Fortescue Metals Group Limited and Ors v. The Commonwealth of Australia [2012] HCATrans 276 (5 November 2012)

Last Updated: 6 November 2012

[2012] HCATrans 276

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S163 of 2012

B e t w e e n -

FORTESCUE METALS GROUP LIMITED ACN 002 594 872

First Plaintiff

CHICHESTER METALS PTY LIMITED ACN 109 264 262

Second Plaintiff

FMG PILBARA PTY LIMITED ACN 106 943 828

Third Plaintiff

FMG MAGNETITE PTY LIMITED ACN 125 124 405

Fourth Plaintiff

FMG NORTH PILBARA PTY LIMITED ACN 125 154 243

Fifth Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Directions hearing

FRENCH CJ

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE AND PERTH

ON MONDAY, 5 NOVEMBER 2012, AT 2.15 PM

Copyright in the High Court of Australia

____________________

MR D.F. JACKSON, QC: If your Honour pleases, I appear with my learned friends, MR B DHARMANANDA, SC, and MR W.A.D. EDWARDS, for the plaintiffs. (instructed by Corrs Chambers Westgarth Lawyers)

MR N.J. WILLIAMS, SC: May it please the Court, I appear with MR D.F.C. THOMAS for the defendant. (instructed by Australian Government Solicitor)

MR A.J. SEFTON: If the Court pleases, I appear on behalf of the Attorney-General of Western Australia intervening. (instructed by State Solicitor (WA))

MR A.D. SCOTT: If the Court pleases, I appear on behalf of the Attorney-General for the State of Queensland intervening. (instructed by Crown Law)

HIS HONOUR: Yes, Mr Jackson.

MR JACKSON: Thank you, your Honour. As your Honour will have seen from the material, we seek the order which is set out in the form in paragraph 19 of our submissions on the application. Your Honour, that is an order under section 18 of the Judiciary Act reserving for determination by the Full Court the questions there set out.

HIS HONOUR: The only difference between you and the Commonwealth is as to proposed question 3; is that right?

MR JACKSON: Yes, your Honour; I was just going to say that. So far as that is concerned, the answer is yes. I should also add that there needs to be added to that one paragraph of dealing with the question of costs. Your Honour, that is the first aspect of the matter.

The second aspect concerns what should be the material upon which the application, if so referred, would be determined. Your Honour, as is apparent from the orders, we ask the matter be determined by the Full Court on the basis of the pleadings and the documents referred to in the pleadings. Now, there would, of course, need to be also – assuming that for the moment – directions as to a date for provision of the questions reserved book and for submissions.

Your Honour, as is apparent from the Commonwealth’s submissions, it does not appear to oppose the referral of questions to the Full Court. But leaving aside any question about the form of the questions, the issue which remains would be the question as to the facts on which the questions should be determined. Now, your Honour, insofar as those matters are concerned, your Honour will see that the Commonwealth has suggested that there ought to be further orders dealing with the materials to be before the Court. You will see that in their written submissions. If I could go to those for a moment, your Honour?

HIS HONOUR: It is 3 to 6, is it, of the orders?

MR JACKSON: Yes. What would be proposed is that there be a number of stages, in effect, leading to the final determination of the materials. Your Honour, could we just say this? We are opposed and, if I may say so, with respect, indeed very opposed to that course on two related grounds. The first is that it is unnecessary and is likely to lead to further directions hearings and, secondly, the consequent delay. We would submit, and I will come to the detail of this in a moment, your Honour, that the facts are, with respect, very clear from the pleadings and the documents referred to in the pleadings.

The statement of claim has already been twice amended to accommodate and to dispose of, I would hope, potential disputes as to fact and any statement of facts is likely to look very similar to the pleadings, and I would take your Honour to it. But one only has to look to the proposed special case which we had suggested at quite an early point in the proceedings.

Could I come, your Honour, in a little more detail to the facts relied on with a view to demonstrating that the pleadings are perfectly appropriate in that regard? Could I go first in that regard to the factual matters that are dealt with in the defence or, perhaps I should say, the latest version of the defence, which is the further amended defence of the Commonwealth.

