Fortescue Metals Group Limited & Ors v The Commonwealth of Australia

[2012] HCATrans 177

[2012] HCATrans 177

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S163 of 2012

B e t w e e n -

FORTESCUE METALS GROUP LIMITED ACN 002 594 872

First Plaintiff

CHICHESTER METALS PTY LIMITED ACN 109 264 262

Second Plaintiff

FMG PILBARA PTY LIMITED ACN 106 943 828

Third Plaintiff

FMG MAGNETITE PTY LIMITED ACN 125 124 405

Fourth Plaintiff

FMG NORTH PILBARA PTY LIMITED ACN 125 154 243

Fifth Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Directions hearing

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY BY VIDEO LINK TO PERTH

ON THURSDAY, 2 AUGUST 2012, AT 10.14 AM

Copyright in the High Court of Australia

__________________

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

MR S.J. GAGELER, SC, Solicitor‑General for the Commonwealth of Australia:   If your Honour pleases, I appear with MR G.J.D. DEL VILLAR for the defendant.  (instructed by Australian Government Solicitor)

MR W. SOFRONOFF, QC, Solicitor‑General for the State of Queensland):   If your Honour pleases, I appear with my learned friend, MR A.D. SCOTT, for the Attorney‑General for the State of Queensland intervening.  (instructed by Crown Law)

MR G.R. DONALDSON, SC, Solicitor‑General for the State of Western Australia:   If your Honour pleases, I appear with MR A.J. SEFTON for the Attorney‑General for the State of Western Australia intervening.  (instructed by State Solicitor (WA))

HIS HONOUR:   Thank you.  Yes, Mr Jackson.

MR JACKSON:   Thank you, your Honour.  As your Honour will have seen from the submissions – I take it your Honour has the submissions in reply we filed yesterday ‑ ‑ ‑

HIS HONOUR:   Yes.

MR JACKSON:   ‑ ‑ ‑ we had suggested that the parties may be able to concur in a special case.  That does not appear to be feasible, at least at this stage of the proceedings, and that is why we propose on one hand and agree with on the other the orders set out in the concluding paragraphs of our reply submissions.  It commences under the heading “Course to be Taken”, paragraph 15, your Honour, and the orders proposed are in paragraph 20.

HIS HONOUR:   Yes.  Could this process yield a demurrer?

MR JACKSON:   It is possible, your Honour.  It may be a question which side demurs.

HIS HONOUR:   Yes.

MR JACKSON:   But it may, your Honour.  I do not wish to go into the detail of it unnecessarily, but could I just say that there are no doubts, as is foreshadowed, in a sense, in the correspondence and submissions on behalf of the Commonwealth, that there are particular contentions as to the, if I can put it neutrally, the effect of the legislation which they wish to suggest and it may well be that once that is done, we might either demur or, your Honour, having a slight reluctance in that regard, but perhaps seek an order under the Judiciary Act dealing with the matter.

HIS HONOUR:   So these disputed elements at the moment are really attached to the notion of discrimination, are they?

MR JACKSON:   Yes.  They perhaps go a little further than that, your Honour, I think, also because they go both to discrimination and preference.  They would go also to the Melbourne Corporation issue and they are relevant to the first part of section 91. 

HIS HONOUR:   What is the section 91 point?

MR JACKSON:   The section 91 point, your Honour, if I could just put it like this.  Your Honour has the first part of section 91, and the point that we seek to make in that regard – your Honour will that section 91 is divided into two parts, in effect, and this relates to the first part of those and it relates only to the Act so far as it imposes a tax in relation to iron ore, which is a metal.  Now, what we contend in relation to that, to put it shortly, your Honour, is that we are engaged in mining for iron ore and that it is another metal in terms of section 91.  Secondly, that the concept of aid to mining for gold, silver or another metal includes any of the forms of reduction of royalty, State royalty, or exemption from payment of it, to which we have referred in paragraph 76 of the statement of claim. 

Now, your Honours, we also say that the grant of any such reduction or exception would have the effect that the MRRT, if I can use the abbreviation, payable by the miner is increased by the amount of such reduction or exception and that, as we have alleged in paragraph 77 of the statement of claim, the matters to which I have just referred would render the grant of that aid illusory or inefficacious because an amount equivalent to the amount of the reduction or exception becomes liable to be paid by the miner to the Commonwealth as taxation, so that the State’s action in reduction is useless, to put it shortly.

HIS HONOUR:   That engages the word “prohibits”?

MR JACKSON: Yes, your Honour. Could I just say this, with respect. We would say, as a matter of substance if not as a matter of form, the MRRT prohibits the grant of that – would prohibit the grant of such aid and that it is imposed by laws made by the Commonwealth in the exercise of powers conferred by the Constitution and that insofar as the provisions of the Constitution might otherwise authorise the making of an Act in terms of the Act having that effect, then the words “Nothing in this Constitution” in section 91 limit the ambit of the Commonwealth’s legislative power in that regard.

HIS HONOUR:   So there is a ground based in 51(ii).

MR JACKSON:   Yes, and 99.

HIS HONOUR:   Section 99.

MR JACKSON:   Melbourne Corporation.

HIS HONOUR:   Melbourne Corporation and 91.

MR JACKSON:   And 91, that is it, your Honour.

HIS HONOUR:   What is the Commonwealth’s attitude, Mr Solicitor, to paragraph 20 there; any amended statement of claim on or before the next week, defence by the 31st and the matter could then come back?

MR GAGELER:   Yes. 

HIS HONOUR:   That seems sensible.

MR GAGELER:   Your Honour, those orders we originally proposed.  That is sensible.

HIS HONOUR:   Thank you.  Thursday, 6 September in Sydney, is that suitable, or would it be better in Canberra?  It does not matter.

MR JACKSON:   Your Honour, the 6th, I think, is – I am not sure what day of the week.

HIS HONOUR:   Thursday.

MR JACKSON:   Yes.  Your Honour, I know I will be in Canberra in a case before the Court.

HIS HONOUR:   Right.  You are usually in Canberra on Thursdays.

MR GAGELER:   Yes, I will be there, your Honour.

HIS HONOUR:   Yes.  That might be the best thing to do.  At 9.15, shall we say, on Thursday the 6th?  It is easier to have any video links too, if that is necessary.  I think at the moment the interveners are standing on the sidelines.

MR SOFRONOFF:   Yes.  I have nothing to say, your Honour.

HIS HONOUR:   Yes.  Mr Donaldson?

MR DONALDSON:   No, thank you, your Honour.

HIS HONOUR:   The orders I make this morning are:

1.The plaintiffs have leave to file and serve an amended statement of claim on or before 10 August 2012.

2.The defendant file and serve its defence on or before 31 August 2012.

3.The matter stood over for further directions before me in Canberra on Thursday, 6 September 2012 at 9.15 am.

4.Costs of today will be costs in the action.

Is there anything else?  Thank you, gentlemen.  I will now adjourn.

AT 10.24 AM THE MATTER WAS ADJOURNED