Philip Morris Limited & Ors v Commissioner of Business Franchises & Anor; Coastace Pty Limited & Anor v State of New South Wales & Ors; Harper v Minister for Sea Fisheries

[1989] HCATrans 48

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M87 of 1987

B e t w e e n -

PHILIP MORRIS LIMITED, STATEWIDE

TOBACCO SERVICES LIMITED AND

G.P.M. CIGARETTE DISTRIBUTORS

(AUSTRALIA) LIMITED

Plaintiff.

and

COMMISSIONER OF BUSINESS FRANCHISES

and THE STATE OF VICTORIA

Defendanc

Case stated

Registry No CS of 1987

B e t w e e n -

COASTACE PTY LIMITED

First Plaintiff

ROGER WILLIAM PETERS

Second Plaintiff

and

STATE OF NEW SOUTH WALES

Philip Morris

First Defendant

ANTHONY DANIEL CLYNE, CHIEF COMMISSIONER

FOR BUSINESS FRANCHISES LICENCES

(TOBACCO) OF NEW SOUTH WALES

Second Defendant

WAYNE DUESBUR'l

Third Defendant

IAN P. SMITH

Fourth Defendant

Case stated

ClTl/1/PLC 287 10/3/89

Office of the Registry

Melbourne No MlO of 1988

B e t w e e n -

GEOFFREY ALAN HARPER

Plaintiff

and

MINISTER FOR SEA FISHERIES,

DIRECTOR OF SEA FISHERIES AND

THE STATE OF TASMANIA

Defendants

Demurrer

MASON CJ

BRENNAN J

DEANE J
DAWSON J
TOOHEY J
GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 10 MARCH 1989, AT 10.01 AM

(Continued from 9/3/89)

Copyright in the High Court of Australia

ClTl/2/PLC	288	10/3/89
Philip Morris

MASON CJ:	Yes.
MR BALE:	Perhaps I should indicate that after the adjournment
yesterday all counsel involved in the case have
had the opportunity to discuss yesterday's events and, so far as the defendant is concerned and the
interveners are concerned, it became apparent that
tr,e COASTAL WATERS (STATE TITLE) ACT had not been
argued in PORT MACDONNELL and that if that was
going to be said to be unconstitutional in this case then the arguments in support of the
constitutionality have not had an opportunity
to be developed and it would not be practical to have developed those arguments sufficiently to put them to the Court today.

MASON CJ: This is a very good illustration of the dangers

that arise when there is not an advance exchange

by the parties of the contentions that they are

going to make with a result that a day set aside

for the hearing of this Court is likely to be

wasted.

MR BALE: Certainly, Your Honour. One cannot argue that

although to accommodate this situation that has

arisen, given the nature of that argument and

the instructions that it is necessary to obtain in relation to it, it would have been necessary for such an exchange to have taken place quite

some distance ahead, I respectfully submit.

MASON CJ: Well, it is a great pity it did not take place

quite some distance ahead.

MR BALE: Certainly, Your Honour, we accept that but, of

course, we would say it is for the plaintiff who

alleges unconstitutionality to establish the basis

of that unconstitutionality and simply for the

defendant to respond to such assertions when that

basis is known.

(Continued on page 290)

ClTl/ 3/SDI:.	289	10/3/89
Philip Morris

MR BALE (continuing): It was never done; there was never

an exchange. Indeed, the first time that an

exchange was sought, certainly to my knowledge, was

on Wednesday of this week - the day before

yesterday - after Your Honour Mr Justice Deane

put to me the question of whether or not

DENNIS was relied upon and I affirmed it was not.

Of course, by that time any raising of COASTAL

WATERS (STATE POWERS) would necessarily have

involved this adjournment.

