Neat Domestic Trading Pty Limited v AWB Limited

[2001] FCA 1178

FEDERAL COURT OF AUSTRALIA

Neat Domestic Trading Pty Limited v AWB Limited & Anor
[2001] FCA 1178

ADMINISTRATIVE LAW – refusal of approval by AWB (International) Limited to consent by Wheat Export Authority for export of wheat – whether decision subject to administrative law remedies – whether decision made in accordance with a rule or policy without regard to the merits of the particular case

Trade Practices Act 1974 (Cth) ss 46, 51(1)(a)
Wheat Marketing Act 1989 (Cth) s 57(3B), (6)

Annetts v McCann (1990) 170 CLR 596 at 598 applied
Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 57-58 applied
Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Limited (1989) 167 CLR 177 at 199 mentioned

NEAT DOMESTIC TRADING PTY LIMITED V AWB LIMITED & ANOR
N 84 OF 2001

HEEREY, MANSFIELD AND GYLES JJ
24 AUGUST 2001
MELBOURNE (HEARD IN SYDNEY)

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 84 OF 2001

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

NEAT DOMESTIC TRADING PTY LIMITED
(ACN 076 453 891)
APPELLANT

AND:

AWB LIMITED (ACN 081 890 459)
FIRST RESPONDENT

AWB (INTERNATIONAL) LIMITED (ACN 081 890 413)
SECOND RESPONDENT

JUDGE:

HEEREY, MANSFIELD AND GYLES JJ

DATE OF ORDER:

24 AUGUST 2001

WHERE MADE:

MELBOURNE (HEARD IN SYDNEY)

THE COURT MAKES THE FOLLOWING ORDERS:

1.        The appeal is dismissed.

2.        The appellant pay the respondents’ costs, including reserved costs.

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	N 84 OF 2001

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

NEAT DOMESTIC TRADING PTY LIMITED
(ACN 076 453 891)
APPELLANT

AND:

AWB LIMITED (ACN 081 890 459)
FIRST RESPONDENT

AWB (INTERNATIONAL) LIMITED (ACN 081 890 413)
SECOND RESPONDENT

JUDGE:	HEEREY, MANSFIELD AND GYLES JJ
DATE:	24 AUGUST 2001
PLACE:	MELBOURNE (HEARD IN SYDNEY)

REASONS FOR JUDGMENT

HEEREY J:

1. The appellant NEAT Domestic Trading Pty Ltd (NEAT) challenges the decision of the second respondent AWB (International) Limited (AWBI) to refuse approval under s 57(3B) of the Wheat Marketing Act 1989 (Cth) (the WM Act) for the proposed export of wheat by NEAT on six separate occasions between November 1999 and February 2000. Because of AWBI’s refusal of approval, the Wheat Export Authority (the Authority) could not give the consent to export which is mandated by s 57(1) of the WM Act.

2. The relevant provisions are as follows:

   “57 (1)    A person shall not export wheat unless:

   (a)the Authority has given its written consent to the export of the wheat; and

   (b)the export of the wheat is in accordance with the terms of that consent.

   Penalty:

   (a)in the case of a natural person - $60,000; or

   (b)in the case of a body corporate - $300,000.

   …

   (3A)Before giving a consent, the Authority must consult nominated company B.

   (3B)The Authority must not give a bulk-export consent without the prior approval in writing of nominated company B.  For this purpose a consent is a “bulk-export consent” unless it is limited to export in bags or containers.    

   (3D)An application for a consent under this section must be accompanied by such fee (if any) as is prescribed by the regulations.  The fee is payable to the Authority.

   (3E)The Authority must issue guidelines about the matters it will take into account in exercising its powers under this section.”

   AWBI is the “nominated company B” referred to.  There appears to be no subsection (3C).

