Castlemaine Tooheys Limited & Ors v The State of South Australia

[1989] HCATrans 118

IN THE HIGH COURT OF AUSTRALIA

Registry No Cl4 of 1986

B e t w e e n -

CASTLEMAINE TOOHEYS LIMITED

First Plaintiff

TOOHEYS LIMITED

Second Plaintiff

THE SWAN BREWERY COMPANY LIMITED

Third Plaintiff

BOND BREWING (VIC) PTY LIMITED

Fourth Plaintiff

PARADE LIQUOR PTY LIMITED

Fifth Plaintiff

ONRUTAS PTY LIMITED

Sixth Plaintiff

SATURNO'S NORWOOD HOTEL PTY LIMITED

Seventh Plaintiff

Castlemaine(2)

MASON CJ
BRENNAN J
DEANE J
DAWSON J.
TOOHEY J
GAUDRON J
McHUGH J

SATURNO INVESTMENTS PTY LIMITED

Eighth Plaintiff

and

THE STATE OF SOUTH AUSTRALIA

Defendant

Special Case

CIT 2/1/JM 1 30/5/89

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 30 MAY 1989, AT 10.23 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:  May it please the Court, I appear

with my learned friends, MR D.M.J. BENNETT, QC,

MR B.W. WALKER, MR M.L. BRABAZON for the

plaintiffs. (instructed by Allen, Allen & Hemsley)

MR J.J. DOYLE, QC: If the Court pleases, I appear with

my learned friends, MR B.M. SELWAY, and

MR M. QUINLAN for the defendant. (instructed

by the Crown Solicitor for South Australia)

MR K. MASON, QC, Solicitor-General for New South Wales: If the

Court pleases, I appear with my learned friend,

MR P.T,. TAYLOR for the Attorney-General for

New South Wales intervening and supporting

South Australia. (instructed by the Crown

Solicitor for New South Wales)

-

MASON CJ:	Mr Jackson?
MR JACKSON:	Your Honours, may I hand to the Court copies

of our outline of submissions.

MASON CJ:  Yes, Mr Jackson?

(Continued on page 3)

CIT2/2/JM	2	30/5/89
Cast lemaine ( 2) ·

MR JACKSON:  Your Honours, these proceedings turn, in the end,

on whether certain provisions of the BEVERAGE

CONTAINER ACT 1975 of South Australia or the delegated legislation, or statutory instruments

made thereunder, contravene section 92. Your Honours,

I will identify, if I may, a little more precisely a provisions of the enactments later but may I

mention some other matters. One which I would like

to make clear at this point is that this is not a

case where the law is relevantly discriminatory

and protectionist on its face but is a case where,

in effect, it is relevantly discriminatory and

protectionist. Your Honours, I say that with one

qualification, and that is that, to an extent

the provisions of section 5b(2) do involve an

element of discrimination, but more facts are
required before one sees that it is a discrimination

of an interstate nature.

Your Honours, that a law being discriminatory

and protectionist in that way, that is, in effect,

may contravene section 92, appears from

COLE V WHITFIELD,~988) 62 ALJR 303. Your Honours,

I will come to that case more fully later, but may I

refer simply to two passages at this point, and if

I could take Your Honours to them. First at page 317, and Your Honours will see in the passage in the left column, commencing between letters F and G, the

Court says,at about letter G:

In doing so, we must say something about,

the resolution of cases in which no impermissible

purpose appears on the face of the impugned law,

but its effect is disciminatory in that it

discriminates against inter-State trade and

commerce and thereby protects intra-State trade and

commerce of the same kind.

So, if I could just pause there, Your Honours. The

Court is recognizing specifically that one class of cases is the class of cases where the law is

discriminatory, in effect, though not ex facie
discriminatory.	And, it deals with that, first

then, in respect of Commonwealth laws and then in

the right column on the same page in the

paragraph commencing between letters C and D, proceeds

to deal with the situation where is arises under a law

of a State.

(Continued on page 4)

ClT3/l/FK	3	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, the Court there said

that:

In the case of a State law, the resolution

of the case must start with a consideration
of the nature of the law impugned. If it

applies to all trade and cormnerce,

inter-State and intra-State alike, it is less

likely to be protectionist than if there

is discrimination appearing on the face of

the law. But where the law in effect, if not

in form, discriminates in favour of
intra-State trade, it will nevertheless

offend against section 92 if the discrimination

is of a protectionist character.

And then the Court goes on to say, importantly for

this case:

A law which has as its real object the

prescription of a standard for a product

or a service or a norm of cormnercial conduct

will not ordinarily be grounded in protectionism

reference to an object which is not

and will not be prohibited by section section 92. by

protectionist,discriminates against inter-State

trade or cormnerce in pursuit of that object

in a way or to an extent which warrants

characterisation of the law as protectionist,

a court will be justified in concluding that

it none the less offends section 92.

Now, Your Honours, several features emerge from those

references upon which we shall make submissions later,

but may I at this point do no more than ask the Court

to note these features about them. One is that

the passages recognize that section 92 may be

contravened by laws which are neutral on their face

but which, in their effect, contain the relevant

discrimination and protectionism. Secondly~ when

of the law and, thirdly, if one takes a law which,	lopking at the effect of State laws, one matter of importance in this context will be the real object	though discriminatory in effect, has as its real
object the prescription of a standard for a product
or service or a norm of cormnercial conduct, such a law will ordinarily, to use the Court's word, be valid. But it will not be valid - and this is the fourth point -
if the Court is of the view that it is discrimination against interstate trade is in a manner or to an extent which makes the law protectionist.

(Continued on page 5)

ClT4/l/VH	4	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  And Your Honours, inherent in that

approach, in our submission, is the recognition that

the Court will be concerned in the resolution of
questions of fact and questions of degree in

determining cases in which section 92 is an issue.

And Your Honours, that should, of course, give rise

to no special problems. It is something for which
the need has been recognised, both here and also in
the United States for many years, although the

recognition of its appropriateness has perhaps been

obscured from time to time, with the varying earlier

interpretations of section 92.

Your Honours, we will be asking the Court to,

in this case, examine the degree to which the laws

of the State may be explained as directed to one or more of a number of socially desirable ends, but we

will be submitting that they are in truth laws,

whose purpose is to prop up or equalize against

interstate competition the existing laws or bodies

of a State and that that is the type of protectionism

in which the laws are engaged.

Your Honours, could I deal with two matters before

moving on. The first is to indicate the respects in

which it is submitted that the relevant provisions

contravene section 92, and they do so, Your Honours,

essentially in two respects. One is the result which

is achieved by the imposition of a very significantly

higher deposit rate, that is fifteen cents as against
four cents, for non-refillable beer bottles, in

comparison with four cents for refillable beer bottles,

and that provision protects, in our submission, South

Australian brewers who use the refillable bottles against the first three plaintiffs who are interstate brewers

who use non-refillable bottles.

And Your Honours, I will come to the details

of it in a moment, but as the special case demonstrates,

in our submission, that the legislation had that affect

was demonstrated starkly in 1986 when the plaintiffs

-entered the market seriously with the advertising

campaign, and in two m:mths captured nearly 4 per cent of the

market from the local producers and Che legislation

which is in question was introduced immediately or
almost inunediately, to make the deposit amount fifteen
cents and four cents, and once that came into being

the plaintiffs were out of the game.

And Your Honours, that was done at a time when,

on the material in the special case, six cents would

have been.a matter as a deposit sum or refund amount,

would have been enough to achieve any environmental

effect sought to be achieved by making the return of the

bottle compulsory, de facto or de jure.

CITS/1/CM	5	30/5/89
Castlemaine (2)

MR JACKSON (continuing): Your Honours, that matter is one

which is of importance because when one reverts to

the words used in COLE V WHITFIELD one has to deal with - one has to consider the extent to which the discrimination operates in a particular way or to

a particular extent. Your Honours, the second

matter in relation to which there is discrimination,

in our submission, and which gives rise in the end

to the invalidity of the various parts of the

legislation, concerns the operation of section Sb

and section 7 of the Act, those being provisions

or section Sb being a provision which was brought

in in 1986.

The effect of section Sb is that only persons

who use refillable bottles and not persons who

trade in non-refillable bottles, namely the

interstate brewers, are persons who can be exempted

from the operation of section 7 which requires a

retailer who sells beer to take back whatever

number of bottles of that kind anyone may bring back

to him. Your Honours I will come to the provision

more precisely a little later.

Your Honours, the course which we propose to

adopt, if I may, is this:  I would like to go first

to the South Australian legislation and to the

instruments made under it to indicate rather more

exactly the way in which the provisions are framed

and also the manner in which, as a matter of

construction, they operate. Secondly, having done
that, I would seek to return then to COLE V WHITFIELD

and also to the Court's decision in BATH V ALSTON HOLDINGS

with a view to identifying, rather more fully if I

may, the approach to be adopted in analysing the facts
of the case.

In that connection, also, to go to a number of decisions in the Supreme Court of the United States where that nation's equivalent, as it were, of

section 92 - the absent provision of the

been considered. And, Your Honours, the purpose of	cotm11erce clause, the negative side of it -has	going to the American cases is because in the
application of tests not relevantly very different
from those contemplated in COLE V WHITFIELD and
BATH V ALSTON HOLDINGS that Court's decisions
provides some guidance on the manner of resolution of similar questions such as those of "extent" as
referred to in COLE V WHITFIELD.

And having done that, Your Honours, I would

wish then to turn to the terms of the special case

to indicate that the facts, or to seek to submit
that the facts in the special case make out the

relevant discriminatory effect. Now, Your Honours,

to
may I go itm11ediately the legislation and Your where it is to be found, that there is a volume which

the Court has which contains the Act and the various

regulations.

ClT6/l/DR	6	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  The Act, in a consolidated form,

appears at pages 15 to 24 of that document.

Your Honours, the regulations do not appear in a consolidated form but our learned friends

have some copies which we have agreed we will
use and I would ask my learned friend if he
would be kind enough to make them available.

Your Honours, may I go immediately to the terms of the BEVERAGE CONTAINER ACT 1975

in its amended form. The consolidated version

of it appears at page 17 of that book.

Your Honours, the commencing pdint in relation

to the Act is section 7(1), which is at page 19.

Your Honours will see that it provides that:

Except as provided in this section, a

retailer who sells -

et cetera -

a beverage in a glass container of a

particular description must not refuse

et cetera -

or fail -

to do two things. One is:

to accept delivery of empty glass containers

of that description -

and the other is, and this-is provided for by section 7 (1) (b):

in respect of each such container, to pay to

the person delivering that container the

refund amount applicable to that container.

Your Honours, what that involves - perhaps,

I should say, some of the .provisions contained

in that section are defined, and may I come to

the definitions in just a moment, but look

first at the content of the obligations, and

they are two: first, that a retailer, by virtue

of section 7(l)(a) must accept delivery of

empty elass containers of a type sold by it and,

secondly, section 7(l)(b) that such a retailer

must pay the refund amount in respect of each

such container. There is no relationship,

Your Honours, between the number of containers

sold by the particular retailer, on the one hand,

and the number required by section 7 (1) to be

accepted and paid for, on the other.

CIT7/l/JM	7	30/5/89
Castlemaine(2)

MR JACKSON (continuing): Now, there is not, for example, an

obligation to accept on return only those which

were sold by the retailer or only those which were

sold within a particular locality. Your Honours,

in short, the retailer may sell one and be obliged to

take back a pallet load or vice versa.

Your Honours, I have mentioned that some of the

terms in section 7(1) were defined and, if I could go

to those definitions, one of them; is "beverage" and

that is defined by section 4 - if I could take

Your Honours to that, at page 17 - to mean, to put

it shortly, paragraph (a) alcoholic liquor;

paragraph (b) carbonated drinks and paragraph (c)

other liquids intended for drinking by humans. The terms "container" and "glass container" are defined

at page 18, again in section 4, in a manner which is

not in any way surprising. It may be noted,

Your Honours, that section 7(1) does not apply to

"containers" but only to "glass containers".

The range of "glass containers" to which

section 7(1) applies is, itself, reduced by the

operation of a number of provisions of the enactments.

The first is section 5 at page 18 which makes the Act

in toto inannlicable to wine bottles and suirits bottles

other than bottles made for "containing a wine-based

beverage". That term is defined in section 4. The second provision which reduces the range of bottles to which section 7(1) of the Act applies is

section Sa at the bottom of page 18 °~: i~ ~ives power

to the governor to:

exempt containers of a specifi	iption
from the application of this Ac~

the application of -

specified provisions of this Act either

unconditionally or subject to conditions

specified in the regulations. (Continued on page 9)

ClT8/l/SH	8	30/5/89
Castlemaine-(2)

MR JACKSON (continuing):  Your Honours, two features may be

noted about section Sa(l). One is that regulations

have in fact been made on a number of occasions in

the exercise of the power under section Sa and

the present situation is that regulation S provides

that the Act does not apply to - if I could take

Your Honours to the regulations for a moment -

the second page in the consolidated document, a

number of containers, and that is glass containers

for cider, refillable, deposit-bearing:

glass containers ..... for carbonated soft

drinks or waters -

cardboard or plastics wine casks or sachets used

for:

wine, mineral water or low alcohol wine-based

beverages and -

all milk containers other than plastic containers.

So the Act does not apply to any of those items.

Your Honours, the second feature which may be noted

about the power in section Sa(l) is that it is

expressed not to apply to containers to which

section Sb applies. Now, Your Honours, if I could go

then to section Sb. Section Sb, as is apparent

from its terms - section Sb(l) provides that the

containers to which that section applies are glass
containers of two categories, namely, beer bottles,

shortly, and other glass containers as prescribed.

The operative part of section Sb is section 5b(2)

to which I take Your Honours and that empowers the

minister to exempt from the application of section 7
glass containers if the conditions referred to in
section Sb(2) are satisfied. Those conditions are,

to put it shortly, in paragraph (a):

that the containers are made so as to be

refilled not less than four times;

secondly, that they are marked as being refillable and,

thirdly:

that proper arrangements have been made for the

re-use of the containers when returned to

collection depots by refilling as referred to

in paragraph (a) and by re-use of the glass of

which they are made.

So the effect of section Sb(2) is that there may be

an exemption from the operation of section 7. Now,

Your Honours, in fact the minister has exercised the

power conferred by section Sb(2) and he did so on

30 December 1986, the relevant notice being at

page 37 of the same volume as the Act is contained in,

on the last page.

ClT9/l/VH	9	30/5/89
Castlemaine(2)

Now, Your Honours will see that that notice -

it is the document - it is in the right colurrm of the

page, the second document referred to:

NOTICE UNDER THE BEVERAGE CONTAINER ACT

and the minister expresses his satisfaction under the

paragraphs (a), (b), (c) and then provides that:

I ..... do hereby exempt the containers

hereunder from the application of section 7

of the BEVERAGE CONTAINER ACT 1975.

Your Honours will see that the bottles referred to

in paragraphs (1) and (2) are beer bottles, paragraph (1)

referring to bottles described as:

Refillable 'Pickaxe Brand' beer bottles being

750 mL amber glass -

and so on. Then two other types of bottles are

referred to under the same heading and they are, again,
refillable beer bottles:

Commonly known as echo bottles -

and -

Commonly known as premium bottles.

The bottles then referred to in paragraph (2) - the

other beer bottles - are, in fact, the beer bottles

which are used by Carlton and United Breweries for

sale in South Australia. Your Honours, in short, as

appears from paragraph 52 of the special case, to

which I would refer Your Honours - it is at the

bottom of page 15 and at the top of page 16 - the

bottles which are referred to in paragraphs 1 and 2

of the notice are the bottles used by the brewers

who brew in South Australia, namely, South Australian

Brewing Company and Coopers, and also by Carlton and

Un1ted Breweries who brew beer for sale in

South Australia.

(Continued on page 11)

ClT9/l/VH	10	30/5/89
Castlemaine(2)

MR JACKSON:	Your Honours, that document was one of the enactments or statutory instruments, as it were,
that came into force at the time when the
amending Act and the new regulations came into
force - the package came in together, as it were.
Your Honours, could I go back to the Act and to section 7(1)(b); that is at the bottom
of page 19, section 7.  Your Honours,
section 7(1)(b), which is the provision from
the·operation of which, or the application of
which, the bottles to which I have just referred
in the notice have been exempted, section 7(1)(b) requires that the retailer pay what is described
as the refund amount in respect of each glass
container.

Section 4 defines "refund amount" as the

amount prescribed in that regard. And

Your Honours, the refund amount is an amount

which is used for two purposes: one is that it

is the amount which is to be paid under

section 7(1)(b) on return of the bottle to a

retailer; the second is that it is the amount

which has to be paid if a bottle is delivered

to a collection depot - that is a concept to

which I have not yet referred Your Honours.

A collection depot is referred to in

section 12(1)(b) and, Your Honours, in relation
to a collection depot the person who is in charge
of it, as appears from section 12(1)(a) must
accept delivery of empty containers of a description
in relation to which the establishment of that
collection depot was approved and must pay to

the person delivering that container the refund

amount applicable to it.

Your Honours, so that in theory, a person who has a beer bottle may do one of two things:

one is that the person having the beer bottle

may, in accordance with sect ion 7 ( 1 ), take· it

person is obliged to pay the person delivering td a retailer who sells those items and that the container the refund amount. The person

having that bottle may also take it back to a

collection depot which is something that may

be established under section 9 provided that

the collection depot is one in relation to which

there has been an approval by the minister.

But, Your Honours, there has been no collection

depots approved for non-refillable bottles. case at pages 19 to 20. ·

DEANE J: Mr Jackson, is there any definition of "particular

description"?

C 1T10/1 /ND 1 1 30/5/89

Castlemaine(2)

MR JACKSON: 

Your Honour, I think the answer is "no".

the minister seems to take the approach that
"description" enables the identified bottle to

DEANE J: 

Because looking at what you showed us before,

be described by reference to the manufacturer.

MR JACKSON: 

Your Honour may have been referring to

section 5b(2), "specified description", I think

it says.

DEANE J: But your argument, as I follow it, assumes that

particular description does not enable him to

say, " ..... of this kind". ,

MR JACKSON:  Your Honour, perhaps I should say first the-

was a definition of "description". That went

in 1986. Perhaps I am misunderstanding what

Your Honour put to me. What we would say about it - may I do it our way and then see if I have

answered Your Honour's question: what we would

say is that under section 5b(2), the minister

may exempt from the application of section 7

only glass containers which satisfy the tests

there set out. So that it is impossible for

someone having refillable bottles to satisfy

those tests.	So they cannot be exempted from
section 7.-

(Continued on page 13)

C 1 T 1 0 / 2 / ND-	JACKSON,	30/5/89
C as t l ema in e ( 2)

MR JACKSON (continuing): But,in relation to section 7,	the term "particular description 11 seems simply,
Your Honours, to mean any description.

DEANE J: What I was asking about was I thought you had

said that if somebody sold a dozen bottles

from a retail site he would then be bound to

accept millions of bottles of the size and type

that he sold.

MR JACKSON:	Yes.
DEANE J:	I was just asking you why would it not be

possible for the particular description to confine

the bottle by reference to the brand?

MR JACKSON:  I am sorry. If I conveyed, Your Honour, that

I was intending to suggest that if one sold beer one had to take back every beer bottle,

I was not intending to do that.

DEANE J:	I misunderstood.
MR JACKSON:	Your Honour, what I was intending to say

was that if one sold one stubby bottle, as it

were,of one of our brands of beer, one would have

to take back all bottles of that brand.

DEANE J:	I follow.
MR JACKSON:	Your Honour, perhaps an argument might arise

whether one would have to take back all stubby

bottles made by that manufacturer under different

names, "New", "Old" and whatever the names happen

to be. But the general proposition, Your Honour,

is just that one would have to take back whatever

number happened to be brought back, which may be

less or may be more. It carries with it, of course,

Your Honours, not just the the potential of requiring space in which to do it, but also of

h~ving money available to pay the refund if a

large number of bottles happens to be brought back

at any time.