Your Honours, we are in this situation that

both the defendants and the several interveners

believe that they need to get instruction in
relation to the issues which are yet to be

raised by the section 78B notice because of the

fact that last night it became readily apparent

that further instruction would be needed and

further argument would have to be prepared.	My
learned friend, Mr Charles, indicated he would

like some time to properly prepare the section 78B

notice so that it adequately raised all the matters

that were to be raised, and so we have not as yet

seen that but I understand we can expect to see
it very shortly. As soon as that is to hand then

the necessary instruction can be obtained and the

necessary arguments prepared.

For myself, I would have felt that I would have adequate instruction and adequate time to

prepare the argument within, say, a fortnight. I

have not discussed the timing with all of my
learned friends and in saying that I do not speak

for them.

MASON CJ:	Yes. -So, you ask for the matter to be adjourned?
MR BALE:	I am ready to proceed with the - no, I do not,
Your Honour.  I am ready to proceed with the
argument. We have not got a section 78B notice
which raises any of these issues and I am ready
to proceed with the argument that I have developed
Qn the issues that are raised on the pleadings.
MASON CJ:	But you know perfectly well that these

constitutional issues are going to arise in the

case and you tell us that you need instructions

before you can present argument on that.

(Continued on page 291)

CIT2/l/JM	290	10/3/89
Philip Morris

MR BALE:	We have not received a section 78 - - -
MASON CJ:	But you know you are going to receive it and you know that there are contentions that will
cause you to rely on the statutes.

MR BALE: If those matters are raised, Your Honour, by a

section 78B notice, then I will be obliged to

say that we are not ready to proceed and I

understand the various interveners are in the

same position. Whilst the Northern Territory

is not represented here I am able to say that

the Solicitor-General for the Northern Territory

has been contacted and he has indicated that

he would need to get some instruction which

he has not, at this time, been able to obtain.

May it please.

MASON CJ:	Yes, Mr Charles.
MR CHARLES:	Your Honours, in the light of discussions

that took place between counsel last night,

it was accepted between the parties that there

was no point in serving the section 78B notice

last night. To keep faith with the Court and

to ensure that there was no misunderstanding

we had one prepared and I have it here. I can

tell the Court now that having seen the contentions
of the defendant in this case we will wish to
argue that the COASTAL WATERS (STATE TITLES)

ACT is not a valid exercise of constitutional power; we will seek to say that it is not made

under section Sl(xxxviii), that the mere fact

that it is external to Australia's coastline

would be a surprising basis for saying the

external affairs power provided any support

for it; we will say that the fact that it is

alleged to belong to the Commonwealth would

also not, in itself, be a sufficient basis for

that exercise of Commonwealth power, and, in

any event, we would want to argue why it is

that an Act of this nature did not involve an

-Tasmania and require compliance with enlargement of the boundaries of the State of section 123.

(Continuing on page 292)

291   10/3/89

Philip Morris

MR CHARLES (continuing):  Your Honour, we would want to

say that absent title it would not be possible

for an exercise of this kind to be described as

a royalty provision. Now, the last point in

the contentions that we have received makes it

plain that the case will also involve an

examination of the point left undecided by
Sir Owen Dixon in MATTHEW's case which is whether
these goods are externally produced goods,
whether therefore the imposition of the Tasmanian

tax amounts to a customs duty and whether

alternatively there may be an excise imposed

on goods brought into Australia from outside

Australia.

Now, Your Honours, having seen the

contentions I am able to say that those are the

points that we will be seeking to raise in this

case. May I respectfully put to the Court that

examination of the defence and demurrer will make

it perfectly clear that no hint of any defence

of substance is shown. There is no suggestion,

in either the defence or the demurrer, that the

State of Tasmania proposed to rely on any

Commonwealth legislation, proposed to rely on any

assertion of royalty or prof its a prendre.

There are simply, in effect, a series of non-admissions and denials, we would say with great

respect, no hint of any of the defence that is likely

to be relied on by the State is included in that

document.	We thought we were coming here to
argue DENNIS HOTELS.	I repeat our apology of

last night that this situation has arisen.

