NEAT Domestic Trading Pty Limited v AWB Limited & Anor S225/2002

[2002] HCATrans 579

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S225 of 2002

B e t w e e n -

NEAT DOMESTIC TRADING PTY LIMITED

Appellant

and

AWB LIMITED

First Respondent

AWB (INTERNATIONAL) LIMITED

Second Respondent

GLEESON CJ
McHUGH J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 14 NOVEMBER 2002, AT 10.25 AM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC:   If the Court pleases, I appear with my learned friend, MR J.K. KIRK, for the appellant.  (instructed by Withnell Hetherington)

MR A. ROBERTSON, SC:   May it please the Court, I appear with my learned friend, MR A.I. TONKING, for the respondent.  (instructed by Allens Arthur Robinson)

GLEESON CJ:   Yes, Mr Gageler.

MR GAGELER:   I propose to deal first with the facts and then with the statute.  The critical findings of fact your Honours will find in volume 4 of the appeal book at page 724 in paragraphs 119 to 122 of her Honour’s judgment.  Those findings must be read in the light of her Honour’s discussion of the evidence, particularly the references to the Pars Ram affair at paragraphs 88 to 94, and the cross‑examination of the two AWBI officers who considered NEAT’s six applications, that is Mr Gomersall and Mr Richardson, that cross‑examination being recorded at paragraphs 108 to 118.

What your Honours will see in the cross‑examination of Mr Gomersall, beginning at paragraph 109, is that in the final sentence as her Honour recorded it, Mr Gomersall denied “that his refusal of the applications was automatic.”

In paragraph 110 he denied that preservation of “the single desk marketing system” was the only “factor in his decision-making”.  In paragraph 113 he maintained that concern about “vomitoxin levels was not a genuine ground for refusing” the fifth of the applications and in paragraph 115 he said that the current market environment was something that “was susceptible to change on a daily basis”.  Contrast Mr Richardson’s evidence recorded in paragraphs 117 to 118.  Your Honours will see at about line 37 on page 723 that:

Mr Richardson conceded that in July 1999 AWBI had a policy against the granting of bulk export permits.

Line 42:

Mr Richardson agreed that he knew about this policy ‑ ‑ ‑

KIRBY J:   What page is that, I am sorry?

MR GAGELER:   Page 723:

and that it did not alter while he was dealing with bulk export permits.  He also agreed that it was for his seniors, not himself, to determine whether there had been a change in the current market environment which would justify a departure from AWBI’s normal policy.  In other words, the policy which prohibited the grant of bulk export permits was to remain in place unless and until Mr Richardson’s seniors at AWB “decreed that there had been a change of circumstances to justify departure from the policy”.  This did not occur during the period between November 1999 and March 2000.

Ultimately, Mr Richardson agreed with Mr Hughes that the “real reason” why he rejected both applications –

he considered two of them –

was because of the existence of the policy against bulk export permits and the fact that his seniors had not notified a change of market conditions justifying departure from the policy.

In the light of that evidence her Honour’s finding at paragraph 109 was that she was satisfied 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 and, 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, one, AWBI had a policy against approving the bulk export of wheat; and, two, AWBI rejected NEAT’s applications in pursuance of this policy.  The existence of the policy ‑ ‑ ‑

KIRBY J:   Could you help me.  I am looking at the orders and relief you seek on 777.  This is all happening several years ago now.  Now, what would be the practical consequence of the relief that you are seeking?  I mean, what happens?  You do not get damages but you get relief from the decisions and a requirement that they be remade, but it is a long way in the past?  What happens, is this to correct the future, effectively, is it, or what?

MR GAGELER:   Your Honour will see ‑ ‑ ‑

KIRBY J:   You declare them void, set them aside and order the costs, but you do not ‑ ‑ ‑

MR GAGELER:   Your Honour will recall that the way in which the proceeding comes to the Court is as a preliminary question for determination in proceedings which, as originally constituted ‑ ‑ ‑

KIRBY J:   That is right, yes.

MR GAGELER:    ‑ ‑ ‑ relied upon two causes of action.  One was simply a cause of action, if I can call it that, under the AD(JR) Act seeking to have the decisions of AWBI and the consequent decision of the Wheat Export authority in each case set aside and remade. 

KIRBY J:   Yes.  You remind me the respondent points out that even if you were to succeed, it has to go back to the Federal Court.  That is in their submissions.

MR GAGELER:   Yes, that was one cause action which had meaning when there was still a buyer for this particular wheat.  It rapidly ceased to have any utility ‑ ‑ ‑

KIRBY J:   Yes, the weevils would get it, I assume.  Maybe not, maybe with the drought the wheat is very valuable now; if you carefully packed it away, it might have gone up in value.

MR GAGELER:   There are physical weevils and economic weevils that are eating away, your Honour, but we accept and we no longer press the claim based on the AD(JR) Act insofar as what was originally sought was a remaking of the decisions.  The other aspect of the claim was a cause of action based on breach of section 46 of the Trade Practices Act.  Now, to make out the claim under section 46 of the Trade Practices Act it is necessary to show that what was done by AWBI was not authorised, or not specifically authorised, by section 57(3)(b) of the Wheat Marketing Act so as to be immune from the operation of section 57(6).

There are two bases upon which we say that section 57(3)(b) is not invoked.  One is that on the proper construction of that provision it prevents the application of a rule or policy without regard to the merits of the case.  The other is, separately and in any event, it is a decision under an enactment and is therefore liable to be set aside, ab initio, if a ground is made out under the AD(JR) Act, one of those grounds being where a decision of a discretionary nature is made in pursuance of a rule or policy without regard to the merits of the case.

KIRBY J:   How does that second way of putting it square with your abandonment of your AD(JR) Act?

MR GAGELER:   I do not abandon the entirety of the AD(JR) Act claim.

KIRBY J:   You keep it alive as a basis of this qualification of the exemption from the Trade Practices Act?

MR GAGELER:   Yes, exactly.  I no longer seek a remitter of the matter which is one of the orders that can be made under section 16 of the AD(JR) Act.  I still seek under section 16 of the AD(JR) Act that the decision be set aside or quashed and I seek a declaration which could be made either under section 16 or, relevantly, under the Federal Court Act or the Trade Practices Act.

KIRBY J:   A bare declaration under the AD(JR) Act.  That seems a ‑ ‑ ‑

MR GAGELER:   That is not a bare declaration, a declaration consequent upon setting aside or quashing the decision.

KIRBY J:   That would leave it open to the respondent to make any fresh and lawful decision. 

MR GAGELER:   Well, what it does for my cause of action under section 46 is that it gives me conduct that occurred at a particular point in time that caused damage to my client that is not immune from the operation of section 46 of the Trade Practices Act by virtue of the combined operation of section 51 of that Act and section 57(6) of the Wheat Marketing Act.  I was drawing your Honours’ attention to paragraph 119 ‑ ‑ ‑

GLEESON CJ:   The Wheat Export Authority is not a party to these proceedings? 

MR GAGELER:   No.  It was originally but it is no longer necessary for the purposes of the ultimate relief being sought, which is related to the claim under section 46 of the Trade Practices Act.

KIRBY J:   But it knows of the proceedings and could, if it had wished, have intervened to protect any interest that it had in the administration of the Acts.  Does it know of the proceedings?  Because at least potentially it has a contingent obligation, does it not? 

MR GAGELER:   There is no right of the Wheat Export Authority that continues to be an issue in the proceedings. 

GLEESON CJ:   And there is no decision of the Wheat Export Authority ‑ ‑ ‑

MR GAGELER:   And there is no decision ‑ ‑ ‑

GLEESON CJ:    ‑ ‑ ‑ that is sought to be set aside. 

MR GAGELER:   Exactly, yes.  The existence of the policy her Honour then turns to at paragraph 120, page 724, where her Honour identifies the policy somewhat more precisely as being that: 

AWBI had a policy that, “in the current market environment”, no bulk export permits would be approved. 

What her Honour there says needs to be read with her Honour’s more full discussion of the policy at paragraph 132 and following.  What her Honour says in paragraphs 139 and 140 is that the addition of the words, “the current market environment”, relevantly added nothing to the statement of the policy.  Her Honour’s finding, line 20, page 730, was that that expression: 

referred to major international market conditions which were unlikely to change in the short‑term and which did not change during the relevant period. 

GLEESON CJ:   Was there evidence as to the structure of the world wheat market? 

MR GAGELER:   There were some internal documents of AWB and AWBI that made reference to the structure of the world market.  I will take your Honour to one of those in a moment. 