I had referred Your Honours to paragraph 56(ii)

and the particular passage is at the top of page 20,

the first new sentence on page 20. Your Honours,

the reftmd amotmts which have been fixed appear
in regulation 7. Could I take Your Honours to the
consolidated regulations. Your Honours will see

that the following refund amounts are prescribed

and bhen paragraph (c):

in relation to a container in respect

of which a notice has been published

under section Sb ..... 4 cents per container

CITll/1/JM	13	30/5/89
Castlemaine(2)

(d) in relation to a container ..... not being a container in respect of which a notice has

been publish ed under section Sb . .... 15 cents

per container.

So there is a very considerable difference in

terms of money between the two amounts. Your Honours,

an attempt was made in fact to reduce the figure

of 15 cents to 6 cents in November 1986 but that

was disallowed by the Legislative Council. That appears, Your Honours, in the volume of statutes

at pages 36 and 36a. At page 36 Your Honours

will see the regulation which was made, putting

in the new paragraphs and then in the.last entry
in paragraph 36a, the regulation was disallowed

by the legislative ~ouncil.

Your Honours, it is also apparent from the

special case that the amount of 15 cents is very
considerably in excess of the refund amount necessary

to achieve the return of non-refillable bottles

at the same rate as refillable bottles which have

the 4 cents refund amount. Could I refer Your Honours

to the special case at page 26, paragraph 80?

Your Honours, amongst the matters there set out,

in subparagraph (a):

a 4¢ deposit is sufficient to ensure a

reasonable and adequate rate of return of

refillable bottles.

In paragraph (b) there is a reference to the only possibly relevant differences between the

two types of bottles, and saying:

There is no evidence as to whether these

differences would have any effect on the

return rate for non-refillable bottles with

a 4¢ deposit.

Then, Your Honours, paragraph (c), the State:

says that thefacts ..... may have an effect

in the short term on the rate of return of

non-refillable bottles and that the period of

such effect would depend upon matters such as

advertising.

But the fact which is accepted, as Your Honours

will see in paragraph (c) in the second sentence is:

The defendant agrees that the period of any

such effect would be less than 1 year and

that for such period a 6¢ deposit on

non-refillable bottles would achieve the same

return rate as for refillable bottles with a

deposit of 4¢.

CITll/2/JM	14	30/5/89
Castlemaine(2)

MR JACKSON (continuing): And, Your Hor:.ours, will s-2e then

in paragraphs (d) and (e), in paragraph (d) the

plaintiffs set out their view and then in paragraph

(e) ," After the initial period, a _ 4¢ deposit

on non-refillable bottles would achieve the same

rate as for refillable bottles with	a deposit of
4¢."	Your Honours, I have indicated before

that I wanted to go back, if I may, to COLE V

WHITFIELD in a little more detail :iJ:l order to

see the approach there taken by the Court, which

is relevant in a number of respects, and also to

the Court's decision in BATH V ALSTON HOLDINGS.

Your Honours, may I go first to COLE V WHITFIELD

and a number of observations of the Court in that

decision indicate the propriety constitutional sense

of the South Australian legislation. Your Honours,

could I go first to page 310 in the left column,

letter E. Your Honours will see there a discussion

by the Court of the purpose of section 92.

The purpose of the section is clear enough:

to create a free trade area throughout the

Commonwealth and to deny to Commonwealth

and States alike a power to prevent or

obstruct the free movement of people,

goods and communications across State

boundaries. Free trade was understood to

give "equality of trade",

Now,Your Honours ,that paragraph then goes on

to set out a number of circumstances and inhibitions

which might be used in respect of protectionism and,

Your Honours, at the end of the paragraph, to

complement the section 92 prohibition against

discrimatory laws which prevented the free flow of

trade. Your Honours, I have referred to that

paragraph because Your Honours will see that the

Court has used the expressioni'a free-trade area throughout the Comrnonwealth" and "obstructing the

free flow of trade". Your Honours, those are generalities of course.

They are expressions which have considerable

similarity with some of those used in relation to

the comrnerce clause and its negative aspects in

the United Staes. I ask Your Honours to note those

passages to that end.

DEANE J:	Mr Jackson, I am sorry to interupt you, but can I
take you back to 80(b) of the stated case.
MR JACKSON:	Yes, Your Honour.

CIT12/l/CM	15	30/5/89
Castlemain~(2)

DEANE J:  Must that be read as qualified by

84(a)? If you read it as unqualified it goes an

extraordinarily long way and really seems to

border on the absurd almost if there is no

difference between refillable and non-refillable

bottles.

MR JACKSON: Well, Your Honour, the two statements in the

special case - if I could start with

paragraph 80, perhaps, paragraph 80 appears to

set out what would be achieved by various rates

of deposit. Now,Your Honour, paragraph - - -

DEANE J:	I follow the relationship if you read 80 as
meaning "in so far as likely returns are concerned".
MR JACKSON:	Yes, Your Honour, that is what it seems to mean,

but I want to make some submissions a little later

about the terms of paragraph 84 and perhaps what

can be derived from that, if anything, but

paragraph 80 seems to be dealing with return rates.

(Continued on page 17)

CIT12/2/CM	16	30/5/89
Castlemaine(2)

MR.JPCKSON (continuing): Now, Your Honours, I was dealing

with COLE V WHITFIELD and I had referred to page 310

in the left column but, at page 310 in the right

column, the same topic is taken up again by the

Court. Your Honours, in the last paragraph on

page 310, between letters F and G:

The expression "free trade" commonly

signified in the 19th century, as it does

today, an absence of protectionism, that

is, the protection of domestic industries

against foreign competition.

Then, the Court goes on to indicate a number of ways

in which protectionism may occur and, Your Honours,

protectionism is taken up again, if I may say so, in

BATH V ALSTON HOLDINGS and the point which seems to

emerge from both of them is that, whilst a number of

ways may be identified, they are not necessarily the

only ways in which protectionism may occur. But, in

particular, there is a reference in COLE V WHITFIELD,

in the passage I was just referring to, to:

Such protection may be achieved by a variety

of different measures -

and various ones are stated, including - five lines

from the bottom of the page:

discriminatory burdens on dealings with imports -

which, alone or in combination, make importing

and dealings with imports difficult or

impossible.

Your Honours, the Court there recognized, in passing, perhaps, that the creation of difficulty may give rise

to something which contravenes section 92. There is a

reference, then, to sections 92, 99 and 102 being -

apt to eliminate these measures and thereby

to ensure -

and the expression is used once again -

that the Australian States should be a free

trade area in which legislative or executive

distrimination against inter-State trade and

connnerce should be prohibited. Section 92

precluded the imposition of protectionist

burdens: not only inter-State border customs

duties but also burdens, whether fiscal or

non-fiscal, which discriminated against

inter-state trade and connnerce.

At:i.d the. Gru.u:.t. s~id that was what section 92 was, historically,

designed for and it did so.

ClT13/l/SH	17	30/5/89
Castlemaine(2)

Your Honours, moving then to page 311, there

is a general statement of the test to be applied,

corrrrnencing in the new paragraph in the right column

first new paragraph in the right column - where the

Court describes in the first sentence the task

confronting the Court and then it goes on, at

approximately letter D, to say:

The history of s 92 points to the elimination

of protection as the object of s 92 in its

application to trade and corrrrnerce. The means by which

that object is achieved is the prohibition

of measures which burden inter-State trade and
commerce and which also have the effect of

conferring protection on intra-State trade

and commerce of the same kind. The general

hallmark of measures which contravenes 92

in this way is their effect as discriminatory

against inter-State trade and commerce in that

protectionist sense.

Now, Your Honours, at page 313, there is an additional

specific reference to the fact that discrimination of

the relevant kind can be discrimination which is factual
as well as in the legal operation of a law and that
appears, Your Honours, at the bottom of page 313, in

the right column:

The concept of discrimination in its

application to inter-State trade and commerce

necessarily embraces factual discrimination as

well as legal operation. A law will discriminate

against inter-State trade or corrrrnerce if the law

on its face subjects that trade or commerce to

a disability or disadvantage or if the factual
operation of the law produces such a result.

That is, the result of subjecting the trade or corrrrnerce to a disability or to a disadvantage and the Court,

Your Honours, went on to say - about the seventh line

o~ the page~

And the more recent decisions proceed upon that	footing. The Court looks to the practical operation of the law in order to determine
its validity.

(Continued on page 19)

ClT13/2/SH	18	30/5/89
Castlemaine(2)

MR JACKSON continuing) : Now, Your Honours, to the same effect is a

passage in the right column between letters C and D

on page 314, where the Court was considering the

criterion of operation test and said, by way of

adverse criticism of it:

What is more, the first limb of the doctrine

as enunciated looks to the legal operation
of the law rather than to its practical

operation or its economic consequences.

And then, Your Honours, at page 315 in the right

column in the second new paragraph on that page,

the Court said:

The second major reason for rejecting the doctrine -

that is, the criterion of operation doctrine,

as an acceptable interpretation of section 92

is that it fails to make any accoIIllilodation for

the need for laws genuinely regulating intra-State

and inter-State trade. The history of the movement

for abolition of colonial protection and for
the achievement of intercolonial free trade
does not indicate that it was intended to prohibit
genuine non-protective regulation of intercolonial

or inter-State trade.

And, Your Honours, could I then take Your Honours

back to page 317 and in particular, I referred

Your Honours to a passage in the left column and

also to one in the right column, but in the right

column on page 317 at about letter C in the passage

to which I referred Your Honours earlier, may I ask

Your Honours to note the following matters: one

is the reference, at about half-way down the page,

to:  ·

A raw which has as its real object the

prescription of a standard for a product

or a service or a norm of coIIllilercial

conduct -

Your Honours will see, also, that towards the end of

that paragraph:

if a law, which may be otherwise justified by

reference to an object which is not protectionist,
discriminates against inter-State trade or

coIIllilerce in pursuit of that object in -

as the Court described it,

a way or to an extent which warrants characterisation

of the law as protectionist, a court will be

justified in concluding that it none the less

offends section 92.

ClT14/l/DR

Castlemaine(2) 19 30/5/89

Now, Your Honours, that passage, of course, recognizes-that a law may have an object which is not

protectionist. In achieving that object it may

discriminate against inter-state trade. The law

will be valid unless it appears, of course, that it

has sought to achieve the non-protectionist result

in a way, or to an extent, which warrants

characterization of the law as protectionist. So,

Your Honours, questions of fact and degree are

involved and that is the matter which the Court then

went on to discuss in the passage which follows on

from the passage to which I had earlier referred.

Now, Your Honours, Your Honours then said, at

page 317 letter F, that:

The adoption of an interpretation prohibiting

the discriminatory burdening of inter-State the relevant questions and a belated
trade will not of course resolve all problems.

acknowledgment of the implications of the

long-accepted perception that

'although the decision ..... was one for a court

of law the problems were likely to be largely

political, social or economic'.

And, Your Honours went on to say, at the bottom of the page:

The means by which domestic industry or trade

can be advantaged or protected are legion.

(Continued on page 21)

ClT14/2/DR	20	30/5/89
Castlemaine(2)

MR JACKSON (continuing):

The consequence is that there will always

be scope for difficult questions of

fact in determining whether particular

legislative or executive measures constitute

discriminatory interference with inter-State

trade.

And Your Honours then proceeded to - the Court then

proceeded to deal with the particular case and said

at the bottom of the left column on page 318:

the agreed facts make it clear that

the extension of the prohibitions against

sale and possession to imported crayfish is

a necessary means of enforcing the prohibition

against the catching of undersized crayfish in

Tasmanian waters.

And dealt with reasons of a factual nature	why
that was so.

Your Honours, may I go from that to

BATH V ALSTON HOLDINGS PTY LTD, (1988) 62 ALJR 363,

and Your Honours, before going to a particular

passage of it may I make this submission about it,

and that is that the case demonstrates in relation

to the proposition that the means of protectionism

are legion. That case demonstrates one instance,

namely that it is not a sufficient answer to an

allegation that legislative or executive action

contravenes section 92 simply to say that the

law does no more than require the interstate

trader to compete on the same terms as the trader
within the enacting State. It is as much
protectionism to bring the trader from interstate
down to the level of the local trader as it is to

bring the local up to the level of the interstate

trader. Both, in our submission, are protectionism

of the kind which is proscribed by section 92.

Now, Your Honours, having made that submission,

may I take Your Honours to BATH V ALSTON HOLDINGS

at page 367, and in particular to the passage in the

right column commencing in the new paragraph in that

column. Now, Your Honours, in the judgment of the

majority, there is a reference in about the sixth or

seventh line of that paragraph to an argument which

was advanced - sorry, to an explanation given for the
particular provision the validity of which was impugned
and that explanation, as the Court said, was - as the
majority said, is that the licence fee which the Act

requires Victorian wholesalers to pay the Victorian

Government will not have been paid to the Victorian

Government by an out of State wholesaler who does

ClTlS/1/FK	21	30/5/89
Castlemaine-(2)

not carry on business in Victoria, and therefore

does not require a licence in that State. Your Honours,-

that fact does not matter particularly, but the

Court then went on to say:

The explanation tends, however, to underline

rather than to remove, the protectionist

character of the discrimination at the retail

level effected by the provisions imposing the

tax. If wholesalers of tobacco products in
another State already pay taxes and bear other
costs which are reflected in wholesale

prices equal to or higher than those charged

by Victorian wholesalers, the practical

effects of the discrimination involved in the

calculation of the retailer's licence fee would

be likely to be that the out of State wholesalers

would be excluded from selling into Victoria and

that the products which they would otherwise sell

in inter-State trade would be effectively

excluded from the Victorian market.

Your Honours, might I pause there simply to draw

Your Honour's attention to the use of the term a

little further up the page, "the practical effects

of the discrimination" and also, Your Honours, the

use of the expression, "eff~ctively excluded from

the Victorian market". The majority went on:

On the other hand, if out of State wholesalers

pay less taxes and other costs than their

Victorian counterparts, and in particular

if they pay no (or a lower) wholesale licence

fee, the effect of the discriminatory tax

upon retailers will be to protect the Victorian

wholesalers and the Victorian products from
the competition of the wholesalers operating in

the State with the lower cost structure. Either

way, the operation and effect of the provisions

of the act imposing the retail tabacconist's

licence fee are discriminatory against

practical purposes, their operation is to impose

inter-State trade in a protectionist sense. For

on Victorian retailers who, during the relevant earlier period, purchased tobacco products both

locally and in the markets of another State, an

obligation to pay to Victorian consolidated revenue

an ad valorem tax-

and so on.

(Continued on page 23)

ClTlS/2/FK -	22	33/5/89
Castlemain(2)

MR JACKSON (continuing):  Now, Your Honours, that recognizes

that in either way of doing it there may yet be

protectionism and at page 368 in the left column,

letter B, there is a reference to a similar matter,

that is that equalizing, or, as they sometimes call

it in the United States, "levelling" provisions,

are themselves provisions which may constitute

a breach of section 92. Your Honours, connnencing

at letter Din the left column on page 368, there

is a reference to the fact that:

The taxes ..... escape invalidity as excise duties only -

because -

of their character as a licence fee .....

Seen as a licence fee, the taxes imposed

upon wholesalers are part of the costs of

of a Victorian wholesaler in carrying on his

business. He will enjoy a competitive

advantage or disadvantage in relation to an out

of State wholesaler according to the comparative

level of taxes and other costs which he must

bearin carrying on his business. The fact that

taxes paid by a wholesaler in one State are
higher than the taxes paid by a wholesaler
in a second State may provide an inducement

for the first State to protect local goods

and local wholesalers by the imposition of

an "equalising" tax upon its retailers in

respect of their purchases of products from

that other State. The most that such notions

of economic equalisation can do, however, is
to provide some local justification for the
improvision of a protectionist tax in respect

of inter-State goods at the later retail stage

of distribution. They do not alter the

character of the tax as such or remove it

from the ambit of section 92. Indeed, to hold

that a law which protects local goods by

goods at the retail level is consistent with	imposing a discriminatory tax on inter-State
section 92 because the law equalises in favour of the local goods an advantage which the
inter-State goods enjoy in their State of
origin in the course of manufacture or distribution
would be to disregard the critical constitutional
purpose which the section is designed to serve.

Now, Your Honours, to the same effect, at page 369,

in letter G, the reference to FOX V ROBBINS and

the majority stated at letter G:

It would have provided no answer in FOX V ROBBINS

to have demonstrated that the price of local wine

to the retailer reflected an equal or higher

burden of some local tax which had been imposed

ClT16/l/VH	23	30/5/89
Castlemaine(2)

on local manufacturers or wholesalers at an

earlier time.

And, Your Honours, in the judgment of the minority

at page 370 in the right column between letters F and G,

Your Honours said:

The consequences which are relevant are

economic consequences for it is largely the ultimate economic effect which will

determine whether or not legislation has

been enacted in pursuit of a protectionist
object.

The observations made by the members of the Court in the passages to which I have referred are observations

which, in our submission, may be seen expressed in a

similar way, although one is conscious that it is

not in exactly the same way, in the United States

decisions and, Your Honours, I would like, if I may,

to go at this point to a number of decisions in the United States in which the supreme court has considered legislation with a view to first of all

identifying the tests which are apposite and, secondly,

in applying those tests in terms of whether legislation,

to put it shortly, goes too far.

Now, Your Honours, in going to the United States

decicisions, may I say one thing, and that is we are

conscious of the observation made by the Court in

COLE V WHITFIELD at page 316, in the right column at

letter A, that the United States decisions on the

commerce clause do not provide:

any assistance in the elucidation on the

meaning of section 92.

(Continued on page 25)

ClT16/2/VH -	24	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, no doubt, there

is no provision which one can construe in the

United States in any relevant sense but those

decisions do provide, in our submission, some

assistance in the practical application of the

concepts dealt with in COLE V WHITFIELD and,

in that regard, Your Honours, a number of features

are relevant. The United States' decisions

recognize also the concept of a national free

trade area. They recognize that discrimination

and protectionism may be constituted by intending

to do no more than putting the enacting State's

traders on an equal footing with those with

interstate traders.

They recognize that one must look at the

reality of the situation and not merely whether

there is ex facie discrimination. They recognize

increased cost as a factor which may demonstrate

that there is protectionism and they recognize

also the need to look at alternatives and the

degree to which a measure is designed to achieve

a non-protectionist end.

BRENNAN J-:	Mr Jackson, before you go to that, could you identify, so that I can observe it as we go to the American authorities, the specific operation
of the legislation here which, in your submission,
is discriminatory and protectionist?

MR JACKSON: Yes, Your Honour. First it is constituted

by the difference in the rates which are the
refund amounts; that is, the four cents, and 15 cents.

Secondly, it is constituted by the fact that

it is impossible for a person whose trade is

carried out in refillable bottles to obtain

the exemption from the operation of section 7
by the use of the provisions of section Sb;

Your Honour, I put it inaccurately when I say "the person"; the precise way in which

it is framed is that the container is exempt

from section Sb. And what that means is that

retailers - this appears in the facts, of course -

who would otherwise deal in our products, do
not wish to deal in them because of the fact

that they may have to take back and pay these

amounts.

The third feature is that if one combines

a number of things, namely, in the light of the

factual background, first, the amendments to the Act to bring in section Sb which altered the way in which section 7 would operate. Secondly,

the provision of the regulations as to the

differential amounts and, thirdly, the provision

C 1 T 17 /1 / ND' 25 30/5/89

Castlemaine(2)

which is the notification under section Sb which

exempts the bottles of all our competitors, in

effect, from the operation of the Act. Those

three things, together, togethec with the time

at which they were enacted, makes it apparent
that they were intended to have a protectionist
effect in respect of the South Australian brewers -

intended and did.

DAWSON J:  You have to draw that conclusion although,

obviously, the argument will be that those measures

are designed to discourage the use of non-refillable

bottles?

