Philip Morris Limited v The Commonwealth of Australia; British American Tobacco Australias Limited & Ors v The Commonwealth of Australia; Van Nelle Tabak Nederland BV & Anor v The Commonwealth of Australia; JT...

[2012] HCATrans 43

[2012] HCATrans 043

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne   No M173 of 2011

B e t w e e n -

PHILIP MORRIS LIMITED ACN 004 694 428

Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Office of the Registry
  Sydney  No S389 of 2011

B e t w e e n -

BRITISH AMERICAN TOBACCO AUSTRALASIA LIMITED ACN 002 717 160

First Plaintiff

BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED BCN 00074974

Second Plaintiff

BRITISH AMERICAN TOBACCO AUSTRALIA LIMITED ACN 000 151 100

Third Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Office of the Registry
  Sydney  No S399 of 2011

B e t w e e n -

VAN NELLE TABAK NEDERLAND BV

First Plaintiff

IMPERIAL TOBACCO AUSTRALIA LIMITED ACN 088 148 681

Second Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Office of the Registry
  Sydney  No S409 of 2011

B e t w e e n -

JT INTERNATIONAL SA

Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Directions

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON THURSDAY, 23 FEBRUARY 2012, AT 9.33 AM

Copyright in the High Court of Australia

__________________

MR A.C. ARCHIBALD, QC:   If your Honour please, I appear with MR C.P. YOUNG for Philip Morris.  (instructed by Allens Arthur Robinson)

MR A.J. MYERS, QC:   May it please your Honour, I appear with MR M.F. WHEELAHAN, SC and MR M.J. O’MEARA for the British American Tobacco Companies.  (instructed by Corrs Chambers Westgarth Lawyers)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR C.L. LENEHAN, for the Van Nelle Tabak parties.  (instructed by Mallesons Stephen Jaques)

MR G. GRIFFITH, QC:   Your Honour, I appear with MR G.A. HILL in JT International, the fourth matter.  (instructed by Johnson Winter & Slattery)

MR S.J. GAGELER, SC, Solicitor‑General of the Commonwealth of Australia:   If your Honour pleases, with MR S.B. LLOYD, SC I appear in each matter for the defendant.  (instructed by Australian Government Solicitor)

MS M.A. PERRY, QC:   I appear in each matter on behalf of the Attorney‑General for the Australian Capital Territory.  (instructed by ACT Government Solicitor)

HIS HONOUR:   Yes, Mr Solicitor.  I have an outline of submissions supplied yesterday afternoon.  Have there been any developments since then?

MR GAGELER:   No, your Honour.  Your Honour sees from the outline of submissions that the parties have been engaged in efforts to find a suitable vehicle to bring the matter before the Full Court on the dates your Honour earlier indicated, and your Honour would infer from the written submissions that senior counsel for all parties have been intensively engaged in those efforts.  The four or five options that appear ‑ ‑ ‑

HIS HONOUR:   Just before we get to the options, could I just ask you some questions about the defences to which the plaintiffs are yet to plead?

MR GAGELER:   Yes, your Honour.

HIS HONOUR:   Looking at the Peter Stuyvesant matter, and I think they are in common though the numbers differ – that is Mr Walker’s matter – am I right in thinking there are three grounds on which you meet a 51(xxxi) claim basically?  The first one is at paragraph 13(b) of the defence:  no “identifiable and measurable benefits or advantages”.

MR GAGELER:   Yes.

HIS HONOUR:   Then paragraph 30, “incongruous and inconsistent”.  That is a Lawler type – if I can use that expression – ground, is it?

MR GAGELER:   Yes, your Honour, but the same concept can be expressed in different ways, and has been expressed in different ways in different judgments.

HIS HONOUR:   Yes.

MR GAGELER:   That particular formulation is the Lawler formulation.  There is another formulation in Airservices Australia by Chief Justice Gleeson, I think, and Justice Kirby, picking up Justice Brennan in Mutual Pools, and that is more particularly captured in the way in which we have expressed paragraph 29.

HIS HONOUR:   Yes, that is right.  I read the phrase “In the premises” in 30 as linking back to 29.

MR GAGELER:   Yes, that is right.  So the same concept, perhaps slightly differently expressed.