KIRBY J:   Will you take us in due course to why the Parliament set up this somewhat curious, as it were, delegation to a private organisation?

MR GAGELER:   I certainly will, yes. 

KIRBY J:    Presumably – and you may clarify this – it is because of the inequalities of the international wheat market and the desire to ensure that in such an unequal market Australia could speak with one voice and speak for the majority interest of wheat growers in this country?

MR GAGELER:   In broad terms, that is correct, but I will take your Honour to that.  I will do that once I have cleared away these preliminary facts.  I will go to the statute, including the statutory history.  Your Honours might note in that discussion at paragraph 137 on page 729 her Honour discerned from disparate sources AWBI’s reason for maintaining the policy, and insofar as it is AWBI’s reason, we accept it as a fair distillation of the way AWBI perceived it, and that was, as your Honour will see, that 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 – and we emphasise “likely expense” – of growers who deliver their wheat to the national pool.  One of the documents her Honour relied upon to discern that policy her Honour identifies in paragraph 136, and I will go to it in a moment.  That was a confidential document of 31 March 2000.  So far as the application of the policy is concerned her Honour deals with that at page 729.

KIRBY J:   Why was it confidential and do we have it?

MR GAGELER:   Your Honours do have it.

KIRBY J:   Is it confidential to the World Trade Organisation ‑ ‑ ‑

MR GAGELER:   Well, if I could say, your Honour, the question would be better directed to Mr Robertson who claimed confidentiality in respect of it, but I did want to draw your Honours’ attention to it, not only for its content but for two other reasons.  One is that, although the clearest articulation of the reasons for the policy, it is a document that was, one, confidential and that, two, post‑dated the events with which we are concerned.  That is perhaps nothing more than a forensic flourish but it does put in context the nature of this policy and the difficulty that any trader in wheat had with dealing with an organisation in order to administer it.

GLEESON CJ:   Policy may operate at several layers in a situation like this.  At a higher level, there is the policy of the Parliament in requiring that the decision of the Wheat Export Authority have the approval of an organisation representing people with a financial interest in the outcome of the decision.

MR GAGELER:   Yes.  The application of the policy at page 724, paragraph 121, your Honours will see very clear findings that in her Honour’s view the evidence overwhelmingly indicates that it was this policy and this policy alone which dictated the rejection of each of NEAT’s applications.  Mr Gomersall said that the existence of the policy was but one of a number of considerations which he took into account when declining to approve NEAT’s applications.  In this regard, his affidavit and that of Mr Richardson set out a number of factors, which were said to have been taken into account in protecting the various applications.  Some of these considerations were specific to the particular application and some were of a more general nature.  Insofar as specific or individual considerations were concerned, I have difficulty in accepting that they played any realistic part in the rejection of the applications.

KIRBY J:   Were these witnesses called to give oral evidence?

MR GAGELER:   Absolutely, and cross-examined at length, and Mr Gomersall was disbelieved.  At line 12 in the same paragraph:

But I cannot accept that they were in fact given any realistic consideration at that stage.

Then in paragraph 122, the last two lines:

the assessment of each case on an individual basis was a meaningless exercise.  AWBI’s assurance that this would occur was a hollow one in these circumstances.

GLEESON CJ:   In exercising its statutory power to approve or not approve, was the company entitled to simply address the financial interests of those it represented and make a decision as to whether to approve or disapprove on the basis of a view as to where their financial interests lay?

MR GAGELER:   What the company had to do, in our submission, is have regard to the merits of the individual application before it and taking account ‑ ‑ ‑

HAYNE J:   Why?

MR GAGELER:   Why?

HAYNE J:   Yes, why?

MR GAGELER:   Your Honour, I will come to the statute in just a moment; I wanted to clear away the facts.

HAYNE J:   In due course, because you should not assume that I accept that the power concerned is a statutory power.

MR GAGELER:   That is why I am here, your Honour.  The reasons for the policy – I had mentioned the document of 31 March 2000.  That is a document that your Honours will find in volume 3 of the appeal books, page 654 and following.  That is a document in respect of which confidentiality is no longer claimed by the respondents – it was claimed at the trial.  Your Honours will note that there are some yellow documents in the appeal books and I think that they are the only documents for which confidentiality is sought to be maintained.

KIRBY J:   Is it 650 or 654?

MR GAGELER:   Pages 654 through to 658.  I am sorry, I am told that none of the documents is now sought to be claimed as confidential.

KIRBY J:   I am sorry?

MR GAGELER:   I had wrongly informed your Honours that the yellow documents in the appeal books were claimed to be confidential.  That is no longer the case.  Your Honours will see at page 655, in partial answer to your Honour the Chief Justice’s earlier question to me, a reference at about line 27 to the structure of the industry.  Indeed, under the heading “Broad Bulk Permit Issues” on that page, a very broad statement as to the reasons for maintaining what is there described as a “Single Desk marketing” policy.

GLEESON CJ:   Just going further up the page, Mr Gageler, to line 15, it is said:

the Wheat Export Authority (WEA) must consult with AWB (International) Limited.

AWB (International) Limited is an organisation that represents growers, is it not?

MR GAGELER:   It is a corporation incorporated under the Corporations Law, some shareholders of which are growers, some are not.  There are A class shares owned by the growers.

GLEESON CJ:   Consulting AWB (International) Limited is simply a more efficient means of consulting wheat growers, is it not?

MR GAGELER:   My answer to your Honour’s question was wrong but, probably immaterially, it is AWB that is owned in part by wheat growers.  AWBI is its wholly owned subsidiary.  The answer to your Honour’s question is a qualified yes and it is qualified in this way:  the persons being consulted are wheat growers who own shares effectively in AWBI.

GLEESON CJ:   Yes, but it is a mechanism for what in another context might be called “industry consultation”.

MR GAGELER:   It is a very peculiar mechanism for industry consultation.

GLEESON CJ:   Yes.

MR GAGELER:   Because it is not all players in the industry who have a voice.  It is a particular player in the industry.  That particular player being in competition with others.

KIRBY J:   What does AWBI do with its profits, and what does AWB do with its profits?  Could that be checked and you can tell us what the scheme of the memorandum is?

MR GAGELER:   Yes.  Since these proceedings, AWB has been floated.  There are two classes of shareholders.  There are the A class shareholders who are the growers.  There are B class shareholders who effectively have the financial interest.  I believe that it is only the B class shareholders who get dividends.

CALLINAN J:   It is a little unusual, Mr Gageler.  Most commodity boards in Australia have traditionally provided for a direct form of consultation with all growers and producers who actually have a vote; first at a local level and often on a State or national level.

MR GAGELER:   Yes.

CALLINAN J:   The interposition of a company which does not embrace a shareholder as everybody is unusual.

MR GAGELER:   Yes.  I admit that.

KIRBY J:   This is all part of privatisation and outsourcing of what used to be governmental activities.

MR GAGELER:   Well, it is a particular transitional phase, your Honour, where one has a hybrid, one has a company incorporated under the Corporations Law with the obvious commercial incentives that necessarily apply to such a body, but one has conferred upon that body a peculiar statutory power.  The existence of the power is undenied.  The ability to use it for the commercial interests of the corporation upon which it is conferred is undenied.  The question is what rights and obligations attend the exercise of the discretionary power.

KIRBY J:   You say undenied.  Undenied by the respondent in these proceedings, because you will not forget Justice Hayne’s question that there is an issue as to whether this company is floating out there all on its own as a private corporation or whether it is ‑ ‑ ‑

MR GAGELER:   The short answer to that, your Honour, is that floating out there as a private corporation it can pass any resolution it wishes.  There is no effect on my client.  It is because of the operation of section 57(1) and section 57(3B), and only because of that, that what is done in this context has any operation or effect.  It is, therefore, in my submission ‑ I will come to it more directly ‑ a decision made under an enactment for the purposes of the AD(JR) Act as her Honour found and in respect of which there is no notice of contention.

GLEESON CJ:   Now, I would like to understand a little better the part you took us to on 655 at line 30.

MR GAGELER:   Yes.

GLEESON CJ:   It says:

Because of the structure of the Australian wheat industry, AWB(I) is obliged to undertake an annual export marketing program of approximately 16 million tonnes.

What does that mean exactly?

MR GAGELER: That would be an overstatement of the position. The obligation of AWBI under section 84 of the Wheat Marketing Act is to accept wheat that is offered to it for inclusion in a pool operated by that company, and it meets the standards required by the company.  There is no obligation on the part of AWBI to establish any particular pool.