MASON CJ:  Mr Charles, there are several questions I

wanted to ask you. What about the outstanding case?

MR CHARLES:  It would be our submission, Your Honour, that

there is an absurdity if that case is not heard at

the same time as the present -

MASON CJ:

or not? Does it raise precisely the same issues,

MR CHARLES:  We would believe, Your Honours, that it raises

precisely the same issue.	As we understand it,
the difference is this;	in relation to the 1989

legislation what is required of the licence

applicant is that in place of simply what appears

to be an imposed licence the applicant is now

required to make an application for a commercial

contract.

ClT4/l/HS	292	10/3/89
Philip Morris

MR CHARLES (continuing): When this was made known to the

plaintiff, what followed was a letter sent by

the plaintiff to the department saying, "Look,

I will comply if I have to but I will do it under protest . " Th e response was, "N o, you

cannot protest. If you want to contract with

us, you contract us, but there will be no

protests".

Now, Your Honours, that plainly is going to

raise what will be a disputed question of fact,

no doubt, as to whether or not there is a realicy

of consent. Apart from that question, we do not

see any other issue of fact arising between the

parties but although the writ was served a

considerable time ago we have not yet received

a defence and we simply do not know. No doubt

the defence will contain denials as the present

one does and a denial, obviously enough, raises
an issue of fact which we would have to prove

but, apart from that, Your Honours, we would have

thought that the issues I have put to the Court

would all be raised and we cannot see any other

question of substance arising.

MASON CJ: Well, now, there is one other issue of fact, is

there not? Apart from the issue concerning the

reality of consent in the second action, there is

this outstanding question as to the nocturnal habits

of the monster.	Now, is that going to be agreed or
not?

MR CHARLES:  Your Honour, I think the difference between us is

likely to be that my friend will say they can move

up to 10 metres at night; we would say 40. I doubt

if any constitutional question will depend on that.

MASON CJ:  Yes, but none the :Jess, it ought to be resolved and if

the matter is to stand over, then it seems that it

should come before a single Justice, say

Justice Dawson in Melbourne in the week after next

with a view to his reviewing the giving of the

notices under the JUDICIARY ACT, the issues that

arise on the basis that contentions have been

fully exchanged and what is to be done about these

two possible issues of fact - - -

MR CHARLES:	Yes, Your Honour.
MASON CJ:	- - -because-. the matter cannot ccma back before this Court

until all those matters have been settled.

MR CHARLES:  I accept everything Your Honour says without

question. I would have thought, Your Honours, that

by a fortnight's time, we would have been able to

settle the difference at somewhere between 25 and 30

metres but, subject to that -

ClTS/1/SH	293	10/3/89
Philip Morris

MASON CJ: Prior history of this particular case does not

lead one to be optimistic about that.

:MR CHARLES:  We are always optimistic, Your Honour.

MASON CJ: Yes. Well, that is comforting anyhow, Mr Charles.

(Continued on page 295)

ClTS/2/SH .	294	10/3/89
Philip Morris

MASON CJ (continuing):  Now, when do you think that the two

cases would be ready to be heard? My interest

in asking that question is, of course, that the Court
has reserved judgment in the PORT MACDONNELL case;
needless to say we do not want to hold up the delivery
of judgment in that case unduly. Therefore, there is

an advantage to the Court in that respect and also

because we have the arguments fresh in our mind in the

two earlier cases in having these two cases listed

for hearing as early as possible.

MR CHARLES:  I should say, Your Honour, that we do not see it

as essential to our argument to raise the validity of

the POWERS ACT. It is the TITLES ACT which we see as

critical to our argument. But accepting what

Your Honour says, my only concern, Your Honour, is that

I understand there are some difficulties with finding a

time soon for the matter to be heard. One date had

been mentioned to us when, I regret to say, that both

my junior and I are unavailable, a,_.date not far hence.