HIS HONOUR:   Yes, all right.  Then 31(b):

constitute fair dealing between the Australian nation, the plaintiffs and the other tobacco manufacturers, importers and distributors –

et cetera.  Is that designed to – I think you mentioned this before ‑ ‑ ‑

MR GAGELER:   Yes.

HIS HONOUR:   Mutual Pools at 189 – 190, is it?

MR GAGELER:   No, this is more designed to pick up the notion of fair dealing that your Honour may have mentioned in the judgment in Lawler.  It goes back to an earlier judgment of I think Justice Kitto in Nelungaloo – there are certainly some formulations by Sir Owen Dixon of the notion of just terms, not necessarily involving monetary compensation but involving a measure of fair dealing; that is what is meant to be captured there.

HIS HONOUR:   I see.  It is not then specifically the need to regulate in the common interest?

MR GAGELER:   Well, it is against that background, the need to regulate in the common interest is again another formula that probably does not quite capture what we sought to do in paragraphs 29 and 30.  Paragraph 31 is against that background essentially saying what you are left with is fair enough in the circumstances, that is, what you are left with and what you are specifically given by adjustment to the Trade Marks Act is fair dealing.

HIS HONOUR:   That is three?

MR GAGELER:   That is three.

HIS HONOUR:   Three prongs.  Is there another one?

MR GAGELER:   Well, there are really two more.  One is to say in respect of what is asserted to be get up reputation and goodwill.  They are consequences at most of an exercise of liberty.  They did not enter into the field of property which is protected by section 51(xxxi).  Or perhaps putting it another way, even if goodwill might for some purposes be seen as property, goodwill is the consequence of a business activity, and if that business activity can be regulated then the effect on goodwill is not an effect that is protected by section 51(xxxi).  So that is one point, your Honour.

HIS HONOUR:   Where do we see that in the pleading?

MR GAGELER:   It appears in different places in different pleadings, your Honour.  I am just trying to turn it up.

HIS HONOUR:   Yes, I am looking at the Stuyvesant one.

MR GAGELER:   Paragraph 3(b)ii and iii on page 2.

HIS HONOUR:   Yes, I see.

MR GAGELER:   Then the same thought gets manifested in other responses.

HIS HONOUR:   Yes, so that is the fourth, and there was one more.

MR GAGELER:   The other is that to the extent that there may be property, that property is inherently susceptible of variation by a law of this nature.  We do not seek to make a universal proposition in respect of the statutory rights but by a law of this nature, this nature being a law designed to prevent injury to the public health.

HIS HONOUR:   Yes.  Well, there is a history of provision in Trade Marks Act denying registration to certain marks, so this is a legislative addition to that idea.

MR GAGELER:   Yes. 

HIS HONOUR:   Where do we see that?

MR GAGELER:   Paragraph 7(e)v and vi.

HIS HONOUR:   Yes, thank you.  I see that.  Now, in respect of those five ways of meeting the complaint, which of them are, as it were, factually contest free, or are they all contested in some way?

MR GAGELER:   Most of them have an element of identifying the mischief to which the legislation is directed and some of them have an element of demonstrating - query to what degree - that the legislation is appropriate and adapted to addressing that mischief.  The two – I have to be careful, I do not want to pre‑empt what might end up being agreement ‑ ‑ ‑

HIS HONOUR:   No, I realise that.

MR GAGELER:   But if I could just say that there is potentially ‑ ‑ ‑

HIS HONOUR:   Paragraph 31, for example, I would have thought - “fair dealing between the Australian nation”. 

MR GAGELER:   I think everyone accepts that that is just a question of characterisation.

HIS HONOUR:   I see.

MR GAGELER:   At least, the point has not been raised with me that that particular issue would require a judicial determination of anything beyond what we have pleaded in paragraph 31.

HIS HONOUR:   Well, “incongruous and inconsistent” is not fact rich, I would have thought.

MR GAGELER:   No, no.

HIS HONOUR:   Nor “identifiable benefit”.  “No identifiable benefit” - why is that fact rich?

MR GAGELER:   It is fact rich in the way in which some of the plaintiffs seek to put their case and in the way in which Van Nelle on one strand seeks to put its case, but that is not a vein of fact that is particularly controversial.  One of the ways in which Van Nelle and one of the other plaintiffs seeks to put the case is to say the health warnings include a reference to Quitline and Quitline is a registered trademark and so Quitline obtains a benefit.  So the nature of the benefit that might potentially be said to be obtained by Quitline is a factual inquiry but, as I said, not one that would be controversial.

