ResourceCo Material Solutions Pty Ltd & Anor v State of Victoria & Anor

[2016] HCATrans 153

[2016] HCATrans 153

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

First Defendant

ENVIRONMENT PROTECTION AUTHORITY VICTORIA

Second Defendant

Directions hearing

GORDON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON THURSDAY, 7 JULY 2016, AT 9.31 AM

Copyright in the High Court of Australia

MR P.J. HANKS, QC:   Good morning, your Honour.  I appear 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 MS P.P. THIAGARAJAN for the first defendant.  (instructed by Victorian Government Solicitor)

HER HONOUR:   Mr Hanks.

MR HANKS:   Thank you, your Honour.  Your Honour has proposed orders and our short submissions.

HER HONOUR:   I do.

MR HANKS:   May I say something briefly about why we say those orders ought to be made?

HER HONOUR:   Yes.

MR HANKS:   The orders that we seek.

HER HONOUR:   Yes.

MR HANKS:   Thank you, your Honour.

HER HONOUR:   Well, can I raise a matter with you?

MR HANKS:   You may indeed, of course.  You do not need to ask for my permission, your Honour.

HER HONOUR:   Maybe.  The two things seem to me to be these.  First of all, as you know, the Court does not state the special case.  The parties have to agree one and you do not have much agreement from Mr Niall and his little team that is attached to him.

MR HANKS:   Well, we think we would be able to reason with them, your Honour.

HER HONOUR:   Really?

MR HANKS:   Yes, we do.

HER HONOUR:   I have a better proposal, I think.

MR HANKS:   Yes.

HER HONOUR:   That is this.  If you are right in your submissions that all these lovely facts that Mr Niall has set out as I asked him to are of no assistance and in a sense irrelevant then why do you not just demur?

MR HANKS:   We could do that, your Honour.

HER HONOUR:   That seems to me to be the answer.

MR HANKS:   Yes, we can do that.

HER HONOUR:   Because you do not.

MR HANKS:   We do not demur.

HER HONOUR:   I have a reply which is all over the shop, with respect, in terms of – when I read the reply my view was there is so much conflict here that cannot be resolved.  You are either right or you are wrong.

MR HANKS:   Yes.

HER HONOUR:   It is either irrelevant to your question – your legal point – and you either accept them and just run it or it is not.  I think you have to tie your flag to a mast.

MR HANKS:   That is right, with, I think, one qualification.  At least one of the justifications that is raised ‑ ‑ ‑

HER HONOUR:   Yes, which one is that?

MR HANKS:   In the defence - your Honour will have to allow me a little time to refresh my memory.  It is in paragraph (c) of 19A of the defence and your Honour will see how we have pleaded for that in the reply.  One of the things that we have said is that the matter raised there, reducing the risk associated with treatment of hazardous waste, we deny that that is a legitimate non‑protectionist purpose in circumstances where treatment outside the State of Victoria poses no risk.  But essentially we are saying that matters pleaded by the defendants, even if they are accepted as soundly based in fact, do not assist in the process of what is essentially a process of characterisation.

HER HONOUR:   Well, let me be abundantly clear.

MR HANKS:   Yes.

HER HONOUR:   If the facts pleaded in the defence are the subject of demur by you, i.e. I accept them ‑ ‑ ‑

MR HANKS:   Yes, indeed.

HER HONOUR:   You can plead it in demur.  I mean, you can say to the Court, “I plead to them, but regardless, it is no answer”, then I am in a very different situation to the one which I am presently in where I have a reply which seeks to agitate factual disputes.

MR HANKS:   I am not sure if that is right, your Honour.

HER HONOUR:   Well, that is how I read it.

MR HANKS:   I do not think it does.  It was not intended to raise any factual dispute.  It was intended, first of all, to say that the pleading in the defence about a national market in industrial waste is irrelevant.

HER HONOUR:   Then you should just demur.

MR HANKS:   Yes.  Mr Hill and I had some discussions about alternatives, your Honour.

HER HONOUR:   I thought you might have.

MR HANKS:   Yes.  I think we can do that quite promptly.  I would prefer to have his assistance in doing that.

HER HONOUR:   And he is not around?

MR HANKS:   He is not around this week.

HER HONOUR:   That is all right.

MR HANKS:   I think he has some child responsibilities.

HER HONOUR:   I can relate to that, in my past life.

MR HANKS:   Yes.  I can barely relate to it, your Honour.

HER HONOUR:   Really.

MR HANKS:   It is ancient history.

HER HONOUR:   I had better have a chat to Mr Niall since you and I have had a long discussion.

