.
MR ROBERTSON: Yes, exactly so, your Honour.
KIRBY J: As a precondition to the public authority.
MR ROBERTSON: Yes, exactly so. The other reference is to Minister for Immigration and Ethnic Affairs v Mayer [1985] HCA 70; (1985) 157 CLR 290, perhaps rather a different environment in the sense that it was the Minister, but also a different structure, because that was a case where the section of the Migration Act said:
"An entry permit shall not be granted -
unless the non-citizen -
is the holder of a temporary entry permit which is in force and the Minister has determined . . . that he has the status of refugee -
and the majority, Justice Mason, Justice Deane and Justice Dawson held:
that the Minister's decision was a decision made in the performance of the statutory function which that paragraph impliedly confers upon him.
That is at 303 point 9. Justice Gibbs dissented, holding that there was:
no room to infer that the provision was inserted for the purpose of subjecting the decision of the Minister to judicial review under the AD(JR) Act.
That is at the foot of 296. His Honour said that:
6A did not expand the power of the Minister or an officer to issue entry permits; on the contrary, it imposed conditions on the exercise of a discretionary power that had formerly been free from those conditions.
And Justice Brennan also dissented and at 307 said:
A distinction must be drawn between the legal effect produced by the exercise of a power to produce it when that power is conferred by an enactment and a legal effect which an enactment attaches to the fact that a decision is made in exercise of another authority of power.
That is at 307, point 3.
KIRBY J: Do you know if Mr Nicholas said in his book is only about contracts with privatised agencies, or is it more generally about the accountability in the privatised sectors?
MR ROBERTSON: Professor Seddon's book, is this?
KIRBY J: Nick Seddon of the Australian National University.
MR ROBERTSON: Yes.
KIRBY J: This is a book which was published about a year ago I think.
MR ROBERTSON: Yes, I think it is the second edition. I think he does touch on governmental issues in relation to contracts. There was certainly a discussion of Ipec-Air I think.
KIRBY J: If either side can find any general discussion of these issues I would be grateful.
MR ROBERTSON: Yes, we will have a look at Professor Seddon's book. I will have to hasten. The last reference I wanted to give to what her Honour had held had happened, and there is this question, we would submit, of what her Honour meant and at what time in the decision-making process the commercial interests of AWBI predominated and became the real basis for decision is that her Honour does say, with some perhaps diffidence, but at paragraph 153 she said:
the present situation would fall within Bankes LJ's first category -
Now, her Honour was referring to Lord Justice Bankes' decision in Kynoch which, although a long time ago now, 1919, and taking into account your Honour Justice McHugh's strictures about foreign courts, but in a sense it is an analogy because the Port of London Authority had a monopoly on works in and around the Thames estuary subject to a power to allow others to do the works.
KIRBY J: Again, that is an authority presumably established by statute.
MR ROBERTSON: By statute. It was a statute power and there was no argument. But the point for present purposes is that Justice Mathews said that she thought that this was within Lord Justice Bankes' first category, and this is set out at page 702 of the judgment It is worth recalling that the first category was cases "where a tribunal in the honest exercise of its discretion" - and this is from page 184 of the judgment in the [1919] KB:
where a tribunal in the honest exercise of its discretion has adopted a policy and, without refusing to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case.
So we would submit that that again is an indication that her Honour was not saying that there had been a constructive refusal to exercise the jurisdiction, assuming that jurisdiction is a relevant concept to AWBI. So, we have no difficulty with her Honour's conclusion that the policy was the dispositive reason but we do not read her Honour as saying that the general considerations did not form a part of the reasoning of Mr Gomersall and Mr Richardson.
KIRBY J: Mr Robertson, I get an impression that the judges below in the Federal Court each reached their conclusion by a different method - all four of them - and I would like to know which one you embrace. Who do you support?
MR ROBERTSON: We support all of them, your Honour. Justice Mansfield and Justice Mathews arrived at their conclusions by the same path, we would submit, and Justice Heerey and Justice Gyles arrived at their conclusions by the same path, not the same path as Justice Mathews and Justice Mansfield. But Justice Heerey went further along the path than Justice Gyles, because Justice - - -
GLEESON CJ: Justice Mansfield and Justice Mathews applied ordinary public law considerations.
MR ROBERTSON: Assumed that they applied, I think. Well, Justice Mathews, I think, held that they applied. Justice Mansfield perhaps assumed that they applied and said even if they did apply - if I may give your Honours five or six page references to Mr Gomersall's evidence, which I will not go to, given the time. The pages are 49 to 52, 75 to 76, 95 and 99 to 100, and I ask your Honours to note that at least some of the answers that he gave were not about the policy as being any sort of blanket policy of rejection of applications for bulk permits. Indeed, as we have submitted in our written submissions, her Honour's finding in paragraph 119 was that the policy was subject to market conditions. Her Honour's finding that the market conditions did not change on the facts is no doubt right, but it does not mean that no examination of the merits, if I can put it that way, was made.