MR JACKSON:  Yes. Your Honour, I can put it in two ways:

they had the effect which was of their intended -

and I do not use that in a motivational sense,

really, but part of the effect of them was to
prevent a large competitor from interstate keeping
up its activity of taking part of the market

share of the existing South Australian brewers.

DAWSON J:  And that is a necessary consequence, of course,

if you only use non-refillable bottles.

MR JACKSON:	Your Honour, it is a consequence which it is true is a necessary consequence but that was
the effect which was intended and the intended effect was to prevent our interstate
trade into South Australia.
DAWSON J:	What I am really getting at is, what you are
saying is this: the motive which lay behind
this was to exclude your client, it was not to
discourage the use of non-refillable bottles?
MR JACKSON:	Yes, and one speaks of motive, Your Honour,

but it was, in fact, effective as well.

(Continued on page 27)

ClT17/2/ND	26	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honour, perhaps I should

have added one other thing in answer to

Your Honour Justice Brennan, and that is that

if one were to seek to obtain from our point of

view an exemption under section Sb(l), it

could not be effected just by engaging

in a trade in which we use refillable bottles.

We would have to obtain the exemption by it

being demonstrated also that the bottles were

to be refilled and re-used, which as a practical

matter would mean they would have to be

transported back to the place where they were

first filled, or some other possible place,

but they would have to be transported, probably

interstate, and thus incur additional costs.

BRENNAN J:  I understand from what you have put that it

is said that the operation of this legislation,

or this complex of legislation, has the effect
and is alleged to have the motive of being

discriminatory against the Bond brewing companies.

Is that discrimination said to arise by reason

of those companies being interstate?

MR JACKSON:  In our submission it does, Your Honour,

it arises because they are companies which were

iterstate companies which went to move into

South Australia in the sense that they sold their

beer into South Australia and sold it in

competition with the dominant brewer in South

Australia, the South Australian Brewing Company

and the measures taken are ones which were

intended to and, in our submission, had the
effect of preventing them from doing so, because

they were an interstate brewer.

BRENNAN J: It means, of course, that a company which

does seek to sell from out of State interstate
has the protection of section 92, on this argument,

which it would not have if it established its

factory within the State?

MR JACKSON:  Yes, Your Honour, that is really what section 92

is intended for, Your Honour.

BRENNAN J: That may be a big question.

MR JACKSON:	Your Honour, one of the things which is brought about by the free trade area to which the Court
referred in COLE V WHITFIELD is that one is entitled
to trade throughout the Coilllllonwealth in interstate
trade in a way which is, to use the words of section 92,
"absolutely free".  Once one adopts the view expressed
by the Court in COL'E V WHITFIELD that involves
a consideration of a number of questions: is there protectionism for the local industry; is the protectionism discriminatory against the interstate

CIT18/1/JM	27	30/5/89
Castlemaine(2)

trader? Because it is a question of fact, it

may well be, Your Honour, that things have changed

from time to time. Of course, as the Court's actual

decision in COLE V WHITFIELD indicates, it was

based on what was the position at the time.

Your Honour, it is right to say, in our submission, that a trader from interstate

who engages in a particular interstate trade

may in particular circumstances obtain an

advantage denied by the law of the State to

a trader in that State,or corrnnencing his business

in that State at that time. That, Your Honour,

will be so in some cases but it will not be so

in others and one cannot put it as a general

proposition. The reason why one cannot put it

really as a general proposition is this: the State

law in question which would regulate the traders

in particular articles is a law which will be

directed to one or more of a number of purposes.

If the purpose to which it is directed is one

which has a protectionist effect and is

discriminatory against insterstate trade, meaning

by that discriminatory against interstate traders

by reason of the way in which they carry on business,

then it may be that the law is valid, but it also

may not be that the law is valid. That is,

Your Honours, where the question of manner and

extent used by the Court - those are not the exact

wori.ds, Your Honours, I think "in a way" or "to an

extent" was the eX:pression used by the Court in

COLE V WHITFIELD- ~to be determine4.	Sometimes
the law will be valid, sometimes not.

(Continued on page 29)

CIT18/2/JM	28	30/5/89
Castlemaine(2)

McHUGH J: What would be your submission if, for example,

Coopers used non-refillable bottles in South Australia?

Would you still be able to argue that this was a

discriminatory law?

MR JACKSON:	Yes, we would, Your Honour and the success of the submission would depend, really, on a number of things
but, particularly, one would think the extent of the
market held by Coopers would be a relevant matter;
The extent to which there were other participants in
the market, other than Coopers; but if one took Coopers as having a small market share and using refillable bottles, then in our our submission, the same situation
would obtain as that for which we contend. But, would depend on the particular facts.
DAWSON J:	I suppose you say, "Well, we do not deny that a

government has the right to discourage the use of

non-refillable bottlei'but we say that the way in

which it did it in this case, looking at the timing,

looking at the market shares, looking at a whole lot

of other things which, no doubt, you will point to,

demonstrate that that was not its substantial motive

or a sufficiently substantial motive. That is the way

in which you put it.

MR JACKSON:  Yes, Your Honour.

DAWSON J: Yes.

McHUGH J:  But I thought a substantial part of your submission

depends upon what the Americans call "disparate impact"?

In other words, the indirect effect of the law or the

factual operation?

MR JACKSON: Yes, Your Honour, that is right. Perhaps, I am

dealing with two at once, if I may say so, with respect.

The proposition that Your Honour Justice Dawson put to

me is one which we wish to advance. We do submit that

the disparate impact, if I could use that expression,

Your Honour, bearing in mind that it is not mine, that test is one which we would apply, for example, to the

potential operation of section Sb. Now, that is not

ex facie discrimination but it does involve a question

of effect in the light of the participants in the

market at the present time.

(Continued on page 30)

ClT19/l/SH	29	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, may I proceed to the

United States' cases. The first of them is

BALDWIN, COMMISSIONER OF AGRICULTURE & MARKETS, ET AL.

V G.A.F. SEELIG, INC., 294 U.S. 511 (1935).

Your Honours, that was an attempt at protectionism

by requiring interstate milk to be sold at the

minimum price prescribed for purchases from local

producers. Mr Justice Cardozo, at page 521,

speaking for the Court, half-way down the page,

spoke, although with reference to the particular

facts, about the general way in which the negative

aspect of the commerce clause operated.	He said
that:

New York has no power to project its legislation

into Vermont by regulating the price to be paid
in that state for milk acquired there. So much

is not disputed. New York is equally without

power to prohibit the introduction within her

territory of milk of wholesome quality acquired

in Vermont, whether at high prices or at low

ones. This again is not disputed.

Then he went on, Your Honours, and I would refer

Your Honours to about two-thirds the way down the page, to say that:

New York asserts her power to outlaw milk so

introduced by prohibiting its sale thereafter

if the price that has been paid for it to the

farmers of Vermont is less than would be owing

in like circumstances to farmers in New York.

The importer in that view may keep his milk

or drink it, but sell it he may not.

He went on to say that would "set up a barrier as

effective as a customs duty" and that, at the top

of the next pag~ that could not be done by

reason of the commerce clause, and then went on at

about point 5 on page 522 to say:

Nice distinctions have been made at times

between direct and indirect burdens. They

are irrelevant when the avowed purpose of the

obstruction, as well as its necessary

tendency, is to suppress or mitigate the

consequences of competition between the states.

He went on to describe the purposes of the corrnnerce clause and, Your Honours, that goes on to page 523,

and in particular to the passage at about two-thirds

the way down the page there is a reference to:

The Constitution was framed under the dominion

of a political philosophy less parochial in

range.

That is -

ClT20/l/DR	30	30/5/89
Castlemaine(2)

the peoples of the several states must sink
or swim together, and that in the long run
prosperity and salvation are in union and

not division.

Your Honours, that is a recurring theme one

sees in the cases, namely that there was to be a

kind of national economic union. Your Honours,

it does not seem to be something very different,

although there are no doubt differences, not very

different from the free market which is referred to

by the Court in COLE V WHITFIELD. Your Honours, I

wanted to refer to that case really because it

seems to be the modern origin of that broad notion,

but may I come from that to the second of the cases,

TOOMER V WITSELL, 334 U.S. 385 (1948). Your Honours,

that case was one which dealt with a number of

matters but the particular point in relation to which

the Court was concerned with the commerce clause was

a provision of a South Carolina statute that owners

of shrimp boats, fishing off South Carolina in

South Carolina waters, were required to dock, unload,

pack and stack the catch in that State before
transporting it elsewhere.

Your Honours, if one goes to page 403, the provision of the statute which was in question

appears about a third of the way down the page

immediately following the heading, "Fifth." Your

Honours will then see, in the paragraph commencing

"The record" that there is a reference to the

materiality and the question of additional cost

caused by the statutory provision. They say:

The record shows that a high proportion of

the shrimp caught in the waters along the

South Carolina coast, both by appellants and

by others, is shipped in interstate commerce.

There was also uncontradicted evidence that

appellants' costs would be materially increased

by the necessity of having their shrimp unloaded

and packed in South Carolina ports rather than at

their home bases in Georgia where they maintain

their own docking, warehousing, refrigeration

and packing facilities.

(Continued on page 32)

ClT20/2/DR	31	30/5/89
Castlemaine(2)

MR JACKSON (continuing): There was a reference to the

employment of potential employees and the fact

that the inevitable concomitant:

· was to divert to South Carolina employment

and business which might otherwise go to -

Georgia -

"the necessary tendency of the statute is

to impose an artificial rigidity on the

economic pattern of the industry."

Your Honours, that case is one which demonstrates, as a number of other cases do, that the question

of the additional cost caused by the imposition

is material to the question whether it is something

which does or does not comply with the terms

of section 92.

BRENNAN J: That is a very difficult concept, though,

Mr Jackson, is it not, because does not that

suggest that there is some notion of equalizing

under section 92 so far as cost is concerned

when the very purpose of free trade is to give

the cost advantage to those which are naturally

able to take it?

MR JACKSON:  Your Honour, perhaps I am putting it badly.

What I am seeking to say is this, that if it

be that an interstate trader carries on his business

in a particular way and if there is a law of

a State into which he trades which may be justified

on grounds other than endeavouring to protect

the trade of the local traders, then in determining

whether that is the only purpose of it or whether

that is its only effect and in determining whether

it perhaps goes too far in achieving that, one
looks at the question of the additional costs
caused to the person from interstate who is subject
to it. Your Honours, if it be that one can see

that what is done is to impose a significant

extra cost for no particularly good reason other

than to apparently protect the trade of the enacting

State, then that is a fair indication that the

Act was intended to have the effect of protectionism

by discriminating against them. ·

McHUGH J:  But that only means it must a discriminatory

cost, must it not? The fact that the costs increase

cannot be relevant, can it?

MR JACKSON:  Your Honour, I suppose that is right to say

that as such but it is a question of how one

32   30/5/89

Castlemaine(2)

defines "discriminatory" in that sense. If what

Your Honour means is that it has to be a

discriminatory cost in the sense that an extra provision is made for the interstate trader as

such then one has a case of ex facie discrimination

no doubt. If, on the other hand, as we would

submit, the situation has to be looked at as

well from the point of view of the actual effect and if the effect of the impost or the provision

is that the interstate trader is subiected to

a cost to comply with to which he is· not subject to which, in his case, is significantly less, then the

disparity between the two is something which

one is entitled to look at.

So, Your Honour, I would not agree with

the proposition Your Honour put to me about it
being discriminatory.

McHUGH J:	The question is what you mean by discriminatory.
I use "discriminatory" to include both senses.

Perhaps I have been reading too many sex

discrimination cases lately.

MR JACKSON:  I wanted to go from there, if I may, to

H.P. HOOD AND SONS INCORPORATED VDU MOND,

(1949) 336 US 525. Your Honours, in that case,

after referring at page 531 to the observations

of Mr Justice Cardozo in BALDWIN V SEELIG, the

court then proceeded, at page 537, to TOOMER

V WITSELL, to which I have just referred - that

is about half-way down the page - and adopted

the passage:

"the necessary tendency of the statute

is to impose an artificial rigidity on

the economic pattern of the industry."

And the reference to "economic pattern" appears to be a reference to the sentence immediately

above where the court said:

It was considered -

in effect, in that case -

that the effect of this section of the

statute was to divert to South Carolina

employment and business which might otherwise

go to other States -

ClT21/2/ND	33	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, from there one goes

to the bottom of page 537 where the broad

principle is stated:

This principle that our economic unit

is the Nation, which alone has the gamut
of powers necessary to control of the

economy, including the vital power of

erecting customs barriers against foreign

competition, has as its corollary that the

states are not separable economic units.

There is a reference then to BALDWIN V SEELIG.

In BUCK V KUYKENDALL the Court struck down a

state act because, in the language of

Mr Justice Brandeis, "Its primary purpose

is not regulation with a view to safety or

to conservation of the highways, but the

prohibition of competition." The same argument

here advanced, that li..lTiitation of competition

would itself contribute to safety and

conservation, and therefore indirectly serve
an end permissible to the State, was there

declared "not sound." It is no better here.

This Court has not only recognized this

disability of the state to isolate its own

economy as a basis for striking down parochial

legislative policies designed to do so, but

it has recognized the incapacity of the state

to protect its own inhabitants from competition as a reason for sustaining particular exercises of the connnerce power of the Congress.

Your Honours will see in the next paragraph,

in the second line, a reference to the description

of the United States as being a "federal free trade

unit" and then, Your Honours, at page 539, in the

first new paragraph on that page:

Our system, fostered by the Connnerce Clause,

is that every farmer and every craftsman shall

be encouraged to produce by the certainty that

he will have free access to every market

in the Nation, that no home embargoes will

withhold his exports, and no foreign

state will by customs duties or regulations

exclude them. Likewise, every consumer

may look to the free competition from every

producing area in the Nation to protect him

from exploitation by any.	Such was the vision
of the Founders -

and so on. Your Honours, we might mention in

passing that if the folk - as the Americans would

say, of South Australia wish to have our beer,

they are very welcome to it.

CIT22/l/JM	34	30/5/89
CHstlemaine(2)

Your Honours, the expressions used there

by the court are very similar to those used

by the Court in COLE V WHITFIELD in passages

to which I have referred already, page 310

left column letter E, and page 310, right column

letter F to page 311 letter B.

Your Honours, the cases to which I have

referred have so far, with one exception, I think,

been cases in the immediate post-War period.

I do not want to get bogged down in that period,

but may I mention one more before moving on and

that is DEAN MIIKCO. V MADISON, (1951) 340 US

at 349. That is a case, Your Honours, where

the city of Madison in Wisconsi forbad the
sale of pasteurized milk unless it had been

pasteurized at an authorized plant within five

miles of the city. The appellant was denied

the licence to sell because its plants in

Illinois were more than five miles away.

Could I take Your Honours to page 353? In

the first new paragraph on page 353 it

was said it was not a case in which it failed

because of federal legislation, and then in
the third new paragraph there was a reference

to the fact that the legislation did appear to

have, in effect, a good purpose, as it were:

Nor can there be objection to the

avowed purpose of this enactment. We assume

that difficulties in sanitary regulation of

milk and milk products originating in

remote areas may present a situation in which

"upon a consideration of all the relevant

facts and circumstances it appears that the

matter is one which may appropriately be

regulated in the interest of the safety, health

and well-being of local communities ... "

Then, Your Honours, having made that assumption,

the court then went on, at page 354, about

yet to consider the application of the commerce point 2 of the first new paragraph on the page, clause, saying:

But this regulation, like the provision

invalidated in BALDWIN V SEELIG in paractical
effect excludes from distribution in

Madison wholesome milk produced and

pasteurized in Illinois. "The importer ..

may keep his milk or drink it, but sell it

he may not." In thus erecting an economic

barrier protecting a major local industry

against competition from without the State,

Madison plainly discriminates against

interstate commerce. This it cannot do, even in

the exercise of its unquestioned power to protect

the health and safety of its people, if reasonable
nondiscriminatory alternatives, adequate to

conserve legitimate local interests, are available.

CIT22/2/JM	35	30/5/89
Castlemaine
MR JACKSON (continuing):

A different view, that the ordinance is

valid simply because it professes to be

a health measure, would mean that the

Commerce clause of itself imposes no

limitations on state action other than

those laid down by the Due Process Clause,

save for the rare instance where a state artlessly discloses an avowed purpose to discriminate against interstate goods.

DAWSON J: These cases must have a limited relevance because

what th.is law does not do is to prevent acceptably

packaged beer from coming in from interstate because,

obviously, non-refillable bottles are not acceptable

or as acceptable as other containers.

MR JACKSON:  Yes, Your Honour, there is no doubt that is one

of the things that it does but, in our submission,

if one assumes that it does prevent non-refillable

bottles coming in, the question is whether the desire.

not to have non - - -

DAWSON J: That is a different question. That goes to what the

real intent behind the legislation is but what these

cases are talking about are laws which prevent

wholesome as well as unwholesome products coming in

and this is not that sort of case.

MR JACKSON: Well, with respect, Your Honour, the - - -

DAWSON J: Because it is not a question of wholesomeness or

otherwi~e. It is a question of acceptable packaging

or unacceptable packaging.

MR JACKSON:  Yes. Your Honour, similar tests have been applied

in packaging cases and the American cases do not really

distinguish between the application of this and similar

tests to cases involving packaging or cases involving

th~ wholesomeness or cases, indeed, not involving

questions of discrimination at all but questions such

as whether trucks of a particular kind may use the

highways of a State, may pass through the highways of

a State. They all involve a question of weighing one

interest against another, as it were, and Your Honour,

it is to that end that one looks to these cases to see

that a purpose which might otherwise be thought to be

absolutely neutral or, perhaps, beneficial, is not yet

the answer to a claim based on section 92.

BRENNAN J: 

Mr Jackson, do you espouse as a test the phrase in

the middle of page 354, namely "reasonable
nondiscriminatory alternatives" as a limitation on the
legislative power of a State when the exercise of

legislative power affects the cost structure of inter-

and intra-State industries?

ClT23/l/SH	36	30/5/89
Castlemaine(2)
MR JACKSON:	Yes.	Your Honour, what we would adopt is this:

we would say'reasonable nondiscriminatory alternatives

adequate to conserve legitimate local interesti'is the

expression that is used.

DAWSON J:	Yes.
MR JACKSON:	What we would adopt, really, Your Honour, is that

expression on the assumption that it is synonymous

with the test espoused by the Court in COLE V WHITFIELD

and that is the passage to which I referred earlier, I

think, at page 317, that a law which does serve some

purpose other than mere protectionism may yet fail

to comply with section 92 if it does so in a manner

or to an extent which brings about discrimination in

the sense used in section 92.

BRENNAN J:	The problem, then, becomes one of whether the test is for this Court to say whether there is a reasonable,
non-discriminatory alternative or whether that characterization is attributed only if this Court is
satisfied that the adoption of the legislative measure
was motivated chiefly or dominantly or perversely in
order to achieve discrimination.

MR JACKSON:  Yes. Your Honour, we would submit it is a question

for the Court - and I will say what the question is in a

moment - but it is a question for the Court and that it

is so is inherent in the nature, Your Honour, of
section 92. Section 92 is a provision which is, in the

end, to be interpreted by the Court. All courts are

bound by it as by other provisions of the CONSTITUTION

and the Court could not give up - and I do not mean

this in any offensive sense, of course - the obligation·
which it has to determine whether the legislative or

executive Acts or a State or of the Commonwealth

contravene section 92.

(Continued on page 38)

ClT23/2/SH	37	30/5/89
Castlemaine(2)

MR JACKSON (continuing): That is a very broad statement of

things, Your Honour. The question is then, what is

to be decided? And, what is to be decided, Your Honour,

is whether, in our submission, in the view of the

Court the legislative or executive measure is one

which whatever might be said about it by the State, is

one which does go beyond as a matter of fact, and I

use that in a relatively loose sense of the expression,

does go beyond what the State might do to protect

the interest which it says it is seeking to protect.