MR HANKS:   Yes, your Honour.

MR NIALL:   Thank you, your Honour.  If the plaintiff chooses to demur to the defence it would be a matter for it and then I suppose it would be a matter for ‑ ‑ ‑

HER HONOUR:   You and I will have to have a look at it.

MR NIALL:   The Court would determine whether it would be appropriate to refer that to the Full Court.

HER HONOUR:   Correct, yes.

MR NIALL:   But can I just, at the risk of trespassing on what might be a debate we have down the course ‑ ‑ ‑

HER HONOUR:   I would be grateful for you to set up now what it is – and I do not hold you to this – what are the difficulties if that was the approach adopted.

MR NIALL:   We essentially meet the case at two levels.

HER HONOUR:   Yes.

MR NIALL:   The first level is, is there protection, accepting for the purposes of argument that there is discrimination.

HER HONOUR:   Yes.

MR NIALL:   That protection, we would contend, is protection in a market ‑ ‑ ‑

HER HONOUR:   Yes.

MR NIALL:   ‑ ‑ ‑ rely on some passages in Betfair (No 1) which identifies protection as being in a market.  We identify the market as the larger market for the treatment of waste and if we are right about that, what we are dealing with is interference with an aspect of the market.  So we are dealing perhaps with – an anology might be inapt but it is like a product, so we are stopping a particular product being the subject but not the whole of the trader.  So the trader, for example – and only one product or one exchange is pleaded at the moment. 

So, for example, in Betfair (No 1) the Betfair offering was substitutable - although it was a laying of the bet it was substitutable for the bet on the tote and the whole of Betfair was excluded.  Now, would it have been different, we ask rhetorically, if, for example, Betfair was not allowed to take quadrellas?  We see this particular transaction as closer to that ilk than excluding Betfair altogether or excluding the plaintiff altogether.

HER HONOUR:   Have you not pleaded that?

MR NIALL:   We have.

HER HONOUR:   Well, that is my point.  My point is that if Mr Hanks, in effect, says “Fine, but I don’t care”, then we are home and hosed, are we not?

MR NIALL:   Indeed.  It might be that the Court – again, for another day, perhaps – that the resolution of that question ‑ ‑ ‑

HER HONOUR:   What question?

MR NIALL:   Whether one looks at protection as we would have it, whether there is a substantial protection or not, is only part of the analysis because if we lose that first hurdle, that is there is protection, we seek to justify it ‑ ‑ ‑

HER HONOUR:   No, I understand.

MR NIALL:   Then when one – I do not wish to speak over your Honour.

HER HONOUR:   No, no, I should have been quiet.

MR NIALL:   Of the three objects that we plead, your Honour will see it in the defence ‑ ‑ ‑

HER HONOUR:   It is set out in ‑ ‑ ‑

MR NIALL:   Yes, 19A and your Honour will see ‑ ‑ ‑

HER HONOUR:   It is set out in (a), (b) and (c).

MR NIALL:   Correct.

HER HONOUR:   Yes.

MR NIALL:   We plead certain facts in support of those and a demurrer would, of course, accept the facts to be true.

HER HONOUR:   True.

MR NIALL:   On the first two of those, as we understood the reply, they accept they are legitimate and ‑ ‑ ‑

HER HONOUR:   I think that is what prompted me to start to think about really to what extent – I will come back to it.  When you first both came before me, it was clear on its face there was a difference in approach to the way in which this question was going to be determined.  It seems to me that if you are going to cut through it then, as I said to Mr Hanks this morning, he faces in a sense a dilemma.  He has to either tie his flag to his mast and say I am prepared to cop it or I am not and if he is not then he will have to go back and have a major fact fight and he can work out what the facts are. 

If he accepts – and I remember I asked you to set out in detail what your case was on the factual matters – that they are accurate or he says they are not accurate but for present purposes I am prepared to accept they are accurate for the purposes of determining the legal question then I do not know what is left.  I will ask a different question.

MR NIALL:   Yes, your Honour.

HER HONOUR:   I know that you do not want us to deal with it, or at least have a reluctance for us to deal with it, but what is wrong with that approach from your side?

MR NIALL:   Just whether it might misfire.

HER HONOUR:   I know – well, that is a conclusion.  That is a consequence.

MR NIALL:   Yes.

HER HONOUR:   What is the reasoning for that, what is the support for that proposition?

MR NIALL:   It might because if - paragraph (c), the policy ‑ ‑ ‑

HER HONOUR:   Of 19A?

MR NIALL:   Yes, paragraph (c), the policy that hazardous waste ought to be treated and disposed of close to its site of production is the one where the plaintiff says well that is just out of play.  You cannot rely on that as legitimate non‑protectionist purpose.