GLEESON CJ:   Does it mean, in a practical sense, that AWBI is obliged to accept and purchase wheat provided by wheat growers up to a level that will enable it to maintain a plan or program to market about 16 million tonnes a year by export?

MR GAGELER:   That is not a matter of legal obligation on the part of AWBI.

GLEESON CJ:   It depends what mean by the legal obligation.  There is a legal obligation to accept wheat delivered to it, is there not?

MR GAGELER:   No, there is a legal obligation to accept wheat delivered into a pool that it has established.

GLEESON CJ:   Yes.

MR GAGELER:   It has no legal obligation to establish a pool and one of the problems here, your Honour, as the evidence indicates, is that durum wheat was a very peculiar and costly commodity, that is, that the cost to grow durum was higher than the cost to grow softer wheats.  It was also a commodity that commanded a higher price, generally, from the softer wheats, yet AWBI had, at the relevant time, no pool for the particular lower grade of durum wheat with which we were concerned here, which is ADR feed wheat.

It had a general soft wheat pool into which any of the growers could have sold their commodity but at an extremely low price.  That is one of the problems.

HAYNE J:   You referred to some statute as bearing on ‑ ‑ ‑

MR GAGELER:   I am jumping ahead of myself, your Honour, but it is the Wheat Marketing Act 1989 which your Honours ‑ ‑ ‑

HAYNE J:   Yes, and you said section 4, I think.

MR GAGELER:   No, I said 84.

HAYNE J: Section 84, was it, thank you.

MR GAGELER:   Yes.

CALLINAN J:   Mr Gageler, is there any material to show why there was not a pool for the more valuable durum wheat?

MR GAGELER:   No.  There is material ‑ ‑ ‑

CALLINAN J:   Is there any evidence from which an inference could be drawn as to why there was not a pool?  Because it does not appear, immediately, to be directly competitive with the respondents ‑ ‑ ‑

MR GAGELER:   That is part of my point.

CALLINAN J:   There is no assertion anywhere or nothing at all to indicate that it is or how ‑ ‑ ‑

MR GAGELER:   That it is competitive?

CALLINAN J:   Yes.

MR GAGELER:   Yes, I think in one of the affidavits, either of Mr Gomersall or Mr Richardson, there is an assertion that insofar as wheat was sought to be being exported to Italy the AWBI was negotiating with an Italian buyer for the sale of a higher grade of durum, ADR6, and that a sale of ADR feed may have had some effect on those negotiations.  I will find that evidence in a moment, your Honour.

KIRBY J:   Is 6 the highest?  I thought 1 was the highest.

MR GAGELER:   No, 1 is the highest and it goes down to 6 and then below 6 there is feed.

CALLINAN J:   What is feed used for?

KIRBY J:   Pasta.

MR GAGELER:   Feed means feeding to animals.

GLEESON CJ:   Stock feed.

CALLINAN J:   That is what I thought.

MR GAGELER:   Generally, yes.

GLEESON CJ:   Stock feed.  It is the higher grade that goes into the making of pasta.

MR GAGELER:   The point is that the Italian buyer was prepared to accept ADR feed for making pasta.

GLEESON CJ:   Yes.  When you are talking about feed, you are talking about stock feed.

MR GAGELER:   I am talking about the grading system.  Your Honours will see ‑ ‑ ‑

KIRBY J:   There is a serious deterioration in Italian restaurants.

CALLINAN J:   I was going to say you have to be careful where you ate.

KIRBY J:   Or a great praise of Australian durum.

MR GAGELER:   If your Honours look in volume 3 at page 680, what your Honours will find is a table that sets out the various grades, the highest grade being ADR1, going down to ADRL.  I cannot tell your Honours what that is but it must be bad.

GLEESON CJ:   It is probably what chooks get.

MR GAGELER:   Yes, probably.  I was at volume 3, page 655.  I wanted to draw your Honours’ attention to the entirety of that page.  This is the main document, I think, that her Honour drew the reason for the policy from.  Your Honours will note the last paragraph on page 655 it is said:

Whilst AWB(I) assesses each bulk permit application on a case‑by‑case basis, in general, the issuing of bulk permits would mean that AWB(I) would lose control of a number of critical advantages that the Single Desk provides which would, in turn, negatively impact on our ability to maximize returns to growers who deliver to the National Pool.  These advantages ‑ ‑ ‑

GLEESON CJ:   What do you say would or should be involved in the assessment of such an application?  You referred earlier to the merits of an application.  What sort of considerations are involved in the concept of merits?

MR GAGELER:   Can I answer that question by taking your Honours to the documents relating to the fifth application.  I do that because it is the one which was referred to by Justice Heerey at pages 756 to 757.  Your Honours will find the relevant documents in volume 3.  At page 579 your Honours will find a redacted version of the application.  The full set of documents your Honours could trace in our chronology, but can I take your Honours to the critical ones.  That is a redacted version of the application.  It was for 50,000 tonnes of ADR feed to be exported to Italy during the period February to April in bulk.  It was accompanied by some notes that your Honours will find at page 573.  Another version is at 581 and your Honours will see that that was a version that was faxed to Mr Richardson at AWBI, but those notes set out some very particular circumstances surrounding those proposed shipments.

What is said is that:

A group of NEAT’s grower clients from –

a particular area –

has approached NEAT to export durum on behalf of the group.

1.  The group is holding significant tonnages of durum on farm with varying levels of protein and fungal staining.  Samples of this grain have been assessed by Graincorp as ADR Feed however the combined characteristics of the parcel of a sound and millable product.  The durum has a high protein content –

et cetera.

2.  A significant portion of this tonnage is stored on the ground in uncovered stacks.  These stacks are exposed to the weather and are at risk if there is further rain.

3.  Local Graincorp silos are either full or shut.  Growers are therefore unable to deliver durum that is stored on the ground to local Graincorp silos.

4.  NEAT can offer the group a significantly higher price for ADR Feed compared with the price AWB Limited –

Now this is the domestic company –

is bidding the group for ADR Feed.

That is, AWBI is not in the market, there is no pool; AWBL is bidding on the domestic market, but at $35 per tonne lower than NEAT could offer.  Paragraph 7:

NEAT’s Italian buyer specifically wants to purchase ADR Feed from NEAT following the inspection of samples NEAT has sent to it from clients –

in the particular area –

NEAT’s buyer does not want to buy commingled stocks that have been taken into the Graincorp system –

8.  NEAT’s buyer only has a very limited time frame in which it can use ADR Feed.  It will also take NEAT a significant time to move 50,000 tonnes of ADR Feed to port by road transport.

Importantly, next sentence:

NEAT’s buyer currently has US Feed durum offered to it and it will buy US Feed durum unless NEAT can confirm it has obtained a permit for ADR Feed in the very near future.

GLEESON CJ:   Now they look to me like a variety of reasons in support of the proposition that it is in the financial interests of NEAT’s grower clients to be permitted to export wheat.  What do they amount to beyond that?

MR GAGELER:   They also support the proposition that the peculiar circumstances of this proposed transaction, with a particular Italian buyer, are, on one view ‑ and it is only one view ‑ unlikely to have an effect on the overall marketing strategy that can be legitimately pursued by AWBI.  I am not saying it would, your Honour ‑ ‑ ‑

GLEESON CJ:   So the merits amount to a combination of two reasons:  one, it is in our financial interests to export the wheat and two, we are not going to do any significant harm to anybody else?

MR GAGELER:   Well, particularly to AWBI, yes.

GLEESON CJ:   So it all comes down to a financial proposition.  We ought to be permitted to export this wheat, because it will be profitable for us and it will not cause financial harm to anybody else?

MR GAGELER:   Your Honour, I cannot embrace that because it is at too high a level.  It is very fact specific, very fact specific.

CALLINAN J:   Is there not a third factor, that you would be compelled to deal with the party that is effectively preventing you from exporting it?  You would be compelled to sell to it at a much reduced price.

MR GAGELER:   Yes.  Your Honour can actually see that that is the way it worked out because there is evidence from one of the growers, Mr ‑ ‑ ‑

CALLINAN J:   That is apparent from 4 anyway, is it not, paragraph 4.

MR GAGELER:   Yes, it is, yes.  But can I show your Honour directly the evidence from Mr Heathcote, volume 1, page 135.  He was one of the group of growers.  His affidavit begins at 135 but at 136 he says, about line 19, line 20:

The only alternatives I had were to sell fungal stained durum for stock feed at a very low price or deliver the durum to AWBI feed wheat pools.