We have given, I think, in our submissions a reference to the decision in Browning 74 CLR 492 that your Honours were looking at this morning. At 506, Justice Dixon summarised the position as to whether or not the application was considered "as an individual case". We would submit that, on the facts found by her Honour, these six applications were each considered as an individual case.
The last thing I wanted to say about the facts and the issue of policy, your Honours, is that in the - perhaps there are two things. One is that your Honours asked this morning about durum and pools. Could I give your Honours three page references where that is discussed. Page 59 of volume 1 between lines 5 and 10, the questions was:
how much durum wheat in broad terms was going to the pools?---In broad terms, 50 per cent of the durum wheat went into the pools.
And -
The balance would have gone domestically. Actually I will qualify that because 50 per cent of the grain I acquired was through a pool, 50 per cent was acquired by me or AWBI under cash contracts.
Then at page 75 - - -
GLEESON CJ: Perhaps you could just give us the references.
MR ROBERTSON: Yes, I will. Page 75, your Honours, point 5 of the page:
strong competition -
in relation to durum wheat in Italy -
between AWBI and many other organisations -
in particular the Americans, and pages 79 to 80.
Then in relation to the last factual matter - I will do this by reference, but do your Honours have a document called "Appellant's Chronology as Annotated by the Respondents"?
GLEESON CJ: Yes.
MR ROBERTSON: We just thought it was the easiest way of perhaps doing it but on page 5 there is a reference to this alleged statement of Mr Flugge who I think was the managing director at the time and we have given your Honours a reference to what the relevant officers knew about that, Mr Gomersall. Could your Honours add to that that Mr Gomersall was cross-examined on that issue at page 98 of volume 1. But the short proposition is that what Mr Flugge said was not in those bald terms and, in any event, those officials did not act on that basis.
Then, your Honours, briefly in relation to section 57(6), that of course is an alternative argument, that is, even if the public law principles apply, 57(6) would give an immunity in relation to the Trade Practices Act. We have set out the cases in paragraphs 43 to 55 of our submissions but basically it comes to the starting point being that you construe the two Acts of the Commonwealth Parliament together. Section 51(1) of the Trade Practices Act required there to be specific reference in the other Act, which there was.
In our submission, section 57(6) proceeds by reference to the acts done and not the legal quality of the act. So even if public law principles were applicable, even if the acts were invalid in some way - or invalidated in some way by public law principles, nevertheless, on the facts of this case, in any event, what had been done by AWBI would have been done for the purposes of section 57, there being no suggestion of ulterior purpose - - -
KIRBY J: The problem is whether you read in lawful purposes, and that includes doing it in the lawful way?
MR ROBERTSON: The question would be, "Why would the Parliament, using the words that it did in section 57(6), be taken to have been limiting the immunity to those things that were done which were unimpeachable from an administrative law point of view?", and of course, our answer to that question is, "There is no reason, in the language, why one would take that approach", and we have given your Honours references to a whole series of cases where the word "done" has been construed as "purportedly done", and I will not repeat those. We do make a separate submission, and perhaps this is the last - - -
KIRBY J: How do you distinguish the cases where the court say "done" equals "lawfully done" from those that say "done" equals "reportedly done"?
MR ROBERTSON: It depends on the nature of the provision, but in short, your Honour, the case relied on by my learned friends is in the judgment of Justice Gummow and Justice Gaudron in Darling Casino. That was in relation to a privative provision, if I can use that expression - - -
KIRBY J: That reversed me in the Court of Appeal. I will be looking at that very closely.
MR ROBERTSON: I did not recall that your Honour sat, but that was a privative provision where, as your Honours know, since time immemorial -at least since the foundation of the Commonwealth - privative provisions have been minutely construed - if I can say that.
KIRBY J: Not minutely enough, in my case, apparently.
MR ROBERTSON: And in that context, their Honours - and I might say the majority expressly refrained in Darling Casino from accepting that construction of section 155 of the Casino Control Act, but that is in the context of a privative clause.
The other line of country, broadly speaking, is in relation to statutory provisions which are protective in some way, whether they are protective of police officers or inspectors or - in other words, one does not have the same starting point in relation to a protective provision. Justice Dixon reviews all the authorities in Little v The Commonwealth 74 CLR 94, but we have set all those matters out in our written submissions.
McHUGH J: 75, I think it is.