HER HONOUR:   That was my point to Mr Hanks this morning.  He cannot have his cake and eat it too.

MR NIALL:   If that were the only justification, I would understand the argument that let us determine that as a question of law.  It is either right or it is wrong.  But where they have accepted (a) and (b) as potentially legitimate, subject to, to use their formulation, the question of whether it is necessary – there is a necessary or sufficient connection, it is difficult to see that being divorced from the facts.  So the case might resolve paragraph (c) but I fear it might not be capable of resolving by way of demurrer paragraphs (a) and (b) of our justification.  But that is ‑ ‑ ‑

HER HONOUR:   I do not understand that.  You will have to put that to me again.  I am being slow.

MR NIALL:   We have three justifications.

HER HONOUR:   Yes, you do, (a), (b) and (c) in 19A – (a) and (b) are accepted as existing.

MR NIALL:   They are accepted.

HER HONOUR:   They are accepted – (a) and (b) are accepted so on a question of demurrer they are not in issue as a matter of truth, i.e. accuracy.

MR NIALL:   But they say although a legitimate end, the means, that is there is no necessary or sufficient connection between that legitimate purpose and the objective so there is a dispute between whether the means are sufficiently acceptable to achieve the particular object or whether there is a disconnect between what we have done to achieve the objective.  That is why they say no necessary or sufficient connection.  We say that issue can only be tried on the facts.  But that is not true in relation to paragraph (c) because they say on any view of the facts a State cannot plead disposal of hazardous waste close to its production.  That is why I fear that there is a ‑ ‑ ‑

HER HONOUR:   Does that just mean you have not set out enough facts in (a) and (b)?

MR NIALL:   No, I think it means that ‑ ‑ ‑

HER HONOUR:   I think that is what it means, is it not?  You may need to relook at (a) and (b).

MR NIALL:   I understood the reply to be well, we are in contest, we have joined issue on whether ‑ ‑ ‑

HER HONOUR:   Not (a) and (b).  I think they accept 19A(a) and (b) – (c) I do not like and I have explained that to Mr Hanks.  He either has to tie his flag to a mast or I will have to remit it.  But in relation to 19A(a) and (b) your complaint seems to be the Court will not be in a position to assess the connection question because it does not have enough facts.  Is that the way you put it?

MR NIALL:   Well, ultimately it will be a question of fact.

HER HONOUR:   No, I am asking you – if you say, listen, the Court will not have enough in 19A(a) and (b) to make the assessment, then that is a question of whether or not the pleading is sufficient.  Anyway, my present view at the moment is – and I am sorry to bring you back ‑ ‑ ‑

MR NIALL:   No, your Honour.

HER HONOUR:   You may want to have another look at 19A(a) and (b) and let Mr Hanks know whether or not you wish to revisit it and get close to each other I think so you could have a little discussion in chambers.

MR NIALL:   Yes, of course, your Honour.  I think (c) – the dispute is not so much in all of (c) but it is in (iii) rather than (i) and (ii).

HER HONOUR:   Yes, I think that is right.  But anyway, Mr Hanks is going to have to revisit all of that question on his reply.

MR NIALL:   Yes.  If the plaintiff says that the defence is unmaintainable on the facts as pleaded then it is a matter for them to put it and we can respond to it once we see it and see whether – and make a submission to your Honour if so advised as to whether it is appropriate to have that question referred to the Full Court or not once we see it.

HER HONOUR:   I must say, I am happy to do that but what I would like is for each of you to revisit the positions and have a discussion and if you cannot work it out then you can let me know.

MR NIALL:   Yes.  Certainly, your Honour ‑ ‑ ‑

HER HONOUR:   Then I will consider it.

MR NIALL:   The only point we make is not whether all these issues should be decided but in what forum they should be decided.

HER HONOUR:   No, I accept that.  As you know, Mr Niall, I am not a great believer in creating extra work if it can be dealt with with less work.

MR NIALL:   Yes, your Honour.

HER HONOUR:   My only question is whether or not it (a) can be achieved with less work and (b) whether this Court can deal with it?  If it cannot, I made it very clear to Mr Hanks what the position is and it seems to me the only mechanism that can go forward.  If there is another one, by all means then it will be remitted.  But you are pretty close, I think.

MR NIALL:   We will have some discussions with our friends about whether there can be a demurrer‑type arrangement on acceptance of the facts.

HER HONOUR:   As I said to him he could plead and demur.

MR NIALL:   Yes.

HER HONOUR:   It does not have to be a straight demurrer.

