Warringah Council & Ors v Optus Vision Pty Ltd & Ors S166/2002 [2003] HCATrans 596 (14 February 2003)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S162 of 2002

B e t w e e n -

BAYSIDE CITY COUNCIL

First Applicant

MORELAND CITY COUNCIL

Second Applicant

FRANKSTON CITY COUNCIL

Third Applicant

YARRA CITY COUNCIL

Fourth Applicant

and

TELSTRA CORPORATION LIMITED

First Respondent

TELSTRA MULTIMEDIA PTY LTD

Second Respondent

HURSTVILLE CITY COUNCIL

Third Respondent

KOGARAH MUNICIPAL COUNCIL

Fourth Respondent

LEICHHARDT MUNICIPAL COUNCIL

Fifth Respondent

PARRAMATTA CITY COUNCIL

Sixth Respondent

PENRITH CITY COUNCIL

Seventh Respondent

RANDWICK CITY COUNCIL

Eighth Respondent

HORNSBY SHIRE COUNCIL

Ninth Respondent

DRUMMOYNE COUNCIL

Tenth Respondent

BURWOOD COUNCIL

Eleventh Respondent

CONCORD COUNCIL

Twelfth Respondent

STRATHFIELD MUNICIPAL COUNCIL

Thirteenth Respondent

Office of the Registry

Sydney No S163 of 2002

B e t w e e n -

MORELAND CITY COUNCIL

Applicant

and

OPTUS VISION PTY LTD

First Respondent

OPTUS NETWORKS PTY LTD

Second Respondent

WARRINGAH COUNCIL

Third Respondent

RANDWICK CITY COUNCIL

Fourth Respondent

BLACKTOWN CITY COUNCIL

Fifth Respondent

Office of the Registry

Sydney No S166 of 2002

B e t w e e n -

WARRINGAH COUNCIL

First Applicant

RANDWICK CITY COUNCIL

Second Applicant

BLACKTOWN CITY COUNCIL

Third Applicant

and

OPTUS VISION PTY LTD

First Respondent

OPTUS NETWORKS PTY LTD

Second Respondent

MORELAND CITY COUNCIL

Third Respondent

Office of the Registry

Sydney No S167 of 2002

B e t w e e n -

HURSTVILLE CITY COUNCIL

First Applicant

KOGARAH MUNICIPAL COUNCIL

Second Applicant

LEICHHARDT MUNICIPAL COUNCIL

Third Applicant

PARRAMATTA CITY COUNCIL

Fourth Applicant

PENRITH CITY COUNCIL

Fifth Applicant

RANDWICK CITY COUNCIL

Sixth Applicant

HORNSBY SHIRE COUNCIL

Seventh Applicant

DRUMMOYNE COUNCIL

Eighth Applicant

BURWOOD COUNCIL

Ninth Applicant

CONCORD COUNCIL

Tenth Applicant

STRATHFIELD MUNICIPAL COUNCIL

Eleventh Applicant

and

TELSTRA CORPORATION LIMITED

First Respondent

TELSTRA MULTIMEDIA PTY LTD

Second Respondent

BAYSIDE CITY COUNCIL

Third Respondent

MORELAND CITY COUNCIL

Fourth Respondent

FRANKSTON CITY COUNCIL

Fifth Respondent

YARRA CITY COUNCIL

Sixth Respondent

Applications for special leave to appeal

GLEESON CJ

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 FEBRUARY 2003, AT 10.45 AM

Copyright in the High Court of Australia

________________

MR N.J. YOUNG, QC: May it please the Court, I appear with my learned friend, MR M.N. CONNOCK, for the Victorian Councils, who are the applicants in matters S162 and S163. The same Victorian Councils are respondents in other matters. (instructed by Maddocks Solicitors)

MR P.J. HANKS, QC: Your Honour, I appear with my friend, MS J.M. JAGOT, for the first and second respondents in S162 and S167. (instructed by Mallesons Stephen Jaques)

MR F.M. DOUGLAS, QC: May it please the Court, I appear with my learned friends, MR K.M. CONNOR and MR G.R. KENNETT, for the New South Wales Councils in matters numbered S166 and S167. (instructed by Deacons)

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR N. PERRAM, for the Optus respondents in S163 and S166. (instructed by Gilbert & Tobin)

GLEESON CJ: Thank you. Yes, Mr Young.