3. The present proceeding was commenced on 20 March 2000. The respondents at that stage were the Authority, AWB Limited (AWB) and AWBI. In its application NEAT sought “Administrative Law Relief” setting aside the decisions and conduct of the respondents in connection with the refusal of approval by AWBI and the refusal of consent by the Authority. NEAT also sought “Trade Practices Relief” including a declaration that “the AWB (International) exclusionary policy” was in breach of s 46 of the Trade Practices Act 1974 (Cth) (the TP Act). That policy was defined in par 7 of the statement of claim as a policy that AWBI “will not give approval to the export of wheat in bulk by any person”. Injunctive relief and damages were sought.

4. In their amended defence AWB and AWBI relied on s 57(6) of the WM Act which provides:

   “(6)  For the purposes of subsection 51(1) of the “Trade Practices Act 1974” the following things are to be regarded as specified in this section and specifically authorised by this section:
   (a)      the export of wheat by nominated company B;

   (b)anything that is done by nominated company B under this section or for the purposes of this section.”

5. Section 51(1)(a) of the TP Act provides that in deciding whether a person has contravened Pt IV of that Act there must be disregarded anything specified in and specifically authorised by an Act of the Commonwealth. However the authorising provision must expressly refer to the TP Act: s 51(1C)(a).

6. By the time the matter came on for trial before Mathews J in July 2000, NEAT no longer sought any administrative law relief against the Authority for the practical reason that the export sales NEAT sought to make could no longer be effected.  The Authority dropped out of the case.  What remained in issue was the validity of AWBI’s refusal of approval.  Although, as will be seen, AWBI’s commercial role and its status as a corporation under the Corporations Law are important for the determination of this appeal, the question whether AWBI’s decision was, in terms, “a decision of an administrative character made … under an enactment” within the meaning of s 3 (1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) was not in issue. It was not necessary to invoke the jurisdiction of the ADJR Act because this Court was seized of the matter in its undoubted jurisdiction under s 46 of the TP Act, the question being whether AWBI’s defence under s 57(6) of the WM Act had been made out.

7. At trial the parties treated the critical issue as being whether AWBI made its decisions in accordance with a rule or policy without regard to the merits of the particular case. It is convenient to use the language of s 5(2)(f) of the ADJR Act, but it was not disputed that there is a common law rule of administrative law to the same effect.

   Statutory control of Australian wheat exports

8. In 1939 the Australian Wheat Board (the Board) was established to control the domestic and export marketing of Australian wheat. It has operated under various Commonwealth statutes from time to time, the most recent being the WM Act. The provisions of the WM Act with which the present case is concerned were introduced by the Wheat Marketing Legislation Amendment Act 1998 (Cth). In the Explanatory Memorandum circulated by the Minister when this legislation was introduced it was said that those amendments were part of a two stage process of legislative change to the WM Act to implement a restructure of the Board from a statutory marketing authority to a grower owned company. In the first stage, undertaken in 1997, amendments to the WM Act enabled the Board to establish a wholly owned subsidiary company called “nominated company A” with two subsidiaries (“nominated companies B and C”) to conduct the Board’s grain marketing and financing functions from June 1998. Company B would be responsible for all matters relating to pooling of wheat of the 1997, 1998 and subsequent seasons. Company C would undertake domestic trading of grains and other activities. “Nominated Company A” is AWB.

9. The 1998 amendments were to put in place the final phase of the Government’s agreement for industry proposals for the grower owned company structure to operate from 1 July 1999.  At that time companies A, B and C would cease to be owned by the Board and would become grower owned.  The Board itself would continue in existence as the Authority.  The Explanatory Memorandum said:

   “5.      The Bill provides for the establishment of the Wheat Export Authority (WEA) on 1 July 1999 with functions to control exports of wheat and to monitor and report to Parliament and the industry on the use of the monopoly by Company B which is given the automatic right to export wheat for five years from 1999 through the Bill.” 

10. Later it was said:

    “18. Following lengthy discussion, Government and industry have agreed that from 1 July 1999 responsibility for all commercial aspects of wheat marketing will be taken over by a new grower owned and controlled Corporations Law company structure. Consequently, from 1 July 1999, the only ongoing Government involvement (and therefore regulatory impact) in wheat marketing will be in relation to the export monopoly on wheat which will be managed, from that time, by a small independent statutory body.

