McMullin, Brian v ICI Australia Operations Pty Ltd
[1996] FCA 857
•25 SEPTEMBER 1996
C A T C H W O R D S
PRACTICE AND PROCEDURE - Application for summary dismissal of proceeding - Claim for losses suffered as a result of contamination of cattle by an insecticide - Joinder of State authorities concerned with approval and registration of the product - Whether action barred by statutory provision that "no action lies" against the State in connection with loss sustained as a result of use of the product- Effect of this provision - Retrospectivity of provision - Whether provision applies in respect of vested cause of action.
Agricultural and Veterinary Chemicals (New South Wales) Act 1994 (NSW), s.31
BRIAN McMULLIN and LEONE MARGARET McMULLIN
v ICI AUSTRALIA OPERATIONS PTY LTD, ICI AUSTRALIA LIMITED, CROP CARE AUSTRALASIA PTY LTD, THE STATE OF NEW SOUTH WALES and THE STATE OF QUEENSLAND
NO. NG305 OF 1995
CORAM: WILCOX J
PLACE: SYDNEY
DATE: 25 SEPTEMBER 1996
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No: NG305 of 1995
GENERAL DIVISION )
BETWEEN:BRIAN McMULLIN AND LEONE MARGARET McMULLIN
Applicants
AND:ICI AUSTRALIA OPERATIONS PTY LTD
First Respondent
ICI AUSTRALIA LIMITED
Second Respondent
CROP CARE AUSTRALASIA PTY LTD
Third Respondent
THE STATE OF NEW SOUTH WALES
Sixth Respondent
THE STATE OF QUEENSLAND
Seventh Respondent
COURT: WILCOX J
DATE: 25 SEPTEMBER 1996
PLACE: SYDNEY
MINUTES OF ORDER
THE COURT ORDERS THAT:
The Notice of Motion filed by the sixth respondent on 16 August 1996 be dismissed.
The sixth respondent pay to the applicants their costs of the motion.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY No: NG305 of 1995
GENERAL DIVISION
BETWEEN:BRIAN McMULLIN AND LEONE MARGARET McMULLIN
Applicants
AND:ICI AUSTRALIA OPERATIONS PTY LTD
First Respondent
ICI AUSTRALIA LIMITED
Second Respondent
CROP CARE AUSTRALASIA PTY LTD
Third Respondent
THE STATE OF NEW SOUTH WALES
Sixth Respondent
THE STATE OF QUEENSLAND
Seventh Respondent
COURT: WILCOX J
DATE: 25 SEPTEMBER 1996
PLACE: SYDNEY
REASONS FOR JUDGMENT
WILCOX J: By Notice of Motion filed on 16 August 1996, the sixth respondent to this proceeding, the State of New South Wales, seeks an order under Order 20 rule 2(1) or Order 11 rule 16 of the Federal Court Rules for the dismissal of the proceeding, as against that respondent, or the striking out of the Second Further Amended Statement of Claim, insofar as it relates to it.
The application is based on a ground similar to one urged in applications made last year by two former respondents to the proceeding, the Commonwealth of Australia and National Registration Authority ("NRA"). Those applications were successful. On 29 May 1996, I made orders dismissing the claims against those respondents. At that time, I dismissed summary dismissal or strike out applications made on different grounds by the State of New South Wales and the State of Queensland, the seventh respondent.
The legislation
Although not previously advanced by New South Wales, the present argument refers to some of the Commonwealth legislation summarised in my earlier reasons. I need not repeat that summary. Nor need I repeat what I said about the facts of the case or the principles that apply on applications for summary judgment. None of those statements are challenged. New South Wales' present application is based on s. 31 of an Act of the New South Wales Parliament, Agricultural and Veterinary Chemicals (New South Wales) Act 1994 (the "NSW Act"). As that is a State Act, difficulties would arise if the applicants' claims against New South Wales were based on Commonwealth law. But they are not. The detail of the claims is set out in my earlier reasons for judgment. For present purposes, it is enough to say that the surviving causes of action pleaded against New South Wales, after abandonment of earlier claims based on the Trade Practices Act 1974, depend upon common law (the negligence claims) or a New South Wales statute, the Fair Trading Act 1987 (NSW). Those causes of action are part of the law of New South Wales, so it is obviously competent for the New South Wales Parliament to exclude claims based on them, even claims brought in a Commonwealth court.
