Rio Tinto Shipping Pty Ltd v CSL Australia Pty Ltd and Anor; Minister for Infrastructure and Transport v CSL Australia Pty Ltd and Anor

[2014] HCATrans 166

[2014] HCATrans 166

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S60 of 2014

B e t w e e n -

RIO TINTO SHIPPING PTY LTD

Applicant

and

CSL AUSTRALIA PTY LTD (ACN 080 378 614)

First Respondent

MINISTER FOR INFRASTRUCTURE AND TRANSPORT

Second Respondent

Office of the Registry
  Sydney  No S61 of 2014

B e t w e e n -

RIO TINTO SHIPPING PTY LTD

Applicant

and

CSL AUSTRALIA PTY LIMITED

First Respondent

MINISTER FOR INFRASTRUCTURE AND TRANSPORT

Second Respondent

Office of the Registry
  Sydney  No S62 of 2014

B e t w e e n -

MINISTER FOR INFRASTRUCTURE AND TRANSPORT

Applicant

and

CSL AUSTRALIA PTY LTD ACN 080 378 614

First Respondent

RIO TINTO SHIPPING PTY LTD

Second Respondent

Office of the Registry
  Sydney  No S63 of 2014

B e t w e e n -

MINISTER FOR INFRASTRUCTURE AND TRANSPORT

Applicant

and

CSL AUSTRALIA PTY LIMITED

First Respondent

RIO TINTO SHIPPING PTY LTD

Second Respondent

Applications for special leave to appeal

FRENCH CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 AUGUST 2014, AT 9.30 AM

Copyright in the High Court of Australia

____________________

MR J.G. RENWICK, SC:   May it please your Honours, I appear with MR A.M. STEWART for the applicant in matters S60 and S61 and for the second respondents supporting the applicant Minister in S62 and S63.  (instructed by Holman Fenwick Willan)

MR A.W. STREET, SC:   May it please the Court, I appear for the first respondent in all matters with my learned friend, MR J.S. EMMETT.  (instructed by Norton White)

MS K.A. STERN, SC:   May it please the Court, I appear with MR B.D. KAPLAN for the second respondent in S60 and S62 and for the applicant in S62 and S63.  (instructed by Clayton Utz)

FRENCH CJ:   Yes, Mr Renwick.

MR RENWICK:   Can I say I have spoken to my learned friend, Ms Stern, and there will be no unnecessary overlap between the Rio submissions and those of the Minister?

FRENCH CJ:   It goes without saying.

MR RENWICK:   Thank you, your Honour.

FRENCH CJ:   Can I just make sure I understand the procedural history correctly?

MR RENWICK:   Yes.

FRENCH CJ:   We have a delegate’s decision made on 9 October and that related to, I think, four voyages.

MR RENWICK:   Yes.

FRENCH CJ:   Then, that was subject to judicial review by Justice Robertson who dismissed all grounds save for the procedural fairness question.  That was then remitted to the delegate.

MR RENWICK:   Yes.

FRENCH CJ:   In the meantime, there was a notice of appeal to the Full Court by CSL and then the delegate granted a variation, pursuant to the remitter by Justice Robertson, in relation to one voyage - so it is named Voyage 12.

MR RENWICK:   That is right.

FRENCH CJ:   That went on judicial review to Justice Katzmann. 

MR RENWICK:   Yes.

FRENCH CJ:   Justice Katzmann dismissed that application on a preliminary question for want of utility.

MR RENWICK:   That is right.

FRENCH CJ:   Then that was a subject of an application for leave to appeal to the Full Court which came up at the same time as the appeal from Justice Robertson’s decision.

MR RENWICK:   The only change I would make to what your Honour has said is that technically it was an application for a stated case by Mr Street.

FRENCH CJ:   Well, no, as I understand there was a contingent draft stated case by Justice Rares which went in to the Full Court and, having allowed the appeal against Justice Katzmann, the court then disposed of that on the basis of the stated - but it all collapsed into the 32, 34 constructional questions, I think.