    19.      The international market for wheat is distorted by the interventionist policies of other grain producing countries such as the US and EU which use varying forms of domestic support and export subsidy programs.  Aggressive use of these programs can substantially reduce international wheat prices.

    20.      The export monopoly, therefore, provides a tool to conduct the export marketing of Australian wheat to maximise the net returns to growers.  It is also considered that the export monopoly provides a net benefit to the wider Australian community.”

11. And later:

    “23.     Certainty is important because the Government has agreed that the monopoly will be retained for its current term of office and be provided to the new grower owned company.  Industry places great importance on continuation of the monopoly.

    Refusals of approval

12. The following are details of refusals:

    No               Date                Tonnes         Grade           Destination

    1.            9 Nov 1999         25,000         ADR 3         Italy

    2.            9 Nov 1999         25,000         ADR 3         Morocco

    3.            13 Dec 1999       25,000         ADR 6         Italy

    4.            13 Dec 1999       25,000         ADR Feed     Italy

    5.            18 Jan 2000         50,000         ADR Feed     Italy

    6.            7 Feb 2000          25,000         ADR Feed     Italy

13. The wheat was durum wheat.  AWBI has a grading system for this variety.  ADR 1 is the highest grade and the gradings drop progressively down to ADR 6 and ADR Feed which is the lowest grade. Growers can deliver wheat to a pool operated by AWBI or sell directly to grain traders.  The life of each pool is approximately twelve to eighteen months.  Growers who deliver to a pool receive five quarterly payments the amount being determined by sales progress of the given grade, less marketing costs.

14. In each case application was made by NEAT to the Authority who in turn sought the approval of AWBI.  AWBI wrote to the Authority stating that it did not grant approval.  The Authority then advised NEAT that consent was refused.  There was no direct contact between NEAT and AWBI.

15. To take by way of example application no. 5, NEAT made an application on 13 January 2000 accompanied by a letter in support.  The letter stated that the wheat was uncovered and exposed to weather.  Local silos in the Liverpool Plains area were either full or shut.  NEAT could offer growers $35 per tonne more than the domestic price.  NEAT’s Italian buyer wanted to purchase this particular wheat following receipt of samples.  The buyer only had a limited time frame and had US Feed durum under offer.  NEAT and its group of grower clients would suffer significant  losses if NEAT failed to obtain consent. 

16. On the same day the Authority passed the application on to AWBI with a pro forma letter which included a request

    “In the event of an application for an export permit being declined, please provide us with the evidence supporting the rejection.”

    Also on 13 January AWBI wrote to the Authority stating that it did not give its approval. The letter stated:

    “Approval is not granted on the basis that the issuing of the permit would jeopardise AWB (International) Limited’s marketing strategy in this market and adversely impact on the net returns received by growers who deliver to the National Pool.”

17. On 17 January Mr Peter Howard of NEAT spoke with the Manager of the Authority and on 18 January NEAT wrote providing further information in support of its application.

18. On 18 January the Authority wrote to NEAT advising its application was unsuccessful.

    Evidence of AWBI’s reasons for refusal of approval

19. The two officials who made the decision to refuse AWBI approval for NEAT’s applications were Mr Nicholas Gomersall and Mr Stuart Richardson. Both Mr Gomersall and Mr Richardson gave evidence of reasons for refusing the approvals.  By way of example, in relation to the refusal of 13 January 2000 already referred to, Mr Gomersall deposed that his reasoning was as follows.  It was an application to export ADR Feed to Italy.  AWBI already had a program for trading ADR 6 in Italy which was only one grade higher than ADR Feed.  He was concerned that allowing another trader to sell slightly lower grade durum into the same market for a consequentially lower price may “soak up the demand” for that range of grade of wheat with the effect that AWBI would be unable to sell ADR 6 into that market.  He was also concerned about the potential for vomitoxin levels in the wheat.  He was aware in December 1999 that some levels in excess of the maximum levels recommended by US authorities had been found in durum sites in northern New South Wales.  Testing had not been completed.  He was also aware that AWBI was negotiating with some nine buyers or brokers in Italy and had secured some sales.  He believed that sales to Italy by another trader were likely to have a negative effect on those current negotiations.  Allowing another trader to negotiate with buyers in the same markets would see Australian wheat competing with Australian wheat and the price received for the wheat would likely be less than if AWBI were the only seller in the market.  Further, returns for sales by another trader would only go to a limited number of growers who had delivered to that trader and not to growers who delivered to the National pool.  This was likely to have a negative impact on AWBI’s single desk marketing arrangements with “serious consequences  for Australian growers”. 