MR YOUNG: If your Honours please, this matter raises constitutional questions and questions concerning the construction and operation of clause 44 of Schedule 3 of the Telecommunications Act 1988 of 1997.

GLEESON CJ: Although there are a number of points of law involved, is there a single issue between all the parties?

MR YOUNG: Yes, there are common issues right through the proceedings. I think the one distinguishing feature is that the New South Wales Councils imposed a charge which it is contended is not a tax. On the other hand, the Victorian Councils imposed a rate which is a land tax. Aside from that, the constitutional issues and the issues of

construction and operation of clause 44 would seem to be common to all the proceedings.

GUMMOW J: There is some section 90 point lurking around in the background. How does that come in?

MR YOUNG: There was. The respondents, Telstra and Optus, contended that the cables carried goods and hence the charges and taxes were excises.

GUMMOW J: The development of Hematite in some way.

MR YOUNG: Yes, that is so. That would arise by way of cross-contention from Telstra or Optus, or may arise, if the matter were to proceed by way of appeal in this Court.

GUMMOW J: But it has not been ruled on, is that right?

MR YOUNG: It was ruled on by Justice Wilcox.

GUMMOW J: But not in the Full Court.

MR YOUNG: But not by the Full Court, that is so.

We would like to take the constitutional issue firstly, if we may, but before doing that can I take the Court to the key provisions of the Telecommunications Act. I believe the Court has - - -

GUMMOW J: Reprint No 3 we have.

MR YOUNG: Right, you are better served than I am, your Honour, I have reprint No 1 but I think there is no material change in the relevant provisions.

Clause 44, the key clause, is found in Schedule 3, which is given legal effect by section 484. That section simply provides that "Schedule 3 has effect." The scheme of the Act is that the Act licenses carriers and imposes requirements on service providers. The licence conditions are set out in Schedule 1. Schedule 3 sets out what are called "Carriers' powers and immunities". The early divisions of that schedule deal with powers to enter land, to install facilities, to maintain poles and cables, and the like. Division 2, for instance, "Inspection of land", Division 3, "Installation of facilities", Division 4, "Maintenance of facilities", and Division 5, "Conditions relating to the carrying out of authorised activities".

Division 7 is, as the Full Court said, important, because it states the way in which the authorised activities are to be carried out largely in a way that is exposed to the concurrent operation of State and territory laws. Can I take the Court to the clauses of Division 7, clause 36:

Divisions 2, 3 and 4 -

which are the various powers of access, et cetera -

do not operate so as to authorise an activity to the extent that the carrying out of the activity would be inconsistent with the provisions of a law of a State or Territory.

Clause 37 is the only exception to that. Clause 37 is similar to the provision that was considered by this Court in Botany. It purports to deal comprehensively with the extent to which there is exclusivity in the Commonwealth regime in respect of the powers and authorities of carriers. Subclause (2) contains a declaration that activities that are authorised are authorised in a way that is intended to be exclusive or exhaustive of certain State or Territory powers in the area of environmental effects, et cetera. Clause 38 provides the concurrent operation of other State and Territory laws, and 39 provides for the fact that:

This Division does not affect the liability of a carrier to taxation under a law of a State or Territory.

Manifest in those provisions is a quite clear indication that so far as the Commonwealth regime is concerned, the limit of exclusivity or exhaustive provision is that set out in clause 37, and otherwise there is no attempt to set up an inconsistency with State laws that might attract section 109 of the Constitution.

GUMMOW J: Clause 38 is not an unusual provision, I think.

MR YOUNG: No, it is quite common.

GUMMOW J: Clause 37, you say, has some analogy with the Airports Case?

MR YOUNG: Yes, there was a provision saying that in relation to environmental laws and other laws the Commonwealth powers given for the purposes of constructing the airport runway were not to be affected by State laws.

GUMMOW J: Yes.

MR YOUNG: But 37(2), if it operates at all, would operate as a declaration of intention and in the area covered - - -

GUMMOW J: As to the field, I suppose.

