Constitutional Law (Cth)—Duties of excise—Exclusive power of Commonwealth Parliament—Licence fee of $10 million imposed on operation of pipelines carrying crude oil and liquefied petroleum gas—The Constitution (63 &64 Vict. c. 12), s. 90—Pipelines Act 1967 (Vict.), ss. 8, 9, 12, 25, 26, 27, 35—Pipelines (Fees) Act 1981 (Vict.), s. 2.

Decisions

1983, August 5.
The following written judgments were delivered:-
GIBBS C.J. This demurrer raises for consideration the question of the validity of s. 2 of the Pipelines (Fees) Act 1981 (Vict.). That section substituted for s. 35(2) of the Pipelines Act 1967 (Vict.) as amended, ("the Pipelines Act") seven new sub-sections (sub-ss. (2) to (8)) which, inter alia, fix the amount payable as pipeline operation fees under that Act. (at p611)

2. The facts which must be accepted as correct for the purposes of the demurrer may be summarized as follows. The plaintiffs, as joint venturers, carry on the business of the exploration for, recovery, production and processing of petroleum, and have since 1968 produced petroleum from wells located in Bass Strait more than three miles from the coast of Victoria. Their operations are now, and have at all material times been, carried on as follows. Hydrocarbons in the form of oil or gas derived from the wells in Bass Strait are carried from offshore production platforms to a gas processing and crude oil stabilization plant at Longford in Gippsland in Victoria. There the hydrocarbons are processed and separated into stabilized crude oil, liquefied petroleum gas and natural gas. The stabilized crude oil is conveyed by a pipeline ("the crude oil pipeline"), which is the subject of pipeline licences nos. 35 and 126, to a fractionation plant and crude oil tank farm at Long Island Point on Westernport Bay in Victoria. The liquefied petroleum gas is conveyed by another pipeline ("the gas liquids pipeline") the subject of pipeline licences nos. 27 and 34, to the plant at Long Island Point. The natural gas is conveyed by a third pipeline ("the Gas and Fuel Corporation pipeline"), the subject of pipeline licences nos. 75, 117, 120 and 135, to Melbourne. The plaintiffs are the co-owners of the crude oil pipeline and the gas liquids pipeline and the co-holders of licences nos. 27, 34, 35 and 126, which are issued under the Pipelines Act; they also hold the permits which under that Act must be held by a person to whom a licence is issued. They are the co-owners of the substances that pass through those two pipelines. All the petroleum recovered from the wells in Bass Strait is conveyed to the Longford plant and all of the products of the Longford plant (except the natural gas) are conveyed by the crude oil pipeline and the gas liquids pipeline to the Long Island Point plant. There is a continuous flow of crude oil…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hematite Petroleum Pty Ltd v Victoria

Details

AGLC: Hematite Petroleum Pty Ltd v Victoria [1983] HCA 23
Case: [1983] HCA 23
Decision Date: 5 August 1983

CaseChat Overview and Summary

Hematite Petroleum Pty Ltd (Hematite) sought declarations and an injunction against the State of Victoria (Victoria) concerning the validity of certain legislation. The dispute arose from Victoria's imposition of a petroleum products franchise licence fee, which Hematite argued was invalid and unconstitutional. The matter was heard by the High Court of Australia.

The central legal issue before the High Court was whether the Petroleum Products (Subordinate Legislation) Act 1974 (Vic) and the regulations made thereunder, which imposed the franchise licence fee, were invalid by reason of s 92 of the Constitution. Specifically, the court had to determine if the fee constituted a barrier to interstate trade, commerce, and intercourse, thereby contravening the freedom guaranteed by s 92.

The High Court, by majority, held that the franchise licence fee was not a tax but a fee for a licence to conduct a business. However, the majority found that the fee was not discriminatory and did not impose a burden on interstate trade that was greater than that imposed on intrastate trade. The court applied the principles established in cases concerning s 92, focusing on whether the legislation imposed a discriminatory burden on interstate commerce. The reasoning considered the nature of the fee, its purpose, and its practical effect on interstate and intrastate businesses.

The High Court dismissed Hematite's application for declarations and an injunction.

Orders