Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd

The High Court of Australia considered an appeal by the Australian Competition and Consumer Commission (ACCC) against Baxter Healthcare Pty Ltd and certain State and Territory governments. The dispute concerned whether Baxter's conduct in negotiating and forming contracts with State and Territory governments for the supply of medical products contravened sections 46 and 47 of the *Trade Practices Act 1974* (Cth). The ACCC alleged that Baxter had engaged in conduct that would have contravened these provisions but for the application of derivative Crown immunity, as the State and Territory governments were not carrying on a business in these transactions.

The central legal issues before the High Court were whether the provisions of sections 46 and 47 of the *Trade Practices Act 1974* applied to Baxter's conduct in its dealings with State and Territory governments, and the nature and extent of any available relief. This involved a determination of the scope and application of the doctrine of derivative Crown immunity, particularly in the context of Commonwealth legislation impacting the governmental or commercial interests of the States and Territories, which are considered manifestations of the Crown. The Court was required to consider whether the presumption of Crown immunity, as established in cases like *Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd*, operated to shield Baxter from the operation of the Act in these circumstances.

The majority of the High Court held that the Federal Court had erred in concluding that *Bradken* governed the present case. The majority indicated that *Bradken* should be viewed as qualified by later High Court decisions and that a more comprehensive examination of the Constitution's text, purpose, and character was necessary for a satisfactory exposition of governmental and derived governmental immunity in Australia. While not elaborating on the specific application of sections 46 and 47, the majority agreed with the proposed orders. Justice Callinan, dissenting, expressed the view that the promotion of competition should not necessarily be elevated above a State's essential constitutional function of providing medical services and medications, suggesting that federal legislation should be construed to intrude as little as reasonably possible on a State's ability to acquire medical supplies on its own terms.

The High Court allowed the appeal, setting aside the orders of the Full Court of the Federal Court of Australia. The matter was remitted to the Full Court of the Federal Court for further consideration in accordance with the reasons of the High Court. The respondents were ordered to pay the appellant's costs of the appeal to the High Court, with other costs to be at the discretion of the Full Federal Court.