MR YOUNG: Yes, as to the field. As to the field covered by Divisions 2, 3 and 4, they are intended to exhaustive or exclusive. Clause 44 stands in a very different category to that. In Division 8, clause 44 provides as part of a miscellaneous division, that - and I will abbreviate it - laws of a State or Territory are to have:

(a) no effect to the extent to which the law discriminates or would have the effect . . . of discriminating, against a particular carrier, against a particular class of carriers, or against carriers generally;

(b) . . . a person -

any person -

is not entitled to a right, privilege . . . and must not exercise a power, under a law of a State or Territory to the extent to which the law discriminates, or would have the effect . . . of discriminating, against a . . . carrier;

(c) . . . a person is not required to comply with a law of the State or Territory to the extent to which the law discriminates, or would have the effect . . . of discriminating -

It is also relevant to refer the Court to subclauses (4) to (7) which permit some relaxation from clause 44 by "disallowable instrument", and also 45, which says:

this Part is not to be construed as preventing a law of a State or Territory from conferring powers or immunities on carriers, so long as that law is capable of operating concurrently with this Act.

GLEESON CJ: It was held against you, as I understand it, as appears from page 171 of the application book, that this is a fairly unusual case in that in the explanatory memorandum it was stated specifically that the purpose of clause 44, or 42 as it then was, was to prevent exactly what the Councils have done in this case.

MR YOUNG: Which is to impose a general rate on all cables, et cetera.

For the purposes of the first argument, your Honour, if I may, we would accept the construction points to which that page goes against us, but regardless of the construction points we say clause 44 is invalid. What, in essence, it attempts to do is to expand the operation of section 109 of the Constitution in a way which is impermissible.

GUMMOW J: In what way?

MR YOUNG: What it does, in effect, is to say State law is negated if it is going to have a discriminatory effect. It does not negate it in terms of section 109 or render it inoperative in a way that 109 does. Section 109 simply says "to the extent of the inconsistency" between two laws, the State law is rendered inoperative.

Clause 44 attempts to go further than that. It would appear to be based on US jurisprudence, emanating from the supremacy clause of the US Constitution which is the foundation of a doctrine of intergovernmental immunities, and part of that doctrine of intergovernmental immunities has the discrimination limb attached to it. There is no provision that the High Court has previously considered that is anything like clause 44. If one looks at cases that have considered statutory provisions that declare a field to be exclusive or exhaustive to a particular extent, none of them operate in the way in which clause 44 does. All of them, in Wenn's Case and the native title case and otherwise, all address themselves to the Commonwealth regime otherwise established by the Commonwealth legislation and they say in respect of that regime that provides for the powers and authorities of licensed carriers, or of the Commonwealth shipping line, or of a scheme of preference for employment of discharged servicemen - - -

GLEESON CJ: Is this a way of expressing the point, that section 109 applies where the Commonwealth makes a law for the peace, order and good government of the Commonwealth on a particular subject and that is inconsistent with a law that a State Parliament has made?

MR YOUNG: Yes.

GLEESON CJ: Whereas this is a case of the Commonwealth Parliament saying the State Parliament shall not make a certain kind of law?

MR YOUNG: Exactly.

GLEESON CJ: And then saying, to make a kind of law that we have forbidden is inconsistent with the law forbidding the making of the State law?

MR YOUNG: Yes, exactly, that is the point and the authorities articulate these principles and without going to the cases can I summarise them. Firstly, a provision of this ilk cannot of its own force deny operation and effect to a State law, that is standard principle. Secondly, it cannot declare an inconsistency to exist where there is otherwise no inconsistency between a specified Commonwealth law or legal regime and some State law that is identified. Thirdly, a provision of this kind only operates, if at all, as a declaration of intention to cover the field.

It is, really, its only relevance or significance which may then bring section 109 into play. In Wenn's Case, Sir Owen Dixon said a provision cannot stand if it is a "bare attempt to exclude State concurrent powers from a subject that the Federal legislature has not effectively dealt with" in its own law, nor can it stand if it is an "attempt to limit the exercise of State legislative power so that the Commonwealth's objectives are not consequentially affected".

GLEESON CJ: But the Commonwealth could pass a law, could it not, saying no State may impose a tax on land on which a lighthouse stands?

MR YOUNG: Yes, it can do that but part of a regime that comprehensively regulates lighthouses as Commonwealth places or the like. O'Reilly's Case was concerned with the Commonwealth shipping line and this Court upheld the section that said that the Commonwealth shipping line, as a Commonwealth agency, shall be subject only to Commonwealth income tax and not State income tax. That was upheld but that section was regarded as declaratory of the fact that the Commonwealth legislative regime governing the Commonwealth shipping line should be exhaustive. It then attracted section 109. It did not operate of its own force but only by means of it attracting section 109 as a declaration of intention.

