Esso Australia Resources Ltd v Com of Tax

[1999] HCATrans 127

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M17 of 1999

B e t w e e n -

ESSO AUSTRALIA RESOURCES LIMITED

Applicant

and

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 14 MAY 1999, AT 10.07 AM

Copyright in the High Court of Australia

MR B.J. SHAW, QC:   If the Court pleases, I appear with my learned friend, MR J.W. de WIJN, QC, for the applicant.  (instructed by Clayton Utz)

MR G.A.A. NETTLE, QC:   May it please the Court, I appear with my learned friends, MR C.M. MAXWELL, QC and MS M.M. GORDON, for the respondent.  (instructed by the Australian Government Solicitor)

McHUGH J:   Yes.  Do not sit down, Mr Nettle.

MR NETTLE:   If the Court pleases. 

McHUGH J:   This seems to be a very clear case for the grant of special leave.

KIRBY J:   I once said that to you in the Court of Appeal, Mr Nettle, and you dissuaded me, so you may do it again.

MR NETTLE:   I saw, with respect, what your Honour had to say about the grant in GPAO.  But may we say by way of submission that, really, before you finally decide to grant leave, the question here is not whether the Act has changed the common law privilege.  It is clear, unless one engages in an exercise in sophistry, that it did not intend to and that it did not change it other than in the very limited area to which the Act specifically applies.

KIRBY J:   Well then, you will win the appeal.

MR NETTLE:   No.

KIRBY J:   Sophistry would never be a fault of the High Court of Australia.

MR NETTLE:   The question which arises is whether the common law, which was not affected by the statute, should now be changed because of the changes made by the statute to the limited area to which it applies.  Once you get to that point and realise that it is only four years ago that the Commonwealth Parliament enacted this particular piece of legislation, expressly, in effect, confining the legislation to a limited area and necessarily therefore expressing the intention that it did not wish to change the common law otherwise as laid down in Grant v Downs, the conclusion which it is submitted to which this Court would come if leave were granted and the appeal were heard would be irresistably that this is not an appropriate time to change the common law in the large area in which it operates which was not affected by the legislation.

If the Court accepts that – and with all respect, we would urge upon you that it is very difficult to see that the position is other than that – then there ought be no grant of leave.  If the Court rejects that, if it says, “Well, we wish now to reconsider the common law, notwithstanding that only four years the Parliament signified an intention that it was satisfied with what we said back in Grant v Downs”, then the Court will grant leave for the reasons that I have - - -

McHUGH J:   Yes, I know, but there are other issues involved, are there not?  One of them is that the point has excited so much controversy throughout the nation, or at least in the places affected by it, that this Court should really deal with the problem and put an end to the debate one way or the other.

KIRBY J:   Is there not a large question – I realise it is not perhaps perfectly presented in this case – as to the interrelationship of statute and common law?  That was mentioned in Cotogno v Lamb.  There is a lot of doctrine in the United States of America about it.  The problem in this case, of course, is that the legislation is not universal but it is an important issue that may be raised.

MR NETTLE:   If your Honours please, if I could take both of those questions in turn.  The answer to the question asked by the learned presiding Judge is, it is submitted, although it may not find favour with your Honour, that now that there has been a determination by a five-man or five‑judge Full Court, the doubts which might previously have existed as to whether or not previous single federal courts were correct or the Court of Appeal in New South Wales was correct, have been resolved in favour of the view expressed by the Court of Appeal in New South Wales.

The answer to your Honour Justice Kirby’s question is, it is submitted, that although, of course, it is an important area of law, what we have called the Saraswati principle, whether the common law ought develop by reference to legislation, it is different here where the Commonwealth has signified in the legislation that it wishes the legislation not to apply to the area otherwise governed by common law.  The Saraswati principle or this idea of developing common law by reference to statute applies only where there has been a development in one jurisdiction or in one area of the law and Parliament has not thought about its application in another, and the Court reasoning, by analogy, decides that it is appropriate at common law to extend the statutory principles into the common law.  Now, here, that does not arise, albeit that it is an important principle to be applied in other areas.  If the Court pleases.

McHUGH J:   Yes, thank you.  The Court need not hear you, Mr Shaw.  There will be a grant of special leave in this matter.

MR SHAW:   If the Court pleases.

AT 10.15 AM THE MATTER WAS CONCLUDED