Section 5 of the NSW Act applies as a law of New South Wales a Code which is known as "the Agvet Code" and is set out in the Schedule to a Commonwealth statute, the Agriculture and Veterinary Chemicals Code Act 1994 (the "Code Act"). The section further provides that, as so applying, the Agvet Code may be cited as "the Agvet Code of New South Wales". Bearing in mind that "this jurisdiction" is defined by s. 7 of the NSW Act as meaning New South Wales, this Code is the provision referred to in subs. (3) of s. 31 of the NSW Act. Section 31 relevantly provides:
"31.(1) No action, suit or other proceeding for damages lies against the State or a person who is or has been a coordinator of this jurisdiction for any loss or injury directly or indirectly suffered as a result of:
(a)the handling of an approved active constituent for a proposed or existing chemical product; or
(b)the handling of a registered chemical product; or
(c)the handling of an active constituent for a proposed or existing chemical product, or of a chemical product, in respect of which a permit or exemption has been issued or given by the NRA; or
(d)an inability to use, or to use in a particular manner, an active constituent for a proposed or existing chemical product:
(i)because an approval, permit or exemption permitting its use, or permitting its use in that manner, has been refused by the NRA or such an approval, permit or exemption that was previously granted by the NRA has been suspended or cancelled; or
(ii)because its use, or its use in that manner, is precluded by the conditions of an approval, permit or exemption; or
(e)an inability to use, or to use in a particular manner, a chemical product:
(i)because a registration, permit or exemption permitting its use, or permitting its use in that manner, has been refused by the NRA or such a registration, permit or exemption that was previously granted by the NRA has been suspended or cancelled; or
(ii)because its use, or its use in that manner, is precluded by the conditions of a registration, permit or exemption; or
(f)the carrying out of a step in the manufacture of a chemical product in respect of which a licence has been issued by the NRA; or
(g)an inability to carry out, or to carry out in a particular manner or at particular premises, a step in the manufacture of a chemical product;
(i)because a licence to carry out that step, or to carry out that step in that manner or at those premises, has been refused by the NRA or such a licence that was previously granted by the NRA has been suspended or cancelled; or
(ii)because the carrying out of that step, or the carrying out of that step in that manner or at those premises, is precluded by the conditions of a licence.
(2) ...
(3)Expressions used in this section have the same meanings as in the Agvet Code of this jurisdiction."
The word "State" is defined, by both the New South Wales Act and the Agvet Code (in each case in s. 3), as including the Northern Territory. The result is that, where used in an indefinite sense, the word "State" refers to any of the six States or the Northern Territory. The definite term "the State" is not defined. However, in a New South Wales statute, it must mean the State of New South Wales. Accordingly, s. 31 enures for the benefit of New South Wales. The question is whether it applies to this case.
Counsel for New South Wales rely on paras. (b) and (c) of s. 31(1). These paragraphs use some words and phrases that are defined in s. 3 of the Agvet Code, and so the Agvet Code of New South Wales. The word "handling" is defined to include "transportation, storage, processing, use or disposal". A "chemical product" is "an agricultural chemical product or a veterinary chemical product, or both". Section 4 of the Code contains a lengthy definition of the term "agricultural chemical product". I need not set it out. It is common ground that "Helix" falls within that definition.
A "registered chemical product" is "a chemical registered under Part 2 of the Agvet Code of this jurisdiction". Part 2 deals with applications for approval or registration made to NRA after the commencement of the Code Act. "Helix" was not registered under the Code Act; it was registered under earlier legislation. But the reference to
Part 2 must be read in conjunction with s. 174(1)(a) of the Code which provides:"174(1) If, immediately before the commencement of the Agvet Code of this jurisdiction, a chemical product was registered by the previous registering authority of this jurisdiction and a label in relation to, or in relation to containers for, that product was also registered or approved by that authority, the following paragraphs apply:
(a)the product is taken to have been registered by the NRA under section 20 of that Code upon that commencement subject to the conditions (if any) to which its registration by that previous registering authority was subject ...".
The term "previous registering authority" is defined by s. 3 of the Code as meaning "a registering authority under a corresponding previous law". A "corresponding previous law" is "a previous law of this jurisdiction that corresponds wholly or partly to this Code, to the extent that it so corresponds". Counsel for New South Wales argue that the Pesticides Act 1978 (NSW) answers that description. There is uncontested evidence that the Registrar of Pesticides registered "Helix" under that Act on 20 February 1989 and, on the same day, registered labels for the product. So counsel contend that the case is covered by the opening words of s. 174(1). The result, they say, is that "Helix" is taken to have been registered by NRA under s. 20 of the Code, which is within Part 2. Accordingly, "Helix" is a "registered chemical product".