If one goes to that, the central matters which are relied on in support of validity are those which are set out in paragraph 60 of that document. Your Honour will see that the paragraph 60 commences on page 16 and goes through for quite a number of pages. If one goes to the two parts of it which are relevant, one sees paragraph 60(c) at page 16, which gives rise to the questions fundamentally of construction and then of validity of the MRRT Act which one sees in subparagraph (c).

HIS HONOUR: Then there is a list of executive actions said to inform objective.

MR JACKSON: Yes, your Honour. Then one comes to (d), commencing on page 17. It lists a large number of matters which go through ultimately, your Honour, for a few pages till one gets to paragraph xxvi at the top of page 24 and then xxvii. So far as the facts that are relied upon in support of that contention, could we take your Honour to paragraph 18 of the reply which has been filed on our behalf?

HIS HONOUR: You admit them largely but deny relevance, do you not?

MR JACKSON: Precisely, your Honour.

HIS HONOUR: Apart from 15AB of the Acts Interpretation Act.

MR JACKSON: Yes, your Honour. The facts really are not disputed –(a) their relevance and (b) their efficacy so far as bringing about validity of the provision. To the extent to which they are relied on for that purpose is a matter of law to be determined by the Court.

Your Honour, we would say then that those are the facts which are relied on by the Commonwealth. There is not any need for those to be restated. They are listed there. That is where the matter lies, in effect. There is not much point in having pleadings if one has to go beyond that.

Your Honour, if one goes then to the further amended statement of claim, what I propose to do, if I may, is to go as briefly as I possibly can to the various paragraphs that it might be suggested give rise to some dispute or lack of clarity or something along those lines. One starts, I think, with paragraph 16 of the statement of claim. I think your Honour needs to keep open at the same time the defence and the reply.

HIS HONOUR: Do you say all your titles are on land which was alienated from the Crown before 1899? Is that right?

MR JACKSON: Yes. We say that is - - -

HIS HONOUR: So it is a factual question, I suppose.

MR JACKSON: Your Honour, the only thing is it appears in the end entirely irrelevant. The reason why I say that is that if you go to paragraph 19 of the defence, what you see in paragraph 19 of the defence is that one sees there, your Honour, in paragraph 19 – it is at paragraph 19(b) – it is admitted that they were obliged to pay royalties at the applicable rate and the only bit that seems to be in issue is the contention, which is hardly a matter of dispute, that in 19(c) that the Mining Act cannot impose an obligation if to do so would be a duty of excise.

HIS HONOUR: I think you agree with that in your reply.

MR JACKSON: I think we do, your Honour. Your Honour, it does have, if I may say so with profound respect, a slightly elementary air to it. Your Honour, if one goes then to paragraph 19(d) of the statement of claim, that, again, is the excise point. The relevant references to it are paragraph 19 of the defence and paragraph 3(b) of the reply. I think I have dealt with that, really.

HIS HONOUR: Yes.

MR JACKSON: In paragraph 27 of the statement of claim your Honour will see there is an allegation that certain of our interests are taken to be the same mining project interests, described as combined interests. Your Honours, in paragraph 27(b) of the defence it is not admitted that all the requirements of section 115-10 are satisfied, and your Honour will see in paragraph 4 of the reply we say it must depend on the situation in effect from time to time.

Paragraph 28 of the statement of claim, it seems it is really the same as 27. Then, your Honour, if one goes from there to paragraphs 35 and 38 – I will not read out those but if one goes then to the defence, in paragraphs 35 and 36 you will see the allegations that are made, and then if one goes from there to our reply in paragraph 5 we accept that position.

The next one, your Honour, is paragraph 43. That seems to be a question of interpretation of the enactment and a characterisation of what it does. If one goes to paragraph 48, that relates back to the matter we dealt with in paragraph 19 and the position of the plaintiffs, other than the first plaintiff. If one goes then to paragraph 49, this seems to be a matter which is one of the ultimate parts of the case. If one goes, though, to the amended defence in paragraphs 48 and 49, your Honour will see the matters that are set out there, and particularly paragraph 49 says that:

the extent to which a respective MRRT liability –

arises –

cannot be determined until –

various times. Then, your Honour will see also that in paragraphs 7 and 8 of the reply we deal with those matters. Your Honour, there is not, I think, any matter in dispute between the parties in relation to it. There may be disputes about the construction of the statute but nothing more than that. Your Honour, one goes then to paragraph 52 of the statement of claim. In relation to paragraph 52, if one goes then to the defence your Honour will see that the Commonwealth admits some of these matters and we agree with that in paragraph 9 of the reply. Paragraph 53 of the statement of claim alleges various matters which are of a constitutional character. Paragraph 53 of the defence - - -

HIS HONOUR: That just raises the constitutional limitations.