MR NIALL:   But then the question would be what goes to the Full Court, whether ‑ ‑ ‑

HER HONOUR:   Correct, and all I am concerned about is to make sure that it is in a form where there is sufficient on both sides to enable you to put your arguments and for the Court to decide those issues having determined what the issues are that go forward.

MR NIALL:   We will do that, your Honour.  Certainly, our position is not in any way informed by a desire to delay.

HER HONOUR:   No, it is not delay.  It is a question of trying to reduce cost.

MR NIALL:   Yes, your Honour.

HER HONOUR:   I cannot imagine that either of you wish to have increased cost just for the sake of it.

MR NIALL:   Certainly not, your Honour.

HER HONOUR:   No.

MR NIALL:   If that is the model that the plaintiff seeks to advance we will assist the plaintiff in seeking whether that is realistic.

HER HONOUR:   What did you want me to do today?  Do you want to have a chat to Mr Hanks and let me know?

MR NIALL:   Perhaps Mr Hanks might address your Honour?

MR HANKS:   I just wanted to put on the record, if I could, your Honour, a couple of simple propositions.  I fully understand what your Honour wants us to do and we will do it. 

HER HONOUR:   I am not saying it is ‑ ‑ ‑

MR HANKS:   What your Honour is suggesting that we do.

HER HONOUR:   I do not even know if it is a suggestion.  It just seems to me that it is a mechanism that is open to you that might cut through a lot of this trouble.

MR HANKS:   Sure.  On the question of justification, which is the second question – the first question is there protectionist discrimination, we think that is very easily answered, but on the justification question, that is essentially, as I said a little earlier, a matter of characterisation.  Is the justification that is advanced appropriate and adapted to serve a non‑protectionist end and is the prohibition justified by – or does it go no further than necessary to serve that end? 

Your Honour will recall that this notion of appropriate and adapted is quite familiar in the jurisprudence on, for example, the external affairs power – 51(xxix) – and on other heads of power of section 51.  So it is essentially a question of characterisation.  It is not a question of fact.

HER HONOUR:   I do not know.  I think sometimes ‑ ‑ ‑

MR HANKS:   It might be constitutional fact.

HER HONOUR:   Correct, and the question here is do we have sufficient constitutional facts set out in something – and here it is a pleading, if you adopt this route.

MR HANKS:   Yes.  Well, we think we do and we will talk to Mr Niall and ‑ ‑ ‑

HER HONOUR:   Mr Niall might want to add in a few.

MR HANKS:   He might.  He might want to improve the omelette, even though he has already made it.  He can always go back to the kitchen, I suppose.

HER HONOUR:   Anyway, absent that, then it seems to me that – what would you like me to do?  Do you want a week to think about it?

MR HANKS:   Yes, your Honour.  When would be convenient for us to communicate with your Honour - tomorrow week?

HER HONOUR:   Tomorrow week.  That is the 15th?

MR HANKS:   Yes. 

HER HONOUR:   Do you want to come and see me or do you want to let me know?  Or you can do both.

MR HANKS:   We can do both.

HER HONOUR:   Or you could let me know on the Thursday night whether you want to come and see me on the Friday.

MR HANKS:   I think that is a perfect solution, your Honour.

HER HONOUR:   Why do we not just say 12 noon on Thursday whether you wish to come and see me on Friday?

MR HANKS:   Even that is okay.

HER HONOUR:   Mr Niall, does that suit you?

MR NIALL:   It does, your Honour.

HER HONOUR:   Are you sure?

MR NIALL:   As I understand that position we will have some discussions about whether the plaintiff is content to ask the Court to refer, effectively, demurrer on the pleadings.

HER HONOUR:   Yes.

MR NIALL:   If your Honour pleases.

HER HONOUR:   Yes.  Mr Hanks will not mind me saying this, but I do not preclude the possibility that you may want to look again at ‑ ‑ ‑

MR NIALL:   Yes, thank you, your Honour.

HER HONOUR:   As I said, it is a question of discussion between the two of you.  All right, what I will do is I will adjourn the summons – I think it is a summons, is it not?  Was it a summons?

MR HANKS:   Yes, which was issued when the ‑ ‑ ‑

HER HONOUR:   Yes, so I will adjourn the summons for directions until Friday, 9.30 on 15 July.  I will direct that the parties let me know by 12 noon on 14 July whether or not you wish to keep that hearing.

MR NIALL:   Thank you, your Honour.

MR HANKS:   Thank you, your Honour.

HER HONOUR:   Thank you very much.  Adjourn the Court.

AT 9.51 AM THE MATTER WAS ADJOURNED