This section does not do that because you juxtapose it against the earlier division which deals with the extent of exclusivity of the Commonwealth regime. This provision in clause 8 goes much further. It is aimed at excluding the State from exercising statutory powers in a particular way, that is a way which may consequentially affect carriers or a way that consequentially might give powers to other persons which are not given to carriers, and the like. It is, in language used in the Botany Case recently, aimed at preventing or controlling State legislative action rather than legislating on a subject matter within Commonwealth power, and more precisely out of Botany, it is: a "law" that "invalidly seeks to displace or expand the operation of section 109".

Can I take the Court to the way in which the Full Court dealt with the constitutional point at the end. Pages 172 and 173 of the application book, under the heading "Does Clause 44 Engage Section 109?". We say there are a number of manifest errors discernible in this passage. First, at line 30, the Full Court uses a form of expression that seems to assume that clause 44 operates directly to exclude the operation of State law by express words. A reading of the cases, and indeed, of the passage that appears under it, makes it clear that it does not operate directly, it only operates as a statement of intention that then attracts section 109 if there is otherwise a conflict between a Commonwealth law declared to be exhaustive and a State law that cuts across it.

At the top of page 173 their Honours, in our respectful submission, misunderstand Wenn. The second line says that:

a Commonwealth law can prevent State law adding to the liabilities, duties, immunities, liberties, powers or rights that have been conferred by the federal law.

The Commonwealth cannot do that directly. Wenn's Case was concerned with a situation where there was a comprehensive Commonwealth scheme for preference in employment to discharged servicemen. The Commonwealth scheme deliberately stopped short of providing for preference in promotion. There was a Victorian scheme also dealing with promotion and preference that went further than the Commonwealth scheme. It was held that the Victorian scheme could not stand because the Commonwealth scheme covered the field and that is what Sir Owen Dixon was addressing in the quoted passage, the promotion or employment scheme of the Commonwealth deliberately or "designedly left" an area open but nonetheless it intended to cover the field.

That is a very different situation than clause 44 and the generality of the proposition stated by the Full Court does not withstand analysis. It is not the case that a Commonwealth law can always prevent State law adding to the liabilities or rights that have been conferred by federal law. Indeed, Division 7 expressly says that the State can do it in clauses 35 to 38. It can be done provided the Commonwealth has not covered the field and provided there is no direct inconsistency.

GUMMOW J: Clause 37 is rather like the Botany Case, is it not?

MR YOUNG: Yes.

GUMMOW J: They have used the phrase "in spite of a law". This is "despite a law". In other words, you may have a law of a State or Territory which makes it an offence to do certain things and this says it is not an offence.

MR YOUNG: Yes, but it is confined to the performance of the activities authorised by Divisions 2, 3 and 4.

GUMMOW J: I understand that but there are other impacts of State law against which immunisation might be sought which cannot be dealt with by that simple way of removing the penalty, as it were.

MR YOUNG: No, that is so.

GUMMOW J: That is what 44 is directed to, I think.

MR YOUNG: It is, and quite clearly it is clause 37 that is aimed at protecting the authorised activities from State intrusion. Clause 44 is aimed at something different altogether yet the Full Court to uphold it first read 44 down and confined it to Divisions 2, 3 and 4 as if it were trying to do the same sort of thing as clause 37. It would be otiose if that was all that it was trying to do having regard to the ambit of subclause (2) of clause 37.

GLEESON CJ: Could the Commonwealth Parliament enact a law that said a law of the State or Territory has no effect to the extent to which the law discriminates against foreign corporations?

MR YOUNG: We would say not, but the question would be whether that was an attempt to legislate legitimately in pursuance of the corporations power, section 51(xx), or whether it was an attempt that falls within the description of what Sir Owen Dixon said is impermissible in those two passages at page 173 of the application book.

GUMMOW J: Has that passage in Wenn's Case had any other life?

MR YOUNG: It has had life in that it has been cited with approval in GMAC and the Native Title Case and in Botany. It also had life when the Collins - - -

GUMMOW J: But to strike down a particular Commonwealth mechanism like 44?