MR ROBERTSON: I am sorry, your Honour, 75 CLR. Perhaps the last thing I should refer to, your Honours, is that we have included some paragraphs of a submission about futility on the basis that now that the administrative law relief has been abandoned against the WEA, and on the basis that it is section 57(1) that prevents the wheat being exported, as we would see it, there is a gap in any causal chain between what AWBI did and any loss suffered. Could I give your Honours one reference. Your Honours have mentioned IPEC-Air - - -
KIRBY J: Do you need loss? All you need is standing, is it not?
MR ROBERTSON: I am sorry. If one accepts that this is no longer a public law case in point of remedy but it is a case under section 82 of the Trade Practices Act, then there has to be a causal relation between the conduct and the loss or damage. We, in our submission, say that even if you set aside on administrative law grounds a refusal to grant, that does not give you a grant either as against AWBI or WEA, and the statute prohibits the export. Could I give your Honours a reference to the joint judgment of Justice Taylor and Justice Owen in IPEC-Air [1965] HCA 27; 113 CLR 177 - which your Honour the Chief Justice was referring to earlier - at 200, point 4, where their Honours said - in that case, I think it was the Customs (Prohibited Imports) Act - it is the Act, and not the secretary, which is preventing the import of the planes that IPEC-Air wish to import.
Your Honours, the one final machinery matter that I should not forget, and that is that there is, towards the end of volume 4, a motion to extend time to some date in August, I think it was, of a notice of contention, and I gather that is consented to but I should formally - - -
GLEESON CJ: Yes, you have that.
MR ROBERTSON: Thank you, your Honour.
GLEESON CJ: Yes, Mr Gageler.
MR GAGELER: Thank you, your Honour. I will deal with the futility point, first. The causal relationship is established by the fact that AWBI refused approval, and by the fact that it was AWBI's refusal of approval that caused the Wheat Export Authority to refuse its consent. The question is whether the refusal of approval by AWBI was clothed with a statutory immunity. That is the question - - -
HAYNE J: But all of those are matters for trial at some later date, are not they?
MR GAGELER: Absolutely. It does not fall within the separate issues stated under order 29, rule 2 of the Federal Court Rules. Your Honours, there are six other short topics to address. The first is to give your Honours two short references. The first is in Australian Broadcasting Tribunal v Bond - well-known - [1990] HCA 33; 170 CLR 321. At 377, Justices Toohey and Gaudron said this - and I only quote one sentence:
If an enactment requires that a particular finding be made as a condition precedent to the exercise of or refusal to exercise a substantive power, a finding to that effect is readily characterized as a decision "under an enactment".
to deal with the jurisdictional factor point. The other reference is in Ipec-Air itself[1965] HCA 27; , 113 CLR 177. It contains the familiar and frequently quoted statement of Justice Kitto at page 189, to this effect:
It is a general principle of law, applied many times in this Court and not questioned by anyone in the present case, that a discretion allowed by statute to the holder of an office is intended to be exercised according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man . . . ought to confine himself.
Now, if we are seeking extension of the law by analogy in the present case it is simply to delete the words "to the holder of an office" in that frequently quoted statement. The case of course was concerned with the application of a policy, and I draw your Honours' attention without reading it to the application of that general principle in a relevant context by Justice Kitto at the top of page 193.
KIRBY J: You want not to delete "holder of office" but to add "or a person whose decisions affect the decisions of the holder of an office".
MR GAGELER: Yes.
KIRBY J: And are integrated by statute with those decisions.
MR GAGELER: Yes, I would be content with that, your Honour.
KIRBY J: Something like that.
MR GAGELER: The second topic concerns the necessity to return to her Honour's findings of fact. Can I simply say this: that findings at paragraphs 121 and 122 of her Honour's judgment there can be no doubt, in our submission, that what her Honour found was that the policy dictated the result that the particular circumstances of each application were given no realistic consideration and that the purported assessment on a case-by-case basis of those applications was a meaningless exercise. If there is any ambiguity about what she said at paragraphs 121 to 122, it is cleared up by what her Honour said at page 734, paragraph 157, line 35, where her Honour said:
Its -
that is, AWBI's -
decisions in this case were clearly made in the flexible application of its policy against bulk export permits.
There was no other conclusion of fact to which her Honour could have come, given the evidence of Mr Flugge's statement, for example, given the Pars Ram fiasco and given the evidence of Mr Richardson, which was very clearly to the effect that the policy was set by his superiors. He was to obey the policy until told to do otherwise by his superiors.
CALLINAN J: You had to pay a fee to get the decision too, did you not?
MR GAGELER: You did.
CALLINAN J: To get the inflexible application of the policy.
MR GAGELER: Yes.
CALLINAN J: You had to pay get the flexible application of the policy to you.