Now, Your Honour, when one looks at the view

of the State, no doubt it is entitled to respect, but it is not, in our submission, something which

binds the Court in determining the question, and

the view of the State is ultimately irrelevant if

what one arrives at is a situation where, whatever

the State says, rightly or wrongly, the position is
that the legislation or measure is one which, in effect,

contravenes section 92.

McHUGH J:	Mr Jackson, can I ask you some questions about
paragraph 27 of the stated case?.  The first three
sub paragraph  talk about the differ enc es between
non-refillable bottles and refillable bottles as
far as their strength is concerned, and then it
says:

At all material times and in ordinary and

usual use, non-refillable bottles are not and were not more likely to break or chip than refillable bottles.

Now, is "ordinary and usual use", is that intended to include the question of being filled and

refilled and washed four times, or - - -

MR JACKSON:  Your Honour, I think the answer is, no. sense that what paragraph 27(d), as I think we In the

would understand it to mean, is saying at all

material times in the ordinary and usual use

appropriate to that kind of bottle, a

non-refillable bottle being one not being refilled.

McHUGH J:  Now, the second thing is, what is the effect of
27(e):

The Executive Government believed that

non-refillable bottles were more likely

to break or chip than refillable bottles.

It says, "evidence came to their attention", it

seems to be left out - - -

MR JACKSON:	Your Honour, may I leave that to our friends to elucidate.	The relevance of the view of the
ClT24/l/FK	38	30/5/89
Castlemain(2)

Executive Government, whatever that might be

relevantly, Your Honour, is something which we

would submit is irrelevant for present purposes,

save for - in respect of the times in question

there - is irrelevant save for one exception and

that is, I suppose, in relation to the notification

under section 5d - - -

McHUGH J:  What about intention to discriminate?

MR JACKSON: Well, Your Honour, that is why I put it this way.

Your Honour, the particular passages that I

referred to there do not touch on that question.

MASON CJ: Mr Jackson, is there any difference in these

statements to which you have drawn attention in the

DEAN MILK COMPANY case at 354 and again the passage

in the simple paragraph on 356 from the statements

that were made in the NORTH EASTERN DAIRY case

at a time before discrimination was accepted as the

test under section 92, although it was discussed

then?

MR JACKSON:  Your Honour, not significantly I think, is the

answer, although I must say I have not really

sought to compare the two, but really to start afresh

as it were from COLE V WHITFIELD - Your Honour, may I

have a look at that question during lunch and see if

there is something I want to add to that.

DEANE J: Mr Jackson, while you are being quizzed on factual

matters and so on, can I ask you, is there any

material which shows the effect of the 15 cent

container refund on wine coolers, non-refillable

glass, on local industries?

MR JACKSON:  I think the answer is "No", Your Honour.

DEANE J: Does that not pose a problem? I mean, otherwise

you have this vast difference only imposed on a

product where it will not really affect local

industry but will affect interstate industry, but

you have got the wine cooler situation where the

same thing is being done and we know nothing about

it.

(Continued on page 40)

ClT24/2/FK	39	30/5/89
Castlemain(2)

MR JACKSON:  Your Honour, may I say two things about it? The

first is that I think there is a reference to it in

the listing of the places that are approved as

collection depots for various types of glass.

DEANE J:	I saw that, but that applies to refillable bottles.
MR JACKSON:	Yes.
DEANE J:	I mean, would it not be relevant to know if, in fact,

all the South Australian wine cooler manufacturers

were using refillable bottles?

MR JACKSON:  Your Honour, it may be, if one were looking at the

matter from a perfect situation of endeavouring to

work out - - -

DEANE J:  Yes, 82 provides the answer to what I asked.

MR JACKSON:  Thank you, Your Honour. Your Honours, where I was

a little while ago was on page 354 of DEAN MILK COMPANY

V MADISON and Your Honours will see at the end of the

long paragraph on that page, Their Honours said:

Our issue then is whether the discrmination

inherent in the Madison ordinance can be

justified in view of the character of the

local interests and the available methods

of protecting them.

They went on to say:

It appears that reasonable and adequate

alternatives are available -

a matter which they proceeded to discuss and then

the conclusion arrived at was at page 356, about

half-way down the page:

To permit Madison to adopt a regulation not

essential for the protection of local health

interests and placing a discriminatory

burden on interstate commerce would invite

a multiplication of preferential trade areas

destructive of the very purpose of the

Commerce Clause.

DAWSON J: One further interruption, Mr Jackson. Regulation 7

applies to cans as well as glass containers, does it,

so that the 15 cents is an imposition on cans

as well?

MR JACKSON:	Yes, Your Honour.
DAWSON J:	Thank you.
MR JACKSON:	Your Honours, could I come then to one of the leading decisions on the negative aspect of the commerce clause,

ClT25/l/VH	40	30/5/89
Castlemaine(2)

PIKE V BRUCE CHURCH, INCORPORATED, (1970) 397 US 137.

In that case an order was made prohibiting the shipping of cantaloupes from Arixona unless they were

packed in a manner which was approved in Arizona.

At page 141, in the opinion of the court, about three-quarters of the way down the page, about eight lines from the bottom of the page, Their Honours

refer to the fact that:

the application of the statute at issue here

would require that an operation now carried

on outside the State must be performed

instead within the State so that it can be

regulated there.

Then, Your Honours, at page 142, the principle is

stated in the first new paragraph on the page:

Although the criteria for determining the

validity of state statues affecting interstate

commerce have been various stated, the general

rule that emerges can be phrased as follows:

Where the statute regulates even-handedly to

effectuate a legitimate local public interest,

and its effects on interstate commerce are

only incidental, it will be upheld unless the

burden imposed on such commerce is clearly

excessive in relation to the putative local

benefits. If a legitimate local purpose is

found, then the question becomes one of degree.

And the extent of the burden that will be

tolerated will of course depend on the nature

of the local interest involved, and on whether
it could be promoted as well with a lesser

impact on interstate activities. Occasionally

the Court has candidly undertaken a balancing
approach in resolving these issues ...... but

more frequently it has spoken in terms of

"direct" and "indirect" effects and burdens.

(Continued on page 42)

ClT25/2/VH	41	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Now, Your Honours, the reference

to the question becoming one of degree, which
appears to be a paraphrase of what was said in

the few lines immediately preceding it, is one

which, in our submission, mirr.ors what was said by the Court

in COLE V WHITFIELD, in particular, Your Honours,

to such references as to the genuine object of the

Act or the re.al object of the Act, and the

question of manner and extent referred to in

COLE V WHITFIELD.

Could I also refer Your Honours, in relation to

EIKE to page.., 145 · and to the fifth line on that page,

the State's tenuous interest in having the

company's cantaloupes identified as originating

in Arizona cannot constitutionally justify the requirement that the company build and operate an unneeded $200,000 packing plant

in the State.

And, Your Honours, that is a reference again to the question of the relevance of a cost which

may be incurred in complying with the statute.

Your Honours, the approach taken in that case was

applied by the supreme court to a levelling case,

or levelling or equalization case, in HUNT V

WASHINGTON STATE APPLE ADVERTISING COMMISSION,

G.977) ,432 US 333. And,

Your Honours, by levelling~ in that sense, we

mean bringing the interstate trader to the level

of the less competative intrastate trader.

Your Honours, at page 336, commencing about

point 3, the basic facts are set out, and Your

Honour, I shall not go to those, but essentially

Washington State was the largest producer of

apples. It had its own system of grading and

North Carolina imposed a new system of grading

~hich was required to be used.

And Your Honours, at page 337, point 6 going

through to page 338, point 7, the Court discussed
the additional costs involved to the Washington

State producers of complying with the law of

North Carolina. The passage commences at page 337,

two-thirds the way down the page:

In addition to its obvious consequence -

and it goes on to two-thirds of the way down page

338, where Their Honour said again:

None of these costly and less efficient

options was very attractive to the industry.

CIT26/l/CM	42	30'5'./89
Castlemaine(2)

Your Honours will see again the

reference to that expression of "cost and

efficiency" and Your Honours, at page 349,

commencing at point 9:

As the appellants properly point out, not

every exercise of state authority imposing

some burden on the free flow of commerce

is invalid.

And some cases are referred to. And then,

Your Honours, at page 350, about point 4:

Moreover, as appellants correctly note, that

"residuum" is particularly strong when the

State acts to protect its citizenry in

matters pertaining to the sale of foodstuffs.

By the same token, however, a finding that state

legislation furthers matters of legitimate

local concern, even in the health and consumer

protection areas, does not end the inquiry.

Such a view, we have noted, "would mean that

the Commerce Clause of itself imposes no

limitations on state action ... save for the

rare instance where a state artlessly

discloses an avowed purpose to discriminate

against interstate goods." Rather, when

such state legislation comes into conflict

with the Commerce Clause's overriding
requirement of a national "common market,"

we are confronted with the task of effecting

an accommodation of the competing national

and local interests.

(Continued on page 44)

CIT26/2/CM	43	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, the observations

made there by the Court touch a little, I think,

on what Your Honour Justice Brennan asked me

a little while ago concerning the role of the

court.

BRENNAN J: It is a problem of defin'ing .what the criterion

of the court's action is: is it a mere

balancing exercise, as was suggested in

one passage in PIKE V BRUCE CHURCH; is it

determining what is reasonable; or is it

seeing whether or not the exercise of

legislative power can be regarded as one

in good faith?

MR JACKSON:  Your Honour, as to those, we would submit

that what the court has to do - and I say

"has to do" not in the sense of seeking to

impose a burden on the court but simply

seeking to say what is the function to be

performed by the court, or a court which

has to consider the question. Your Honour,

may I say that in defence of the burden,

because it may not always be the court

which is deciding at the first instance, at

least. What the court has to do in the end,

we would submit, is to examine the effect

of the proposed law in the first place.

When one looks at the effect of the law

in question, one may see that one of a number

of effects is revealed.. One of the effects

may be that there is some reason for enacting

it other than the protectionist reason.

When the court does that it may also see

that there is the protectionist reason. That

is the point at which the balancing exercise

comes into play, and, Your Honour, in doing

that the court has to see whether, in our

submission, which of the two is the dominant

one and whethe~ in doing something that the State	is entitled to do, the State in the end has gone,
in the opinion of the court, too far. So, there
is an element, Your Honour, which, to use the court's expression picked up from FREIGHTLINES in COLE V
WHITFIELD, the questions are political, political
in that sense: the questions are questions of
degree; they depend on particular facts. The
answers may change, depending on what facts are
before the court, but in the end, Your Honour, the question is one which the court has to decide
and has to decide as a matter of the court's view
whether the legislature has gone too far.

DAWSON J:	So that in that last situation, the simple question
is whether the law is·more protectionist than not.

CIT27/l/JM	44	30/5/89
Castlemaine(2)

MR JACKSON:  Yes, Your Honour, that is correct.

Your Honour, if I could proceed then

court saying:

with that case, at the bottom of page 350

As the District Court correctly f01IDd, the

challenged statute -

and then they discuss the practical effect of

the statute, saying, at the bottom of page 350:

This discrimination takes various forms.

The first, and most obvious, is the statute's

consequence of raising the costs of

doing business in the North Carolina market

for Washington apple growers and dealers,

while leaving those of their North Carolina

counterparts unaffected. As previously noted,

this disparate effect results from the

fact that North Carolina apple producers,

unlike their Washington competitors, were
not forced to alter their marketing practices

in order to comply with the statute.

We pass over the next sentence and go on:

Obviously, the increased costs imposed by
the statute would tend to shield the local

apple industry from the competition of

Washington apple growers and dealers who

are already at a competitive disadvantage

because of their great distance from the

North Carolina market.

Second, the statute has the effect of

stripping away from the Washington apple

industry the competitive and economic

advantages it has earned for itself through its expensive inspection and grading system.

Your Honours, that is discussed and then I go

to the last paragraph on page 351:

Third, by prohibiting Washington growers and dealers from marketing apples under their

State's grades, the statute has a leveling

effect which insidiously operates to the

advantage of local apple producers.

That is discussed, Your Honours, throughout that

paragraph and in the part where it is discussed

at page 352, on about the seventh line on the page:

CIT27/2/JM	45	30/5/89
Castlemaine(2)

MR JACKSON (continuing):

Such "downgrading" offers the North Carolina

apple industry the very sort of protection

against competing out-of-state products

that the Commerce Clause was designed to

prohibit. At worst, it will have the effect

of an embargo against those Washington apples

in the superior grades as Washington dealers

withhold them from the North Carolina market.

At best, it will deprive Washington sellers

of the market premium that such apples would

otherwise command.

At page 353, at about point 5, dealing with the

State's interest in protecting the citizens from

confusion and deception, Their Honours say:

The several States unquestionably possess

a substantial interest in protecting their

citizens from confusion and deception in the

marketing of foodstuffs, but the challenged

statute does remarkably little to further that

laudable goal at least with respect to

Washington apples and grades.

Your Honours, finally, in relation to that case, at

page 354, at about point 3:

In addition, it appears that nondiscriminatory

alternatives to the outright ban of Washington

State grades are readily available.

Now, Your Honours, that case demonstrates, in our submission, an approach which it is apposite to take

in the light of COLE V WHITFIELD to the consideration
of the validity of the instruments in question. Could

I also refer Your Honours to a case I mentioned before which is not a protectionism case but is one of the

cases involving trailers on roads. I want to do so

because, in that case, the Court, applying a similar

test, emphasized the factual nature of the inquiry

and that the result would depend, in the end, upon

the facts which were before the court. Your Honours,

that is RAYMOND MOTOR TRANSPORTATION, INC V RICE,

(1978) 434 USR 429. That was a case where there was

a prohibition on the use of 65-foot double trailers

on-Wisconsin roads. May I go, first, to page 436

point 3 where, at the commencement of the first new
paragraph on that page, Mr Justice Powell referred

to the fact that the:

Appellants presented a great deal of

evidence supporting their allegation that
65-foot doubles are as safe as, if not safer
than, 55-foot singles when operated on limited-

access, four-lane divided highways.

ClT28/l/SH	46	30/5/89
Castlemaine(2)

Then, at page 437, in the new paragraph on the page:

The State, for reasons unexplained, made no effort to contradict this evidence of

comparative safety with evidence of its own. The scepticism underlying what His Honour says appears

again at page 438, the commencement of the first new

paragraph where His Honour said:

Appellants also produced uncontradicted

evidence showing that their operations are

disrupted, their costs are raised, and their
service is slowed by the challenged regulations.

Now, Your Honours, I have mentioned that to indicate a question of evidence and what the evidence was and

what it amounted to was involved and Their Honours

then went on to indicate the test apposite at page 440,

in the first new paragraph on that page:

By its terms, the Cotmnerce Clause -

and so on and then, Your Honours, conunencing about the

middle of the page:

At the same time, however, it never has been

doubted that much state legislation, designed

to serve legitimate state interests and applied

without discrimination against interstate

commerce, does not violate the Corranerce Clause

even though it affects commerce.

Various cases are referred to including, about 10

lines from the bottom of the page:

The Court in the absence of congressional

guidance is called upon to make 'delicate

adjustment of the conflicting state and

federal claims' -

and then, three lines from the bottom of the page:

In this process of 'delicate adjustment',

the Court has employed various tests to express
the distinction between permissible and impermissible

impact upon interst:atecommerce, but experience

teaches that no signle conceptual approach

identifies all of the factors that may bear

on a particular case. Our recent decisions

make clear that the inquiry necessarily involves

a sensitive consideration of the weight and

nature of the state regulatory concern in light
of the extent of the burden imposed on the course

of interestate commerce.

PIKE V BRUCE CHURCH, INC is then referred to.	Then,
Your Honours, at page - - -

ClT28/2/SH 47 30/5/89

Castlemaine(2)	(Continued on page 47A)
McHUGH J:	But that passage just demonstrates how carefully

you have to be in using these American authorities

because South Australia, provided it did not
discrminate, could burden interstate commerce as

much as it liked, as long as it burdened intra-state

commerce at the same but you cannot do that in the

United States. I mean, a State has got to show a

legitimate State interest if it burdens interstate

commerce.

(Continued on page 48)

ClT28/3/SH	47A	30/5/89
Castlemaine(2)

MR JACKSON:	Yes, Your Honour, it has to show a legitimate State interest to burden interstate commerce
but it may do so.  But if it does so, Your Honour,
it has to apply it as is said at the middle of
page 440, without discrimination against
interstate commerce, and, Your Honour, it is right to say, of course, that the United States'
cases do not start from entirely the same base nor, indeed, do they cover quite the same area
as section 92, but there is a common area.
McHUGH J:	There may be but a State law which w0uld be invalid

because of the commerce clause may well be valid

under section 92.

MR JACKSON:  Maybe, Your Honour, yes. Your Honour, one

also has, of course, the fact that with the addition

of the words "trade and commerce and intercourse"
one has an area that brings Your Honour back

a little more, perhaps, to the American situation.

McHUGH J:  But the Chief Justice raised with you earlier

about whether DEAN MILK CO V MADISON took it

any further than NEDCO but does this take it any further than a case like KERR V PELLY in the High Court; that dealt with size of trailers,

did it not, in section 92?

MR JACKSON:  Yes. Your Honour, undoubtedly prior to COLE

V WHITFIELD those questions were debated and

dealt with by the Court under various tests but

what I am seeking to demonstrate in relation

to these cases is that they do show that the

issue is one of fact and that it is the Court

which, in the end, has to place its own assessment

on the facts and that in cases involving situations

bearing a general similarity to the present -

I am.speaking.about a conceptual similarity rather

than any factual one - the types of matters which
the eourt has taken into account are those which

we want to urge the Court should take into account

h~re.

So~ Your Honour, I am conscious of what

Your Honour says to me and I will endeavour to

be, I submit, quicker about it but the cases do demonstrate, in our submission, that the

factors which militate against the validity of

their instruments are ones which are germane,

in our submission.

Your Honours, I had ~eferred to the passage

at pages :441 .to 442 where PIKE V BRUCE CHURCH

was picked up. All I wanted to say.was this:

at page 442, Your Honours, there is a reference

in the middle of the page to the fact that the

evidence showed that the burden was:

C 1T29 /1 /ND.	48	30/5/89
Castlemaine(2)

substantial in terms of expense and

delay· - and that, at page 445, again in the first new

paragraph on that page, was treated as a matter

of cost which was not -

entirely irrelevant -

and Their Honours emphasized the factual nature
of the particular case by saying, at page 447,

in the fifth line from the bottom of the page·-

Our holding is a narrow one, for we do not

decide -

and then, Your Honours, at the bottom of~-~ page in

note 25, perhaps a little acidly, note the

responsibility of those involved in commec:e

clauS:! litigation to ensure that the facts are

properly presented.

Your Honours, the next case to which I wish

to go,· EXXON CORPORATION V MARYLAND·,

(1978) 437 US 117, also demonstrates, in our

submission, that the effect of the law impugned

need not be so that it applies equally to all

interstate traders. In that regard, Your Honours,

may I go to page 126 where, after referring to

the fact that the particular enactment did not

discriminate against interstate traders,

Their Honours went on to say, at the bottom of the page:

(Continued on page 50)

C l T 2 9 / 2 / ND_	49	30/5/89
Castlemaine(2)
HR JACKSON (continuing):

The fact that the burden of a state regulation

falls on some interstate companies does not, by

itself, establish a claim of discrimination

against interstate commerce.

And then they went on to expand upon that in note 16:

If the effect of a state regulation is to cause

local goods to constitute a larger share, and

goods with an out-of-state source to constitute

a smaller share, of the total sales in the

market - as in HUNT V DEAN MILK - the regulation

may have a discriminatory effect on interstate

commerce. But the Maryland statute has no

impact on the relative proportions of local and

out-of-state goods sold in Maryland and, indeed,

no demonstrable effect whatsoever on the

interstate flow of goods.