MR YOUNG: There is an antecedent in this Court that did, it is not an application of Wenn. It is Collins v Charles Marshall and there there was an attempt to protect matters dealt with in an award. The provision, section 51 of the Conciliation and Arbitration Act, provided that:

When a State . . . is inconsistent with, or -

and these were the critical words -

deals with any matter dealt with in, an order or award, the latter shall prevail.

Justices Dixon, McTiernan, Williams, Webb, Fullagar and Kitto said that provision was invalid insofar as it went beyond section 109 and sought to say that a State law could not deal with any matter dealt with in an order or award because that was going beyond section 109. Now, that is at 548 to 549 of 92 CLR.

GLEESON CJ: Thank you, Mr Young. I think it is probably convenient to hear you now, Mr Douglas, is not it?

MR DOUGLAS: If your Honour pleases.

If it please the Court, I just wish to develop the aspect of the submission which has not been developed by Mr Young but which we say is equally important. The relevant law of the State of New South Wales which is said to be affected by the operation of clause 44 of the Commonwealth legislation is section 611 of the Local Government Act. It is to be found reproduced in the application books at page 20 in paragraph 34 of a judgment, at first instance. It is an Act which enables:

A council may make an annual charge on the person for the time being in possession, occupation or enjoyment of . . . structure laid, erected, suspended, constructed or placed on, under or over a public place.

Then provisions are made to ensure it is a fair and reasonable charge and there is a right of appeal in the event that the charge is regarded as not being fair and reasonable, and there is an exemption, which is important, which is in subsection (6) which provides:

This section does not apply to:

(a) the Crown; or

(b) The Sydney Water Corporation Limited . . .

(c) Rail Access Corporation;

(d) the owner or operator of a light rail system (within the meaning of the Transport Administration Act).

So, essentially, what has been done by this piece of legislation is that the State has sought to exempt from the power of local governments to charge a fair and reasonable charge for the utilisation of public lands of New South Wales, instrumentalities of the Crown or other bodies under State law.

In earlier days, of course, we had a situation in which Commonwealth instrumentalities such as the predecessors of Telstra used to use those lands and do not appear to have been charged, notwithstanding the existence of this provision.

GUMMOW J: There is no section 51(xxxi) element in any of this, is there?

MR DOUGLAS: The Acquisition Act, yes, there is an aspect of acquisition, because up until the 1997 Act, your Honour, you had a situation in which we would say, section 611 applied so as to enable charges to be made, even if in fact those charges were not made, but if the effect of clause 44 is to remove the power of the councils of the State to charge, well then, there is a question of acquisition which arises.

Now, there is provision made under the 1997 Telecommunications Act in relation acquisition which may be applicable from that time, but there does not seem to be any other applicable provision in the legislation which would apply prior to that date.

The point I would wish to make about section 611 is this. The nature of a discrimination which is said to have arisen in this case, is that the telecommunications carriers, utilising the land, pursuant to the Commonwealth law, are charged, but it is said that the bodies which are exempted pursuant to section 611(6) are not charged. So the complaint is not about the charge but rather that other bodies are exempted by State law from the charges.

GUMMOW J: This is an argument on construction of 44, is it?

MR DOUGLAS: Yes, your Honour.

GUMMOW J: On the word "discriminating" in clause 44?

MR DOUGLAS: Yes, well, it really goes this way. We would say, firstly - and I think it flows from our written submissions - but relevantly, what is being done here is not discrimination because in no relevant way could these corporations be said to be equals. What the law purports to do, on its face, is to say to the States, you can charge telecommunications carriers, but only if you charge these State instrumentalities as well. If you charge these State instrumentalities, well, you can charge the telecommunications carriers, but only in those circumstances and only if you charge all of them.

Now, that seems to us to give rise to considerations if that is the meaning which discrimination bears under this legislation and, in our respectful submission, it does not and we have set out those considerations in our written submissions, but if that is the meaning which it bears, how could that then be said to be a valid law under the telecommunications power? In other words, what interest does the Commonwealth have in passing a law which - - -

GUMMOW J: So you are arguing not just on the construction, but you are saying the construction urged by the other side would entail invalidity. Is that - - -

MR DOUGLAS: It would, your Honour, yes. We say it falls down at the level of discrimination, but if it bears the meaning which the Full Court gave to discrimination, it is effectively a law which says to the States, you can only charge telecommunications carriers if you charge or own instrumentalities. We say, if that is the effect of the law, well then, as a matter of characterisation, that cannot be said to be a law with respect to telecommunications, and moreover, there is arising, as we would see it, a Melbourne Corporation situation, because effectively, what the Commonwealth is saying to the States, you can only charge our telecommunications carriers if you charge yourself, that is, the Crown, which is one of the exempted bodies, and your own instrumentalities. So those other questions of significant important arise. The way in which the acquisition point arises - - -

GUMMOW J: Now, that last argument you mentioned about the Melbourne Corporation, was that dealt with in the Full Court?