MR GAGELER: The third topic concerns the letter at pages 476 to 477 to which your Honour the Chief Justice referred. There is contained in that letter in the third last paragraph at page 477 a justification for a general policy, the justification being stated in terms of avoiding Australian wheat competing with Australian wheat. One can readily accept, as we do, that that consideration is one that is consistent with the purposes of the Act. It is one that treats the power under (3B) as acting to protect the export permission automatically granted by (1)(a). Indeed, if your Honours note that at paragraph 98 of the explanatory memorandum that is precisely how it was explained to the Parliament that the power of veto would work, that is, in aid of the power to export. The point is - - -
KIRBY J: Which one is that, the one to the House or the one to the Senate?
MR GAGELER: I think they are consistent in this respect but I was looking at the one to the House.
What that consideration does not do is lead inevitably to a policy that prevents exports in any circumstances, the reason being that competition of necessity is always a question of fact and degree. To accept that a relevant consideration is to avoid Australian wheat competing with Australian wheat is automatically to invite a consideration of the circumstances of the particular export to determine whether or not and, if so, to what degree that is a realistic prospect.
It only leads to the sort of policy adopted by AWBI by the chain of reasoning in fact adopted by AWBI if your Honours were to look, for example, in volume 3 at page 655, which was this formerly confidential document that I took your Honours to in-chief. I did not get to the second page where the justification is sought to be set out but your Honours will note at the top of page 656 the very first of the justifications for the blanket rule is stated in these terms:
The issuing of a permit establishes a precedent which makes it difficult to counter requests for other permits in similar or related markets.
That is, if we do it once, then we are going to find it difficult not to have to consider the merits and do it again. It is a self-perpetuating, self-fulfilling justification.
KIRBY J: Yes, and I do not know quite how to express this, but could it be said that the Board or that the AWBI could take the view that if they allow this particular export to take place that they thereby in some way diminish the signal that they send of the Australian market speaking with one voice and not allowing wheat growers to trickle into other minor markets and thereby destroy the unity of the market which they are seeking to sell at the one desk?
MR GAGELER: If they act reasonably in ultimately taking that into account and deciding against an approval, then that is something they can do.
HAYNE J: But the scheme of the Act is threefold; one, only AWBI may export without a permit; two, everyone else needs a permit; three, AWBI has a veto.
MR GAGELER: Yes, and the question is, what limitations apply, if any, to the exercise of that power of veto conferred by the statute, yes.
Next, the proposition was put on a number of occasions that the wheat sought to be exported by NEAT would necessarily be in competition with wheat of AWBI in the Italian market. I drew your Honours' attention in-chief, particularly to the fifth of the applications in respect of which there was a particular Italian buyer - at least it was asserted by NEAT that there was a particular Italian buyer - who sought to buy this particular wheat and if he did not buy this particular wheat he would purchase the same quantity of wheat from a US buyer.
That occurred in circumstances where as at 13 January 2000, as is shown by page 29 of the appeal book, there was no pool for ADR Feed and AWBI was not purchasing ADR Feed on the stock market and where it is said at page 143 of the appeal book that although AWBI was negotiating with a buyer in Italy it was negotiating in respect of ADR6 wheat, a different grade. That illustrates the point that the question of competition can only be assessed on a case-by-case basis.
Next, the constitution of AWB. Your Honours will recall that the objects in Article 2.1 require regard to be had to the interests of growers. Growers are defined in Article 1.1(a) to include only persons delivering wheat to the AWB group. So it is the case that ultimately growers who are denied export permits, or persons acting on behalf of growers who are denied export permits, will be shareholders of AWBI, but that circumstance does not lead, in our submission, automatically to the view that the interests of growers are therefore adequately protected by their rights as shareholders, that is, they are in these circumstances very much the minority whose rights are not necessarily to be protected in a general meeting.
Finally, your Honours, dealing with section 57(6), the respondent reads the words "under this section" as meaning "purportedly under this section". In the respondents' written submissions, reliance is placed on a line of authority epitomised in Australia by Little v The Commonwealth, mentioned in paragraph 51 of their submissions, in England by Scammell v Hurley, mentioned in footnote 5 of their submissions. That line of authority says that, in the context of imposing a special limitation period for tortious action against a public officer or public authority, "under this Act" means and includes "purportedly under this Act".
The point about that line of authority is that the starting point is very different from the starting point with which we are concerned here. The starting point is that the statute, that is, the protective statute in question, only has work to do where the relevant conduct falls outside the scope of the statutory authority in the first place. Those cases need to be read in that light. In Little v The Commonwealth [1947] HCA 24; 75 CLR 94 at 108, point 6, that is what Sir Owen Dixon said. The same thing is said in Scammell v Hurley [1929] 1 KB 419 at 427. If the Court pleases.
GLEESON CJ: Thank you, Mr Gageler. We will reserve our decision in this matter.
AT 4.06 PM THE MATTER WAS ADJOURNED
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