20. In cross-examination Mr Gomersall agreed that AWBI’s concern to preserve the single desk marketing system was an important factor in his decision-making process but denied it was the only one.  He was aware of AWBI’s policy not to approve bulk export applications in “the current environment” which he said included the market environment which was susceptible to change on a daily basis.  Mr Richardson was also cross-examined. The Primary Judge said:

    “119.   I am satisfied on the evidence that the effective reason for AWBI’s refusal to approve NEAT’s application in each case was the existence of its policy against bulk permits for the export of wheat.  In spite of Mr Gomersall’s protestations that the existence of the policy was only one of a number of relevant factors, the evidence overwhelmingly indicates that:

    ·AWBI had a policy against approving the bulk export of wheat

    ·AWBI rejected NEAT’s applications in pursuance of this policy.

    120.     As to the existence of the policy, the evidence is all one way.  The strength of the policy was illustrated by the consternation which followed the mistaken issue of a bulk export permit to Pars Ram.  But even without the Pars Ram affair, it is incontrovertibly clear that, during the whole of the period which is relevant to this case, AWBI had a policy that, ‘in the current market environment’, no bulk export permits would be approved.  As to what was the current market environment at the time, the evidence is not so clear.  I shall be discussing this matter shortly.  It is plain, however, that the relevant market environment, whatever it was, did not alter during the relevant period, namely between November 1999 and March 2000.”

21. Her Honour concluded [at 121] that the evidence “overwhelmingly” indicated that it was this policy, and this policy alone, which dictated the rejection of each of NEAT’s applications.  However her Honour thought that adherence to policy could not on its own be a ground for complaint.  The real question was whether the policy had been applied so inflexibly that relevant considerations had been ignored [at 123].  Her Honour then went on to consider AWBI’s obligation under its constitution.  Relevantly its Articles of Association required its directors to ensure that its business was managed with the objective of “maximising the net pool return for Growers who sell wheat into the pools run by the Pools Subsidiary by securing, developing and maintaining markets for wheat and by minimising costs as far as practicable”.  Her Honour then discussed some correspondence under which AWBI reaffirmed its single desk policy and also memoranda from AWBI to the Authority.  Her Honour said [at 137]:

    “This material shows that AWBI’s reason for maintaining its policy against bulk export permits can be encapsulated into a very simple proposition, which is this: the grant of bulk export permits might well benefit individual growers who sell their wheat under the permits, but this will be at the likely expense of growers who deliver their wheat to the National Pool.  It is against AWBI’s constitutional mandate to prefer individual growers who are outside the pool system to growers who are within it.  Therefore bulk export permits should not be approved.”

22. Her Honour thought [at 140] that AWBI’s qualification that its policy against bulk exports would be maintained during “the current market environment” referred to major international market conditions which were unlikely to change in the short term and which did not change during the relevant period and as such the qualification was of little relevance to the issues raised in the case. 

23. Her Honour then went on to deal with the considerations urged in support of NEAT’s applications.  There was no direct communication between NEAT and AWBI and the documentation which AWBI received on each occasion from the Authority was “to say the least, sparse”.  Her Honour concluded that this material contained “nothing which could be expected to deflect AWBI from applying its policy against bulk export permits”.  No attempt was made to address AWBI’s primary concern, namely that the grant of the permit might provide benefits for the growers concerned but to the possible detriment of growers who supplied their wheat to AWBI’s pools. 