That is, not ADR feed because that did not exist, but the soft wheat pools –

At that time AWBI was not even offering a pool for ADRF.

GLEESON CJ:   That is why I am endeavouring to come to grips with the concept of merits and what it involves in a context like this.  Presumably, these people would not be applying for permission to export wheat unless they had made up their own minds that it was in their financial interests to do so.  So what are they trying to do, persuade the Wheat Export Authority that they are right about that?

MR GAGELER:   No, what we are ‑ ‑ ‑

KIRBY J:   To exercise their discretion according to law, I suppose.

MR GAGELER:   What they are seeking to do, obviously, is to gain a permit so that they can enter into a commercial transaction.  What they are seeking to persuade the Wheat Export Authority to do is to grant them their permit because it is in their interests and because, by doing so, the national interest, which the Wheat Export Authority undoubtedly is to have regard to, will not be damaged but, rather, furthered. 

GLEESON CJ:   That is getting closer to the mark.

MR GAGELER:   Yes.

GLEESON CJ:   I have myself some problem with the notion of people who are willing to risk their money in a business transaction having to persuade some authority, governmental or otherwise, that it is wise for them to be permitted to rest their money.  It is their business because it is their money, so what they are really trying to persuade the authority is the second part of what you are saying, is it not, that is, that it is not contrary to the national interest that they be allowed to pursue their own financial interest?

MR GAGELER:   Or that it is positively in the national interest that they be allowed to do so.

GLEESON CJ:   Yes, but why would they have to try and persuade the Wheat Export Authority that they are right in their assessment that this is a good deal for them?

MR GAGELER:   Because the Wheat Export Authority is charged by Parliament ‑ again, I am jumping ahead slightly ‑ with the management of the monopoly in the national interest.

GLEESON CJ:   I understand completely why they have to try and persuade the Wheat Export Authority that permission to export is not contrary to the national interest.  I have difficulty in understanding why they have to try and persuade the Wheat Export Authority that permission to export is in their own interests, that is, the applicant’s interests.

KIRBY J:   Is that because the more that they can show profit to an Australian operator, that that is part of the national interest? 

MR GAGELER:   Yes. 

GLEESON CJ:   Why is it the business ‑ ‑ ‑

MR GAGELER:   I am sorry, your Honour.  It is not just NEAT; it is the durum growers.  One is talking about a large section – well, a significant, although regionally concentrated, section of the industry. 

GLEESON CJ:   But if the durum growers have made a commercial assessment that it is in their interest to export wheat, why do they have to persuade the Wheat Export Authority that their assessment is correct? 

MR GAGELER:   Your Honour, the Wheat Export Authority has published some guidelines as to the exercise of its own administrative discretion.  Those guidelines are at pages 265 to 279 of volume 2 of the appeal book.  I may have given your Honours a wrong reference there. 

GLEESON CJ:   Is it 265? 

MR GAGELER:   Yes.  I fear that I have given your Honour a wrong reference, but I will – I am sorry, it is at 280 and following.  What your Honours will see at page 283 and following, for example, are some considerations that might legitimately and appropriately be brought to bear on individual proposed exports. 

GLEESON CJ:   Right.  Well, the next thing I wanted to ask you is this:  is it being assumed in your argument that the considerations that are legitimate for the Wheat Export Authority to take into account in deciding whether to give its approval are identical with the considerations that it is legitimate for AWBI to take into account in deciding whether to exercise its power of veto? 

MR GAGELER:   That is no part of my argument, no.  I accept fully that AWBI can take into account its own commercial charter, its own constitution, the interests of ‑ ‑ ‑

HAYNE J:   To the exclusion of all other interests? 

MR GAGELER:   No.  That is the point. 

HAYNE J:   Why not?  They are a commercial entity, incorporated under corporation statutes.  Why are they concerned with anything more than their narrow commercial interest? 

MR GAGELER:   Your Honour, my point is a relatively narrow one.  It is not that AWBI could not adopt a policy that says – as many of the statements of the policy suggest that it is – “Generally, in the interests of growers who deliver their wheat into the pools, we will not grant consent, we will not grant approval, to bulk export permits”.  What AWBI must, in our submission, do is consider the merits of each application that are placed before it and determine on a case‑by‑case basis whether that general proposition, for which there may be good grounding, ought apply to the merits of the case before it.  That is the vice of the policy in the present case. 

HAYNE J:   Well, now, it needs unpacking. 

McHUGH J:   Where do you get this from?  Why is it not just an absolute veto, that they can just veto for any reason they like, including the fact that they do not like the look of you?  Where do you get anything in the statute which says that they even have to consider your application? 

MR GAGELER:   I will come to that, and can I come to it through the legislative history, then directly to the statute.  The legislative ‑ ‑ ‑

HAYNE J:   You want us to come to the words with a bit of baggage in hand, do you, Mr Gageler? 

KIRBY J:   Understanding the purposes of ‑ ‑ ‑

MR GAGELER:   I want to guide your Honours through the thicket. 

HAYNE J:   Thank you so much.  And that is not at all in the narrow commercial interests of your client, is it?  It is with a much broader picture in mind. 

KIRBY J:   It used to be usual to start with the statute and then toss in the second reading speech in case it might help, but now ‑ ‑ ‑

MR GAGELER:   There is a story to be told, your Honour, and the statute here is part of a transitional process.

KIRBY J:   It is a very unusual arrangement to, as it were, use a private corporation in this way.  Is there any precedent or is there any analogy in any other marketing arrangement that you are aware of, or is this unique?

MR GAGELER:   A provision such as 57(3B) I think does not exist elsewhere in Commonwealth statute law.

KIRBY J:   It is a big thing for the Parliament of this nation to grant to a private corporation such a power.

MR GAGELER:   Yes, that is right.  The question is how is that power to be construed.

McHUGH J:   You keep referring to it as a power.  Why is it not just simply a condition precedent which you must obtain and if they refuse to give approval, then 57(6) validates what they have done for the purpose of the Trade Practices Act, but why ‑ ‑ ‑

MR GAGELER:   I am defeated, your Honour.  I am coming to the statute straightaway.

GLEESON CJ:   Where is the most convenient place for us to find that, Mr Gageler?

MR GAGELER:   Your Honours have been provided with it together with our written submissions.

GLEESON CJ:   Part of it?

MR GAGELER:   It should be annexed to our written ‑ ‑ ‑

GLEESON CJ:   Yes, we have part of the statute.

MR GAGELER:   No, your Honour should have the whole of the Wheat Marketing Act 1989 ‑ ‑ ‑

CALLINAN J:   I have the whole of it, Mr Gageler.

MR GAGELER:   ‑ ‑ ‑ as amended, on and from 1 July 1999.

McHUGH J:   I do not have all of it.  I have different sections.

MR GAGELER:   No, your Honour.  It is a funny looking statute because most of it has been repealed.  That is it.  That is the entirety of it.

GLEESON CJ:   So, for example, the statute goes straight from section 57 to section 84?

MR GAGELER:   Yes, and it goes straight from section 16 to section 57.

KIRBY J:   And it is Reprint 2 that we should be working on?

MR GAGELER:   We did not provide your Honours with a reprint ‑ ‑ ‑

HAYNE J:   You gave us a SCALEplus version as at July 1999?

MR GAGELER:   Yes.

HAYNE J:   I take it, the date, July 1999, is the critical time.

MR GAGELER:   Yes.  I am sorry, your Honours, this is probably a breach of the practice direction, but what I have not done is check whether the reprint contains anything different from the version as at July 1999.

KIRBY J:   This is the one we should work ‑ ‑ ‑

MR GAGELER:   Yes, I will have that done and we will tell your Honours.  Section 57, your Honours will find at page 14 – I will come back to the history, if I may.  What your Honours find in subsection (1) is that it expressly prohibits the export ‑ ‑ ‑

KIRBY J:   Could not we start with the beginning of the Act and see what its title is and ‑ ‑ ‑

MR GAGELER:   Yes.  To put section 57 in context, your Honour ought look at section 5 ‑ ‑ ‑

KIRBY J:   Its long title is “relating to the export of wheat”.

MR GAGELER:   Yes.

KIRBY J:   There would be no doubt of the constitutional power to so provide and it is not governed by section 92?

MR GAGELER:   No, it is section 51(i).

KIRBY J:   But there is nothing that restricts the federal power over such a matter?

MR GAGELER:   Not any more.

KIRBY J:   And there is no section 92 argument as to the consequences of it within Australia, and that is not run, anyway.  We are not concerned with it.

MR GAGELER:   Since Cole v Whitfield, no. Section 5, your Honour should have regard to and your Honour ought also look at section 84.