And, Your Honours, the point to which I wish to

refer there is that although it may be that there is
someone else engaged in interstate trade in the

particular case who is not effected by the particular

provision, such as Carlton and United breweries

already selling into South Australia from Victoria,

the fact that not everyone is affected by the

imposition does not mean that those who are affected,

such as us - the only other large brewing group in

Australia - and does not mean that there is not yet

an interference with interstate trade. Your Honours,

that is again a question of fact and degree.

Your Honours, could I next go to

CITY OF PHILADELPHIA V NEW JERSEY, 437 US 617 (1978). Your Honours, that is a case in which waste had become an item of commerce, or it was held by the Court,

and at page 623, towards the end of the page, the

purpose expressed by Mr Justice Jackson in HOOD's

case:

"This principle that our economic unit is the

Nation -

was again stated, and at the bottom of the page:

The opinions of the Court through the years

have reflected an alertness to the evils

of "economic isolation" and protectionism,

while at the same time recognizing that

incidental burdens on interstate commerce

may be unavoidable when a State legislates to

safeguard the health and safety of its people.

Thus, where simple economic protectionism is

effected by state legislation, a virtually

per se rule of invalidity has been erected .....

The clearest example of such legislation is a law that overtly blocks the flow of interstate

50   30/5/89

81T30/l/]:>R astlemaine(2) (Continued on page 50A)

we must inquire (1) whether the challenged

statute regulates evenhandedly with only

"incidental" effects on interstate cormnerce,

or discriminates against interstate cormnerce,

either on its face or in practical effect;

(2) whether the statute serves a legitimate

local purpose; and, if so, (3) whether

alternative means could promote this local

purpose as well without discriminating against

interstate cormnerce.

Two-thirds of the way down the page after the reference to HUNI' V WASHINGTON APPLE:

Furthermore, when considering the purpose of a

challenged statute, this Court is not bound by
"the name, description or characterisation
given it by the legislature or the courts of

the State," but will determine for itself the

practical impact of the law.

Your Honours, at page 337, five lines from the bottom

of the page:

The fiction of state ownership -

that is, of wild game -

may no longer be used to force those outside
the State to bear the full costs of "conserving"
the wild animals within its borders when

equally effective nondiscriminatory conservation

measures are available.

His Honour goes on to say:

Far from choosing the least discriminatory alternative, Oklahoma has chosen to "conserve"

its minnows in the way that most overtly

discriminates against interstate cormnerce.

At the bottom of the preceding page, page 337, in

note 17, there is a reference to a passage from

PHILADELPHIA V NEW JERSEY to which I referred

earlier and then at page 338 under the heading III:

The overruling of GEER does not leave the States

powerless ..... Today's decision makes clear,

however, that States may promote this legitimate

purpose only in ways consistent with the basic

principle, that "our economic unit	is the
Nation."

ClT31/2/VH	52	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, LEWIS V B.T.

INVESTMENT MANAGERS INC, (1980) 447 US 27 was a

case which dealt with two questions. They appear

at the top of page 35 and, Your Honours, at page 36

there are references to the earlier cases and then

about half way down page 36 immediately after the

reference to BALDWIN V SEELIG:

However important the state interest at hand, "it may not be accomplished by

discriminating against articles of commerce -

and so on, and then, Your Honours, commencing about

three-quarters of the way down the page:

The Court has observed that "where -

then the passage is quoted to which I referred before,

then:

In contrast, legislation that visits its

effects equally upon both interstate

and local business may survive

constitutional scrutiny if it is narrowly

drawn. There is the reference then to PIKE V BRUCE CHURCH

and then, Your Honours, a third of the way down page 37:

The principle focus of inquiry must be the

practical operation of the statute, since

the validity of state laws must be judged

chiefly in terms of their probable effects.

MASON CJ:  These cases mainly seem to reiterate what has been

said before.

MR JACKSON:  Yes, Your Honour, that is true, although what

they do do is to illustrate the way in which the Court,

in effect, more and more as time goes by, deals with

the practical application of the particular enactment

and weighs up entirely overtly what is being done,

what the effect of the law is, and against other

measures that may be apposite.

(Continued on page 54)

ClT32/l/HS	53	30/5/89
Castlemaine(2).

MR JACKSON (continuing):  Your Honours, so far as

the particular case is concerned, Your Honours

will see at page 42, about a quarter of a way

down the page and going on from there, a

discussion of the effect of the law. Then,

Your Honours, at page 43, half-way down the

page, Their Honours consider the alternatives:

Nor is there any reason to conclude that

outright prohibition of entry, rather than

some intermediate form of regulation, is the

only effective method of protecting against

the presumed evils, particularly when other

out-of-state businesses tha:may be just

as large or far-flung - ·

and so on. Then, Your Honours, at the bottom of

the page:

In almost any Conrrnerce Clause case it would

be possible for a State to argue that it has

an interest in -

and then it lists the various State matters and

then at the top of page 44:

Yet these arguments are at odds with the general principle that the Conrrnerce Clause

prohibits a State from using its regulatory

power to protect its own citizens from outside

competition.

Your Honours, at the end of that paragraph,

Their Honours say:

There is thus no reason to believe that the

State's interst in local control, to the

extent it legitimately exists, has been

significantly or evenhandedly advanced by

the statutory means that have been employed.

Where, Your Honours, a statute is one that

has a number of purposes, one of which has

an effect which is discriminatory, was discussed

fairly fully in MINNESOTA V CLOVER LEAF CREAMERY

COMPANY (1981) 449 US 456. That was a case

where Minnesota had banned the retail sale of

milk in plastic non-returnable, non-refillable

containers but permitted the sale in other

contaimers. Your Honours, at page 462 the issue

was stated, at bhe third line:

(Continued on page 55)

CIT33/l/JM	54	30/5/89
Castlemaine(2)
MR JACKSON (continuing):

Thus, the controversy in this case centers on the narrow issue whether the

legislative classification between

plastic

I am sorry, Your Honour, I was ref erring in error to

discussion by the Court under the equal

protection clause The discussion by the Court in

relation to the question of the application of the

connnerce clause connnences at page 471.

MASON CJ:  Now, that is the first time the test has been

stated in the way in which it appears at 462 and

463, is it not?

MR JACKSON:  Your Honour, that is not in relation to the

connnerce clause.

MASON CJ:	Not in relation to the connnerce clause?
MR JACKSON:	No. At page 461, under the heading II,

Your Honour will see the reference to the equal

protection clause. That discussion continues

until page 470. Now, Your Honours, at page 471,

a statement of the principle is set out in the

first paragraph on that page and then, Your Honours,

at page 472, in the first new paragraph,

Their Honours say:

Since the statute does not discriminate

between interstate and intrastate connnerce,

the controlling question is whether the

incidental burden imposed on interstate

connnerce by the Minnesota Act is "clearly

excessive in relation to the putative local

benefits."

And then they proceed to discuss the facts of

the case in arriving at that conclusion.

Your Honours, would this be a convenient time?

MASON CJ: Yes. We will adjourn until 2.15 pm.

AT 12.44 PM LUNCHEON ADJOURNMENT

C 1T34 / 1 / JH · 55 30/5/89

Castlemaine(2)

UPON RESUMING AT 2.15 PM:

MASON CJ: Yes, Mr Jackson.

MR JACKSON:	Your Honour the Chief Justice asked me before lunch about the relationship between propositions
I was advancing and the observations of members of
the Court in NORTH EASTERN DAIRY CO LTD V DAIRY INDUSTRY AUTHORITY OF NEW SOUTH WALES

:1975) 134 CLR 559, and in the passage in

Your Honour's judgment at pages 606 and following - - -

MASON CJ: What pages of the report?

MR JACKSON:  606, Your Honour. Your Honour there is engaged

upon an exercise which certainly has considerable

similarities with the approach which we are

suggesting and I will come to it in just a moment

Your Honours, but one thing that it does indicate is

that the task in which the Court is engaged, however

one may describe it exactly and whatever might be the
precise test, is one in which the Court has engaged

in the past and is one which does not seem to involve

particular difficulties in reaching an ultimate

conclusion.

Your Honours, in that regard, the particular

passage I want to refer to is the bottom of page 606

where Your Honour said:

This approach takes account of the practical

effect of a law.

Then proceeded to say that:

The contrary view has no secure base in s.92 -

and, Your Honours, one goes from there up to the

look at the practical effect that is:

top of the next page, that is, if one does not

to reduce the constitutional prohibition
to a legal formulation which may be readily

circumvented.

Then Your Honour discusses in the next paragraph the operation of the regulation and goes on to say, about

two-thirds of the way down that paragraph, that is the

"direct and immediate operation of the law". Then

Your Honour proceeds to say, half-way down the page:

ClT35/l/FK -	56	30/5/89
Castlemaine(2)
MR JACKSON (continuing):

As the prohibition discriminates against

the products of other States, unless it

can be justified as a regulation of

interstate trade, it falls within the field

of operation of s. 92.

In the next paragraph Your Honour discusses

section 92 and about eight lines from the bottom

says:

A law which does no more than protect the community from hazards affecting health

is regulatory in the relevant sense.

And then, at the top of the next page, in the

first new paragraph:

The defendant argued that it was a

reasonable regulation of the trade in

pasteurized milk to require that

and so on. Then, Your Honours, in the second

sentence of that paragraph:

Why departmental officers are unable to

inspect premises in Victoria was not

explained. Nor was it explained why

observance of prescribed standards could

not be made a condition of a certificate

so as to enable cancellation of the

certificate should non-compliance occur.

Your Honour, in the next paragraph:

An alternative means of achieving a

similar result would be to make it an offence

to sell pasteurized milk ..... no persuasive

reason was advanced why such a method of

regulation was inadequate to maintain the

desired purity of pasteurized milk.

Then Your Honour dealt with the argument that:

it was for the legislature to choose the

method of regulation which it thought

necessary or desirable.

And Your Honour said, again, that was to disregard

section 92 and that:

It is for the defendant to show that the

regulation is permissible and, to do so, it must satisfy the Court as a matter of

fact that the method of regulation selected -

C1T36/l/ND 57 30/5/89

Castlemaine(2) (Continued on page 57A)

and so on,	1nd Your Honour dealt with the
question w	ther that had or had not been
shown.

Your Honours, that type of examination is,

with respect, not very different or if different

at all from the type of examination into which

the Court needs to go, with respect.

MASON CJ:  Except within the context of reasonable

regulation rather than discrimination but, of

course, it leads to the conclusion that there

was discrimination in that case.

(Continued on page 58)

ClT36/2/NU	57A	30/5/89
Castlemaine(2)

MR JACKSON:  Yes. And, Your Honour, the fact that it is

discriminatory is referred to in the second-last

paragraph on page 608. I would refer also,

Your Honours, to page 578 and 579 in the judgment

of Chief Justice Barwick. Your Honours, so that

the type of examination is one which, in our
submission, is the type of examination which the

Court needs to engage in in dealing with, as was

said at page 317 of COLE V WHITFIELD, the question

whether a law which may otherwise be justified by

reference to an object which is not protectionist

discriminates against interstate trade and commerce,

whether it does so in a way or to an extent that

warrants characterization of the law as protectionist.

Your Honours, in the NORTH EASTERN DAIRY case,

in two passages that are from Your Honour the

Chief Justice's judgment, reference was made to the	fact that the mere description of the law by,
for example, the legislature as being of a certain type or fulfilling a certain function, is not the decisive matter. And, Your Honours, a similar proposition was put quite vividly in the Supreme
Court of the United States in KASSEL V CONSOLIDATED
FREIGHTWAYS CORP. OF DELAWARE, 450 US 662 (1981)
at page 670. Your Honours, this is a case which is
similar to the case to which I referred earlier,
namely RAYMOND MOTOR TRANSPORT INC. V RICE - the
65-foot double trailers. At page 670, in the
paragraph commencing a little past half-way down the
page, Mr Justice "Powell said: :

But the incantation of a purpose to promote

the public health or safety does not insulate a

state law from Commerce Clause ·attack.

Regulations designed for that salutary

purpose nevertheless may further the purpose

so marginally, and interfere with commerce so

substantially, as to be invalid under the

Commerce Clause.

(Continued on page 59)

ClT37/l/DR	58	30/5/89
Castlemaine(2)

1:1R JACKSON (continuing):  He was saying that.in reference to

what appears immediately above it in the

preceding paragraph, that the Court, in relation

to observations that the Court would not second -

guess legislative judgment, but he applied a

qualification to it, which is the qualification

about the incantation of the purpose.

Your Honours, as to the United States cases,

the last to them to which I wish to go in any

detail is BACCHUS IMPORTS LIMITED V DIAS.

Your Honours, the United States Reports reference is

(1984) 468 US 263. Mignt I inquire if Your

Honours have that reference or -

MASON CJ:	Yes.
1:1R JACKSON:	And, Your Honours, that was a case in which the

Hawaii Liq_uor. -Tax imposed a 20. per cent excise tax on

sales of liquor at wholesale, but exempted some

locally produced beverages from the tax and it

was a case which, in a sense, is the opposite of

cases which say that the freedom conferred by section 92, if I could put it loosely, may be

relied upon, although the imposition in question

is not one which attacks every person engaged in

interstate trade. This really is in a sense the

obverse of it because although the exemption did

not apply to all local products of the type, it

applied to some of them and it was still held that

it would contravene the negative aspect of the

commerce clause.

Now, Your Honours, at page 270, the

paragraph commencing:

A finding that state legislation constitutes

"economic protectionism" may be made on the

basis of either discriminatory purpose or

discriminatory effect. Examination of the

entitlement to a more flexible approach

State's purpose in this case is sufficient to demonstrate the State's lack of

permitting inquiry into the balance between

local benefits and the burden on interstate

commerce.

Then there is a reference to the finding of the Supreme Court or Hawaii and tour Honours,

at page 271, the first paragraph:

Thus, we need not guess at the legislature's motivation, for it is undisputed that the purpose of the exemption was to aid Hawaiian

industry. Likewise, the effect of the exemption

is clearly discriminatory, in that it applies

only to locally produced beverages, even

though it does not apply to all such products.

CIT38/l/CM	59	30/5/89
Castlemaine(2)

MR JACKSON ( continuing) :

Consequently, as long as there is some competition between the locally produced

exempt products and nonexempt products

from outside the State, there is a
discriminatory effect.

Your Honours, at page 273 there is a reference to something which has recurred, in the paragraph

commencing:

We also find unpersuasive the State's

contention that there was no discriminatory

intent on the part of the legislature

because "the exemptions in question were

not enacted to discriminate against foreign
products, but rather, to promote a local

industry."

Their Honours said that if they were to accept that

they would have very little occasion ever to find

a statute unconstitutionally discriminatory.

Virtually every discriminatory statute allocates

benefits or burdens unequally; each can be viewed

as conferring a benefit on one party and a
detriment on the other ..... The determination

of constitutionality does not depend upon whether

one focuses upon the benefited or the burdened

party.

They go on to say that it requires a comparison

in each case.

Your Honours, could I mention also,

SUPREME COURT OF NEW HAMPSHIRE V PIPER (1985)

470 US, 274 and I would refer Your Honours to

pages 280, 284 and 285 as applications of the

tests to which I have referred in relation to the

requirements for admission to the bar of the

Supreme Court of New Hampshire, a matter with

which Your Honours may not be unfamiliar.

(Continued on page 61)

CIT39/l/JM	60.	30/5/89
Castlemaine(2)

MR JACKSON (continuing): Now, Your Honours, may I move from

those cases to one further matter before I go on to

deal with the facts appearing in the special case

and that is, in relation to the operation of

section Sb of the Act. Could I take Your Honours -

BRENNAN J:	Mr Jackson, before you go there, could I take you back to something that took my eye in KASSEL V
CONSOLIDATED FREIGHTWAYS. It seems that in the
United States there are some categories of laws and,
notably, those relating to safety, where the court
has a different and, perhaps, more relaxed approach
to the consideration of the operation of the commerce clause than in others. Here, it is said, for example,
citing RAYMOND:

"If safety justifications are not illusory,

the Court will not second-guess legislative

judgment about their importance in comparison -

In other cases, the court does second-guess the

legislative judgment of comparison.

MR JACKSON:  Yes. Your Honour, the observation about

second-guessing legislative judgment does not,

with respect, appear really to be borne out as

being other than, if I might put it this way, a
declamatory view of results as distinct from the

approach to be taken, if one looks at the two cases

to which I have referred Your Honours dealing with

the particular topic. The first of those, of

course, was RAYMOND's case; the second was KASSEL

itself and in each of those two cases, the approach

which was adopted was one of saying that one had to

look at the situation and look at the matter as a

question of fact. Now, Your Honour, if one were to

go back to RAYMOND's case, that is the case in which

Mr Justice Powell referred to what the evidence had

been and Your Honour will recall about the safety of

trailers and other matters, and he commented

adversely, in a sense, upon the absence of evidence

saying that if safety justifications are not illusory	the other way but it is apparent from that that, in	the Court will not second-guess legislative judgment
about their importance, what is really being referred
to is that on questions of safety the Court will have to look at the evidence but would be inclined, no doubt because of the nature of the issue if the
question were one of doubt, to find a view which
was not a second-guessing of the legislator's view
about it.

(Continued on page 62)

ClT40/l/SH	61	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  So, Your Honour, it may be really

not a different test, but a different application
of the test, and it would not be correct, in our

submission, to treat the passage about not

second-guessing as setting out the principle,

particularly when it appears in two cases, and if

I could just refer Your Honour to KASSEL at page 670

where, immediately after referring to that there is

the reference to fact that the incantation is enough

and that one has to look at the facts of the case.

And, Your Honour, also particularly when the

decision in the other case is one that is expressed
again and, as it were, again to turn on the facts

and where particular reference is made by the Court

in its footnote to the judgment to the fact that

these cases do turn so much on the facts. Could I,

Your Honour, go in relation to KASSEL in relation to
Your Honour's question, to a couple of pages I did

not give a reference to. One is at page 675,

Your Honours, this is 450 US 675, and the proposition

that is dealt with that Your Honour mentioned to me

is expanded upon perhaps a little at page 675 in

the first new paragraph on the page:

The Court normally does accord "special deference" to state highway safety regulations.

..... This traditional deference "derives in

part from the assumption that where such

regulations do not discriminate on their face

against interstate commerce, their burden

usually falls on local economic interests as

well as other State's economic interests, thus

insuring that a State's own political processes

will serve as a check against unduly burdensome

regulations." Less deference to the legislative

judgment is due, however, where the local

regulation bears disproportionately on out-of-state

residents and businesses.	Such a disproportionate
burden is apparent here.

Now, Your Honour, at page 678, immediately under the

heading "V", Their Honours say: 

In sum, the statutory exemptions, their history,

and the arguments Iowa has advanced in support of

its law in this litigation, all suggest that the

deference traditionally accorded a State's

safety judgment is not warranted.

And the reference is there to RAYMOND, and I think
Your Honour will find that the pages referred to
are those in which emphasis is made in RAYMOND's case
about the matter being ultimately one of fact, and I
should also have said, Your Honours, at the bottom of

page 670 of KASSEL, still dealing with the point

Your Honour raised, that RAYMOND is there dealt with at

Cl T41/ 1 /FK	62	30/5/89
Castlemain(2)

the bottom of the page, irrnnediately after the
passage I _earlier cited, emphasis is laid on the

weighing of the matter involved and, of course,

reference at the top of the next page as well to

PIKE V BRUCE CHURCH, INC.

Your Honours, I was about to go to the terms

of section 7 of the Act as amended and, Your Honours,

in relation to section 7, that is at page 19 of the

volume of statutes Your Honours have seen that it

compels the plaintiff's retailers to accept returns of bottles and to pay refunds in respect of bottles in which their beer was sold regardless of whether

the bottle was sold by the particular retailer and

regardless of amount. Section Sb, which permits

ministerial exemption from that, only permits the

exemption for bottles which are refillable and

bottles in respect of which, paragraph (c):

proper arrangements have been made for the

re-use of the containers when returned to

collection depots by refilling as referred

to in paragraph (a) -

that is, presumably refilling by something of the

same nature -

and by re-use of the glass -

presumably when they have come to a point when they

can no longer be refilled or otherwise broken or

unsuitable.

