ResourceCo Material Solutions Pty Ltd & Anor v State of Victoria

[2016] HCATrans 124

[2016] HCATrans 124

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M32 of 2016

B e t w e e n -

RESOURCECO MATERIAL SOLUTIONS PTY LTD (ACN 608 316 687)

First Plaintiff

SOUTHERN WASTE RESOURCECO PTY LTD (ACN 151 241 093)

Second Plaintiff

and

STATE OF VICTORIA

Defendant

GORDON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON WEDNESDAY, 25 MAY 2016, AT 9.30 AM

Copyright in the High Court of Australia

MR P.J. HANKS, QC:   I appear with MR G.A. HILL, for the plaintiffs. (instructed by Davis Advisory)

MR R.M. NIALL, QC, Solicitor‑General for the State of Victoria:   May it please your Honour, I appear with my learned friend, MS P.P. THIAGARAJAN, for the defendant.  (instructed by Victorian Government Solicitor)

HER HONOUR:   Thank you.

MR HANKS:   Your Honour, there is a summons for directions dated 31 March.

HER HONOUR:   I have read it.

MR HANKS:   Thank you.  We filed some submissions yesterday.

HER HONOUR:   I have read those.

MR HANKS:   I will not express surprise, your Honour.

HER HONOUR:   And I have read Mr Niall’s.

MR HANKS:   Thank you.  Attached to those submissions are some, as it were, consolidated orders that we seek.  My understanding is that the first two of those orders are consented to by our friends.

HER HONOUR:   Yes.

MR HANKS:   They effectively allow the filing of them.

HER HONOUR:   So you add a defendant and file an amended statement of claim?

MR HANKS:   Correct.

HER HONOUR:   Yes.

MR HANKS:   Thank you, your Honour.  Now, I wanted to turn directly to the principal issue which is raised by our friend’s written submissions for the State of Victoria.  Now, your Honour will have the written submissions that we filed initially on 31 March in anticipation and then the response that we filed yesterday.  As your Honour knows, a question posed by the statement of claim – if I can put it in that colloquial way – is whether regulation 26(3) of the Victorian regulations with a rather long name, whether that offends section 92, and that in turn leads to these two questions; the principal question, namely, whether it imposes a burden that discriminates against interstate trade with a protectionist effect.

HER HONOUR:   Yes.

MR HANKS:   Now, that question, we contend, can be answered very simply by reading the relevant regulation, regulation 26(3), in the context of the Act and the regulations, and there are also some guidelines issued by EPA Victoria which assist in understanding the operation of the Act and the regulations.  One thing that the guidelines make clear is ‑ ‑ ‑

HER HONOUR:   What is the status of the guidelines?

MR HANKS:   They do not have any legal status, your Honour; they make clear what the practice of EPA Victoria is, but an analysis of the Act and the regulations would come, we think, to the same simple conclusion as that which is expressed in the guidelines, which is that if you are outside Victoria you cannot be licensed to receive waste.  The Act has, not surprisingly, a territorial reach and does not reach extraterritorially.

Now, that is an important factor because, as your Honour can see in regulation 26(3), you cannot get a permit to transport waste unless the facility to which the waste is being transported has better environmental performance gains than a registered or licensed facility.  Now, necessarily, the licensed facility must be one located in Victoria.  So if, as in the present case, our clients wished to transport waste to South Australia they are required to obtain approval from ‑ ‑ ‑

HER HONOUR:   Yes, and that approval has been refused.

MR HANKS:   It has been refused, and it has been refused on the basis that the South Australian facility does not have higher environmental performance standards than a facility in Victoria.

HER HONOUR:   That is only the first limb of the refusal that you – as I understand the way I read your proposed – or now no longer proposed but new statement of claim.

MR HANKS:   Yes.

HER HONOUR:   So if you go to page 5 and, in effect, the basis upon which you say the regulation discriminates against interstate trade and commerce, there is the better analysis argument in paragraph 1, and then in paragraph 2 there is the contention that premises outside the State are not licensed.

MR HANKS:   Well, that is so, your Honour.  Our understanding of the Act is that they are incapable of being licensed.

HER HONOUR:   I will have a chat to Mr Niall.  It seemed to me, given the way in which the new statement of claim is now formulated, it will be very nice to know what the State’s position was before we made a decision about what to do with this case.

MR HANKS:   That is right.  We make the point that we need to know what their position is on the secondary question posed by section 92.  So far as the primary question is ‑ this regulation, does it give effect to, does it introduce, does it impose discrimination against interstate trade that has the effect of protecting intrastate trade.  That question we think can be answered directly by reading the regulations and the Act.

HER HONOUR:   What about the second question?

MR HANKS:   The second question is, is there some permissible purpose, and as a subsidiary element in that, can it be said that the regulation is appropriate and adapted to achieving that permissible purpose.  We do not know, your Honour, what that purpose might be.