GLEESON CJ:   Well, nominated company B is AWBI, is that right?

MR GAGELER:   That is correct, yes.

KIRBY J:   Was there a nominated company A originally?

MR GAGELER:   Your Honour, I really need to take your Honours to the legislative history.  It makes it very difficult.

KIRBY J:   It is.

MR GAGELER:   The legislative history your Honours will see set out in her Honour’s judgment, volume 4 at page 687 to 690 – and I have not forgotten your Honour Justice McHugh’s question.  I will just take a moment to answer it.

McHUGH J:   No, that is all right.

MR GAGELER:   At page 687 at line 30 her Honour sets out section 57(1) of the Act of 1989 as it existed between the passing of the Act in 1989 and 1 July 1999 and your Honours can see from an extract from the second reading speech for a 1992 amendment, the details of which do not currently matter, the export monopoly sustained by section 57(1) was labelled “the single desk”.  Your Honours will see many references throughout the materials to “the single desk”.

Bearing that in mind, what your Honours need to be aware of is that in fact the single desk did not mean that the Wheat Board was the only exporter and it did not equate to an inflexible policy being adopted by the Wheat Board against the export of wheat by anyone else.  Your Honours can see that most clearly in the appellant’s chronology which ought to be attached to our written submissions.  Your Honours can see page 1 of the appellant’s chronology shows, simply by reference to NEAT’s own experience, that there were a number of occasions, including as late as January 1999, when the Wheat Board consented to the export of wheat in bulk by NEAT under section 57(1).

GLEESON CJ:   What does Justice Mathews mean on page 687 line 17 where she says that until 1989 the Wheat Board had a monopoly over the export wheat market?

MR GAGELER:   She is doing nothing other than give a label really to the effect of section 57(1) because her Honour found at paragraph 85 of her judgment, in accordance with the chronology that I have just taken your Honours to, that is that the Wheat Board in fact granted approvals to NEAT on various occasions.  Then at page 688 her Honour says that:

In 1997 the Act was amended, as the first part of a two‑phase process –

this was a transitional regime, the details of which are extremely complex.  It was applicable and indeed itself changed during the period between 1 June 1997 and 1 July 1999.  Relevantly it involved the establishment under the Corporations Law of two corporations, one being described as “nominated company A”, which became Australia Wheat Board Limited; the other being “nominated company B”, Australian Wheat Board (International), or AWBI, to be a wholly-owned subsidiary of AWB, AWB being a grower-owned company, with this qualification, that there were class A shares and class B shares.  The class A were the growers’ shares; the class B were the financial shares.  It was class B shares that carried the dividends.

Then if I could again ask your Honours to look at the chronology, your Honours will see that it was just at the end of that transitional period and just before the new Act was to come into force on 1 July 1999 that your Honours will see that AWB, that is AWB Limited, sends out a letter to NEAT that says, “We’ve been reviewing the policy and from now on in the current market environment, there won’t be any permits”.

GLEESON CJ:   Mr Gageler, would your argument be any different if the power of veto was vested not in nominated company B but in, for example, a large grower of wheat; let me suppose Elders Pastoral Company Limited?

MR GAGELER:   No.  The answer is no.  The legal argument would be no different, but we are here concerned with a unique legislative scheme.  Your Honour would be proposing another unique legislative scheme.  Page 688 then there is the reference at the bottom of the page to that second set of legislative amendments coming into effect, those being introduced by the 1998 Amendment Act.  Your Honours have been provided with a folder called “Appellant’s bundle of legislative materials”.  Because it is of some relevance to construction, may I take your Honours briefly to some parts of that.

Your Honours will see the 1998 Bill as introduced into the Parliament, behind tab 5, with the amendments then proposed to section 57, appearing at page 14.  Your Honours will see then the Bill as enacted ‑ or the Act as it emerged from Parliament, behind tab 8, with the relevant amendments, that is to section 57 at pages 14 and 15.

KIRBY J:   This is behind tab 5?

MR GAGELER:   Tab 5 as the Bill is introduced, and I draw your Honours’ attention to that because I want to take you to the second reading speech and one has to accept that there was a slight adjustment and the Bill as enacted, tab 8 pages 14 and 15, and without going into the detail for the moment your Honours might note that what changed during the course of the Parliamentary consideration of the Bill was that the proposed subsection (3C) which had a sunset provision as at 1 July 2004 for the power with which we are now concerned, was deleted and in its place was inserted subsection (7) which had the authority reviewing and reporting to Parliament on the exercise of power by nominated company B.  There was also a small but I think relevantly inconsequential change to subsection (6) which separated it out but relevantly added in paragraph (6)(a), with which we are not currently concerned.  The second reading speech ‑ ‑ ‑

KIRBY J:   I have lost that on pages 14 and 15.  Where is subsection (6)?

MR GAGELER:   Is your Honour looking at tab 5 or tab 8?

KIRBY J:   I was looking at tab 8.

MR GAGELER:   Tab 8 will be on page 15.

KIRBY J:   Page?

MR GAGELER:   Page 15.

McHUGH J:   Item 13.

MR GAGELER:   Item 13, “At the end of section 57”.

KIRBY J:   I see, yes, I am sorry.

MR GAGELER:   Tab 6 is then the second reading speech for the 1998 Amending Act.  It is a short speech but I will draw your Honours’ attention to some parts of it.  The top of the right‑hand column it is said:

The bill before the House completes the legislation necessary for the restructure of the Australian Wheat Board ‑

and addresses three points, the second one being that which is critical to the present case.

That second point is then addressed on the next page, page 3332, left‑hand column under the heading:

Provision of the Wheat Export Monopoly

The bill also provides for the retention of the wheat export monopoly from 1 July 1999.  Specifically, the bill provides for an independent statutory authority, to be known as the Wheat Export Authority, to manage the export monopoly on wheat.  To give growers the certainty that they have been asking for, the bill also provides that a new grower company pool subsidiary, called company B, have an automatic right to export wheat for five years.  Requests to export wheat from other than the grower company pool subsidiary, as currently happens, will be managed by the Wheat Export Authority in consultation with the grower company pool subsidiary.  The Wheat Export Authority will also oversight the pool subsidiary’s use of the export monopoly –

Then, the explanatory memorandum.  Your Honours will see several versions of it.  The details of its slight evolution do not matter.  I will take your Honours only to the first version behind tab 7.  Some of the general outline is useful to put the transition in its context, but can I take your Honours particularly to paragraph 18, the second sentence:

from 1 July 1999 . . . the only ongoing Government involvement . . . 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.

Your Honours should note paragraph 19, which would be in partial answer to your Honour the Chief Justice’s I think initial question to me.

KIRBY J:   Is there somewhere here where someone describes the ancient history of the Wheat Board, you know, how we have done this over – presumably it has been done over a very long time, wheat being one of our major exports for a very long while.

MR GAGELER:   Yes.

KIRBY J:   Is there any sort of general historical description of ‑ ‑ ‑

MR GAGELER:   Paragraph 17 through to 20 really trace the position back to 1939.

KIRBY J:   I see, that is it, 1939.

MR GAGELER:   If your Honours would be assisted by that, we could do that work.  I think much of it would be probably in Ubergang v Australian Wheat Board.

McHUGH J:   Well, Ubergang and Nelungaloo.

MR GAGELER:   Nelungaloo, yes.

GLEESON CJ:   I thought that there was a question mark over some of the information that was provided in Ubergang.

McHUGH J:   Yes.

CALLINAN J:   It has been very controversial.  The Court received a whole lot of written material after the argument and relied upon it.

MR GAGELER:   Yes, and it mattered for some of their Honours and not for others.

GLEESON CJ:   It was handed by the Chief Justice to the associate when it was handed up and then it appeared in some of the judgments and some commentators on the judgments ‑ ‑ ‑

KIRBY J:   Have not been kind.

GLEESON CJ:   ‑ ‑ ‑ suggested that it was not necessarily completely accurate, having been perhaps formulated in counsel’s chambers.

MR GAGELER:   Yes.  I was not aware of that last point, your Honour.

HAYNE J:   But the general thesis revealed in paragraph 18 of the explanatory memorandum appears, does it, that the export monopoly is to be managed:

by a new grower owned and controlled Corporations Law company ‑ ‑ ‑

MR GAGELER:   No, quite the opposite.

HAYNE J:   The opposite?