(Continued on page 64)

ClT41/2/FK _	63	30/5/89
Castlemaine(2)

MR JACKSON (continuing): Your Honours, it is impossible

for exemption to be gained from section 7 in

respect of non-refillable bottles and because

an exception - Your Honours, I should also say

that in respect of bottles which are refillable

and in respect of which an exemption is granted,

there is not then the requirement of section 7

which is applicable to it. All that is applicable

is section 10 which provides that:

A retailer must not sell ..... a beverage

for consumption off the premises of the retailer in a container of a particular

description unless the place or premises
from which that sale takes place is situated

within a collection area delineated in

relation to a collection depot which will

accept delivery of containers of that

description.

And it is provided by subsection l(a) that that

section:

does not apply to containers to which

section 7 applies.

Your Honours, a collection depot must bear,

of course, some relation to a collection area

although the Act does not prescribe specifically

that it must be located within it. A collection

area must be in South Australia - that is provided

for by section 4 in the definition of "collection

area" - but the obligation, for example, that

one finds in section 10(1) for retail sales to

be made only from premises within a designated

collection area suggests that, as a matter of common sense, the designated collection depot

in respect of an area is likely to be situated

either in or near to the collection area. It

may not necessarily be exactly within it.

Your Honours, the only way in which the

plaintiffs - - -

McHUGH J: Section 9 deals with it to some extent, does

it not?

The Minister ..... approves ..... a	collelction
depot .....

(b) delineate a collection area in relation

to that collection depot.

MR JACKSON:  Yes, Your Honour, there has to be a relationship

and the point I was making, simply noting

about it, Your Honours, was that there no absolute

requirement that the collelction depot be within

64   30/5/89

Castlemaine(2)

the collection area and it is possible to imagine,

for example, that the collection depot for an

area outside a town might be within the town

and that would be the collection depot for the
town as well.

But, Your Honours, having said that, the

only way in which the plaintiffs could take
advantage of the possibility of exemption under

section 7 by the operation of section Sb is by

making arrangements for the refilling and

recycling of its bottles via collection depots

and the collection depots are highly likely as

a matter of practicality to have to be in South

Australia.

Your Honours, what that will mean, of course,

is that assuming that the collection depots are

in or are near to South Australia, a company

which is an interstate company and which has

to make the proper arrangements contemplated

by section 5b(2)(c), has to make proper arrangements

for those containers to be returned to collection
depots and then to be transported for refilling
because the purpose of taking them back to the

collection depot is as section 5b(2)(c) says:

proper arrangements have been made for the

re-use of the containers when returned to

collection depots by refilling as referred

to in paragraph (a) -

So that, Your Honours, in order for a person

who is an interstate participant to acquire an

exemption under section 5b(2) - what that person

has to do is to demonstrate that there is a

collection system which will collect and

transport its bottles back to its brewery for

refilling.

(Continued on page 66)

ClT42/2/ND	65	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honours, as a matter of

geography and political boundaries and also

as a common feature of the location of breweries

in relation to their markets it will follow

almost inevitably that South Australian brewers

will be physically closer to the relevant

collection depots than will any interstate

brewers. It is possible, of course, for there

to be peculiar positions arising in relation

to brewers which are near a border, but generally

speaking South Australian breweries which are

local in the sense of being located in South

Australia in or near their South Australian

markets will always be closer to the relevant

collection depots than will interstate brewers

such as the plaintiffs.

McHUGH J:	I am sorry, I am not following you. Where do
you say the Act requires the collection depot
to convey the bottles to your clients out of State?
MR JACKSON:	No, Your Honour, I did not, with respect,

quite say it. What I was saying was this: in

order to becane exempted under section 5b(2)

what is necessary for the person seeking

exemption of the containers to demonstrate is,

amongst other things, paragraph (c):

that proper arrangements have been made for

the re-use of the containers when returned

to collection depots by refilling as

referred to in paragraph (a).

McHUGH J: Yes.

MR JACKSON:  Your Honour, that is what has to be shown

and in order to satisfy that requirement,

what interstate brewers would have to demonstrate

is that there would be a collection system

which would allow the containers to be returned to

the collection depots and then transported back
to them for refilling.	Your Honours, that would

mean that in order to do that they are faced

by costs which,we would submit, would necessarily

be greater than those which would be incurred

by someone in South Australia who was seeking a

similar exemption because they have - - -

McHUGH J: Are you saying that the proper arrangements

include a system for the return of the collection

depots as opposed to a proper arrangement for

re-using containers which have in fact been
returned to the collection depots?

MR JACKSON:  Your Honour, what I am saying is that

what has to be shown is that there are proper

CIT43/l/JM	66	30/5/89
Castlemaine(2)

arrangements which have been made for the

re-use of the containers once they have got to

the collection depots by refilling.

McHUGH J:	Yes.
MR JACKSON:	Meaning by that that they have to be refilled,

in effect, by the brewer.

McHUGH J: So do the intrastate brewers have to do the same

thing?

MR JACKSON:  Yes, Your Honour. I entirely accept that

but the point I am seeking to make about it is

that the interstate brewer is necessarily at

a - when I say "necessarily" it is putting it

slightly too highly, but in almost every case

the interstate brewer will be at a disadvantage

because the interstate brewer will have to

transport his bottles from there back to his

brewery for the purpose of refilling in

accordance with paragraph (a). So that the

interstate brewer is faced with costs, in our

submission, which necessarily in that sense are

greater than those which the local brewer would

have.

The interstate brewer is at a disadvantage

in considering whether to incur the costs of

participating in the collection system and

he has to incur those costs before the marketing

advantages, which are derived by exemption from

section 7, can be enjoyed. That disadvantage

and the disadvantage of not gaining exemption

from section 7, if they decide they should not

incur the costs of participating,are ones which

are protectionist in effect, in our submission.

Your Honours, could I move from that now to the terms of the special case and to deal with a

number of the paragraphs of it. (Ctoninued on page 68)

CIT43 /2 / JM -	67	30/5/89
Castlemaine(2)

DAWSON J: Just before you do that, Mr Jackson,

I do not really understand the position with cans but it is that there is no discrimination either

in purpose or effect to be derived £ran the legislation

in relation to the use of cans, is that right?

MR JACKSON:  I am sorry, Your Honour, in relation to the use

of cans?

DAWSON J: Yes.

:MR JACKSON:  Yes, that is so.

DAWSON J: Although it is the same 15 cents that is charged

in relation to those.

MR JACKSON: It is the same 15 cents, yes, Your Honour.

Your Honours, I was just going to go to the special case and I wondered if I might take Your Honours

first to page 2 · of it, and Your Honours will see

that in paragraphs 1 and 2 there is a history

of the brewery industry in Australia up to the

period of the 1970's in paragraph 1. Then in

paragraph 2 there is a reference to the various

merges which occurred prior to 1985 and in

paragraph 4 :

Since about 1985 -

the three plaintiffs and Carlton United Breweries -

have emerged as the two major national brewing

groups in Australia ..... together.they account

for in excess of 90.7% of the market for

packaged beer in Australia.

Your Honours, as to the marketing of beer,

paragraph 5 indicates a change which occurred and

the particular change is set out in the first two

sentences of it, and the third:

The marketing of some brands has become

national as well as local. This has chiefly

been the result of the activities of -

the two major participants in the market. Paragraph 6

sets out the current market shares of the two major

brewers and Your Honours will see that they have

compared with other participants the "lion's share"

as it were and that they ar~ the two groups together,

are the substantial participants in it. Your Honours,

at paragraph 7:

Approximately 65% of the total quantity of

beer sold in South Australia prior to 1986 was

packaged beer.

And, Your Honours, the document then sets out at

.page 4 the shares which obtained in 1985 in

South Australia in the packaged beer market, that is,

ClT44/l/DR	68	30/5/89
Castlemaine(2)

prior to the marketing campaign into which the group

entered. Now, Your Honours will see that the first,

second and third plaintiffs had only a fraction of the

market, a very small fraction: the South Australian

Brewing Company had 77.4 per cent; Coopers 3.8 per cent

and Carlton United Breweries 18.6 per cent. And,

Your Honours will also see from that that the only

significant possible new entrant into the market was

one or more of the three interstate brewers constituting

the Bond Brewing Group - there was no other possible

significant participant.

Your Honours, in the next table which is June and

July 1986, that shows that there had been an increase,

and this is in consequence of the marketing campaign
and I will come to the timing of that just a little

later - there had been an increase in the market shares

of the three plaintiffs to 4.0 per cent. In fact, as

Your Honours will see a little later, that increase

occurred in the space of two months. It occurred -
the marketing campaign commenced in January 1986, in

January and February 1986 they had got to 4.0 per cent -

the amending Act was introduced on 3 March. They were

hoping to get to 10 but of course that was that.

Your Honours will also see where the 4.0 per cent

came from in the sense that it came from the South

Australian Brewing Company.

(Continued on page 70)

ClT44/2/DR	69	30/5/89
Castlemaine(2)

MR JACKSON (continuing): Now, Your Honours will also

see the third table on page 4 inoicates the present

position. We went back to one per cent rather than

point one per cent. The South Australian Brewing Company

is back to 78 per cent and Carlton United Brewery is 17 per

cent. Now, Your Honours, the Carlton United

Brewery beer, paragraph 8, is produced in

Victoria and produced in refillable bottles.

Your Honours will see that in September 1988

Carlton and South Australian Brewing Company entered into the agreement for the brewing of

the Carlton product in South Australia and

Your Honours, I shall not read out paragraphs

8 and 9, but I refer Your Honours to them.

Now, Your Honours, moving from there, in

paragraphs 10 and following there is a discussion

of the figures for the sale of beer in cans and

bottles in Australia and in South Australia, and

Your Honours will ~ee from the bottom of page 5,

a rather striking figure that in the national market

61. 74 per cent of beer is sold in glass bottles

and in South Australia 97 per cent and in Daragragh 11,

Your Honours, what had been the standard iarge

bottle of beer up to the 1970s, began to lose

out and since about 1975 there has been a marked

trend away, throughout Australia, from that

in favour of beer in smaller bottles and Your

Honours will see here the figures for the sale of

those bottles throughout Australia and South

Australia and in particular that, Your Honour,

at the bottom of the page in the second half of
the page - until the 1970s, beer was chiefly sold
in refillable bottles, that has changed, and the

figures. are there set out, and Your Honours will

see that the nationwide figure is 28. 5 per cent in

refillable and 71% per cent in non-:refillable.

In South Australia it is 98. 8 per cent in refillable glass bottles and one notes,of course, the

principal method of sale in Australia in the

Australian free market, if I might use that

expression, Your Honours, is the sale of beer

in non-refillable bottles, except in South Australia.

Now, Your Honours, paragraph 12 refers to the

economic advantages to producers in using non-

refillable bottles and it says that the trend

towards non-refillable bottles has occurred in

all the States except South Australia. Now,

Your Honours, in paragraph 13, Your Honours will

see that the three companies that still sell

presentl? any large quantity in South Australia use

predominently retillable bottles and in paragraphs

14, 15 and 16 in relation to the three plaintiffs,

Castlemaine Tooheys, the Brisbane brewer, only

uses a refillable large bottle for some products

in the Queensland market, but intends to discontinue

CIT45/l/CM 70 30/5/89

Castlemaine (2)

that in two years. Tooheys, paragraph 15, does not use a refillable bottle at all and the Swan

Brewery is in a position similar to that of the

Queensland Brewery.

And paragraphs 19, 20 and 21, each of the

plaintiffs produces beer only in one State.	Your
Honour, we think the word"refillable"should be

in the last line of paragraph 17, before 375ml.

(Continued on page 72)

CIT45/2/CM	71	30/5/89
Castlemaine (2)

11R. JACKSON (continuing):  Your Honours, paragraphs 22 and

following deal with a system of voluntary return

for refillable beer bottles and soft drink bottles

in South Australia prior to 1977. Paragraph 25

says that:

In 1975, the SAB began to use non-refillable

375ml bottles -

but did not do so after the Act came into force.

Your Honours, paragraph 27 deals with the

characteristics of the various bottles and, if

one goes then to paragraph 32, Your Honours will

see that the first version of the BEVERAGE CONTAINER

ACT came into operation on 1 July 1977 and that the

refund amount, at that point, was five cents. The

regulation appears at page 26 of the volume of statutes
and, at the bottom of page 27 in the penultimate

paragraph numbered 4, there is the declaration that:

the "refund amount" in relation to any

container -

was -

an amount of Sc.

Now, Your Honours, that five cent refund amount did

not apply to refillable beer bottles because of a

regulation which came into force at the same time

and that was the original form of regulation 5 which

excluded from the operation of the Act glass containers

which were refillable beer bottles. That appears at

page 28 of the volume of materials, regulation 5(1).

The form of regulation set out at page 28 there

excludes in regulation 5(1) - I should say that in the

form in which it is set out in paragraph 3.4 at page 12
of the special case, the word "filled" should be

"refilled" in the second-last line of the regulation.

non-refillable beer bottles. So that, Your Honours, there was some discrimination in amounts, as it were, between refillable and The plaintiffs then mounted a campaign to obtain

a share of the market and that appears at paragraph 42.

The campaign began in January 1986. They established

a distribution system and they spent approximately

$600,000. As a result of the campaign, the first

four plaintiffs increased their share of the market

in packaged beer from less than point one per cent

to 4 per cent in less than two months. They had

intended to continue to do so and the first three

plaintiffs had planned to attain 10 per cent of the

market for packaged beer in South Australia within

a year.

C1T46/l/SW	72	30/5/89
Castlemaine(2)

Your Honours will then see from paragraph 51 -

or, perhaps, I should refer Your Honours to

paragraph 50 and that is that the system they had
was one which they discontinued in October and, if

they succeeded in the proceedings they would wish

to introduce a similar system. Going to

paragraph 51, the AMENDMENT ACT was enacted on

5 March 1986, the percentage having gone, of course,

in January and February, to 4 per cent.

(Continued on page 74)

ClT46/2/SH	73	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  The relevant parts of it came into

operation on 1 October 1986 and contemporaneously

two things happened:  one was that referred

to in paragraph 50, namely that the minister

exercised the power under section 5b(2) to exempt

various - I was referring I think to paragraph 52,

I meant to. The minister exercised the power

under section 5b(2) to exempt a number of

refillable beer bottles from the operation

of section 7 of the amended Act. I have taken

Your Honours to the notification already,

it is the last page of the bundle of documents.

Paragraphs 1 and 2 of it exempted from the

operation of section 7 all the competitors'
beer bottles with the exception of those used

by the .1 per cent of sundry participants in the

market.

Your Honours, the second thing that happened

at the time when the amending legislation came

into force was that referred to in paragraph 53

and that was the regulation prescribing the

refund amounts. Your Honours will see that

regulation - I have referred to it already - but
it is the regulation which provided for the refund

amounts applicable to the various types of bottles

and what was involved was that in respect of

refillable glass beer bottles the refund amount

was increased from nil to 4 cents; in respect of

non-refillable glass beer bottles from five to

15 cents.

Your Honours, paragraph 55 goes on to describe the various collection systems for various types

of containers in South Australia. Paragraph 56

indicates the occasions on which the minister
has approved of a number of collection depots for

the purpose of section 9(1), in particular,

Your Honours, as appears at paragraph 56(ii),

there are no collection depots approved for

handling non-refillable bottles, which means that

the only way in which non-refillable bottles can

be dealt with pursuant to the Act is by the

operation of section 7 .

Your Honours, I should have referred to

paragraph 5 5(d) and in relation to pages 18 and 19.

Your Honours will see in the last six lines of

paragraph 55(d) at page 19, that:

some retailers have refused to sell

non-refillable containers as they have

no facilities to handle them on their return.

Your Honours, moving on - - -

McHUGH J:  What is the difference between paragraphs 56(i)

. and 56 (ii)?

CIT47/l/JM	74	30/5/89
Castlemaine(2)

MR JACKSON:  Your Honour, I really will have to check that.

I must say I had not noticed the supererogation

that prima facie appears, however - one suspicion,

which may be the case, is that one should refer to
"non Metropolitan Area".

Your Honours, moving on from there, could I go then to the position which occurred after

the amendments? That appears, Your Honors, in

paragraphs 57, 58 and 59, and that is, paragraph

57:

After the coomencement ..... approximately 75%

of packaged beer .... in South Australia was

produced in -

that State.

Approximately 96% ..... is sold in glass

containers -

which are exempted from the operation of section 7

of the Act and in respect of which there is the

4 cent refund.

Less than 10% of ..... beer sold in Australia -

sold in the nation as a whole -

is sold in glass containers ..... which are

capable of being exempted.

Your Honours, the situation set out then

in paragraphs 60, 61, 62 and 63 applies that

to the particular plaintiffs and that reflects

what was said earlier in the special case

about the extent to which they do manufacture

beer in refillable bottles; in the case of the

second plaintiff, not at all, of course.

(Continued on page 76)

CIT47/2/JM	75	30/5/89
Castlemaine(Z)

MR JACKSON (continuing): Then, Your Honours, in

paragraph 64 and following there is the statement

of the effects which the amending Act had upon

the plaintiffs' business. First, there is, in

paragraph 64, a statement of the economic effect
of a statutory preference in deposit levels and

then, Your Honours, going on to paragraph 66:

Immediately prior to the commencement of

the Amending Act, the first three plaintiffs

held a 4% share

to which I have referred earlier, and -

The market share had been increasing since

January 1986.

And then, Your Honours, the facts stated are

in paragraph 67:

In the market conditions existing in 1986

(and without any external factors), the

first three plaintiffs together could have

captured up to 10% of the market ..... This

would have been at the expense of other

producers in the market.

BRENNAN J:  At that time, when the 4 per cent was being

acquired as the market share, am I right in thinking

that there was a nil deposit figure for refillable

beer bottles?

MR JACKSON:	Yes, Your Honour.
BRENNAN J:	So there was a differential then?
MR JACKSON:	Yes, four cents then.
BRENNAN J:	Four cents?
MR JACKSON:	Five cents.
BRENNAN J: Five cents? So the bite has come since the

figures were increased to four and 15 cents

respectively?

MR JACKSON:  Your Honour, it is a bite in which the teeth,

perhaps, may be applied twice, in a sense, in

this way that, of course, prior to January 1986

I suppose we have tried - we began a marketing

campaign in January 1986. At the time when we

tried there was at that point a five cent difference,

in effect, being the refund amount, which we

had to wear. I do not want to convey the impression

that the provision of section 1, together with

the then exemption provision might not itself

have contravened section 92 but the bite, as

C 1T48/1 /ND 76 30/5/89

Castlemaine(2)

it were, occurred because of the new Act - the big bite oc~urred with the new Act, I will put

it that way.

DEANE J:	But the purpose of the bite is a bit ambiguous,
is it not?  I mean, you say it was to protect
South Australian industry but is it not equally
consistent that it was to meet a real threat
of non-refillable bottles?
MR JACKSON:	Your Honour, so far as the second of those

things, so far as neetin3 the threat of

refillable bottles is concerned, one sees, of

course, that that threat, at least so far as

getting the bottles returned was concerned, would

have been met by a less greedy bite, that is,

a bite which took only six cents of the cake

rather than 15.

DEANE J:	What if the view were taken that refillable bottles
or refillable beer bottles should effectively
be outlawed?
MR JACKSON:	Your Honour, if the view were taken that

refillable bottles should be outlawed altogether,

that is that they would not be permitted to be
sold by anyone, then it may be that in some
circumstances that law is one which would not

contravene section 92. If it were the position -

and it does involve a question of fact and degree,

Your Honour, underlying fact and degree, if

I can put it that way, where one has a situation,

however, that the local producers are the ones

who are using the r.efillable bottles - - -

DEANE J: Yes. Perhaps· I have put it back to front which

led you astray but you are dealing with what

I have put.