Paragraph (c) uses the term "active constituent". This is defined by s. 3 of the Code to mean, in relation to a proposed or existing agricultural or veterinary chemical product, "the substance that is, or one of the substances that together are, primarily responsible for the biological or other effect identifying the product as an agricultural chemical product or a veterinary chemical product, as the case may be".
The para.(b) argument
As I have said, counsel for New South Wales rely on both paras. (b) and (c) of s. 31(1) of the NSW Act. Their para. (b) argument contains four points:
"Helix" is a "registered chemical product" within the meaning of s. 31(1)(b); that is, as that term is defined by s. 3 of the Code;
the word "handling" includes "use";
this proceeding is an action for damages against New South Wales for losses suffered as a result of the use of "Helix";
therefore s. 31(1)(b) applies to bar the proceeding.
There is no doubt about points (ii) and (iii). There are questions about (i) and (iv). I will deal with each separately.
"Registered chemical product"
The question whether "Helix" is a "registered chemical product" within the meaning of s. 31(1)(b) turns on whether or not it is correct to say that the Pesticides Act is a "corresponding previous law". The Pesticides Act is a "previous law" of New South Wales. It was enacted in 1978 as the Pesticides and Allied Chemicals Act. It may have had a narrower application than the 1994 NSW Act but at all material times it provided for applications for registration of pesticides (ss. 8 and 9) and labels (s. 10). The Registrar of Pesticides was empowered to register pesticides and labels (s. 18) and it was an offence to sell, supply or use an unregistered pesticide except pursuant to a permit issued under s. 25 of the Act: see ss. 29-31. The word "pesticide" was defined by s. 5 so as to include a "substance ... that is manufactured, represented, sold or used as a means for directly or indirectly ... destroying, stupefying, repelling, inhibiting the feeding of, or preventing infestation by or attacks of, any pest". Those words cover "Helix". The evidence is that the active constituent of "Helix", chlorfluazuron, operates to alter the natural development and reproductive capacity of the target pest, bullworm, by inhibiting the production of chitin. Chitin is the material from which the bullworm grows its hard outer shell. Without an outer shell, bullworms cannot mature or reproduce. So far as the evidence shows, chlorfluazuron does not destroy, stupefy or repel bullworms or inhibit their feeding; but interference with their maturation and reproduction must have the effect of preventing their infestation of cotton plants.
I conclude that the Pesticides Act is a "corresponding previous law" within the meaning of s. 3 of the Code, and therefore, s. 31(1)(b). Point (i) is made good.
The application of s.31 to a vested cause of action
Notwithstanding that points (i), (ii) and (iii) are correct, counsel for the applicants says point (iv) does not follow. He advances two reasons. First, he says that s. 31 bars the coming into existence of a cause of action, not the bringing of a suit. As the section is not expressed to have retrospective operation, it has no application to a cause of action that arose before its enactment. That is what happened in the present case. The NSW Act came into force on 15 March 1995 whereas the alleged contamination, and damage, occurred between 1989 and 1994. Counsel for New South Wales argue that s. 31 bars the remedy, not the accrual of a right of action; accordingly, the section applies to this proceeding which was commenced on 3 May 1995.
In my reasons for judgment of 29 May, I discussed a similar issue, arising out of s. 69H of the (Commonwealth) Agricultural and Veterinary Chemicals (Administration) Act 1992. The opening words of that section are relevantly identical to those of s. 31 of the NSW Act. Section 69H provides that, subject to subs. (3), "no action, suit or other proceeding for damages lies against the Commonwealth" etc. In my May 29 reasons, I commented that the words "no action lies" are "a not uncommon statutory formula" but I had not found any authority concerning their effect. I said that, if I had to determine the matter one way or the other, I would accept the applicants' then submission that the words merely barred the remedy; it did not extinguish the right. But I did not have to decide the question because s. 69H had been preceded by an earlier provision to like effect. On any view, one or other of the provisions applied. This is not the situation in relation to s.31, which has no New South Wales predecessor. It is necessary to come to a conclusion about the effect of this formula in order to resolve the present application.
Counsel for the applicants says that the language of the section evinces an intention to prevent the accrual of a cause of action because it "fixes upon 'loss or injury'" and, so, "can only have been intended to apply to loss or injury arising after the date the statute came into force". He refers to the presumption against retrospectivity and comments: "Were it otherwise a person with a complete cause of action and right to recover as at 14 March 1995 retrospectively had that valuable right abolished on 15 March 1995".
I do not think the reference to "loss or injury" assists the applicants' argument. These words are merely part of the formula qualifying the word "damages", to explain what actions for damages are affected by the section.
In order to resolve the issue posed by the applicants' first argument, it is necessary to determine the effect of the words used in s.31(1) and, then, whether the provision applies to a cause of action that accrued before the subsection was enacted.
