Fortescue Metals Group Limited and Ors v The Commonwealth of Australia

Fortescue Metals Group Limited and its associated entities (the applicants) brought proceedings against the Commonwealth of Australia (the respondent) in the High Court of Australia. The dispute concerned the validity of certain provisions of the *Carbon Pollution Reduction Scheme Act 2009* (Cth) and related legislation, which the applicants argued were beyond the legislative power of the Commonwealth Parliament.

The High Court was required to determine whether the impugned provisions of the *Carbon Pollution Reduction Scheme Act 2009* (Cth) and associated legislation were constitutionally valid. Specifically, the Court considered whether the legislation was supported by any head of power in section 51 of the *Constitution*, including the corporations power (s 51(xx)), the external affairs power (s 51(xxix)), or the taxation power (s 51(ii)). The applicants contended that the scheme imposed a tax and that, if it did, it was not a valid tax because it was not for the purposes of the Commonwealth.

The Court ultimately found that the *Carbon Pollution Reduction Scheme Act 2009* (Cth) and its associated legislation were constitutionally valid. The majority of the Court held that the scheme did not constitute a tax for the purposes of section 51(ii) of the Constitution. Instead, it was characterised as a regulatory scheme. The Court also considered and rejected arguments that the legislation was invalid by reference to other heads of power, including the corporations power and the external affairs power, finding that the scheme fell within the scope of the Commonwealth's legislative authority.

The applicants' challenge to the validity of the legislation was dismissed.