HIS HONOUR:   The statutory variation, that is to say paragraph 7(e)v, “at all time subject to variation” are statute?

MR GAGELER:   Well, one would think that that should not be controversial, your Honour. 

HIS HONOUR:   Then the 3(b)ii and iii likewise, I would have thought.

MR GAGELER:   Well, 3(b)ii ought not be controversial.  Again, 3(b)iii, that is a reference to the statutory or the course of statutory developments.  That ought not be controversial.

HIS HONOUR:   What is left?

MR GAGELER:   What is left is ‑ ‑ ‑

HIS HONOUR:   Of the five grounds?

MR GAGELER:   Yes.  It is the – well, it is paragraphs 29 to 30 grounds and ‑ ‑ ‑

HIS HONOUR:   The Lawler ground.

MR GAGELER:   Yes, that is one way of putting it, and I was too quick to say the paragraph 31 question is entirely without factual content because the paragraph 31 ground then builds upon paragraph 29 in particular, paragraphs 24 to 28 and then 29.

HIS HONOUR:   Yes, yes, that is right.

MR GAGELER:   But once those factual elements are there, I have not heard it suggested that the characterisation of fair dealing is one that would need to be the subject of some further factual inquiry.

HIS HONOUR:   I think it may come to this, Mr Solicitor, that it is open I think to the plaintiffs as to these five grounds to say, as to one or more of them, there is no such ground as a matter of constitutional law, to demur in effect.

MR GAGELER:   A demurrer is something that ‑ ‑ ‑

HIS HONOUR:   And also to plead and say if we are wrong about that the facts do not match up.

MR GAGELER:   Yes.  A demurrer, your Honour, where there is an acceptance of the truth that the allegations of fact contained in the defence is not a problem.

HIS HONOUR:   Then if it comes to it and the demurer fails and there does have to be a dispute of fact, well that can then go off somewhere else.

MR GAGELER:   Yes, of course.  That, of course, is one of the five vehicles - your Honour has seen that there is an attempt to explore another vehicle.

HIS HONOUR:   This is relying on section 18 of the Judiciary Act, is it?

MR GAGELER:   Well, yes, and the procedure that was, in fact, adopted in the Tasmanian Dam Case.

HIS HONOUR:   Yes, I wanted to ask you about that.  Now, where do you mention that in your outline?

MR GAGELER:   Paragraph 4, we identify possible ways of going and ‑ ‑ ‑

HIS HONOUR:   Yes, I see, paragraph 6.  This is what puzzled me:  “areas of factual agreement and factual disagreement”.

MR GAGELER:   Yes.

HIS HONOUR:   Was that what was done in the Tasmanian Dams Case?

MR GAGELER:   Yes.

HIS HONOUR:   Some people at the Bar table have long enough memories about it.  Is that right, is it?

MR GAGELER:   Yes, that is right.

HIS HONOUR:   Does it spring out of the report?

MR GAGELER:   Yes, it does.  Does your Honour have the report?

HIS HONOUR:   Yes.

MR GAGELER:   You can see it in the form of the questions that are recorded at pages 54 and 55, and it is peppered through them, but if you just look at page 54 at the first two questions and you will see that there is a general question asked.  In effect, does one side or the other win on the basis of what is the agreed facts and then ‑ ‑ ‑

HIS HONOUR:   The disputed allegations containing the annexed statement of facts and allegations?

MR GAGELER:   Yes.

HIS HONOUR:   The report does not have the annexed document, unfortunately ‑ ‑ ‑

MR GAGELER:   No, apparently that was quite a long document – we do have it.

HIS HONOUR:   Yes, I see.

MR GAGELER:   I did not need to get to it.

HIS HONOUR:   Yes, and when you look at the answers to question 2, for example – no.

MR GAGELER:   You do not need to reach it.

HIS HONOUR:   Yes, I see.  The Tasmanian Dams Case had to be got together in a hurry, did it not, because there were pending injunction applications?

MR GAGELER:   That may explain the inability to reach agreement on some of the facts.

HIS HONOUR:   Yes.  That was argued in ‑ ‑ ‑

MR GAGELER:   It was argued in Canberra, and judgment was delivered a couple of weeks later in Brisbane – all very difficult.

HIS HONOUR:   Yes, all right.  I do not think it is an ideal method of procedure to repeat.