MR RENWICK:   The 32, 34 constructional questions in relation to the matter from Justice Katzmann and 3(1)(a) questions in relation to the matter from Justice Robertson.

FRENCH CJ:   Yes, I know.  You are concerned with 3(1)(a) questions.

MR RENWICK:   No, we are concerned with 32 and 34 as well.

FRENCH CJ:   Yes, as they feed into 32 and 34.

MR RENWICK:   Quite so.  Yes, indeed.

FRENCH CJ:   Are there any extant voyages?

MR RENWICK:   No, your Honour.

FRENCH CJ:   What is the practical effect if you win the appeal?

MR RENWICK:   Yes.  Justice Rares dealt with the practical effect in – let me just give your Honour the paragraph – well, the answer is that it will not have any effect on any particular voyages but ‑ ‑ ‑

FRENCH CJ:   Everybody would just like to know for the future.

MR RENWICK:   It is an important matter relating to the administration of the Act.  Can I just give you what Justice Rares who, I think, anticipated this issue – dealt with it specifically.  It is really an Ainsworth point. At application book 186, paragraph 332, his Honour says:

It cannot be said that a declaratory order made by the Full Court will produce no foreseeable consequences for the parties.  Rather, such an order will decide a real legal controversy.  There is nothing abstract or hypothetical in determining whether the Minister, by his delegate, varied Rio Tinto’s temporary licence in accordance with the Act.  CSL has a real interest. . . And, there is a considerable public interest -

We rely on the way Justice Rares put that.

BELL J:   CSL’s real interest is in having the matter clarified for its benefit in relation to future applications for temporary licences.  That is the matter to which Justice Rares was directing attention.

MR RENWICK:   Yes, but, equally, that is an interest we have, your Honours.  This is a most important matter.  There have been 3,000 voyages under temporary licences under this Act.  It is really critical, we say, that we know whether the Full Court is right.

BELL J:   Someone says what the law is.

MR RENWICK:   Quite so.

BELL J:   For the future.

MR RENWICK:   For the future.  But, we do say it is a live matter and, we say, in an Ainsworth sense it is not academic and we rely on that.  I cannot put it higher than that. 

FRENCH CJ:   We are looking at this, of course, in the context of whether it warrants a grant of special leave.

MR RENWICK:   Quite so.  It is not put against us there are any vehicular difficulties.  It is not put against us that it is not an important matter.  We say it plainly is – first case in relation to an important new statute.  May I then, in those circumstances, your Honours, go directly to the errors we particularly identify?  I can do this quite quickly.  If your Honours have the statute and sections 32 and 34 which are critical, I might deal with matter S 61 first. 

Could I simply note this?  The general licensee has four rights in relation to a temporary licence application which, of course, do not include a right to do the work - the right to be notified under section 30; if eligible to provide a notice under section 31 to negotiate under section 32 – now, that is important because one aim of the Act must be to come to an agreement between the general and temporary leading to a withdrawal of a licence under section 29 and then, if unsuccessful, to have the outcome of the negotiations considered as a mandatory consideration.

Can I, then, take you directly to application book page 105.  Your Honours recall that the plurality is Chief Justice Allsop, with whom Justice Mansfield agreed.  We really focus on the sentence at paragraph 44 at line 19, which says:

This is because –

That, with great respect, is the whole of the relevant reasoning of the Chief Justice and we say a different implication should be drawn.  Your Honours recall that for all carriage, whether of passengers and cargo, there must be negotiation about timeliness and whether the nominated vessel is equipped to carry – see section 32(3).

FRENCH CJ:   What is the purpose of the negotiations?

MR RENWICK:   The purpose of the negotiation is at least twofold.  It is first, as I have said, if possible, to reach an agreement between the general and temporary licensee leading to the section 29 withdrawal.  There is at least that possibility. 

FRENCH CJ:   That is an agreement on the basis that, for example, we accept you can do this and we cannot, in terms of our capacity, timing, et cetera, and the length of the ship which, I think, came into it at one stage.