MR GAGELER:   The opposite.  It was going to be managed by a small independent statutory body and that that is so is then borne out by the more detailed discussion at paragraph 27 and following that:

The options considered for providing the export monopoly included:

.          Legislate the monopoly for all wheat exports to the grower

company;

.          Legislate the monopoly for bulk wheat exports to the grower

company, with a separate mechanism to manage exports by other than the grower company ‑ ‑ ‑

GLEESON CJ:   The grower company, or the grower company subsidiary, did not need the approval of WEA, did it?  It automatically had the right to export?

MR GAGELER:   That is right.

GLEESON CJ:   The statutory scheme then was that other people who wanted to export needed the approval of the Wheat Export Authority but the power of veto was vested ‑ ‑ ‑

MR GAGELER:   The Wheat Export Authority, yes.  That is right.  Your Honours will see that there are three options set out.  The third option, paragraph 27, the one that was ultimately accepted, was:

.          Legislate the monopoly to an independent statutory body –

that is, Parliament is choosing here to say the monopoly is going to be administered by this statutory authority known as the Wheat Export Authority –

to manage, with a legislative requirement that wheat export rights reside with the new grower company for a prescribed period.

So that was the model.  Importantly, paragraph 28, the first option, was rejected.  The second option, which your Honours will recall is to legislate the monopoly for bulk wheat exports to the grower company with a separate mechanism to manage exports by other than the grower company, was considered and it was rejected as well in paragraph 29.  It was said that the second option raised difficulties in providing an acceptable level of accountability and it was therefore excluded as an option. 

Now, one problem with the adoption of a blanket rule or policy by the grower company, nominated company B, AWBI, is that it effectively converts option 3 that was chosen back into option 2 that was rejected.  Your Honours ought look at paragraph 30 and 31 and relevantly also, although they perhaps shed very little light on the current issues, your Honours should look at paragraph 98, which deals specifically with consultation and the right of veto, and paragraph 102, which deals with section 57(6), the immunity provision where it is recognised that the operation of section 57(3B) raises a very serious issue about the operation of Part IV of the Trade Practices Act to the conduct of nominated company B.

So, your Honours, with that background, can I come to your Honour Justice McHugh’s question, noting that section 57 then takes its place within that historical context and within the context of a much truncated amended Act applying from 1 July 1999.  Section 57(1) expressly prohibits the export of wheat without the prior consent of the authority and, by implication, a necessary implication, but implication nonetheless, grants power to the authority to give consent to the export of wheat.

HAYNE J:   That being Mayer’s Case 157 CLR, I think, which establishes that.

MR GAGELER:   Yes.  Your Honour, I was going to refer to Browning’s Case but, effectively, it is the same point, prohibition with an ability to consent to lift the prohibition impliedly grants power under the statute to give that consent.  If your Honours look at subsection (3B), what one finds is exactly the same structure.  What one finds is expressly a prohibition on the authority giving its consent “without the prior approval in writing of nominated company B” and by necessary implication, by exactly the same process of reasoning, one gets to the point of nominated company B being empowered by subsection (3B) to grant or withhold its consent.

HAYNE J:   Why?  Nominated company B is not a creature of statute, whereas the Wheat Export Authority is.

MR GAGELER:   Yes.

GLEESON CJ:   Is there anything corresponding to subsection (3E) that applies to the nominated company?

MR GAGELER:   No, there is not, but what ‑ ‑ ‑

McHUGH J:   I noticed in the paragraph 38 of the explanatory memorandum that the Minister said that the decision of the Wheat Board was subject to AD(JR) examination.  There is no mention of the nominated company B.  Why is this not just a United Nations Security Council-type veto, thumbs down, or the veto that used to be on the Law Council in respect of reciprocal admissions much utilised by the Queensland ‑ ‑ ‑

CALLINAN J:   After full consultation.

HAYNE J:   With its own interests.

CALLINAN J:   All the members were consulted.

KIRBY J:   Nominated company B is a statutory concept.  It is in a statute of the Parliament of Australia.

MR GAGELER:   Yes, and it is a defined expression. 

KIRBY J:   It is not just a pure company.  It is something which has been mentioned, specified and has a statutory status.

MR GAGELER:   Yes.

HAYNE J:   What is the status it has, Mr Gageler? 

MR GAGELER:   It has the ‑ ‑ ‑

HAYNE J:   It is mentioned in the statute.  That, of course, is evident, but what is the status it has?  What is the power it is given by statute? 

McHUGH J:   The Minister himself said it was a Corporations company. 

MR GAGELER:   It is a Corporations Law corporation. 

HAYNE J:   Why is this not, in administrative law terms, simply the jurisdictional fact, namely, consent, upon which statutory power then falls to be exercised? 

MR GAGELER:   Your Honour, that is – I am struggling to find the words, your Honour, but that is ‑ ‑ ‑

HAYNE J:   You are so shocked and horrified, are you, by the proposition that is put to you?  I know that.  Well, I want to know why it is shocking and horrifying. 

MR GAGELER:   If your Honours were to look back at the judgment of Justice Kitto in the Tasmanian Breweries Case – and I am sorry I do not have it before me – there is a discussion of the nature of executive decision making, that is, the nature of an executive decision, as distinct from a judicial decision, and ‑ ‑ ‑

HAYNE J:   This is not the executive that is making the relevant decision. 

MR GAGELER:   What is said there is that the way in which an exercise of discretionary power under a statute ordinarily operates is that the statute picks up and operates upon the decision that is made by the decision‑maker nominated in the statute.  That is the ordinary way in which an exercise of discretionary power under a statute takes effect.  That basic structure is then reflected in the language and structure of section 57(1). 

GLEESON CJ:   Well, in relation to the structure of section 57, does “nominated Company B” have to follow the guidelines issued by the authority, under subsection (3E)? 

MR GAGELER:   No.  What your Honour sees is the same structure in (3B), both of those occurring in this context.  The context is that the consideration is triggered by an application being made under subsection (3D).  There is then a requirement for consultation to occur, under (3A).  There is then the statutory power of AWBI under (3B), and the statutory power of WEA under subsection (1).  They are all ‑ ‑ ‑

KIRBY J:   It is all integrated. 

MR GAGELER:    ‑ ‑ ‑ part of an integrated process.  One does not have something that exists dehors the statute entirely, like a Security Council resolution, which has its own force and effect and meaning. 

McHUGH J:   Well, let us come a little closer then.  The Attorney‑General of the Commonwealth has to consult the Attorney‑Generals of the State in relation to an appointment to this Court.  Now, why cannot the States veto anybody?  They do not have to exercise a power, or the Attorney‑General of a State is not subject to review, is he?  It is just a veto or a power. 

KIRBY J:   That depends on what the word “consult” means.  In India, it has been construed to mean, it has to be real, genuine.  Other views might be that it is just ask them, and then move on. 

MR GAGELER:   One can see the same thing in the jurisprudence of the Court of Appeal of New South Wales, your Honour, that is, that consultation is generally a substantive process, that requires a true attempt at meaningful interaction by reference to the merits of the case. 

GLEESON CJ:   But when the authority consults nominated company B, why cannot nominated company B respond by consulting its own view of its own interests? 

MR GAGELER:   I do not deny that, your Honour, I do not deny that, but what nominated company B must do within this structure is to consider the application that is made and about which it is consulted by reference to considerations that legitimately include its own interests.

GLEESON CJ:   That is why I was concerned with your reference to the merits of the application earlier.

MR GAGELER:   Yes.

GLEESON CJ:   What might constitute the merits of the application from the point of view of the export authority might be something quite different from what might constitute the response of nominated company B to the application, having regard to its own interests.

MR GAGELER:   I accept that, your Honour, I fully accept that, but what nominated company B must do is look at the particular application about which it is consulted and form a view, taking into account its own interests, by reference to that particular application.

GLEESON CJ:   You mean form a view on the merits?

MR GAGELER:   Yes.

GLEESON CJ:   Why does it have to form a view about anything other than its own interests?

MR GAGELER:   Form a view as to its attitude towards that particular application being granted by reference to its own interests and the impact on its own interests of the particular circumstances of that transaction, as ‑ ‑ ‑

GLEESON CJ:   But is it entitled to act only on the basis of its view of its interests?

MR GAGELER:   Ultimately it is allowed to make a decision, the determining factor in which is its own interests.  What it is required to do in reaching that decision is to consider the application in its entire factual context.

HAYNE J:   And that is forms and solemnities rather than substance, Mr Gageler.  If at the end of the day it can make its own interests the determining factor, you are requiring it to go through a process which has form but no content.

KIRBY J:   Not necessarily.  By going through the process it may alert itself to something it actually should and does take into account.