24. The essence of her Honour’s conclusion was:

    “157.   It is trite to say that each case must be determined according to its own particular merits.  The present case is, in many respects, a very unusual one.  AWBI was, as Mr Gomersall conceded, concerned more with its overall marketing strategy than with the merits of individual cases. Its decisions in this case were clearly made in the inflexible application of its policy against bulk export permits.  On the other hand, this policy accorded with AWBI’s constitutional charter.  It was based on apparently legitimate considerations.  No material was put before AWBI which challenged the legitimacy of those considerations, or which provided any argument to the effect that the bulk export permits which were sought could be granted in a manner that was consistent with AWBI’s constitutional mandate.  In other words, no material was put before AWBI which could be expected to persuade it to deviate from its policy.”

25. Her Honour then dealt with and rejected the argument that AWBI unlawfully purported to delegate its functions to AWB.

    Was AWBI’s decision subject to administrative law?

26. In my opinion the challenge to AWBI’s decisions to refuse approval to the Authority’s consent to NEAT’s shipments fails at a threshold point, which was raised by way of Notice of Contention.  In making these decisions AWBI was outside the province of administrative law.  The accepted juristic basis of administrative law principles now is that they are free-standing common law rules, operating to control administrative decisions and conduct unless excluded by plain words of necessary intendment:  Annetts v McCann (1990) 170 CLR 596 at 598, Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 57-58. Those cases of course concerned the rules of natural justice, but other administrative law rules such as the inflexible policy rule, with which the present case is concerned, the relevant/irrelevant considerations rule and Wednesbury unreasonableness stand on the same footing. 

1. AWBI is a company incorporated under the Corporations Law. Parliament envisaged that AWBI would operate as a commercial entity which of necessity means that it must act in its own interests. The Explanatory Memorandum already quoted emphasises the independent commercial nature of AWBI. So does the structure of the WM Act. Export requires a two-step process; approval by AWBI and consent by the Authority. The latter is a public law body and in the exercise of its functions would be subject to administrative law remedies. Its members are appointed by the Minister (s 6), it cannot borrow without the approval of the Minister (s 12), must provide operational plans to the Minister (s 16) and lay annual reports before Parliament pursuant to s 9(3) of the Commonwealth Authorities and Companies Act 1997 (Cth). Applications for consent to export sales are to be made to the Authority (s 57(3D)). It must issue guidelines about the matters it will take into account (s 57(3E)).

2. By contrast, the WM Act does not provide for communication between the would be exporter and AWBI, for the very good reason that it will usually be an actual or potential competitor of AWBI.

3. The requirement for approval by AWBI is not related to any administrative governmental function of that company but simply to allow for the possibility that in some circumstances it may suit it not to exercise its monopoly rights, for example where it does not have stocks available or for some commercial reason does not want to enter a particular export market.

4. A company engaged in trade and commerce must be free as a matter of commercial judgment to adopt what might be regarded in administrative law terms as an inflexible policy.  For example, an insurer might resolve that claims in a particular category should always be resisted rather than settled.  In the case of a given claim such a policy may turn out to be unwise, but it is not unlawful or beyond power.  Similarly a commercial entity in carrying on its functions is not bound by the rules of natural justice or procedural fairness vis-a-vis competitors.  As was said by Mason CJ and Wilson J in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Limited (1989) 167 CLR 177 at 199:

   “Competition by its very nature is deliberate and ruthless.  Competitors jockey for sales, the more effective competitors injuring the less effective by taking sales away.  Competitors almost always try to ‘injure’ each other in this way.”

5. Parliament intended that AWBI should be a vigorous, monopolistic participant in the Australian wheat export market, even to the extent of being free from the restrictions which Pt IV of the TP Act imposes on companies competing in domestic markets.

6. It follows that there was no breach of any rule or principle of administrative law which had the effect that AWBI was acting outside s 57(3B) with the consequence, as NEAT argued, that what AWBI did was not “under this section or for the purposes of this section”. Therefore the protection of s 57(6) is available.

7. There was the further point as to whether the AWBI impermissibly delegated its function to AWB.  I would agree with her Honour that on the evidence this was a case where AWB made officers available to AWBI.  But in any event this is a rule of administrative law which has no application.