HER HONOUR:   In a sense, that is one of the reasons why I thought it might be appropriate to, in effect – and I notice Mr Niall has got lots of juniors so they can get busy ‑ ‑ ‑

MR HANKS:   Mr Niall could probably deal with it himself.

HER HONOUR:   I would have thought so – to work out where, in effect, the dispute is at all.  I mean, at the moment I understand from Mr Niall’s submissions that there may be a whole range of disputes but, given the narrowing of the complaint to regulation 26(3), I would like to know what the position is.  I will have a chat to Mr Niall.

MR HANKS:   Thank you, your Honour.

MR NIALL:   Thank you, your Honour.   The position remains, of the State, that the matter should be remitted, and can I just try and – our learned friends have pleaded the case in a conclusionary way and perhaps masked some of the complexities that attend claims ‑ ‑ ‑

HER HONOUR:   Question one or question two?

MR NIALL:   Both, your Honour.

HER HONOUR:   Right.

MR NIALL:   Well, question two – sorry, your Honour, when you identify question one and question two, is your Honour referring ‑ ‑ ‑

HER HONOUR:   I am talking about the way in which Mr Hanks and I just discussed it.

MR NIALL:   So on the burden ‑ ‑ ‑

HER HONOUR:   Yes, that is question one.

MR NIALL:   Yes, and then on what I might call loosely justification.

HER HONOUR:   Yes.

MR NIALL:   So just dealing with the first of those two, the burden.  Now, this case will involve the application of settled principle in section 92 to the facts.  No new principle or doubt about principle is said to exist.

HER HONOUR:   It is interesting though.

MR NIALL:   It is always the interesting principle, your Honour.  There is no emergency, no discrete question of law and no reason to short‑circuit the normal trial process.

HER HONOUR:   Well, we are not short‑circuiting because we do not know whether we need a trial yet; that is the point, that is why I want to see what you want to say.

MR NIALL:   Yes, your Honour.  Can I come to that directly?  Your Honour will see in paragraph – well, nowhere in the statement of claim will your Honour see a pleading in relation to the market.

HER HONOUR:   Because they say they do not need one.  That is my point.  You see, this is why I cannot work out – and as you know, the downside probably for you is that I was once a trial judge and I am not going to make a decision in a vacuum.  I have got an allegation on one side that there is a definition of a market required.  The way Mr Hanks and Mr Hill put it, it is not a question of market because the complaint is narrower, both in terms of the regulation and also the way in which they say the burden is imposed, so I need you to answer it.

MR NIALL:   Market remains critical because ‑ ‑ ‑

HER HONOUR:   Well, it might.

MR NIALL:   ‑ ‑ ‑ as the plurality observed in Betfair v WA, the term “protection” is concerned with the preclusion of competition and activity which occurs in a market for goods or services.  So they have to show not just discrimination but discrimination with protectionist effect.  Protectionist effect necessarily shows preclusion of competition in a market.

HER HONOUR:   It might.

MR NIALL:   Well, in our submission, it will ‑ ‑ ‑

HER HONOUR:   Well, that is the question.  So I think the solution is, as I said, put on your defence and tell us what the problems are so that we can work out where the real complaint is.  I must say, as I understand the way in which Mr Hanks and Mr Hill put it, it is a narrower complaint than that which would be the subject of debate in the sort of preceding 92 cases.  I may be wrong about that ‑ ‑ ‑

MR NIALL:   It may be.  We do not perceive it.  Can I just explain why – in very general terms why we do not perceive it to be ‑ ‑ ‑

HER HONOUR:   Yes.

MR NIALL:   ‑ ‑ ‑ and it is related to the second question of purpose, your Honour.

HER HONOUR:   Yes.

MR NIALL:   This is a regulatory scheme.  Now, one unusual feature of what I might call loosely the transaction that involves the removal of waste from site and approval under regulation 26 is that the interest of the State is to reduce the production of waste.  That is, our avowed purpose is to prevent the supply of goods to anyone.  And that regulatory purpose makes it quite inapposite to compare the contaminated waste with barley or wheat or sugar because we are not about maximising the production of waste for interstate traders, we are trying to obliterate waste.

Secondly, we are trying to reduce transport of waste.  Thirdly, we are trying to encourage, as a regulatory objective purpose, higher forms of treatment, which is a statutory imperative in the Act and the regulations on a hierarchy of waste of which deposit and destruction is the last or least preferred.  And, finally, we want to process and treat waste close to the source of production of waste.

Now, identify those factors, your Honour, as regulatory objectives because this case will show, or will involve, very detailed analysis, as we apprehend it, of the regulatory environment – not just with this particular

form of waste but other forms of waste.  Now, your Honour may wish – because when one looks at elasticity of supply is one only looking at a hole in the ground with waste treatment or is one looking at the whole waste disposal market so that the product within the market is a matter of some complexity and the geographic boundaries and we have a regulatory system.