MR GAGELER:   And what your Honour has to take into account is what Mr Gomersall said in his affidavit that he did and Mr Gomersall said in his affidavit that he had regard to six or eight specific factors and when he weighed those up ‑ ‑ ‑

McHUGH J:   Yes, but the judge really did not give them any real consideration at all; for practical purposes he did not give them ‑ ‑ ‑

MR GAGELER:   Absolutely, and this is the point, your Honour.  I am not saying that he could not have come to the same conclusion if he had really come to grips with the merits of the application, using merits in a particular way.

CALLINAN J:   You say he just inflexibly applied a pre-conceived policy.

MR GAGELER:   Absolutely.

CALLINAN J:   Mr Gageler, can I ask you another question though, arising out of something Justice McHugh asked you before.  He drew attention to paragraph 38 on the explanatory memorandum in which the Minister said that the authority’s decision could be reviewable, but did not refer to any other decisions.

MR GAGELER:   Yes.

CALLINAN J:   Looking at section 5 of the Act and section 57(3B), what possible decisions would there be of the WEA and the authority that anybody would want to review?

MR GAGELER:   Well, your Honour, it would be a good job sitting on an authority that never had to make a decision because there was a veto at an earlier stage of the process.

CALLINAN J:   Well, is that not right?  Are there any decisions relevantly that the authority makes?  The authority either acts on the veto or it does not, it effects a veto or it does not.  Is there anything else?

MR GAGELER:   No, to be fair, your Honour, the veto applies only to bulk export.  There is ‑ ‑ ‑

MR ROBERTSON:   We support all of them, your Honour.  Justice Mansfield and Justice Mathews arrived at their conclusions by the same path, we would submit, and Justice Heerey and Justice Gyles arrived at their conclusions by the same path, not the same path as Justice Mathews and Justice Mansfield.  But Justice Heerey went further along the path than Justice Gyles, because Justice ‑ ‑ ‑

GLEESON CJ:   Justice Mansfield and Justice Mathews applied ordinary public law considerations. 

MR ROBERTSON:   Assumed that they applied, I think.  Well, Justice Mathews, I think, held that they applied.  Justice Mansfield perhaps assumed that they applied and said even if they did apply – if I may give your Honours five or six page references to Mr Gomersall’s evidence, which I will not go to, given the time.  The pages are 49 to 52, 75 to 76, 95 and 99 to 100, and I ask your Honours to note that at least some of the answers that he gave were not about the policy as being any sort of blanket policy of rejection of applications for bulk permits.  Indeed, as we have submitted in our written submissions, her Honour’s finding in paragraph 119 was that the policy was subject to market conditions.  Her Honour’s finding that the market conditions did not change on the facts is no doubt right, but it does not mean that no examination of the merits, if I can put it that way, was made. 

We have given, I think, in our submissions a reference to the decision in Browning 74 CLR 492 that your Honours were looking at this morning. At 506, Justice Dixon summarised the position as to whether or not the application was considered “as an individual case”. We would submit that, on the facts found by her Honour, these six applications were each considered as an individual case.

The last thing I wanted to say about the facts and the issue of policy, your Honours, is that in the - perhaps there are two things.  One is that your Honours asked this morning about durum and pools.  Could I give your Honours three page references where that is discussed.  Page 59 of volume 1 between lines 5 and 10, the questions was:

how much durum wheat in broad terms was going to the pools?---In broad terms, 50 per cent of the durum wheat went into the pools.

And –

The balance would have gone domestically.  Actually I will qualify that because 50 per cent of the grain I acquired was through a pool, 50 per cent was acquired by me or AWBI under cash contracts.

Then at page 75 ‑ ‑ ‑

GLEESON CJ:   Perhaps you could just give us the references.

MR ROBERTSON:   Yes, I will.  Page 75, your Honours, point 5 of the page:

strong competition –

in relation to durum wheat in Italy –

between AWBI and many other organisations –

in particular the Americans, and pages 79 to 80.

Then in relation to the last factual matter – I will do this by reference, but do your Honours have a document called “Appellant’s Chronology as Annotated by the Respondents”?

GLEESON CJ:   Yes.

MR ROBERTSON:   We just thought it was the easiest way of perhaps doing it but on page 5 there is a reference to this alleged statement of Mr Flugge who I think was the managing director at the time and we have given your Honours a reference to what the relevant officers knew about that, Mr Gomersall.  Could your Honours add to that that Mr Gomersall was cross‑examined on that issue at page 98 of volume 1.  But the short proposition is that what Mr Flugge said was not in those bald terms and, in any event, those officials did not act on that basis.

Then, your Honours, briefly in relation to section 57(6), that of course is an alternative argument, that is, even if the public law principles apply, 57(6) would give an immunity in relation to the Trade Practices Act.  We have set out the cases in paragraphs 43 to 55 of our submissions but basically it comes to the starting point being that you construe the two Acts of the Commonwealth Parliament together.  Section 51(1) of the Trade Practices Act required there to be specific reference in the other Act, which there was.

In our submission, section 57(6) proceeds by reference to the acts done and not the legal quality of the act.  So even if public law principles were applicable, even if the acts were invalid in some way – or invalidated in some way by public law principles, nevertheless, on the facts of this case, in any event, what had been done by AWBI would have been done for the purposes of section 57, there being no suggestion of ulterior purpose ‑ ‑ ‑

KIRBY J:   The problem is whether you read in lawful purposes, and that includes doing it in the lawful way?

MR ROBERTSON:   The question would be, “Why would the Parliament, using the words that it did in section 57(6), be taken to have been limiting the immunity to those things that were done which were unimpeachable from an administrative law point of view?”, and of course, our answer to that question is, “There is no reason, in the language, why one would take that approach”, and we have given your Honours references to a whole series of cases where the word “done” has been construed as “purportedly done”, and I will not repeat those.  We do make a separate submission, and perhaps this is the last ‑ ‑ ‑

KIRBY J:   How do you distinguish the cases where the court say “done” equals “lawfully done” from those that say “done” equals “reportedly done”?

MR ROBERTSON:   It depends on the nature of the provision, but in short, your Honour, the case relied on by my learned friends is in the judgment of Justice Gummow and Justice Gaudron in Darling Casino.  That was in relation to a privative provision, if I can use that expression ‑ ‑ ‑

KIRBY J:   That reversed me in the Court of Appeal.  I will be looking at that very closely.

MR ROBERTSON:   I did not recall that your Honour sat, but that was a privative provision where, as your Honours know, since time immemorial –at least since the foundation of the Commonwealth – privative provisions have been minutely construed – if I can say that.

KIRBY J:   Not minutely enough, in my case, apparently.

MR ROBERTSON:   And in that context, their Honours – and I might say the majority expressly refrained in Darling Casino from accepting that construction of section 155 of the Casino Control Act, but that is in the context of a privative clause.

The other line of country, broadly speaking, is in relation to statutory provisions which are protective in some way, whether they are protective of police officers or inspectors or – in other words, one does not have the same starting point in relation to a protective provision.  Justice Dixon reviews all the authorities in Little v The Commonwealth 74 CLR 94, but we have set all those matters out in our written submissions.

McHUGH J:   75, I think it is. 

MR ROBERTSON:   I am sorry, your Honour, 75 CLR.  Perhaps the last thing I should refer to, your Honours, is that we have included some paragraphs of a submission about futility on the basis that now that the administrative law relief has been abandoned against the WEA, and on the basis that it is section 57(1) that prevents the wheat being exported, as we would see it, there is a gap in any causal chain between what AWBI did and any loss suffered.  Could I give your Honours one reference.  Your Honours have mentioned IPEC-Air ‑ ‑ ‑

KIRBY J:   Do you need loss?  All you need is standing, is it not? 

MR ROBERTSON:   I am sorry.  If one accepts that this is no longer a public law case in point of remedy but it is a case under section 82 of the

Trade Practices Act, then there has to be a causal relation between the conduct and the loss or damage.  We, in our submission, say that even if you set aside on administrative law grounds a refusal to grant, that does not give you a grant either as against AWBI or WEA, and the statute prohibits the export.  Could I give your Honours a reference to the joint judgment of Justice Taylor and Justice Owen in IPEC-Air 113 CLR 177 – which your Honour the Chief Justice was referring to earlier – at 200, point 4, where their Honours said – in that case, I think it was the Customs (Prohibited Imports) Act – it is the Act, and not the secretary, which is preventing the import of the planes that IPEC-Air wish to import. 