Once again, counsel cited no authority concerning the effect of the statutory formula "no action lies". However, my Associate found some decisions concerning s.44(1) of the Safety Rehabilitation and Compensation Act 1988 ("the SRC Act"), formerly the Commonwealth Employees' Rehabilitation and Compensation Act 1988, which are helpful: see Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 and Commonwealth of Australia v Mewett (1994) 126 ALR 391 and, on appeal, (1995) 59 FCR 391. Subsection 44(1) of the SRC Act says that "an action or other proceeding for damages does not lie against the Commonwealth" in respect of a compensable injury "whether that injury ... occurred before or after the commencement of this section". Reinforcing the notion that the provision was intended to be generally retrospective, subs. (2) excepted actions instituted before the commencement of the section. In Georgiadis the High Court by majority (Mason CJ, Brennan, Deane and Gaudron JJ; Dawson, Toohey and McHugh JJ dissenting) held that s. 44(1) was constitutionally invalid, at least in relation to a cause of action that was not statute-barred before the action was commenced. The reason was that it effected an acquisition of property otherwise than on just terms, as required by s. 51(xxxi) of the Constitution. The High Court expressly reserved the position in relation to statute-barred causes of actions. However, in Mewett, a Full Court of this Court held that the subsection was invalid in relation to those causes of action also.
The question of constitutional validity is not material to this application. Nonetheless, Georgiadis is of present interest because of its characterisation of s. 44(1). In this regard there is no difference between the views expressed by the majority and minority Justices. Mason CJ, Deane and Gaudron JJ said at 306: "... the effect of s.44, if valid, is to extinguish a vested cause of action that arose under the general law". Brennan J at 310 referred to "the extinguishment of the plaintiff's cause of action". Dawson J at 314 said that the 1988 Act "purported to extinguish the plaintiff's claim for damages for his back injury". At 318 Toohey J spoke of the "extinguishment" of the plaintiffs common law action for damages. McHugh J at 322 said that
"(t)he 1988 Act extinguishes all rights to sue the Commonwealth ... for damages for injuries ...".
I do not see any material distinction between the language used in s. 31(1) of the NSW Act and that of s. 44(1) of the SRC Act; the characterisation adopted in Georgiadis must apply to s. 31(1). Contrary to the tentative view I earlier expressed, that subsection must be regarded as a provision extinguishing the right, not merely one that bars the remedy.
Unlike s. 44(1) of the SRC Act, s. 31(1) of the NSW Act contains no indication that it was intended to apply to losses or injuries sustained before its commencement. There are no words corresponding to s. 44(1)'s "whether that injury ... occurred before or after the commencement of this section". There is no reference to already-commenced proceedings. Nor does the subsection refer to things that could only have happened, or losses or injuries that could only have been sustained, before its enactment. For example, there is no reference to a person who was a member of the Technical Committee on Agricultural Chemicals or the Australian Agricultural Veterinary Chemicals Council, both of which bodies were disbanded before March 1995. To construe it as having only a prospective operation does no violence to the language of s. 31(1).
In considering whether s. 31(1) applies to already-accrued causes of action, it is appropriate to recall the principle stated by Dixon CJ in Maxwell v Murphy (1956) 96 CLR 261 at 267:
"The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed."
At 270 Dixon CJ adopted the following summary of principles regarding retrospectivity:
"unless the language used plainly manifests in express terms or by clear implication a contrary intention - (a) A statute divesting vested rights is to be construed as prospective. (b) A statute, merely procedural, is to be construed as retrospective. (c) A statute which, while procedural in its character, affects vested rights adversely is to be construed as prospective."
In Fisher v Hebburn Ltd (1960) 105 CLR 188 at 194, Fullagar J said:
"There can be no doubt that the general rule is that an amending enactment - or, for that matter, any enactment - is prima facie to be construed as having a prospective operation only. That is to say, it is prima facie to be construed as not attaching new legal consequences to facts or events which occurred before its commencement."
These statements have been applied in numerous subsequent cases, as is apparent from the discussion in Chapter 10 of Pearce and Geddes "Statutory Interpretation in Australia", fourth edition.
Once it is determined, as a matter of construction, that s.31(1) operates to extinguish rights, and not merely to bar remedies, it must be concluded that the presumption against retrospectivity applies. On the Georgiadis analysis, it is a provision "divesting vested rights", within para. (a) of Dixon CJ's summary of principles. It has the effect of "attaching new legal consequences" to facts that occurred before its commencement. Of course, the presumption against retrospectivity is only that, a presumption. A disposition to treat a statutory provision as not operating retrospectively must yield to any indication of a contrary intention, as in Georgiadis. But, as I have pointed out, s. 31(1) contains no such indication. Accordingly, it should be understood not to apply to causes of action that accrued before its commencement. That is the present case. I hold that the subsection has no application to this case. New South Wales' motion must be refused.