MR JACKSON:  Where one has a situation that the local producers

are the ones who are using the refillable bottles,

and where the only serious likely entrant into

the field is an interstate producer who is using

non-refillable bottles and if the legislation

has the effect of preventing that producer from

getting into the trade, that is from trading

interstate into that State, then the question

which does arise, Your Honour, is a question

of determining whether the provision, though

enacted for a purpose deemed to be beneficial

by the State, is in truth one which bears two

aspects or bears one aspect only.

ClT48/2/ND	77	30/5/89
Castlemaine(2)

MR JACKSON (continuing): The two aspects whic'1 it

might hAar are that it is enacted for the

purpose of assisting the State in implementing

a policy ~hich it chooses. Th~ other is that

it is enacted for t~e purpose of protectin~

the industry of the 3tate.

Now, assuming, Your Honour, that what appears

is that both those purposes are there, the question

which then arises is one of fact and degree in a

sense, because what one has to determine is whether

the State can achieve that aim by something which is,

in fact, discriminatory, and that is a question of

fact and degree and looking at alternatives.

McHUGH J:	You sell canned beer in other places in Australia, but you do not complain about that. Supposing a
New South Wales brewer wanted to sell only canned
beer in South Australia, would this act offend section 92?
MR JACKSON:	It probably woul~ Your Honour, yes, because - and

that is where the United States cases do demonstrate
that it is not sufficient for a State, in relation

to the Trade and CoTIID1erce power, or section 92, it is not sufficient for the State just to want to do something. Section 92 operates as a provision which

prevents it affecting interstate trade and affecting the course of the trade throughout the nation unless

there is some good reason, as it were, for doing

so, and provided that the manner in which it does so is not, to put it shortly and somewhat exactly,

excessive for the particular occasion.

Now, Your Honour, that is answering that in

generalities in a sense, but it is not capable, with

respect, of being answered other than in generalities,

we would submit.

DEANE J: Except the real problem is this,is it not, and that is

the cost of the non-refillable bottle or the non-reusable

can is effectively borne by the coTIID1unity - - -

MR JACKSON:	Not of that State normally.
DEANE J:	- - - in that the brewer, it is to his financial

advantage to market something everybody just throws

away?

ClT49/l/FK	78	30/5/89
Castlemaine(2)

MR JACKSON:  Your Honour, that makes it a difficult question to answer, in effect, in that form. What the

brewer does is to make a product as might any

other producer of some kind of foodstuff or beverage

and in doing so, there are various costs which the

brewer has to bear and the costs no doubt vary

depending on the source of supply of the components

and the materials and energy necessary to produce

then in the first place. The second thing would

depend so far as the consumer is concerned on the

distance from the market and a variety of other
matters, including the level of profit that is sought
to be made or is capable of being made on it.

Now, Your Honour, it does not quite follow,

of course, that the brewer lets the corrnnunity bear
the cost of the non-refillable bottles and that, with

respect, is a simplistic view in the sense that it is

capable, Your Honour, of being dealt with, for example,

in so far as interstate trade is involved, by a law of

the Corrnnonwealth, of course. The brewer's activities

are capable of being dealt with to some extent by

State laws in the place where the goods are manufactured.

For example, it is the energy of that State,

one would think, one is talking about

so far as energy is concerned and also, of course,

the various taxes that are imposed upon the brewer

and, Your Honour, it is not impossible, wewould submit, to

say just that the brewer throws on the corrnnunity the

cost of getting rid of the refillable bottles.

DEANE J: Well perhaps what I should have said was, looking at

the material before us, it seems to me to be pretty

apparent that if he could get away with it, it would

be in the brewer's best financial interest to simply

sell his product in disposable containers and forget

all about them.

(Continued on page 80)

C 1T49 / 2 / FK - 79 30/5/89

Castlemaine(2)

MR JACKSON:  It may be in the brewer's financial interest,

Your Honour, if one were to look at the matter

bottle by bottle. On the other hand, no doubt

selling in particular markets is something where one

had to tailor one's activities to the community

expectations of the market. And if it were, for

example, that the populous of a particular area took

a particularly, if I could use a fashionable

expression, a "green view of things" as it were

then the brewer might find that as a practical matter

he just could not go about doing it that way.

DEANE J: All I was trying to get to, Mr Jackson, is, is yoursul:::mission

this, that if the South Australian Government

makes a genuine assessment that environmental

factors require these provisions to protect the State from non-reuseable bottles and throw-away

cans that it simply cannot ban them? Or is your

submission that when one looks, for example, at

this scheme and sees the way it treats soft drink

bottles and cans and beer bottles and cans that it

obviously is not something that flows from such a

decision.

MR JACKSON:  Yes. Your Honour, I would - - -

DEANE J: Is it the first or the second or both?

MR JACKSON: 

Your Honour, may I say this: as to the first of

those possibilities, Your Honour asked me if it were
the State makes a genuine judgment. Your Honour,
accepting that the judgment is genuine the matter is
still a matter which is capable of examination by the

Court and it does not follow by the fact that the judgment is judgment of the State is one which is

genuine, as it were, that the law does not contravene

section 92 in banning all bottles.

DEANE J: Well what if one looked at it and reached the conclusion,

the only thing wrong with this is that all the States

have not done it?

MR JACKSON: Well, Your Honour, that would go to demonstrate

that the measure being adopted in the hypothetical

case was one which was an appropriate method of

dealing with the problem. By "appropriate" I mean

one, by the way and extent to which it is done,

did not exceed what was necessary to deal with the

problem.

DEANE J: Well I was talking about a hypothetical case and, of course, the effect of that conclusion will not affect the nature of the burden imposed on the

out of State trader whose State has not done it

because it is implicit in the remedy that the further

you are away from the market the more you will suffer

from the remedy of requiring the recycling of containers,

or the reusing of containers.

ClTS0/1/DR	80	30/5/89
Castlemaine(2)

MR JACKSON:	Yes. Your Honour, we would admit the possibility that such a law may be something which does not
contravene section 92, but the reason why it would
not contravene section 92 would be that the law,
so expressed, would be a law which the Court would
find was, as a matter of practicality, a law for that purpose and which did not excessively interfere with
interstate trade.  One reason why a court might so
find would be that it was, for example, the only way
with which to deal with it.
DEANE J:	I follow the way you put it, thank you.
BRENNAN J:	Mr Jackson, I will wait until you have been

instructed.

MR JACKSON:	Your Honour, I am sorry.
BRENNAN J:	Mr Jackson, could I ask how many bottles are we

talking about here in 4 per cent or 10 per cent of

the market?

MR JACKSON:  Your Honour, I will have to have someone work that

out. Your Honour, I would not attempt to -

BRENNAN J: Is this the sort of fact that we need to know? If

the Court must evaluate, for example, the threat of

throw-away beer bottles, do we need to know?

MR JACKSON: Well, Your Honour, the threat of throw-away -

the exact numbers involved, might, if other facts

were not in the case, perhaps be of some significance. about 2000 as apprised to 2 million.

(Continued on page 82)

ClTS0/2/DK	81	30/5/89
Castlemaine(2)

MR JACKSON (continuing): It might well depend on factors

such as area and area of a State and so on and

other matters but, Your Honour, in addition to

what one has in the present case, of course, is

that what is put shortly, in effect, in the special

case is to what extent the various prices and various

refund amounts would be effective in bringing about

the result. So, to that end, Your Honour, it is

probably unnecessary, in our submission, to look at the numbers. One is not really talking about parks

being covered in them, one would think.

Your Honours, where I was, I think, was at

page 22 of the special case and I was about to indicate

in paragraphs 65, 66 and 67 that before the Amendment

Act, the deposit was five cents a bottle on such a

product as we sold. In paragraph 66, immediately

before the Amendment Act came into operation, we

held four per cent and, in paragraph 67:

In the market conditions .....

we -

could have captured up to 10% of the market

for packaged beer in South Australia.

Now, Your Honours, moving on from that, I think, in

fact, the point I had got to was about paragraph 68;

the fact that "beer is a price sensitive commodity"

is mentioned and that:

It is not possible to sustain a market share
in excess of 1.0% with uncompetitively priced

product.

Then, paragraph 69:

Prior to the commencement of the Am~ndment

Act ..... the "bottle cost" -

for us to make it: 

was 16¢ per bottle. The bottle costs to SAB

was 16.65¢ per bottle. Following the

introduction of the Amendment Act ..... the bottle

cost of -

our bottle cost went up to 26 cents and:

The bottle cost to SAB remained 16.65¢ per

bottle.

And Your Honours will see a very significant difference

in that regard. Paragraph 70:

ClT51/l/SH	82	30/5/89
Castlemaine(2)

The effect of the 15c deposit ..... following
the introduction of the Amendment Act and the

continuing requi:remmt that the deposit be repaid

by retailers was that retailers refused to stock

such beer where the volume of sales of a

particular brand was high.

Your Honours, that is the requirement of section 7(1).

That is expanded upon in paragraph 71 and in

paragraph 73:

As a result of the introduction ..... of the

15¢ deposit ..... and the requirements of -

section 7(1), the plaintiffs:

could not and cannot obtain a market share
in excess of about 1% of the market in

packaged beer in South Australia ..... whilst

their major competitors use and continue to

use refillable beer bottles.

So, that is the effect of it and, if one goes back to the preceding paragraph, about half-way down the

paragraph:

The cost of establishing a system to recover

bottles from retailers or of establishing an

alternative system would have increased the

bottle cost -

to us -

and would have further affected -

our -

ability to compete in the market. The cost

of establishing a return system would have

increased the bottle cost to -

us -

by about Sc per bottle. The bottle cost of

the products of the first three plaintiffs

would have been 31¢ per bottle compared with

the bottle cost of SAB of 16.65¢ per bottle.

And that ties up, of course, with paragraphs 68 and 73.

Paragraph 74 sets out the fact that it was:

Having regard to their prospective market share ..... it was and remains unprofitable for the first three plaintiffs (or any of them) to

establish a new brew:ing plant for the purpose of providing

refillable bottles for use in the South Australian market.

ClTSl/2/SH	83	30/5/89
Castlemaine(2)

MR JACKSON (continuing): Paragraph 75 - we cannot obtain

access to brewing facilities in South Australia

and paragraph 76(a):

The remaining alternative means available .....

would be to convert their existing plants to

use refillable bottles ..... or to contract with

some other party to wash and inspect the

refillable bottles. In either event, the

empty bottles would have to be transported

back to the interstate breweries for refilling.

Paragraph 76 (b) :

The cost of establishment of new plant .....

plus the cost of transport ..... for washing

and refilling would involve an increase

in the price of products sold ..... by about

nine cents per bottle -

And paragraph 76(c):

Bottle washing facilities are not consistently

available in South Australia ..... If such

facilities were available the cost of such a

contract plus the cost of transport to the

interstate breweries for refilling would be

at least 13 cents per bottle.

And Your Honours,we refer also to paragraph 77 and

to the conclusion that:

By reason of the increased prices that it would be necessary to charge for the products

.... to recover these increased costs, ..... would

be unable to obtain a market share in excess of

about one per cent ..... even if they used

refillable bottles for their products.

And then, Your Honours, paragraph 78 and 79:

position of producers using refillable bottles

has improved -

and -

the Amendment Act has been to make the sale of

beer in non-refillable bottles cormnercially

disadvantageous.

Your Honours, moving from there, under the heading

"Miscellaneous", paragraph 80 is the paragraph

which deals with the quantam of the deposit

necessary to ensure	return of the non-refillable
bottle.

CIT52/l/CM	84	30/5/89
Castlemaine(2)

Your Honours, I have referred to that

already and the significant feature,of course,

is that it is either four cents or six cents, but

taking the higher figure, it is six cents for a

year, that appears from paragraph 80(c)

And after that it would onlv need

to be the same as the deposit fo~ refillable bottles.

GAUDRON J:  But that, Mr Jackson, assumes, does it not, that

the non-refillable bottles still remain in

South Australia, not being transported back to

your breweries for refilling, to be disposed

of as litter in South Australia, in any event.

MR JACKSON:  Well, Your Honour, what it assumes is that the

bottles are returned and that is the object, one

would think,of the provisions in relation to the

refillable bottles, that is the bottles are

returned and then used for refilling. Now, i£ one is

concerned about: 1 it ter, Your Honour - and the litter that one

would have thooght there is conc-2rn about. is the beer

bottles, be they refillable or not, being left

lying around or forming part of a larger body of

litter that is perhaps just put in garbage bins

and so on, or not put in garbage bins, as the

case may be, the effect of six cents would be for

the first year to educate people not to do that

and to put them in the same position as

refillable bottles.

Your Honour, there is no certainty that

refillable bottles equally would be in fact refilled.

GAUDRON J: There is some prospect though that they would not

find themselves so readily in need of being

disposed of by State provided or municipality

provided garbage collection services.

MR JACKSON:  Yes, Your Honour, there is not , of course,

anything at all to suggest that, with respect, in

the special case.	And Your Honour, it may be that
those who collect glass do not do it at all for

the purpose of having bottles refilled, but would
do it for that and other purposes, such as smashing

the bottles or using them for further glass.

DEANE J:	You could have a 5b(2)(c) arrangement required,
not for refilling, but for re-useof the glass;
5b(2)(c) which would answer that part of the
problem.

CIT52/2/CM	85	30/5/89
Castlemaine ( 2)

MR JACKSON:  Your Honour, the only thing is that

section 5b(2)(c) says:

re-use of the containers when returned to

collection depots by refilling as

referred to in paragraph (a) and by

re-use of the glass -

the question is, what is meant, of course, by

"refilling as referred to in paragraph (a)''.

DEANE J:  I was not referring to that; I was referring to

re-use of the glass.

MR JACKSON:  I understand that, Your Honour. The qualification

I was seeking to introduce, perhaps was this

that when it says "refilling as referred to in

paragraph (a)", the question which arises is whether - and it speaks also of re-use - it contemplates re-use and refilling as alternatives

or re-use as something which happens after refilling

up to four times. Your Honour, how one would know

whether it has been in fact refilled more than four

times, one does not really - - -

DEANE J: What I was suggesting was re-use of the glass would

solve the litter problem, but not the paragraph 84(a)

problem.

MR JACKSON:  Your Honour, it is a question, of course, whether

once the bottles are collected, of course - they are

collected and the refillable bottles are collected,

each with their refund amount, the fact of the
matter is that they are there and,Your Honours,
the material in the special case does not demonstrate,

with respect, that they are at that point a litter

problem.

Your Honour, could I move on from that now.

Your Honour, if one goes from there to paragraph 84, what one sees in paragraph 84 is an assertion

dealing with two things: the release of

carbon dioxide, in paragraph 84(a) and the use energy for the purpose of manufacturing bottles

in the succeeding paragraphs. Your Honour, there is not anything which attempts to quantify any of the matters referred to in paragraph 84(a).

One also notes that there is not any attempt, of cours~, to say that the energy resources; for

example,used for any of those purposes would be

more than the energy resources used, say, in

washing bottles, nor does there appear to be

any rational distinction drawn between the various

types of glass that may be used, some of which

are beer bottles and some of which might be used

in entirely different types of bottles. Nor does

CIT53/l/JM	30/5/89
Castlema.ine(2)

one see anywhere an assertion that the purpose

of avoiding the things set out in paragraph 84
was in any way one of the purposes for which

the Act was introduced.

DEANE J: Where do we go from there, though, Mr Jackson?

I mean, there is no assertion that it was not.

I mean, these are the disadvantages of having

a case stated instead of a hearing by a single

judge where the issues the parties want to

rely on can be resolved.

MR JACKSON: Well, Your Honour, the issues the parties want

to rely on have, so far as the parties are

concerned, with respect, have been resolved by

the facts which are the agreed facts contained

in the special case.

DEANE J: Well, then, what do we say, that the plaintiff does

not assert that the purpose was not; or do we
say: the government does not assert that the

purpose was? Because the thing is there that

that is the fact.

MR JACKSON:  Yes, Your Honour. Your Honour, what it says,

if Your Honour is referring, for example,

paragraph 84(a), it simply says that:

The use, return and refilling of refillable bottles generally results in a conservation

of energy and resources.

(Continued on page 88)

CIT53/2/JM	87	30/5/89
Castlemaine(2)

DEANE J:  It was the next thing that I - the pro?ortionate

reduction in the release of carbon dioxide.

MR JACKSON:  Yes. Your Honour, what I was going to say was

this that if one looks at that what one does not see

in the facts that are relied on~ and, Your Honour,
the facts are not just relied upon by us, of course.

What I mean by that is the situation that we have is one where we are submitting that the enactments are

such that, if one looks at them and their effec~ they appear to have an effect which is protectionist and

discriminatory. Now, Your Honours, that is something,

of course, which would be prohibited by section 92,

unless it were to appear that in relation to those

provisions they are enacted for some other purpose

and that they are enacted in a way and to an extent

that does not go beyond that purpose.

Now, Your Honours, one sees as a background fact

what is set out in paragraph 84 and in particular in

relation to paragraph 84(a). No doubt one is entitled

to take into account the broad generality of the

proposition which is set out in paragraph 84(a) but

if the law wnic~ prima facie, in our submission, would

contravene section 92 in effect is one which it is

sought to justify by saying that there is some effect,

we are entitled to say all that is stated is a

proposition of generality without any attempt to

quantify it and it does not go sufficiently far as

to establish a proposition which overall would

entitle the State to succeed.

Your Honour, no doubt every time, I suppose, someone lights a cigarette one could say the same

thing about that, but there is a question of quantum

paragraph (f) on page 29, and what one sees there is

involved and that has not been sought to be established.

really that:

If the number of beer bottles made in South

Australia is reduced, then the use of the

South Australian resources ..... will be reduced.

We use bottles manufactured outside South Australia.

If we increase our market share, then the use of

South Australian natural resources will be reduced.

Your Honours, the point about it all is, in our

submission, that one cannot, from these figures, draw

any useful inference to demonstrate that the matters

set out in paragraph 84 are matters which, in the end,

require the implementation of provisions of the nature

in question.

Your Honours, could I say one other thing a

little more generally about it: the two features of

non-refillable beer bottles which might be said to be

ClT54/l/HS	88	30/5/89
Castlemaine(2)

unacceptable, perhaps, are their contribution to

litter and the fact that they cannot be reused

without recycling the glass. The first of those

features, in our submission, is met by the deposit

of six cents for the first year, but so far as

energy is concerned, returned non-fillable beer

bottles need not be recycled at all or recycled

in South Australia.

Your Honours, one notes in relation to this

that one must take into account the fact that the

scheme of the legislation and the delegated legislation

shows that South Australia is not concerned from an

energy point of view, for example, to force or
encourage the recycling of the glass which is

used in wine bottles - and Your Honours, perhaps my

knowledge of statistics is not good, but one had

thought that South Australia was the largest wine-

producing State in the nation -or in such other things

as jam jars, pickle bottles, I suppose, and other

forms of glass container. Your Honours, the

practical consequence of non-refillable bottles being
sold into South Australia from interstate is that the

energy resources which would be consumed in their

manufacture would not be the energy resources of

South Australia. They would be energy resources

outside South Australia and energy resources in

relation to which the governments of the areas from

whic~ ~hey come would no doubt make suitable

prov1s1on.

(Continued on page 90)

ClT54/2/HS	89	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Your Honour, preventing the

use of non-South Australian energy resources,

which is the effect of stifing the interstate

trade, does not, in our submission, bear a

rationalrelation to the State interests which

may be involved. Your Honours, I do not think

I need to say any more about paragraphs 84 and

85.      They seem to demonstrate, as always, that

more is found when there is a need to find more,

like the oil crisis of 10 years ago.

Your Honours, the last matter with which

I wish to deal is this, and it is the matter which we have set out in paragraph 7(c) of the

outline of submissions and that is that if one

is in any doubt as to the real object and effect

of the various provisions, what appears, in our

submission, is that the introduction of

section 5b(2), the amendment in effect of
section 7(1) effected by the provisions of
section 5b(2), the notice under 5b(2) and the

fixing of the different rates under regulation 7

was to bring to an end the plaintiff's incursion

into the South Australian market and, Your Honours,

in fact, to prevent any further incursion because

Your Honours will recall from the case that we

are unable to acquire a significant market share

in those circumstances.