MR RENWICK:   Quite, that is part of it.  But what we say is very important is that is never going to result in the withdrawal of the temporary licence application unless there is also consideration of commercial matters.

FRENCH CJ:   Well, there is a withdrawal of the temporary licence application or, presumably, some withdrawal or abandonment of the implied objection that a notice ‑ ‑ ‑

MR RENWICK:   Yes, quite so.  That is the other way it could happen.  A general licensee might accept that they cannot ‑ ‑ ‑

FRENCH CJ:   That was the example I just put to you.

MR RENWICK:   Quite so.  I accept that, your Honour.  So, I suppose there are three possibilities.  If that cannot be done, then the Minister needs to be informed of why.  What we say is you do not exclude from the four corners of the negotiation the commercial matters which will arise in every case because that will destroy the harmonious operation of the Act.  But, perhaps more importantly, structurally, it will mean words in the statute have no work to do.

BELL J:   As I understand his Honour’s reasoning at paragraph 44, application book 105 it was to note that under 32(3) the negotiations are to be in respect of the matters identified in subparagraphs (a) and (b).

MR RENWICK:   Yes.

BELL J:   The balance of his Honour’s reasons makes clear that what you are describing as commercial considerations are matters to which the Minister may have regard under 34(2)(g).

MR RENWICK:   That is so.  There is no doubt about that.  Yes, your Honour, I am not meaning to be flippant.

BELL J:   What is the difficulty with what his Honour says at line 19, paragraph 44?

MR RENWICK:   Yes.  A number of difficulties – mainly, as I say, that the words in 32(4) and 34(3)(d) will thereby have no work to do.  May I seek to make good that proposition?  It works in this way.  You go forward.  Your Honours recall that because of what Chief Justice Allsop decides at that paragraph – then at paragraph 49 he says commercial considerations are likewise not encompassed within 34(3)(d).  So the one directly flows into the other.

Now, what is the Minister doing we ask when he comes to look at the mandatory considerations in 34(3)?  You will find a precise correspondence between 34(3)(b) and 32(3)(a) and also between 32(3)(b) and 34(3)(c).  There is no work left to do for 34(3)(d) in those circumstances.  The entirety of those subject matters is already dealt with.  That is why we say the Chief Justice’s construction is surprising and wrong because it leaves no work to do. 

May I take you backwards to section 32(4)?  Equally it has no work to do for this reason.  Whether or not the shipper is the applicant - and, of course, many of the matters in section 28 which prescribes what is to appear in the application concern the shipper’s requirements - the shipper’s requirements will, of course, in relation to the matters in 32(3) always be caught up in 32(3).  They will be raised. 

For example, this vessel is unsuitable because we want it shipped in bulk rather than in containers.  That will be raised there.  We say there is no work left to do for 32(4).  So that is two important contraindications to the implication drawn by the Chief Justice.  Let me draw your Honours’ attention to two other indications that the Chief Justice, with respect, was wrong below. 

FRENCH CJ:   Section 32(3)(a) and (b) set out matters which mandated for negotiation.  It does not preclude other matters being brought in, does it?

MR RENWICK:   The Chief Justice says, on our reading of 44, the commercial attractiveness – this is the second‑last sentence:

is irrelevant to the negotiations mandated by the Act.

FRENCH CJ:   Negotiators can talk about what they want.

MR RENWICK:   Yes, but it has enormous significance, as it did in the result in this case – for us to be spun off to the periphery of a permissible consideration under 34(2)(g), rather than being required to be considered by the Minister.  That is our third ground of appeal.  But may I just complete the ‑ ‑ ‑

FRENCH CJ:   This is a decision‑making process which has a seven‑day timeframe.

MR RENWICK:   Yes, it does, and two days for negotiations.  What we say, in our submissions ‑ ‑ ‑

FRENCH CJ:   It suggests a fairly “bare bones” process, does it not?