Your Honours, the one final machinery matter that I should not forget, and that is that there is, towards the end of volume 4, a motion to extend time to some date in August, I think it was, of a notice of contention, and I gather that is consented to but I should formally ‑ ‑ ‑

GLEESON CJ:   Yes, you have that.

MR ROBERTSON:   Thank you, your Honour.

GLEESON CJ:   Yes, Mr Gageler.

MR GAGELER:   Thank you, your Honour.  I will deal with the futility point, first.  The causal relationship is established by the fact that AWBI refused approval, and by the fact that it was AWBI’s refusal of approval that caused the Wheat Export Authority to refuse its consent.  The question is whether the refusal of approval by AWBI was clothed with a statutory immunity.  That is the question ‑ ‑ ‑

HAYNE J:   But all of those are matters for trial at some later date, are not they?

MR GAGELER:   Absolutely.  It does not fall within the separate issues stated under order 29, rule 2 of the Federal Court Rules.  Your Honours, there are six other short topics to address.  The first is to give your Honours two short references.  The first is in Australian Broadcasting Tribunal v Bond – well‑known ‑ 170 CLR 321. At 377, Justices Toohey and Gaudron said this – and I only quote one sentence:

If an enactment requires that a particular finding be made as a condition precedent to the exercise of or refusal to exercise a substantive power, a finding to that effect is readily characterized as a decision “under an enactment”.

to deal with the jurisdictional factor point.  The other reference is in Ipec‑Air itself, 113 CLR 177. It contains the familiar and frequently quoted statement of Justice Kitto at page 189, to this effect:

It is a general principle of law, applied many times in this Court and not questioned by anyone in the present case, that a discretion allowed by statute to the holder of an office is intended to be exercised according to the rules of reason and justice, not according to private opinion;  according to law, and not humour, and within those limits within which an honest man  . . . ought to confine himself.

Now, if we are seeking extension of the law by analogy in the present case it is simply to delete the words “to the holder of an office” in that frequently quoted statement.  The case of course was concerned with the application of a policy, and I draw your Honours’ attention without reading it to the application of that general principle in a relevant context by Justice Kitto at the top of page 193.

KIRBY J:   You want not to delete “holder of office” but to add “or a person whose decisions affect the decisions of the holder of an office”.

MR GAGELER:   Yes.

KIRBY J:   And are integrated by statute with those decisions.

MR GAGELER:   Yes, I would be content with that, your Honour.

KIRBY J:   Something like that.

MR GAGELER:   The second topic concerns the necessity to return to her Honour’s findings of fact.  Can I simply say this:  that findings at paragraphs 121 and 122 of her Honour’s judgment there can be no doubt, in our submission, that what her Honour found was that the policy dictated the result that the particular circumstances of each application were given no realistic consideration and that the purported assessment on a case‑by‑case basis of those applications was a meaningless exercise.  If there is any ambiguity about what she said at paragraphs 121 to 122, it is cleared up by what her Honour said at page 734, paragraph 157, line 35, where her Honour said:

Its ‑

that is, AWBI’s ‑

decisions in this case were clearly made in the flexible application of its policy against bulk export permits.

There was no other conclusion of fact to which her Honour could have come, given the evidence of Mr Flugge’s statement, for example, given the Pars Ram fiasco and given the evidence of Mr Richardson, which was very clearly to the effect that the policy was set by his superiors.  He was to obey the policy until told to do otherwise by his superiors.

CALLINAN J:   You had to pay a fee to get the decision too, did you not?

MR GAGELER:   You did.

CALLINAN J:   To get the inflexible application of the policy.

MR GAGELER:   Yes.

CALLINAN J:   You had to pay get the flexible application of the policy to you.

MR GAGELER:   The third topic concerns the letter at pages 476 to 477 to which your Honour the Chief Justice referred.  There is contained in that letter in the third last paragraph at page 477 a justification for a general policy, the justification being stated in terms of avoiding Australian wheat competing with Australian wheat.  One can readily accept, as we do, that that consideration is one that is consistent with the purposes of the Act.  It is one that treats the power under (3B) as acting to protect the export permission automatically granted by (1)(a).  Indeed, if your Honours note that at paragraph 98 of the explanatory memorandum that is precisely how it was explained to the Parliament that the power of veto would work, that is, in aid of the power to export.  The point is ‑ ‑ ‑

KIRBY J:   Which one is that, the one to the House or the one to the Senate?

MR GAGELER:   I think they are consistent in this respect but I was looking at the one to the House.

What that consideration does not do is lead inevitably to a policy that prevents exports in any circumstances, the reason being that competition of necessity is always a question of fact and degree.  To accept that a relevant consideration is to avoid Australian wheat competing with Australian wheat is automatically to invite a consideration of the circumstances of the particular export to determine whether or not and, if so, to what degree that is a realistic prospect.

It only leads to the sort of policy adopted by AWBI by the chain of reasoning in fact adopted by AWBI if your Honours were to look, for example, in volume 3 at page 655, which was this formerly confidential document that I took your Honours to in‑chief.  I did not get to the second page where the justification is sought to be set out but your Honours will note at the top of page 656 the very first of the justifications for the blanket rule is stated in these terms:

The issuing of a permit establishes a precedent which makes it difficult to counter requests for other permits in similar or related markets.

That is, if we do it once, then we are going to find it difficult not to have to consider the merits and do it again.  It is a self‑perpetuating, self‑fulfilling justification.

KIRBY J:   Yes, and I do not know quite how to express this, but could it be said that the Board or that the AWBI could take the view that if they allow this particular export to take place that they thereby in some way diminish the signal that they send of the Australian market speaking with one voice and not allowing wheat growers to trickle into other minor markets and thereby destroy the unity of the market which they are seeking to sell at the one desk?

MR GAGELER:   If they act reasonably in ultimately taking that into account and deciding against an approval, then that is something they can do.

HAYNE J:   But the scheme of the Act is threefold; one, only AWBI may export without a permit; two, everyone else needs a permit; three, AWBI has a veto.

MR GAGELER:   Yes, and the question is, what limitations apply, if any, to the exercise of that power of veto conferred by the statute, yes.

Next, the proposition was put on a number of occasions that the wheat sought to be exported by NEAT would necessarily be in competition with wheat of AWBI in the Italian market.  I drew your Honours’ attention in‑chief, particularly to the fifth of the applications in respect of which there was a particular Italian buyer – at least it was asserted by NEAT that there was a particular Italian buyer – who sought to buy this particular wheat and if he did not buy this particular wheat he would purchase the same quantity of wheat from a US buyer.

That occurred in circumstances where as at 13 January 2000, as is shown by page 29 of the appeal book, there was no pool for ADR Feed and

AWBI was not purchasing ADR Feed on the stock market and where it is said at page 143 of the appeal book that although AWBI was negotiating with a buyer in Italy it was negotiating in respect of ADR6 wheat, a different grade.  That illustrates the point that the question of competition can only be assessed on a case‑by‑case basis.

Next, the constitution of AWB.  Your Honours will recall that the objects in Article 2.1 require regard to be had to the interests of growers.  Growers are defined in Article 1.1(a) to include only persons delivering wheat to the AWB group.  So it is the case that ultimately growers who are denied export permits, or persons acting on behalf of growers who are denied export permits, will be shareholders of AWBI, but that circumstance does not lead, in our submission, automatically to the view that the interests of growers are therefore adequately protected by their rights as shareholders, that is, they are in these circumstances very much the minority whose rights are not necessarily to be protected in a general meeting.

Finally, your Honours, dealing with section 57(6), the respondent reads the words “under this section” as meaning “purportedly under this section”.  In the respondents’ written submissions, reliance is placed on a line of authority epitomised in Australia by Little v The Commonwealth, mentioned in paragraph 51 of their submissions, in England by Scammell v Hurley, mentioned in footnote 5 of their submissions.  That line of authority says that, in the context of imposing a special limitation period for tortious action against a public officer or public authority, “under this Act” means and includes “purportedly under this Act”. 

The point about that line of authority is that the starting point is very different from the starting point with which we are concerned here.  The starting point is that the statute, that is, the protective statute in question, only has work to do where the relevant conduct falls outside the scope of the statutory authority in the first place.  Those cases need to be read in that light.  In Little v The Commonwealth 75 CLR 94 at 108, point 6, that is what Sir Owen Dixon said. The same thing is said in Scammell v Hurley [1929] 1 KB 419 at 427. If the Court pleases.

GLEESON CJ:   Thank you, Mr Gageler.  We will reserve our decision in this matter.

AT 4.06 PM THE MATTER WAS ADJOURNED