8. The appeal should be dismissed with costs, including reserved costs.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

Associate:

Dated:             24 August 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 84 OF 2001

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

NEAT DOMESTIC TRADING PTY LIMITED
(ACN 076 453 891)
APPELLANT

AND:

AWB LIMITED (ACN 081 890 459)
FIRST RESPONDENT

AWB (INTERNATIONAL) LIMITED (ACN 081 890 413)
SECOND RESPONDENT

JUDGE:	HEEREY, MANSFIELD AND GYLES JJ
DATE:	24 AUGUST 2001
PLACE:	MELBOURNE (HEARD IN SYDNEY)

REASONS FOR JUDGMENT

MANSFIELD J

1. I have read in draft the reasons for judgment of Heerey J.  His Honour has described the background to and the nature of the proceedings, the relevant provisions of the legislation, including the history of statutory control of Australian wheat exports, and the particular transaction giving rise to the proceedings.  It is neither necessary nor useful to repeat that material.  I also propose to adopt the definition of terms used by his Honour in those reasons.

2. The critical issue on this appeal was whether AWBI, in deciding not to grant approval to the six export transactions proposed by NEAT now under consideration, so that the Authority could not and did not consent to those export transactions under s 57(1) of the WM Act, acted in accordance with the WM Act.

3. If it did not, the argument runs, AWBI is not entitled to the protection provided by s 57(6) of the WM Act so that its conduct in making its decisions is susceptible to attack under s 46 of the TP Act. The question whether the decisions of AWBI exposed it to the potential operation of s 46 of the TP Act was heard and determined separately from, and prior to, issues arising directly under the TP Act. NEAT contended that AWBI’s decisions were not made in accordance with the WM Act, nor were they authorised by it, because it made its decisions in accordance with a rule or policy without regard to the merits of the particular case: see s 5(1)(e) and s 5(2)(f) of the ADJR Act.

4. I do not find it necessary finally to determine whether the decisions of AWBI were decisions of an administrative character made under an enactment, so as potentially to fall under the purview of the ADJR Act. That is simply because, even on the basis that its decisions were subject to review under the ADJR Act, it has not been shown that its decisions not to consent to the six bulk-export transactions under consideration, so that the Authority could not consent to them (subs 57(1)and (3B) of the WM Act), involved the exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular applications: cp British Oxygen Co Ltd v Minister of Technology [1971] AC 610 at 624 - 625.

5. The learned judge at first instance found that the effective reason for each of AWBI’s refusals to consent to NEAT’s application to the Authority to bulk-export wheat was because it had a policy against the bulk export of wheat “in the current market environment”.  It had formed the view that the issue of permits for the bulk export of wheat (at least during the period material to these proceedings) would :

   “... jeopardise AWBI’s marketing strategy and adversely impact on the net returns to growers who deliver to the National Pool.”

6. To permit bulk export sales of wheat to markets to which AWBI was itself exporting would, it feared, lead to competition between itself and other Australian suppliers in that market to its commercial detriment, and to the growers who supplied wheat to it as that would reduce overall returns to growers, the vast majority of who supply wheat to AWBI.  The learned judge at first instance concluded :

   “137This material shows that AWBI’s reason for maintaining its policy against bulk export permits can be encapsulated into a very simple proposition, which is this:  the grant of bulk export permits might well benefit individual growers who sell their wheat under the permits, but this will be at the likely expense of growers who deliver their wheat to the National Pool.  It is against AWBI’s constitutional mandate to prefer individual growers who are outside the pool system to growers who are within it.  Therefore bulk export permits should not be approved.”

7. As Heerey J has shown in his reasons for judgment, the export monopoly for the export of Australian wheat has been a cornerstone of legislative policy for many years, and it has been maintained by the 1997 amendments and the 1999 amendments to the WM Act. The 1999 amendments to the WM Act preserved the monopoly. That appears to be because the Government perceived :

   “19The international market for wheat is distorted by the interventionist policies of other grain producing countries such as the US and EU which use varying forms of domestic support and export subsidy programs.  Aggressive use of these programs can substantially reduce international wheat prices.

