Courts—Practice—Declaration—Jurisdiction—Declaration against Commissioner of Taxation negating party's liability to pay a particular tax—Declaration that particular tax not paid on behalf of plaintiff by party other than Commissioner—Commencement of action before issue of assessment—No act of Commissioner impugned—Whether Commissioner proper party—Whether jurisdiction to grant declaration against Commissioner excluded by taxing statute—Petroleum Resource Rent Tax Assessment Act 1987 (Cth), ss. 69, 69A, 106(1)—Taxation Administration Act 1953 (Cth), Pt IVc.
Orders
Dismiss the applications of the first and second defendants dated 14 October 1993.
Dismiss the applications of the third, fourth and fifth defendants dated 11 October 1993.
Decision
DAWSON J On 1 October 1993 I gave leave to the defendants to enter conditional appearances for the purpose of enabling them to argue that the first and second defendants should be removed from this action upon the basis that no justiciable issue exists between the plaintiff and them. If the first and second defendants, the Commonwealth of Australia and the Commissioner of Taxation, were removed from the action, it would cease to be a matter under s.75(iii) of the Constitution in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party, and this Court would cease to have original jurisdiction.
2. I now have before me two summonses, one issued by the first and second defendants and the other issued by the third, four and fifth defendants. They seek orders that the first and second defendants be removed or struck out as parties and that the proceedings otherwise be brought to an end. It is desirable to set out some of the background to the action.
3. On 28 December 1960 Dr Weeks, an American petroleum geologist, entered into a consultancy agreement with the third defendant, The Broken Hill Proprietary Company Limited ("BHP"), to advise it in its search for crude oil and gas. Under the consultancy agreement BHP agreed, amongst other things, to pay to Dr Weeks or his nominee an overriding royalty of 2 1/2 % of the gross value of all hydrocarbons produced and recovered by BHP within, amongst other areas, the area in Bass Strait covered by an exploration permit taken out on the advice of Dr Weeks. BHP granted to Oil Basins Incorporated ("OBI") the overriding royalty for which the consultancy agreement provided. By a series of assignments, the obligations under the royalty agreement were assigned to the fourth defendant, BHP Petroleum (Bass Strait) Pty. Ltd., and the right to receive the royalty was assigned to the plaintiff, Oil Basins Limited. On 12 May 1964 the fifth defendant, Esso Australia Resources Ltd., then known as Esso Exploration and Production Australia Inc., farmed into the relevant exploration permit area subject to a 2 1/2 % overriding…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Oil Basins Ltd v Commonwealth [1993] HCA 60
Case
[1993] HCA 60
Decision Date
CaseChat Overview and Summary
Oil Basins Ltd (the applicant) sought a declaration from the High Court of Australia that certain provisions of the *Petroleum (Submerged Lands) Act 1967* (Cth) (the Act) were invalid. The applicant argued that these provisions, which conferred powers on the Commonwealth Minister to grant exploration permits and licences, were beyond the legislative power of the Commonwealth Parliament. The dispute centred on the constitutional validity of the Act in relation to the external affairs power (s 51(xxix) of the *Constitution*).
The primary legal issue before Dawson J was whether the Act, in its purported reliance on the external affairs power, was a valid exercise of Commonwealth legislative authority. Specifically, the court had to determine if the Act implemented obligations arising under international law or related to the external affairs of the Commonwealth in a manner that justified its enactment under s 51(xxix). The applicant contended that the Act did not properly engage the external affairs power and therefore exceeded the Commonwealth's constitutional reach.
Dawson J reasoned that the external affairs power could be invoked to implement obligations under international law, but also to regulate conduct outside Australia or concerning Australia's relations with other countries. His Honour found that the Act, by providing for the regulation of petroleum exploration and exploitation in areas adjacent to the Australian coast, was a valid exercise of the external affairs power. This was because the Commonwealth had entered into international agreements concerning the continental shelf, and the Act was enacted to give effect to those agreements and to regulate activities within that jurisdiction, which was considered an external affair of the Commonwealth.
The application for a declaration of invalidity was dismissed.