MASON CJ:	How long would the argument take in the two cases?
MR CHARLES:	I should have thought, Your Honour, that it would

not be very much more, if it was more than a day.

We could certainly put the arguments we would have in

mind following the questions that we have raised in

two hours.

MASON CJ:  And, Mr Solicitor for Tasmania, what is your estimate

of the time?

MR BALE:  I would have thought certainly less than two days,

Your Honour, given that I would anticipate interventions
from the Commonwealth and all States. One day might

be a little conservative, but between one and two days.

MASON CJ:  Yes, thank you. Is there anything else you wish to

say, Mr Charles?

MR CHARLES:	No, Your Honour.
MASON CJ:	Perhaps I should ask the parties, has a deferice

or a demurrer been delivered in the outstanding case?

MR BALE:  No, Your Honour, the time for delivery of the defence

and demurrer is Friday of next week, I believe the

time for delivery expires. Instructions have not been

completed so far as the defence is concerned. The

current indications are that there would be likely to

be a defence without a demurrer but I regret that I am

not in a position to confirm that, because my

instructions are not complete.

ClT6/l/JH	295	10/3/89
Philip Morris

MASON CJ: It would be of assistance, of course, if that

defence and/or defence and demurrer were delivered

by the end of next week.

MR BALE: It will be.

MASON CJ:  So that when the matter comes before Justice Dawson

in the following week, at least the formal record

is complete.

MR BALE:	Yes, that will be done, Your Honour.
MASON CJ:	Very well.
MR BALE:	I would hope by the middle of next week.

MASON CJ: Yes. Mr Solicitor for the Commonwealth.

MR GRIFFITH: 

Your Honour, were were unaware of this statement

of agreed constitutional facts until it was handed
to the Court and we see ambiguities in that statement

and internal inconsistencies particularly between paragraph 2

and paragraph 5. Tasmania has closing lines under

the SEAS AND SUBMERGED LANDS ACT - if I could just

hold this diagram up to the Court to indicate that

the areas in dark are the internal waters within the

closing lines. I have drawn in yellow what would be a rough indication of the territorial sea and beyond

that is the area which is covered by the arrangement

which has been made in respect of the off-shore areas

by the Commonwealth with the State which is conformity
with section 3A(c) of the FISHERIES ACT 1959 of
Tasmania.

That area includes all this area up to Wilson's

Promontory but, of course, one has within that area three waters. There is the internal waters, the

territorial sea and then the balance of the area

constituting this area. It is our understanding

that as a matter of fact almost all abalone is taken

from within this area.

DAWSON J: -What is "this area"?

MASON CJ: What is "this area", I cannot - - -

MR GRIFFITH:  I am sorry this area is the internal waters and

the territorial sea, coastal waters. There is very

little taken from beyond that in this larger area.

(Continued on page 297)

ClT7/l/BR.	296	lU/3/89
Philip Morris

MR GRIFFITH (continuing):  Your Honours, when one goes to

the statement of	agreed constitutional facts,
paragraph 2 uses	a very imprecise expression but
we understand it	as to indicate all this area.

In paragraph 5, Your Honour, there is also

an imprecise expression and it says:

A large percentage of all abalone taken by

persons licensed under Tasmanian law to take

abalone is taken from Tasmanian coastal waters.

The remainder is taken from adjacent Australian

waters.

Your Honours, we see as a relevant fact in this

case the fact as to what proportion the plaintiff

says he takes from within the territorial sea

and internal waters of the State and what proportion

is taken outside that area. We understand that

as a fact only an insignificant proportion is

taken in the outside area but we think,

Your Honour, that that is of relevance and our

contentions which we had ready yesterday refer

to that difference.

Our submission will be that if the preponderance

is taken from within or the fact that an insubstantial

proportion is taken from without does not affect the validity of the State impost. Your Honours,

if a large proportion is taken from without there

may be different considerations.