   20.The export monopoly, therefore, provides a tool to conduct the export marketing of Australian wheat to maximise the net returns to growers.  It is also considered that the export monopoly provides a net benefit to the wider Australian community.”

   (Regulation Impact Statement, Explanatory Memorandum to the 1999 amendments to the WM Act).

8. Under s 57, the Authority must consent to any export of wheat by AWBI: s 57(1A), but it must not consent to any other bulk export of wheat without AWBI’s consent: s 57(3B). Section 57(6) expressly adverts to the potential application of the TP Act to AWBI. It provides that, for the purposes of s 51(1) of the TP Act, anything that is done by AWBI under or for the purposes of s 57 of the WM Act is to be regarded as specified in s 57 and specifically authorised by s 57. The consequence is that, in considering whether AWBI has contravened any provision in Part IV of the TP Act, there must be disregarded anything done by AWBI under or for the purposes of s 57 of the WM Act. AWBI is obliged under s 84 of the WM Act to purchase all wheat which meets its required standards from any wheat grower, and must then account to the grower for the net return for the particular pool of wheat.

9. In my view, AWBI in giving effect to its policy (as found by the learned judge at first instance) was doing that which the legislature empowered it to do. It was, in the exercise of its commercial functions for the benefit of the wheat growers who had supplied wheat to it, endeavouring to secure the best commercial result for them both in the short term and in the longer term. It was implementing a commercial monopoly which the WM Act gave to it. Its policy to secure its commercial monopoly for the bulk export of wheat was one which the WM Act both contemplated and authorised. In addressing each of the applications by NEAT to the Authority for the bulk-export of wheat, as the learned judge at first instance found, the material which was received by AWBI :

   “... contained nothing which could be expected to deflect AWBI from applying its policy against bulk export permits”.

10. Her Honour then assumed that, at least in general terms, the material submitted by NEAT to the Authority in support of its six applications had been conveyed to AWBI.  That material, as the learned judge at first instance found, was directed to showing the benefits to be derived by the particular growers whose wheat was to be exported.  It really did no more than highlight the clash between the interests of the wheat growers who supply wheat to AWBI through the pool system, and whose interests at least in the bulk export of wheat are given the legislative monopoly referred to, and those wheat growers who wish to export wheat outside the pool system.  The learned judge at first instance concluded :

    “157It is trite to say that each case must be determined according to its own particular merits.  The present case is, in many respects, a very unusual one.  AWBI was, as Mr Gommersall conceded, concerned more with its overall marketing strategy than with the merits of individual cases.  Its decisions in this case were clearly made in the inflexible application of its policy against bulk export permits.  On the other hand, this policy accorded with AWBI’s constitutional charter.  It was based on apparently legitimate considerations.  No material was put before AWBI which challenged the legitimacy of those considerations, or which provided any argument to the effect that the bulk export permits which were sought could be granted in a manner that was consistent with AWBI’s constitutional mandate.  In other words, no material was put before AWBI which could be expected to persuade it to deviate from its policy.”

11. In my judgment, AWBI’s decisions refusing to consent to the six applications of NEAT to the Authority for consent to bulk-export wheat were made in accordance with a policy which reflected AWBI’s legislative mandate and its constitutional charter. Its policy was established for the reasons which the legislature contemplated. The NEAT applications were not consented to because they did not show any reason to depart from that policy. They really sought to undermine or reverse the legislative policy by which AWBI’s monopoly for the bulk-export of wheat was provided for in the WM Act.

12. Accordingly, in my view, the decisions of AWBI were made in accordance with s 57(3B) of the WM Act. They are not decisions which were made in accordance with a rule or policy without regard to the merits of the particular case, but because the NEAT applications gave no cause to depart from the policy AWBI had adopted consistent with its legislative mandate. Consequently, s 57(6) operates to exclude AWBI’s decisions from exposure to Part IV of the TP Act.