BRENNAN J:  How does that sit with paragraph 79 in the special case

which states what the object and effect of

the Act has been?

MR JACKSON: It is not different, Your Honour, it is more.

Paragraph 79 says that:

The object and effect of the Amendment Act

has been to make the sale of beer in
non-refillable bottles commercially

disadvantageous.

BRENNAN J: Full stop.
MR JACKSON:	Your Honour, that is where the paragraph finishes,

if I can put it that way but it does not, in

our submission, prevent us from saying, "We are

persons who are engaged in interstate trade and

who sell in non-refillable bottles and the practical

effect that is set out there is one which

contravenes section 92"

BRENNAN J: That may be. If that is to be taken as the

finding of fact, however, which this Court should
proceed upon, then the question of the impact
on the trade of the plaintiffs might be regarded,
may it not, having regard to the terms in which

that paragraph is drawn as incidental?

C 1T55 /1 /ND	90	30/5/89
Castlemaine(2)

MR JACKSON:  Your Honour, I am sorry I just did not

hear it.

BRENNAN J:  May be regarded as incidental. In other words,

one does not say that the object and effect of
the Amendment Act is to make the trade commercially
disadvantageous, it is to make the sale of beer

in non-refillable bottles corrrnercially disadvanta~eous

and the consequential effect of that may truly

be regarded as incidental to the main object

of the Act.

(Continued on page 92)

ClTSS/2/ND	91	30/5/89
Castlemaine(2)

MR JACKSON: Well, Your Honour, may I say, with respect, that

that is really to cut up the special case rather

too much and to treat what is said there as

being exclusionary as well inclusionary in effect,

and, Your Honour, I do not want to go over all the

paragraphs again, and then seek to find them

as I go, but Your Honour will have seen

that a number of things appear. One is that this

case speaks of the effect of the Act upon the

plaintiffs' activities, as well as in that paragraph

to which Your Honour referred me, and, Your Honour,

it does so in a number of places, and it speaks of

the plaintiffs' trade having become uneconomic by
reason of - I am sorry, it speaks of the

trade in which the plaintiff had engaged.

Now the whole framework of the case stated

is to deal with the plaintiffs' interstate trade

and that is the way in which that paragraph should be

understood. May I also say, Your Honour, that it is

expressed in a context where it is leading to a

question of whether section 92 is contravened, which

appears at page 31 of course, and, Your Honour, without

attempting to set out all the paragraphs again, we

would submit that one should not treat section - - -

BRENNAN J:  I understand the way you put it, Mr Jackson, but

it seems to me that what 79 does is to say that this

is the object and effect, of the Act. By having

that object and effect it has an adverse effect upon

the trade of the plaintiff ·companies. Then one

goes to see what is the comparison between the

object and effect so far as it relates to the trade
of the plaintiff companies on the one hand and the

object and effect so far as it relates to the

prevention of litter on the other. And then one

has to do either some balancing test or to

perform some function as a matter of fact and degree

as between those two further or ulterior objects, and

I do. not know how one does it, at all events on a

special case.

MR JACKSON: Well, Your Honour, if there had been a trial of

the matter at first instance and the facts had

been found, and the facts which had been found had
been those which I set out in the special case, the

Court would then - before which it came - would

have to determine which view it formed. Now, in

our submission the facts set out in the special case

do demonstrate sufficiently that the instruments

in question are instruments and laws which have the

required effect to make them invalid pursuant to

section 92. Now, Your Honour, one sees in the

special case two other reasons referred to as

concepts which in effect might provide a justification

other than a discriminatory justification or

protectionist justification for the implementation of

the law. Now, a court might, if those facts had

ClT56/l/FK	92	30/5/89
Castlemaine(2)

been found below, at first instance form one view.

A court on. appeal, intermediate appellate court,
might have formed a different view, and it would

then be for the Court to form its own view in

effect on those matters.

Now it may be that views would differ, and

Your Honours, in one of the /merican cases to which

I referred that in fact was what happened. I do not

recall which it was now, but it had been in three

courts and different views were taken as in effect to

the weight of each of these matters. But, Your Honour,

one has to really assume in effect that those are the

findings which are made and, that being so, form a

view on them.

Now, Your Honours, there was other matter

to which I wish to refer, and it i" .1e matter

which concerns the course of the BEV~RAGE CONTAINER ACT

AMENDMENT BILL when it went through the Legislative

Chambers in South Australia. I wanted to refer to

three passages; one from the speech of the Deputy

Premier in the House of Assembly when introducing the

Bill and the second being two passages from the

Minister for Health who had the conduct of the Bill

in the Legislative Council.

(Continued on page 94)

ClT56/2/FK	93	30/5/89
Castlemaine(2)

MR JACKSON (continuing):  Those passages, in our submission,

serve to identify the mischief to which the Act was
directed or the amendments were directed at the time.

The passages, Your Honours, are first in the House of

Assembly at page 180 and I should say, Your Honours,

that my learned friend may have a caveat about the,

propriety of the use of this material but has

indicated that such argument as he wants to address

upon it, he will do so in the course of his

submissions.

The first is at page 180 and Your Honours will

see in the left colunm the explanation of the bill

and, in the first paragraph of that:

It changes certain aspects of the beverage

container legislation as they apply to beer cans

and bottles. The Government sees no reason at

this stage to change the Act in respect of soft

drinks and the Bill is framed accordingly.	A
position has arisen whereby the much valued

traditional South Australian use of reusable

containers for the marketing of beer is under

threat. In August 1985, following discussions

with the Government, South Australia's breweries

increased the refund amount for refillable bottles

from 30¢ to 50¢ a dozen. The interstate brewer -

Your Honour, or perhaps we might put up our hand in

that regard - I put down my hand, Your Honour.

has refused to follow suit. Since a return to

the 30¢ deposit level by the local manufacturers would be an environmentally retrograde step, the

only reasonable course open to us is to legislate

to place all suppliers on an equal footing.

The amount is to be fixed -

and so on. Then, Your Honours, in the Legislative

Council, at page 214, in the left column, inn:nediately

after half-way down the page, the Minister for Health,

the Honourable J.R. Cornwall said:  There is the further very important

consideration that at present the interstate

giants -

and, perhaps I should put up my hand now -

are enjoying an unfair advantage. I do not

think that we have to apologise for trying

to make things a little more equal; we do not

have to apologise, with regard to the matter

of competition between Carlton and United

Breweries and Castlemaine/Tooheys versus our

very own South Australian Brewing Company, for

taking legislative action that will tend to

ClT57 /1/SH -	94	30/5/89
Castlemaine(2)

equal the score. At least we intend that the

South Australian Brewing Company should have

an even go in the market. I make no excuse

at all. In fact, I am very proud to inform

the Committee that that is one of the reasons

why the Government is introducing this legislation.

And, Your Honours, more mischief than - - -

MASON CJ:  It is not often you find gold like this in Hansard,

Mr Jackson.

MR JACKSON:  Your Honour, page 215, in the last substantive

paragraph, the same speaker:

The specific problems that were being experienced

because of the activities of Castlemaine, Tooheys

and Swan were not·spelt out during the second

reading explanation. As I said, that is one of

the reasons for this legislation being introduced.

I will repeat what I said earlier (I do not

believe that we need to be coy about it): we

want to ensure that the South Australian Brewing

Company can compete on at least an equal basis

with the large interstate companies.

McHUGH J: But what abaJt the paragraph at the top of that column,

the second paragraph:

We want to stop the flood of non-returnable

c~iners from interstate, which is threatening

to break down -

MR JACKSON:  Your Honour, I do not suggest that that is not one

of the reasons for legislation but it is a question

in the end of weighing up the reasons for the

legislation and what I was seeking to do was that one of

the reasons was to erect the barrier.

McHUGH J:  But the problem from the government's point of view was,

was it not, that unless they maintained a

differential, then South Australian brewers would go

into the non-returnable containers and then it would

just increase the litter. So they wanted to keep the South Australian Brewing Company using the refillable

bottles and the only way they could do that is to

penalize the non-refillable bottles.

MR JACKSON:  Yes. Your Honour, so far as litter was concerned,

one would not think there would be any difference in

refillable or non-refillable bottles in the South the number of bottles, as it were, whether they used and, if the same provisions were brought in and - - -

ClT57/2/SH	95	30/5/89
CastlemainE;(2)
McHUGH J:	But you still have the litter.	I mean this

legislation drove the cans out of South Australia.

Cans have never got a foothold in South Australia as

they have in every other State and Territory of

Australia.

MR JACKSON:  Yes. Your Honour, if it be that the result of

it was that the South Australian brewers did commence

to use the non-refillable bottles that would have

the result of course that there would be, as I was

submitting before, as many bottles as before assuming

that consumption remained unchanged. It may be that

the bottles are recycled more often but there would

still be the same, in effect, number of bottles at

any one time.

McHUGH J:  I know that, but if non-refillable bottles become

the norm then they are going to be scattered all over

the countryside, whereas with the refillable bottles

they are being brought back in, are they not?

MR JACKSON:  But Your Honour, with respect, that does not seem

to accord really with paragraph 79, that one would get

the same return rate with non-refillable bottles as

with refillable bottles. I am sorry, 80(c) I should

have said. . And, Your Honour, one needs to

rea~ perhap~ the whole of paragraph 80 but what it does

do is show,with-d!spect.,tba.tif one had a deposit system

which was the same then the same number would come back.

McHUGH J: Yes, I follow the force of your argument based on

that.

MR JACKSON:  Your Honour, perhaps I should also add one other

thing,that it is not suggested anywhere in the special

case that bottles in garbage bins, as it were, is a

problem. Perhaps I created that myself, I suspect, in the course of the argument. Your Honours, those are our submissions.

(Continued on page 97)

ClT58/l/DR	96	30/5/89
Castlemaine(2)

GAUDRON J:  Mr Jackson, is there any point in this Court

answering question (a) at page 31?

MR JACKSON:  Your Honour, I think that relates to the

first Act.

GAUDRON J:	Yes.
MR JACKSON:	I think the answer is that it is unnecessary

to answer, Your Honour.

GAUDRON J: Yes, thank you.

DEANE J:  Can we not just strike it out; it makes easier

when we come to deal with these things?

MR JACKSON:	Your Honour, we do not really mind.
MASON CJ:	Well, if there is no objection on the part of
the solicitor, we may as well strike it out

on the day. It will be struck out. We will

renumber the others (a) and (b) in place of

(b) and (c). Yes, Mr SolicitM"?

'-=··,,

:MR DOYLE:	If the Court pleases, can I hand up two
documents; one is some submissions on the facts and
the other is our ordinary outline of submissions.

MASON CJ: Yes.

(Continued on page 98)

CIT59/l/JM --	97	30/5/89
Castlemaine(2)
MR DOYLE:	If the Court pleases.	I propose to begin with

taken the step of putting our submissions

the submissions on the facts because the

substantially in writing but I do wish to direct
some oral submissions on that matter as well.

Then, I will turn to the outline itself and our submissions on the matters of law.

Your Honours, first of all the background to the 1975 Act. In our submission, it is imuortant

to bear in mind that before 1975 there was

as we say in the submissions on the facts, a well

established voluntary return system. There is no

way in which it could be suggested that this system
was implemented, as it were, to meet the threats

of interstate competitors. The special case shows in the paragraphs referred to that for many years,

possibly 60, 70, 80, 90 years, this had been a

traditional method of dealing with beverage

containers in South Australia and what the special

case shows is that all the features which are found

in the system now were present in it for many years;

that is, first of all, the use of deposits on

beverage containers; secondly, the use of what is

sometimes called, "the point of sale system", that

is refunding the deposits at the point of sale and

that was a feature of the system in relation to

soft drinks. And the third thing that the special

case shows is that, in relation to beer, as well as

deposits there had been a long-standing system of

collection depots, places to which bottles could be

returned.

So, those central elements of the legislation,

that is, first of all a deposit; secondly, the use of a point of sale return system; thirdly, the use of collection depots, all of those things had for

many years been features of the handling of

beverage containers in South Australia.

It is also established by the special case

in those paragraphs that for many years refillable

bottles had been used for beer. The second point

which, in our submission, can be drawn from the

special case is that from about 1975 the increasing

use of cans as beverage containers was posing a

threat to the system and it was a simple and obvious

threat, namely i~ obviously, cans became sufficiently

popular then there would be an insufficient volume

of business for those handling the refillable,
returnable containers and the return system would

start to "wither on the vine".

C1T60/l/JH	98	31/5/89
Castlemaine(2)

MR DOYLE (continuing): Prior to 1975, as we say in

paragraph 2, there was no deposit on cans used

for beer or used for soft drinks and those empty

cans were not collected through the system.

There was obviously no incentive for them to

be returned through the system and so that led

to the threat to the system,in paragraph 3,

in the reduction in the volume of business.

The use of cans which, as the special case

shows, was becoming increasingly popular in

1975 was likely to have certain effects; first

of all, one which is not particularly relevant

here but for completeness is referred to there,

the safety hazard from the use of what we call rin3-pull

tops which were banned by section 13 of the Act; secondly, from the increased popularity of cans,

the increased litter because there was no deposit

on them and they were not part of the system;

thirdly, the waste of resources and energy that

was involved because they were not refillable

and so were not re-used and furthermore, most

of them were in fact finishing up as waste and

not being recycled; then, the further effect

that I have already referred to, endangering

the return system.

Your Honours, by 1975 the use of non-refillable

bottles was, in our submission, posing a similar threat to the system,and again this emerges from

the special case and,once again, the waste of
resources and energy from the use of those
containers and secondly, once again, the threat
to the system through the lack of volume making

the system uneconomic to operate.

Your Honours, in paragraph 6 we make the

point which, in our submission, is very important

in getting this case in context and appreciating
the facts that the South Australian Brewing Company

had begun to use both non-refillable bottles and cans and both were becoming popular as beverage

containers. (Continued on page 100)

CIT61/l/JM	99	30/5/89
Castlemaine(2)

MR DOYLE (continuing):  And I will come back to this point ,

Your Honours, at various stages when I make my

submissions on matters of law. In our respectful
submission it has to be borne in mind that one

of the single facts in this case is that after the 1975 legislation was introduced, the South Australian Brewing Company altered its - well, not altered its trading methods entirely, but

switched from non-refillable bottles to refillable

bottles and continued to use cans. If we assumed

that nothing had been done until 1986 and the

Act had been brought in then, and that up until then

the South Australian Brewing Company had been using

non-refillable bottles following the Australian trend,

a dramatically different picture would emerge and

one would wonder whether any complaint could be

made if one saw that as a result of the Act in

1986 South Australian Brewing Company was equally

discouraged from using non-refillable bottles.

McHUGH J:  But is not the problem that if you now introduced

an across the board . :ilS, ·-'- cents for all bottles

and cans, the only difference probably would be

that the South Australian Brewing Company would

switch to non-refillable cans, because it would be

economically better for it and so it is the body

that is protected by this currant legislation.

MR DOYLE:  Yes. Your Honour, I do not suggest the matter I am

putting there is as it were, a complete answer.

I simply make the point that it is very important

to bear in mind that,for one reason or another,

that particular company has as it were, met the

cost of making the change, and the argument was

being put that its position was being protected,
but the submission I wish to make is that we have

to bear in mind that what happened is that in

1975, as a result of the legislation, it made the

change, and it is not as if-that the cost has been

imposed on interstate brewers, which was never

intended to be and never borne by the local

brewing company.

(Continued on page 101)

CIT62/l/CM	100	30/5/89
Castlemaine(2)

MR DOYLE (continuing): It bore the cost in 1975 and while

obviously my friend may, as he does, seek to say that

having done that to the local brewing company the

local parliament then, as it were, seeks to compensate

by protecting it and, as it were, rewarding it for

making the change, the fact is there was a cost to

the local brewing company which it met in 1975 when

it switched to refillable bottles. An~ in my

respectful submission, that is an important matter

to be borne in mind.

And so in so far as it is said that here theparliament

is simply· protecting the local brewer, in my

respectful submission, to some extent that argument

can be tested by saying, "Well, what would be the

position had the legislation come in for the first

time in 1986?" So, I suppose, Your Honours, the

points we seek to get from that first part of the

submissions on the facts is simply that the system

which is being imposed by legislation is a system
which existed locally and it is understandable and,

I will be submitting in due course in no sense

flavoured with protectionism, that parliament should

have built on what already existed locally as a

means of handling litter.

Secondly, the trend throughout Australia to

non-refillable bottles and cans was a genuine threat

to that system and posed a litter problem. The trend

was occurring in South Australia. nresponse to the

legislation in 1975 the local company switched to the

refillable container, continued to use cans, but

of course as the facts show, and no doubt because of

the higher deposi~ they have been relatively unpopular

in the South Australian market, whereas they are

popular in other- States.

Then we come to the 1975 Act, Your Honours, and when we look at what that did in essence, and I have

endeavoured in these submissions to, as it were, state

concisely what in fact it did of relevance. First of

all it made compulsory the marking of the refund

amount, that is marking containers with the amount of

the deposit. (Continued on page 102)

ClT63/l/DR	101	30/5/89
Castlemaine(2)

MR DOYLE (continuing): Secondly, it specifies the amount

of the maximum refund. Thirdly, it requires

retailers of glass containers to refund

deposits unless they are either exempt containers,

or used for spirits or wine. Fourthly, it

prohibits the sale of non-glass containers unless

the outlet was within a collection area, and this was in effect building on the system of

collection depots. The section 7 requirement

was in effect building on the existing point

of sale refund system. Then, finally, it enabled

certain containers to be exempted by virtue of

section 4 and the definition of "exempt container".

If we just pause there again for a moment

and look events in 1975, in my respectful

submission, there is simply no basis for

suggesting that the Act, as enacted in 1975,

had anything protectionist about it, because at

that time its impact on the local company was

exactly the same as its impact on any other

brewer. It was providing the same encouragement

to all producers to move from non-refillable to

refillable bottles, and providing the same

disincentive to rely on cans by making them more

expensive in the market compared with other
containers. Again, in my respectful submission,

it becomes of some significance to look at this

not merely as a matter of history but, in my

submission, what we are looking at is a piece

of legislation as to which it cannot be said

realistically that when it was enacted it was

protectionist.

When we look at the regulations I would

respectfully make similar submissions. First of all,

looking briefly at what the regulations did:

they fixed a five cent deposit for all containers

except obvious.1 y - although I have not spelt it

out there - those that were exempt; exempted

from the Act certain containers, namely refillable

beer bottles and refillable soft drink bottles;

and exempted temporarily - and I do not pretend

to understand why it was temporary - mineral

water containers and what are referred to as

PET containers which are, as I understand it,

plastic and flexible plastic bottle; and finally,

exempted milk containers unless plastic.

Once again, in our submission, on the

material before the Court there is nothing in tha4 again, that could be pointed to as

protectionist if one focuses on the regulations

rather than the Act. Its impact on the local

producer was exactly the same as its impact

on interstate producers.

CIT64/l/JM	102	30/5/89
Gast lemaine ( 2) ·

MASON CJ:	Mr Solicitor, it may be convenient now to adjourn.
MR DOYLE:	Your Honours, I do have some other material I was
going to hand up. It is simply some American and
Canadian legislation dealing with litter control.
MASON CJ:	It may be convenient to hand it in now.
MR DOYLE:	Yes.  And there is also, just to assist Your Honours
with it, a short synopsis which we have prepared
endeavouring to precis ~hat is in the legislation. There are two books for each of Your Honours. There
are two different books there and one synopsis.
MASON CJ:	Thank you, Mr Solicitor, we will adjourn now.

AT 4.17 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 31 MAY 1989

ClT65/l/FK	103	30/5/89
Castlemaine(2)