MR GAGELER:   Nobody regards it as ideal.  It is number 4 on my list, but it is better than number 5.

HIS HONOUR:   Yes, I see.  We do not know what the plaintiffs are going to do to respond to your defence yet, do we?

MR GAGELER:   Areas of factual dispute have been identified in draft replies, your Honour.  Your Honour will have seen that the proposed orders contain provision for those replies to be filed.

HIS HONOUR:   Why does BAT need three more days?

MR GAGELER:   They asked me to include that.  They can explain that, your Honour.

HIS HONOUR:   What is the answer, Mr Myers?  We really have to get a move on in this case.

MR MYERS:   We agree with that, your Honour, and if your Honour were of the view that we should not have three more days, we would accept that.

HIS HONOUR:   All right, thank you.  Next week – and the parties suggest or acquiesce in Wednesday of next week, is it?

MR GAGELER:   Tuesday, your Honour.  Sorry, we have the wrong date.  The 28th we had in mind coming back.

HIS HONOUR:   That is the beginning of a fairly heavy two‑week sittings.  The afternoon of the 27th would be much preferable.

MR GAGELER:   Then we should change perhaps the orders indicated in paragraph ‑ ‑ ‑

HIS HONOUR:   Simply because 9.30 or 4.15, it is not an ideal way of getting into the detail that may be involved here.

MR GAGELER:   Yes.

HIS HONOUR:   So just going through your outline there, the proposed orders, what would need to be modified?

MR GAGELER:   In paragraph 9 ‑ ‑ ‑

HIS HONOUR:   The 24th is tomorrow.

MR GAGELER:   Yes.

HIS HONOUR:   I think Mr Myers’ clients will have to meet that as well.

MR GAGELER:   Yes, and then the 27th is Monday, and we would have to change 2 pm to noon.

HIS HONOUR:   Yes.

MR GAGELER:   Then the directions at a time suitable for your Honour later that day.

HIS HONOUR:   Will counsel be travelling to Canberra?

MR MYERS:   Yes, I will.

MR GAGELER:   Yes.

HIS HONOUR:   Mr Archibald?

MR ARCHIBALD:   I can and will.  I was not going to.

HIS HONOUR:   It is not that depressing a prospect.  Mr Walker?

MR WALKER:   Yes.

HIS HONOUR:   Will we say at 2.15 pm on the 27th?  Then there is no need for a different provision in 10, is there, for BAT?

MR GAGELER:   No, that can be deleted.

HIS HONOUR:   Then your point 11 would arise next Monday, I suppose?

MR GAGELER:   Yes.

HIS HONOUR:   All right.  I will read out how it would then stand.

In each of the matters:

1.The plaintiff or plaintiffs file and serve their reply to the defence on or before 24 February.

2.The defendant file and serve any agreed draft questions reserved, excluding any exhibits and annexures, on or before noon on 27 February.

3.The proceedings be listed before me for directions in Canberra at 2.15 pm on 27 February 2012.

4.Costs of today will be costs in each action.

MR GAGELER:   If the Court pleases.

HIS HONOUR:   Is that sufficient?  Yes, Dr Griffith.

MR GRIFFITH:   Yes, your Honour, if I may have leave.  Your Honour, as indicated by the Solicitor‑General, there have been discussions with the parties and so far as JTI, my client, is concerned there will not be agreed draft questions with the Commonwealth.  We have our proposed questions which we have delivered to the Commonwealth.  They have not been agreed and we would be proposing to have our learned friends – he said non‑preferred fifth alternative “simple question reserved” as under his paragraph 4(5) as the way in which this should proceed.

HIS HONOUR:   Just a minute.  What would be your option?

MR GRIFFITH:   “Question reserved”, your Honour, “with the pleadings attached”.  One page questions and pleadings attached.  No other issues of fact.  Your Honour, we have draft submissions that we could either hand up today or have leave to file as to why we say that is a way to proceed and why we do not accept the Commonwealth’s proposals.  Your Honour has not seen the Commonwealth’s proposals, but could your Honour accept that so far as our client is concerned we cannot accept them and we desire to proceed on the basis of a question reserved seeking to argue to your Honour that this is exactly the same result as a demurrer, but submitting that this is a preferred way to proceed.  Can I indicate to your Honour why we do not wish to proceed on a demurrer as my learned friend says?