MR DOUGLAS: Yes, it certainly had been raised. I do not think the Full Court has dealt with it at any length, your Honour, but it has been argued and considered, at first instance, and on appeal. So, in our respectful submission, your Honours, this case gives rise to a number of points of very considerable constitutional importance, and it is an appropriate case for the Court to grant special leave.

GLEESON CJ: Thank you. Yes, Mr Hanks.

MR HANKS: Your Honour, there are a series of very simple questions raised by this application to which the answers are equally simple, and the first of those is whether the Commonwealth Parliament has the power, under 51(v)(ii) to legislate itself as to provide a protection to those who provide telecommunication services from State laws, and the answer to that question is plainly, yes, on the authority of O'Reilly's Case, and of course the Botany Municipal Council Case.

The second question is whether that protection can be provided against a class of State laws, that is, State laws which have the effect of discriminating against carriers. We would say plainly the answer to that question must be in the affirmative. If there is a general power to provide protection, there must be a power to provide a narrower protection.

GLEESON CJ: Discrimination in the context meaning or said to mean treating them differently from the way in which people who - or utilities - - -

MR HANKS: Which make a similar use of the same space, yes, your Honour, in the facts of this case, but one would think, looking at clause 44, just as the Full Court said, it is directed to ensuring that there is not differential treatment, where that treatment is based on a difference which is not a relevant difference.

GLEESON CJ: Are we concerned with overhead cables here?

MR HANKS: Yes, we are.

GLEESON CJ: Those things that look like overhead oil pipelines that we see?

MR HANKS: Yes, your Honour, overhead and underground cables, your Honour. As the facts found by the court show, in the case of Telstra, at least, the majority of the cables are underground. The majority of the cables have been subject to charges in New South Wales and the rates in Victoria are those which are laid underground in pipes, effectively, the same as those pipes which carry water and gas.

GLEESON CJ: Now, to take a simple example, is the discrimination alleged to consist in the fact that the Council has imposed rates or charges on Telstra and Optus for this, but not on, say, water pipelines or whatever else is in - - -

MR HANKS: That would be putting it perhaps a little too simply, your Honour. The discrimination lies in the effect which each Local Government Act produces, namely, to render the carriers liable, if the councils choose to exercise the power which they have, to a burden from which other entities making the same use of the same space are immune, and it is that differential treatment in relation to an activity which is not relatively different.

GLEESON CJ: It cannot be actually the same space, can it? It must be similar space, must not it?

MR HANKS: Same spaces, your Honour. I mean it need not go into all the factual issues, but in some cases obviously the overhead cables are strung from the same poles. They do not occupy precisely the same space because there is a separation. Underground, in some cases, the cables are laid in identical trenches, but again, they do not occupy precisely the same space. There may be a separation of centimetres in that situation, but the point I was making, your Honour, was only that by the same space, I am referring to the public places in respect of which the power to levy a charge under section 611 of the New South Wales Act arises and the public places in respect of which the Victorian councils have authority to levy rates - - -

GLEESON CJ: The same kind of space?

MR HANKS: The same kind of space, yes, so that the real question is whether there is any relevant difference between the use which is made of those places or spaces by the various entities - the Full Court said there was not any relevant difference - and in the absence of a relevant difference to treat the two classes of entity in a different way constituted discrimination.

This is not a case, your Honour, in which clause 44 should be read as directed to the State Parliament, and saying to the State Parliament, you shall not legislate to such and such an effect. Just as the provisions which were considered in Western Australia v Commonwealth, Native Title Act Case, were construed by the High Court as not having that effect, although the argument was that this was an attempt by the Parliament directly to deny to the State the capacity to exercise its power.