MR JACKSON: Yes, your Honour. Then, your Honour, paragraph 54 of the statement of claim again alleges various matters about constitutional powers. If you go to the equivalent paragraph in the defence, you will see that there is an allegation by the Commonwealth which repeats the preceding paragraph. Your Honours, these matters are referred to in paragraph 10 of our reply. There is not really any matter of fact in issue in these things.

Your Honour, if one goes to paragraph 54A, then the only matter in dispute in paragraph 54A of the defence is that it admits that Western Australia has from time to time entered into agreements with bodies seeking to engage in major developments in Western Australia, to put it shortly. Perhaps the words “to authorise and regulate such developments” in paragraph 54A of the statement of claim are not admitted but it is purely a matter of construction of what those agreements do.

HIS HONOUR: I am just wondering about the fact that we have a lot of agreements pleaded. I am not sure that any of them are pleaded as having statutory force. They are simply authorised or ratified. So, for example, if you wanted to vary a statutory royalty in Western Australia, presumably that would be done by legislation or pursuant to ministerial discretion supported by the Government Agreements Act in that State, if it is still in operation.

MR JACKSON: Your Honour, in paragraph 54B there is a list of enactments which are said to authorise or ratify the agreements relating to minerals and it is said which enactments remain in force. Your Honour, it does not, in terms, go beyond – and I have said, the pleading does not, in terms, go beyond saying “authorised” or “ratified”. The actual status of a provision in the agreement would be, no doubt, a matter for argument if the issue arose. I am not sure that - - -

HIS HONOUR: I am just wondering why. Presumably there is a general proposition emerging from this that the States do from time to time, pursuant to particular statutory arrangements and particular agreements, vary the royalties or make concessions and so forth for the purposes of a particular development. Do these specific references have any more significance than particulars? I am just wondering what role they are going to play, if any, apart from the broad proposition, which is probably a statement of the reasonably obvious.

MR JACKSON: Your Honour, the structure of the document – if I can put it this way first of all – is this: you will see in paragraph 54A, in effect, a general proposition. 54B indicates agreements and agreement Acts that have been made. 54C goes on to say that on various occasions in relation to royalty rates the State agreements referred to in 54B then have provided for specified rates and royalty concessional rates or reduced rates. The succeeding paragraphs go on to deal with each of these cases. You will see 54D deals with 54C(a) and identififes the provisions, and similarly, your Honour, when one comes to 54E, 54F and 54G.

Your Honour, what is sought to be done is to indicate, I suppose, first of all for the Melbourne Corporation argument and, secondly, for the purposes of the section 91 argument, that these are the types of things that have been commonly done by States and also goes to a degree because there are references to other States that follow. It also goes to the 51(ii) and section 99 arguments, your Honour, although perhaps not to quite the same length.

In relation to paragraph 54P, it is said the Commonwealth does not admit the paragraph and says it does not know whether State agreements have been used as frequently in other States as they have been used in Western Australia and Queensland.

Your Honour, in relation to paragraph 54Q, it is admitted in respect of Western Australia, Queensland and South Australia. In respect, then, of paragraph 55, your Honour will see at the bottom of page 25 the words “have the effect in stated circumstances”. An issue arises as to whether or not that is the effect. Your Honour will see our reply in paragraph 14 is not an issue of the fact, however.

Your Honour, paragraph 56 relates to one of the ultimate questions. Paragraphs 57 through to 65 relate to ultimate questions, so too do paragraphs 66 and 67. What is in paragraph 68 is admitted. The paragraphs 69 through to and including 71 are denied – that is, the ultimate issues. Paragraphs 74 and 75 are admitted and the remainder of the statement of claim relates to matters that are ultimate issues in that proceeding. I have used “ultimate issues” a little inexactly, but your Honour will appreciate what I meant.