So it would be our submission, Your Honour,

that it is proper for the Court to have agreement

between the parties or to make a finding as to

what, in respect of the plaintiff, is the proportion

in 1987 and 1988 of abalone taken within State

and territorial waters and outside that area.

DAWSON J: Within internal waters?

MR GRIFFITH: Internal waters and the territorial sea,

Your Honour.

DAWSON J:	And to differentiate between the two?
MR GRIFFITH:	No, we do not differentiate.

MASON CJ: Differentiate between them and the waters outside

those two areas.

MR GRIFFITH:  Yes, Your Honour. Our submission is that

if it is only a small proportion outside, then

it is insubstantial and there is no difficulty

about State impost.

ClT8/1/SDI:.	297	10/3/89
Philip Morris

MASON CJ:  Yes, thank you for raising that point.

MR GRIFFITH: If the Court pleases.

McHUGH J: Mr Solicitor, having regard to the way it is

developed, should the Commonwealth be a party

to this action in some way now? It seems

strange one of your statutes is being challenged?

(Continued on page 299)

C 1T8/2/SDL·	298	10/3/89
Philip Morris

MR GRIFFITH:  Your Honour, we are content to intervene.

We will be here. In DICKENSON we were not granted

leave to intervene so, perhaps, as long as we

can be heard that is all we need.

BRENNAN J: It is a question, is it, of your title?

MR GRIFFITH:  Your Honour, we feel comfortable to argue

on the basis of being interveners. If the Court

would order us to be a party we would be

comfortable with that.

MASON CJ:	You will be here, at any rate?
MR GRIFFITH:	We will be here.

MASON CJ: If we want to call you a party and ask that

you be joined then - - -

MR GRIFFITH:  Your Honour, we are prepared to argue

it today. If the Court pleases.

MASON CJ:  Thank you, Mr Solicitor. Mr Charles and

Mr Solicitor for Tasmania, obviously you will

have to give attention to that matter. It is

clear enough now that attention has been directed

to the statement of agreed constitutional facts

that they are imprecise and vague, in this respect.

MR CHARLES: If I may so, Your Honour, we were simply

asked to agree to these facts and after taking

instructions we did so. We also asked, while

we were being asked to agree to them, and were
not told. It is only now that we learn the

circumstances and the legislation to which it

is directed.

MASON CJ:  Yes, but this is another matter to which

attention will be given when the matter comes

before Justice Dawson. Very well, in the circumstances, the Court will consider its

decision in PHILIP MORRIS and COASTACE, it will

stand HARPER V MINISTER FOR SEA FISHERIES AND
·OTHERS over to a date to be fixed.	In the

meantime, that matter and the other matter that

is awaiting hearing involving the same parties

will be listed before Justice Dawson the week

after next in Melbourne as on a summons for

directions when His Honour will give attention

to the various matters that have been identified

during the course of the discussion this morning.

Yes, Mr Solicitor.

MR BERKELEY:  I wonder if I could ask the Court to consider,

in ,due course, whether the Court would issue

C 1T9 /1 /ND-	299	10/3/89
Philip Morris

a.practice direction that in constitutional

cases, at any rate, contentions are delivered

between the parties and the interveners some

time before the date fixed for the hearing?

It seems to me that the trouble is there is

an existing direction that they are issued when

you get to your feet and in constitutional cases
where it is very important the matter be

properly argued it might be an advance	if
it were done earlier.

MASON CJ:	Mr Solicitor, the events of yesterday have
focused our attention on that very matter.
It certainly is a matter to which we will give
attention.
MR BERKELEY:	Yes, Your Honour.
MASON CJ:	The Court will now adjourn until 10. 15 am on

Tuesday next.

AT 10.24 AM THE MATTER WAS ADJOURNED

TO A DATE TO BE FIXED

C 1T9 /2/ND. 300 10/3/89

Philip Morris