The majority of the court said, in the joint judgment, "No, that is not the case. This is simply legislation which directs that in this area there is no room for State legislation having a particular effect on native title." Here, the Parliament has said, "In this area of activity, telecommunications, there is no room for a State law, and it will be ineffective if it attempts to enter. No room for a State law which would have the effect of discriminating against carriers." Your Honours will have noted that the terms used in clause 44 are extraordinarily wide. They are intended to catch not only direct discrimination but also indirect discrimination, and also to catch laws which have the effect of discriminating.

GLEESON CJ: You seem to have the unusual advantage on the construction point of having a declaration of legislative intention that goes directly to the facts of the case?

MR HANKS: Yes, and we certainly have relied on the explanatory memorandum both before the primary judge and before the Full Court, and their Honours in the Full Court thought, after they had concluded on the construction point, that our argument was reinforced by the explanatory memorandum.

GUMMOW J: Now, Mr Young, said that does not matter, and he refers to Wenn's Case. What do you say about the significance of that statement in Wenn for the construction of 44 - or the validity of 44, I should say?

MR HANKS: It does not present any embarrassment at all, your Honour. Section 109 - when it refers to inconsisteny, your Honour well knows, has been characterised as identifying different types of inconsistency, direct, indirect, et cetera, but two of the - - -

GUMMOW J: Mr Young is saying in a way that this is a new species that is being manufactured?

MR HANKS: But it is not a new species, your Honour. First, one might say that clause 44 is an example of a legislative provision which indicates Parliament's intention to offer protection to a carrier, to an entity which is carrying out a Commonwealth function. That protection is plainly within Commonwealth legislative power. For the State to invade that protection would constitute inconsistency. Colvin v Bradley Bros is a good example of that. Your Honour, I am going back to a wartime case relating to competition between State and Commonwealth industrial regulations, and the Court said in that case there is a particular protection or a privilege given under the federal law to employers. State laws purport to take that away. That amounts to inconsistency.

Even if we were seeking to characterise the inconsistency in terms of covering the field, your Honour, we might say that if you look at the schedule to the Telecommunications Act and consider the various provisions, the Commonwealth has marked out an area in which its regulations are to be the only regulations. Now that area may be narrower than the totality of the activities of carriers. It is a part of their activities, but it has nevertheless marked out that area in clause 37 and clause 44. For the State to purport to enter by legislating so as to - in this case - authorise or permit discriminatory burdens in the relevant sense, is for the State to enter that field.

So we say, with respect, your Honour, there is nothing novel or radical about the principles and concepts applied by the Full Court to solve this unique problem.

GLEESON CJ: Thank you, Mr Hanks. Mr Jackson.

MR JACKSON: Your Honours, as it is apparent from summary of argument in these cases, the grant of special leave is resisted primarily on the ground that the decision of the Full Court is not sufficiently attended by doubt. Your Honours, we would also submit that whilst this Court is the final arbiter of the Constitution, it does not mean that every constitutional case has to come here.

Your Honours may I deal with the three, essentially, questions that seem to have raised. If one goes to the question of discrimination and the construction of the provision, the position, to put it very shortly, is simply that charges were imposed on us when they were not imposed on other people doing the same thing, using the land for pipes, wires and so on.

That question is simply one of statutory construction. Does it discriminate against us and, your Honours, in our submission, the answer would be, of course, it does. If that is not discrimination what is? Your Honours, it is the ordinary meaning of the term, and the Full Court was right in what it said at paragraph 39, page 169. Your Honours, one sees the advantage that this is the very case that the legislature contemplated.

Your Honours, the second point is as to the validity of clause 44 as a law made pursuant to section 51(v). Your Honours, it is clear, and established by a number of cases in the Court, that the power under section 51(v) is very broad. Could I take your Honours to Jones v The Commonwealth [No 2] [1965] HCA 6; (1965) 112 CLR 206 at page 226. It is tab 16 of our materials. The principal - if I can put it that way - judgment in the case was delivered by Justice Kitto and your Honours will see at page 226, commencing at about point 6 or 7 on the page, he said:

Since the decision in that case -

namely Brislan -

it cannot be denied, I think, that the power under section 51(v) is not confined to providing for the establishment, maintenance and operation of telegraphic, telephonic or other like services, but extends to -

and, your Honours, I will not read it out, but your Honours will see what is set out on the next six or seven lines.