So, your Honour, we do come to a situation, with respect, where we find it difficult to see what utility is to be served by going through a further step of stating facts. The purpose of the pleadings is to arrive at the facts upon which the matter is to be determined and to have a further step it carries with it the possibility of further disputation and, indeed, delay and, your Honour, in the result our submission is, as I submitted before, that an order should be made in terms as per paragraph 19 of our submissions,

together with the addition of paragraph 4(iii) of the amended summons, which is who should pay the costs of the questions reserved.

Your Honour, there would be a need, as I said, for directions as to the questions reserved book and for the times for submissions. Your Honour, that might depend on the time at which the Court might list the matter for it otherwise to be heard. Perhaps that is a matter I could deal with a little later, if it comes to that. Your Honour, those are our submissions.

HIS HONOUR: Yes, Mr Williams.

MR WILLIAMS: Your Honour, there is one difference between the proposed questions in addition to the additional question 3 and those are the words in parentheses in the chapeau of Mr Jackson’s question, the words on the basis of the pleadings and documents referred to in the pleadings. If those words are included then we agree that it is likelier, perhaps very likely, that the facts are sufficiently identified in the pleadings.

The purpose in proposing a further step was to avoid or perhaps minimise – that might be the best that can be hoped – the possibility of a further fact arising in the course of submissions in a way that might disrupt the hearing of the matter. The likelihood that we accept that the facts are adequately set out is such that the Court can, in our submission, confidently refer the questions at this point, but we see some merit in a further step in order to, in effect, put the parties to final identification.

HIS HONOUR: You cannot point to anything which is likely to be a source of factual contention.

MR WILLIAMS: No, I do not put the case in that way, your Honour. It is common ground that there is a prospect that constitutional facts will be determined in the course of determining the case and it is simply a matter of providing a process for ensuring that any additional facts are identified in a timely way.

HIS HONOUR: Incidentally, I was going to ask you about 60(d). I might have not read it with its full import, but it takes us through a series of executive actions, if I may so broadly call them that. It gets to a point of two exposure drafts and then it talks about a Bill, which became the MRRT Act. There is no explicit linkage made, I do not think, between the exposure drafts and that Bill. Is that an implication? Does the Bill reflect one of the exposure drafts? Has that been said? I just wanted to make sure. Otherwise we have got this whole series of things and then up pops a Bill out of some sort of quantum leap process.

MR WILLIAMS: It does reflect it. The precise points of difference I would need to identify with precision, but it does reflect the exposure draft substantially.

HIS HONOUR: So this is all in aid of some kind of proportionality argument, is it, in the discrimination context?

MR WILLIAMS: In relation to discrimination, the way in which we put it is really in paragraph xxvi.

HIS HONOUR: Just a minute.

MR WILLIAMS: We say first that it is not discriminatory at all.

HIS HONOUR: Yes, I understand that. This is a fall-back position.

MR WILLIAMS: It is a law of general application.

HIS HONOUR: This is an alternative.

MR WILLIAMS: But in the alternative we say that, even if is discriminatory, it is appropriate and adapted. It is really based on paragraph 118 of Austin. We say that it is the product of a distinction which is appropriate and adapted to the attainment of a proper objective, and these paragraphs seek to contextualise and identify the proper objective.

HIS HONOUR: Yes. There seems to be a lot of history.

MR WILLIAMS: It is a lot of history, and it is an argument that we may not get to. But if we are at this argument then we would wish the Court to see the context within which this particular structure emerged. We say that it is legitimate to point to the matters that were available to the Parliament, or before the Parliament in the broader sense, as leading to this particular treatment.

HIS HONOUR: All right. Thank you. Anything further?

MR WILLIAMS: No, your Honour. Your Honour, we need leave, of course. We have sought to tidy up our pleading in two small respects.

HIS HONOUR: I do not imagine there is any difficulty with that.

MR WILLIAMS: No.