HIS HONOUR:   Yes.

MR GRIFFITH:   The reason is, your Honour, because the assumption under the Rules of the Court is that you accept the facts for the purpose of the hearing.  Although we believe we can frame a demurrer on the basis of saying the matters pleaded are irrelevant and have that question set down on a demurrer, our client’s position is, your Honour, that they do not know and cannot protect how offshore Australia such a result of pleading with the application of such a rule would be regarded as relevant to litigation throughout the rest of the world and, for that reason, your Honour, see that the obvious way to proceed, in our submission, would be way of a question reserved which gets the same result, but avoids that almost insurmountable difficulty for our client in accepting the operation of the Rules.

HIS HONOUR:   Yes.

MR GRIFFITH:   So we will seek, your Honour, to – we have the document.  We could file it today.

HIS HONOUR:   Yes, I think that would be good.

MR GRIFFITH:   With our reply, our question reserved, our submissions in support and, if I could add to that, your Honour, explanation saying why, although we can frame a demurrer to exactly the same result, at the moment it is not an acceptable course for the offshore reasons, to be absolutely frank with the Court.

HIS HONOUR:   Why is it an unacceptable course for ‑ ‑ ‑

MR GRIFFITH:   Your Honour has not seen the document which is being put forward in a question reserved.  If I could say, your Honour, that it was served to us at 9.17 last night, it is 31 pages.  It incorporates other documents, your Honour, which run to, I am told, more than one linear metre. 

MR GAGELER:   Your Honour, may I object to a course that involves the disclosure of one element of an extensive course of without prejudice negotiations.  Your Honour is being given ‑ ‑ ‑

MR GRIFFITH:   Your Honour, I accept that objection.  Your Honour, I was responding to your Honour’s question without addressing ‑ ‑ ‑

HIS HONOUR:   Yes.

MR GRIFFITH:   It is suffice, your Honour ‑ ‑ ‑

HIS HONOUR:   Let us not get too heated.

MR GRIFFITH:   No.  If you ignore that statement, your Honour, other than to say there is a document which was served at 9.17 last night which, by ‑ ‑ ‑

HIS HONOUR:   It does not matter whether it was 9.17 or 9.20.

MR GRIFFITH:   I know, your Honour, but by 10.17, my learned friend has been informed that JTI cannot agree with what the Commonwealth proposes on a without prejudice basis and we desire to apply for our question reserved, preferring that to the demurrer course under the Rules, your Honour, for the reasons I have stated.

HIS HONOUR:   All right.  Now, do you have any objection to Dr Griffith filing this document today?

MR GAGELER:   Your Honour, it is a document I have ‑ ‑ ‑

HIS HONOUR:   You have not seen it?

MR GAGELER:   Next Monday afternoon is the time and place and Canberra is the place.

HIS HONOUR:   I think that might be right.  Now, the other thing all four plaintiffs had better bear in mind in their dealings with the defendant is there is no particular reason why the Court has to try all these four cases together.  If any one of them is in a better shape than the others, that can be dealt with more promptly.

MR GRIFFITH:   We are apprised of that, your Honour.

HIS HONOUR:   It may not be a satisfactory result for the other plaintiffs, but they have to bear it in mind.  You are not all yoked together inseverably from the point of view of the court disposing of these challenges.  Now, does counsel have a note of those directions?  All right.  We will adjourn until 2.15 pm next Monday in Canberra.

MR GRIFFITH:   I am sorry, your Honour.  Your Honour, if I may have leave – has your Honour admitted that we can file on the basis of not agreed case?

HIS HONOUR:   No.

MR GRIFFITH:   Because your Honour’s order now says “agreed questions”.  We will not have agreed questions.  We will have proposed questions.

HIS HONOUR:   Well, any agreed questions.

MR GRIFFITH:   Well, we will not be agreeing to it.

HIS HONOUR:   Yes, well, that may be so.  There is no agreed question.

MR GRIFFITH:   In that case, your Honour, we seek leave to file our proposals and contentions ‑ ‑ ‑

HIS HONOUR:   You can do that on Monday afternoon.

MR GRIFFITH:   May we file that in advance so your Honour is apprised ‑ ‑ ‑

HIS HONOUR:   No.  Is there anything else?  I will adjourn until 2.15 next Monday.

AT 10.04 PM THE MATTER WAS ADJOURNED