Now, your Honours, the ambit of the power was adverted to again in Grain Pool of WA v Commonwealth, behind tab 14, and could I give two references in that regard, your Honours. The first is that in paragraph 16 on page 492, your Honours will see the general principles applicable to interpretation of the head of legislative power under section 51 set out, then one sees a particular reference in paragraph 18 on the next page, to this head and, your Honours, it is a recognition that it is a broad power.

Now, your Honours, it is also perfectly clear, in our submission, if I may say so, with respect, that Parliament may legislate to advance and protect the position of bodies which exercise powers conferred on them by Commonwealth legislation. Your Honours, the references are contained in the Full Court's reasons, volume 1, page 164, commencing paragraph 28, at the bottom of the page. Could I just pause to say, your Honours, what is involved here is really something at, in a sense, the heartland of the exercise of the power. It is the actual carriage - in carriage of the information. Your Honours will see at page 165, commencing about line 5:

A head of power such as section 51(v) will also enable Parliament to confer a measure of protection -

et cetera, and then three decisions are referred to, Australian Coastal Shipping Commission v O'Reilly, Strickland v Rocla Concrete Pipes Ltd and then, of course, your Honours, the well-known, if I could put it that, quotation from Justice Mason in paragraph 30 on the next page from Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd where he describes how a law may be within power in dealing with corporations.

Now, your Honours, in our submission, the Full Court was right in the view expressed at page 166, about line 50:

a law which protects the trading activities of a corporation will be within power provided it has a direct legal operation on the head of power.

And the activities that were referred to at page 160, were referred to by the Full Court at page 162 in paragraph 23. Now, your Honours, if I could move on from that? Your Honours, if the position is, for example, that a full exemption from State tax can be given pursuant to the exercise of the power under section 51(v), why could not, for example, a partial exemption be given as is the effect of the operation of clause 44 in a case such as this? Your Honours, could I come finally to the - - -

GUMMOW J: Indeed, it could be given on a condition?

MR WALKER: Indeed, your Honours, indeed. Some exemption can be given but there can be provision for there to be a contribution made equivalent to the amount otherwise payable or a proportion of it.

Your Honours, could I come to the section 109 issue. The general principle can be seen in an extract from Botany Municipal Council. It is behind tab 11, and your Honours will see the regulation that was the subject of that case or the principal regulation appears at page 464 in the first new paragraph. There are other regulations to the same effect, but it is said:

A licensee is authorised to carry out the part of the works and exercise those of the rights referred to in the licence in spite of a law . . . of the State of New South Wales that -

does various things.

Now, your Honours, when one came to see what the Court said about that, you will see that at page 465 in the first new paragraph, where all the members of the Court in a joint judgment said:

There can be no objection to a Commonwealth law on a subject which falls within a head of Commonwealth legislative power providing that a person is authorised to undertake an activity despite a State law prohibiting, restricting, qualifying or regulating that activity. Indeed, unless the law expresses itself directly in that way, there is the possibility that it may not be understood as manifesting an intention to occupy the relevant field to the exclusion of State law.

Now, your Honours, if one goes to the terms of clause 44, it is a provision directly within the doctrine. It may not go as far in some cases as saying the State law has no effect, but what it is saying is that the operation of the State law is excluded pro tanto in circumstances where it would operate in a way inconsistent with the powers that are to be exercised by the body. Your Honours, in our submission, the provision does not go, and it does not go in terms, to legislative power at all. It operates on State legislation in being.

Finally, your Honours, could I say two things. The first concerns the section 51(xxxi) issue your Honour Justice Gummow raised. That is dealt with in section 591 of the Act by the fairly common provision that says if an acquisition of property in terms of section 51(i) would otherwise be affected, then there is a right to compensation.

The second thing, your Honours, is that it is difficult, with respect, to see that any Melbourne Corporation issue could arise. It does not arise in relation to provisions that say, for example, a body created pursuant or acting pursuant to a Commonwealth law is not subject to tax by a law of a State. If one took the particular operation of the provision here, it says less than that.

GUMMOW J: Mr Jackson, would you be putting on a notice of contention if it arose, dealing with section 90?

MR JACKSON: Your Honour, no decision has been made on the issue. None would be made unless the special leave were granted.

GLEESON CJ: In each of these matters there will be a grant of special leave to appeal.

AT 11.32 AM THE MATTERS WERE CONCLUDED