MR JACKSON: No, there is not, your Honour. Your Honour, might I just note one thing? Our learned friend referred to the opening words of the

proposed order that we would seek for determination by the Full Court on the basis of the pleadings the documents referred to in the pleading. I had not intended to exclude that; that was exactly what I did intend.

HIS HONOUR: But the note is excluded, is it not, the note in 4(a)?

MR JACKSON: I am sorry, your Honour. There was a note. That has gone.

HIS HONOUR: That has gone.

MR JACKSON: That has gone.

HIS HONOUR: I suppose the virtue of question 3 might be that if something did emerge then it leaves the Court with the option of – that is of a factual nature which is not anticipated at the present time. It might be a counsel of prudence to include it.

MR JACKSON: I understand your Honour saying that, but could I just say in relation to it that if you go to the terms in which that is proposed, and that is question 3 on page 4 of the Commonwealth’s submissions, it asks:

Does the resolution of Questions 1 and/or 2 require the judicial determination of any and if so what disputed facts following a trial?

There are really a couple of things I could say about that. The words “following a trial” are perhaps giving only one way of dealing with the matter. The second thing is, your Honour, that this is something open to the Court in any event. What including a question like that does, we would submit, if I may say so, with respect, it inclines the Court’s mind to that issue when really it is a question that would arise and can be adequately dealt with in any event. The Court does not have to answer a question if it thinks it is inappropriate to answer at this point or in this state of the evidence.

HIS HONOUR: Thank you. Just bear with me for a moment.

Allowing for possible interventions, or likely interventions, would you estimate two or three days?

MR JACKSON: I think two days, your Honour. I know from our point of view it is really a day or a bit more so far as our case is concerned. Your Honour, it probably would be prudent to say more than two days but perhaps not three.

HIS HONOUR: Thank you. Mr Williams?

MR WILLIAMS: Yes, we share that estimate as to time. If our friend is going to be more than a day then it is likely to go into a third.

HIS HONOUR: Yes. Mr Sefton?

MR SEFTON: Yes, that estimate appears to be appropriate, in our submission.

HIS HONOUR: And Mr Scott?

MR SCOTT: We are content with that estimate, your Honour.

HIS HONOUR: At this stage I have in mind that the matter could be listed for hearing in the March sittings, in the first week, which would be commencing on the 5th, but I am not going to lock that in at the present time. It is just to give the parties an indication that that is likely.

What I propose to do then is to make orders in terms of the order proposed by the plaintiffs in paragraph 19 of the plaintiff’s outline of submissions, together with (iii), who should pay the cost of the reserved questions, and from then on it is a matter of really fixing a timetable. Now, part of your timetable, I think, Mr Williams, was assuming exchanges on questions of fact and I am not going to make those directions.

MR WILLIAMS: May it please the Court.

HIS HONOUR: So can we bring the written submissions, Mr Jackson, on a bit earlier than 13 December?

MR JACKSON: Yes, your Honour; the end of November.

HIS HONOUR: That makes it 30 November. You would file your questions reserve book - - -

MR JACKSON: That might take a little longer to put together.

HIS HONOUR: All right.

MR JACKSON: Could I perhaps suggest the middle of December, your Honour?

HIS HONOUR: 14 December?

MR JACKSON: Yes.

HIS HONOUR: Any intervener in support of the plaintiffs file and serve written submissions by? Mr Sefton, what do you say about 19 December? Do you adhere to that date?

MR SEFTON: Yes, I believe we would be in a position to do so, your Honour.

HIS HONOUR: Thank you. And Mr Scott?

MR SCOTT: We would be content with that date, your Honour.

HIS HONOUR: All right. So that will be then any intervener in support of the plaintiffs file and serve the written submissions on or before 19 December and then, Mr Williams, you can then have to 25 January, I would think.

MR WILLIAMS: May it please the Court.

HIS HONOUR: Then any intervener in support of the defendant to file and serve written submissions by 1 February and then the plaintiff file and serve written submissions in reply to the defendant and any intervener on or before 8 February and then the matter will be listed before the Full Court on a date to be fixed and then costs today in the cause. Is there anything further? The Court will then adjourn.

AT 2.56 PM THE MATTER WAS ADJOURNED