So the relationship between the two is factually and regulatorily complex and it is not simply enough to assert facial discrimination, we want to deposit it here, we cannot.  So all of those things, the usual incidents of a trial under section 92 and, in our respectful submission, it should be done in the usual way.

HER HONOUR:   Well, it may be, but I want to see your defence.

MR NIALL:   May it please, your Honour.

HER HONOUR:   How long do you need after ‑ ‑ ‑

MR NIALL:   I have just had – our learned friends seek 14 days, but I have had discussions with him for 21 days and I do not think that causes any difficulty.

HER HONOUR:   So 15 June?  That is what I calculate it to be.

MR NIALL:   Well, I am sure your Honour is correct.

HER HONOUR:   I am sure I am not, but anyway, your instructors can work that out.  How long after 15 June do you need, Mr Hanks?

MR HANKS:   Could we have 14 days?  Thank you.  Just allowing for the difficulties of communication.

HER HONOUR:   29 June.

MR HANKS:   Thank you, your Honour.  Now, I do not need to say anything about Mr Niall’s interesting submissions, other than – I had intended to refer your Honour to something that all members of the High Court said in Norman v Barley Marketing Board which is no doubt why my friend said this is not like wheat and barley, and I am going to take the opportunity to hand it up to your Honour, if I might.

HER HONOUR:   You can do what you like, Mr Hanks, for the moment.

MR HANKS:   I know that the door is almost closed, but I wanted to refer your Honour to page 204.  If you have page 204, about point 2 on the page:

it could scarcely be denied that a prohibition or restriction upon the export of a commodity from a State with a view to conferring an advantage or benefit on producers within the State over out‑of‑State producers –

et cetera.  That is a paradigm ‑obvious example of discrimination of a protectionist kind and we suggest, your Honour, that what our learned friend has indicated this morning is that the real dispute in this case will be on whether there is some permissible governmental purpose and whether the regulations are appropriate and adapted to achieving that purpose.

Your Honour has indicated precisely what we had thought was the appropriate course.  As we said in our written submissions, a defence should be filed so that we can understand what the point is.  Thank you, your Honour.

HER HONOUR:   Mr Niall, can I ask two questions – or one is really a request and the second is a question.  The request is that when you come to deal with your defence can you shell out as clearly as possible the answer to both questions?

MR NIALL:   Yes, of course, your Honour.

HER HONOUR:   And then the second is, on the assumption that you get a reply by 29 June when do you want to come back?

MR NIALL:   We are in your Honour’s hands.

MR HANKS:   Almost, your Honour.

MR NIALL:   Well, my learned friend has a more exciting life than I do, your Honour, so perhaps he can go first.

HER HONOUR:   I am not entering that debate.

MR NIALL:   He can go first, your Honour.

MR HANKS:   Well, any time – I mean, if your Honour were to choose a date after 3 July ‑ ‑ ‑

HER HONOUR:   6 July.

MR HANKS:   I am in Sydney on 6 July, unfortunately, in the Federal Court.  I think that is a Wednesday.  Is Wednesday a good day or a bad day, or Thursday or Friday?

HER HONOUR:   I do not mind, as long as it is that week, because you are not going to get – so anything in the week commencing 4 July is fine by me.

MR HANKS:   Could we have the Thursday, your Honour?  Is that convenient with my friend?

HER HONOUR:   That is 7 July.

MR HANKS:   Yes, your Honour.

HER HONOUR:   Is that all right with you, Mr Niall?

MR NIALL:   Yes, thank you, your Honour.

HER HONOUR:   Now, I have one more request, I am sorry, and that is my problem is this is – I am to assume, are I not, Mr Niall, that the defence will be filed on behalf of both defendants?

MR NIALL:   Yes, your Honour, there may be one, there may be two, but the direction will go in relation to both.

HER HONOUR:   Yes, so I will change the proposed order that I was given by Mr Hanks to include the fact that it will be the defendants that will file the defence.

MR NIALL:  Yes, thank you, your Honour.

MR HANKS:   Thank you, your Honour.

HER HONOUR:   The orders then will be as follows:

1.Environmental Protection Authority Victoria be added as the second defendant.

2.The plaintiffs have leave to file an amended statement of claim in the form attached to the submissions they filed on 24 May 2016.

3.The defendants file and serve a defence on or before 15 June 2016.

4.The plaintiffs file and serve any reply on or before 29 June 2016.

5.The matter be brought back for further directions at 9.30 on Thursday, 7 July 2016.

6.Costs of the application are costs in the cause.

MR HANKS:   If your Honour pleases.

MR NIALL:   May it please your Honour.

HER HONOUR:   Is there anything else?

MR HANKS:   No, thank you, your Honour.

MR NIALL:   Thank you, your Honour.

HER HONOUR:   Thank you.

AT 9.47 AM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 7 JULY 2016