13. I also agree with Heerey J that the ground of attack based upon the claim that AWBI unlawfully delegated its functions to AWB also fails.  That claim was based solely upon the terms of the service agreement between AWBI and AWB which took effect from 1 July 1999.  The judge at first instance has identified the relevant provisions of the service agreement, and concluded :

    “174Whilst I accept that AWBI was itself required to exercise its powers under s 57(3B), I am satisfied that it did so. The mere fact that AWBI performed its functions through staff which was provided, for a fee, by AWB, does not constitute an abdication to AWB of its decision-making functions. The service agreement does not purport to delegate AWBI’s functions to AWB. As Mr Robertson pointed out, there is a significant difference between an agreement under which A requests that B carries out its functions, and one where A requests B to make available, for a price, personnel who can assist it to carry out its functions. In the first case there is a delegation of functions, in the second there is not. This case, in my view, clearly falls within the second category.”

14. I respectfully agree with her Honour’s conclusions and the reasons by which she reached them.  I will not repeat those reasons.

15. Accordingly, I consider this appeal should be dismissed with costs, including reserved costs.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate:

Dated:             24 August 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 84 OF 2001

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

NEAT DOMESTIC TRADING PTY LIMITED
(ACN 076 453 891)
APPELLANT

AND:

AWB LIMITED (ACN 081 890 459)
FIRST RESPONDENT

AWB (INTERNATIONAL) LIMITED (ACN 081 890 413)
SECOND RESPONDENT

JUDGE:	HEEREY, MANSFIELD AND GYLES JJ
DATE:	24 AUGUST 2001
PLACE:	MELBOURNE (HEARD IN SYDNEY)

REASONS FOR JUDGMENT

GYLES J:

1. The relevant factual and legal considerations are set out in detail in the judgment appealed from and are adequately summarised in the judgments of Heerey J and Mansfield J, which I have had the advantage of reading in draft.

2. Counsel for the appellant went to the nub of the matter when he submitted that a duty upon the second respondent to consider each request on its own merits and not blindly apply a blanket policy or rule is to be imported into s 57(3B) of the Wheat Marketing Act 1989 (Cth) (“the Act”) as a matter of construction. Absent such an implication, the appellant cannot succeed. For reasons expressed by the Primary Judge and each of Heerey J and Mansfield J, no such implication should be drawn here if s 57(3B) is construed against the whole of the Act, particularly considering the history of it. Indeed, the language of s 57 itself gives no support to the suggested implication.

3. In my opinion, in deciding whether to give approval to a bulk-export consent for the purposes of s 57(3B) of the Act the second respondent has an unrestrained power of veto which may be exercised solely for its own commercial interests as it sees them. I can see no reason why the second respondent cannot decide, for the time being, to adopt a blanket ban on approving sales by others if it concludes that to do so is in its commercial interest. I do not regard this as the kind of situation to which s 5(2)(f) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) or the common law principle as to application of inflexible policy referred to in the authorities cited by counsel for the applicant applies.

4. I would prefer to rest my decision on this limb of the argument on that basis and not necessarily exclude the reach of administrative law from s 57(3B) altogether. For example, it may be arguable that s 57(3B) imposes an enforceable duty upon the second respondent to give an answer when requested and the case of a decision not to approve made for reasons which are not bona fide may require separate consideration.

5. I agree with Heerey J and Mansfield J that the reasons of the Primary Judge for rejecting the non-delegation argument are sound.

6. If each of the attacks upon the decisions not to approve fail, as I have held they do, then there is no reason why s 57(6) of the Act would not apply in these circumstances. At the least, the decisions were “for the purposes of” s 57. The decisions are thus covered by s 51(1) of the Trade Practices Act 1974 (Cth).

7. I would dismiss the appeal, with costs.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate:

Dated:             24 August 2001

Counsel for the Appellant:	S J Gageler SC
Solicitor for the Appellant:	Withnell Hetherington
Counsel for the Respondents:	A Robertson SC and AI Tonkin
Solicitor for the Respondents:	Arthur Robinson & Hedderwicks
Date of Hearing:	22 May 2001
Date of Judgment:	24 August 2001