Limitation to "registration causes of action"
This conclusion makes it unnecessary for me to refer to the applicants' second argument for denying the correctness of point (iv). Nonetheless, I will shortly state my view concerning it.
The second argument is that s. 31 only applies to what counsel calls "registration causes of action"; that is, causes of action arising in relation to New South Wales' performance of its regulatory functions under the NSW Act and the Code. Counsel says the exemption from suit that it confers does not extend to negligence by New South Wales' representatives on the Technical Committee on Agricultural Chemicals or the Australian Agricultural and Veterinary Chemicals Council, or by Departmental officers in giving advice to graziers; the operation of s. 31 must be limited by its statutory context. In his written submission, he said:"It cannot be intended to mean that every loss or injury however suffered as a result of the handling of a registered chemical product is exempted. An example would be where a state transport authority negligently allowed a drum of a registered chemical it was handling to fall and injure a person. Could it be contended that the exemption extended to such negligence in an unrelated activity of conducting a transport enterprise merely because the drum dropped contained a registered chemical product? The absurdity of such an interpretation would be indicated if 2 drums were dropped, one containing a registered chemical product and one containing water, each injuring a different person. One person would have a remedy and one person would not because of a statute not concerned with transport enterprises or right of action generally. The field of operation of section 31 should therefore be limited to causes of action relating to or arising from the exercise of the functions set out in the Act."
Counsel's example may be poorly chosen. A State transport authority would probably be a statutory corporation vulnerable to be sued in its own name; s. 31(1)(b) would not exclude an action against such a defendant. However, I accept counsel's point that, if s. 31(1)(b) applies to all causes of action, it has a wide operation. Does this mean the Court would be justified in reading it down in the manner suggested by counsel? I think not. There is nothing in the paragraph that suggests it applies only to "registration causes of action", whatever they may be. Paragraph (b) unambiguously says that no action etc lies against New South Wales for damages for any loss directly or indirectly suffered as a result of the "handling" of a registered chemical product. In other words, if the product is a "registered chemical product", as that term is defined, and the action is one for recovery of damages consequential upon a loss occasioned by its "handling", the exemption applies. I do not accept the second argument.
The para. (c) argument
Counsel's submissions do not develop any separate argument concerning para. (c). There is no doubt, once again, that "handling" includes "use" and the evidence establishes that the active constituent for "Helix" is chlorfluazuron. The complaint made in this proceeding is that the applicants and group members suffered losses because of chlorfluazuron contamination of cattle. So it is accurate to say that their alleged losses flowed from the use of "an active constituent for a ... chemical product". There is no evidence that NRA ever issued a permit, or gave an exemption, in respect of chlorfluazuron. If the concluding clause in the paragraph qualifies "active constituent", the paragraph is not satisfied. There is evidence that NRA gave a provisional clearance of "Helix", on 19 July 1994. If a provisional clearance is a "permit", within the meaning of para. (c), and the concluding clause of the paragraph modifies the words "chemical product", para. (c) applies. Having regard to the conclusion I reached in the context of para. (b), it is unnecessary to express views about these matters.
Costs
When I disposed of New South Wales' previous motion for summary dismissal or striking out, I ordered that the costs of that application be applicants' costs in the proceeding against it. That is a common order in such a case. However, in referring to the matter of costs in relation to the present motion, counsel for the applicants emphasises that the argument now raised could have been advanced in the earlier motion. He protests that it is unreasonable of New South Wales to put his clients to the expense of two separate motions seeking the same relief.
I agree. New South Wales' present argument should have been advanced in the earlier motion, thus avoiding duplication of costs. Whatever the ultimate result of the case, the applicants should be enabled to recover the costs they have incurred in resisting a second motion for the same relief. I propose to order that New South Wales pay the applicants' costs of the motion.
I certify that this and the preceding eighteen (18) pages are a true copy of the Reasons for Judgment of his Honour
Justice Wilcox.
Associate:
Dated: 25 September 1996
APPEARANCES
Counsel for the Applicants: J E Rowe
Solicitor for the Applicants: Peter Long & Co
Counsel for the 6th Respondent: P R Garling SC
and M Windsor
Solicitors for 6th Respondent: Audrey Lee
Date of hearing: No oral hearing - written submissions supplied
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