MR RENWICK:   Well, it does, but what we say in our submissions – your Honours will have seen – is that the two matters in 32(3) will already likely be known in their entirety already before the 48 hours of negotiations commence.  There is ample time in the shipping world for discussions about freight and the contractual scheme to be used and who bears the risk and the like.  If that is not there, the opportunity for resolution – which is my next point – is thereby removed.  If we are unsuccessful, AAT review – similar problems.

May I just complete this point?  Your Honours have our point that it is desirable that there be a negotiated fixture withdrawal and the obviation of the need for a ministerial decision and the negotiations within the four corners of section 32 will never achieve that result.  Chief Justice, of course you are right, there may be negotiations outside that but our fear is that the general licensee may say “All I need to tell you” – temporary licence applicant – “is these two matters”.  It goes then to the Minister.  The Minister has nothing about freight or other conditions.  He happened to know them in this case and they were critical.  He knows nothing about them and then he ‑ ‑ ‑

FRENCH CJ:   Is the purpose of the statute loaded in favour of general licensees, though, because it is trying to support an Australian shipping industry, is it not?

MR RENWICK:   Can I deal with that directly?  It is not in that way.  It gives the rights I have mentioned to the general licensee as well as the fact they have a licence and do need one.  But as to the suggestion made occasionally in the judgments below that because of the higher manning costs, for example, on Australian ships, you have to tilt the Act in favour of the general licensee, the second reading speech – and I can take you to it – directly deals with that and says we deal with that problem by cognate legislation giving tax breaks.  So our point is it is not irrevocably slanted in that way to the general licensee at all.

FRENCH CJ:   I was just looking at the title of the Act which seems to – it is usual to contain a political message.

MR RENWICK:   Indeed.  The objects, however, do not contain the same words as “revitalising Australian shipping” and we say that is of significance.  Can I just continue this point, your Honours?  It gets to the Minister.  The Minister is not told of any commercial considerations because the general licensee does not have to tell the temporary licensee anything at all about the huge variety of commercial matters.  What is the Minister to do?  Under section 77, the power to stop the seven‑day clock and require further information cannot be directed to the shipper who is not an applicant.  It can only be directed to the applicant which rather suggests to our mind that this is something which the Minister needs to be told compulsorily and take into account compulsorily, rather than leave to a possibility.

Even if all the cards are on the table - can I then deal with Justice Bell’s point - we say the centrality of commercial matters suggest they be dealt with always and in every case as a mandatory consideration thereby fulfilling the objects of the Act, rather than potentially spun off to the periphery.  We say that is very important.  Of course, what happened in this case, your Honours – and can I take you now – I can deal with this quickly by going to page 366 which sets out our written submissions.

FRENCH CJ:   By the way, if the Minister does not make a decision within the timeframe is a variation deemed to be made?  I know a temporary licence is deemed to be granted.

MR RENWICK:   Yes.  Yes, as I understand it, yes, your Honour.  That is because section 53 says that the provisions dealing with temporary licences ‑ ‑ ‑

FRENCH CJ:   They are applicable to ‑ ‑ ‑

MR RENWICK:   ‑ ‑ ‑ are equally applicable.  Can I quickly then take your Honours to the third special leave question in S61?  This is my answer to your Honour Justice Bell.  If you look at page 360 – what happened here, of course, is the court below did say well, look, that was not a mandatory consideration, it was a permissible one.  But then it was said well, there is a misconstruction and it may well have given these matters an importance and weight drawn from their perceived central place in 34(3)(d).

Our point is that there is no indication in the Act as there was, say, in Sean Investments v MacKellar where there was a single mandatory matter, that the mandatory considerations are necessarily and in every case to be given greater weight than permissive matters.  We do say they should be considered in every case – that is our point in relation to 32 and 34 – but we say the Full Court made an error here in getting into the merits.

Can I then turn to the section 3(1)(a) ground which is in matter S60?  I can deal with this promptly and I may have to deal with it very promptly.  If I can take you to application book 239.  Your Honours have the delegate’s reasoning at the top of the page, paragraph 20.  That did not need to be considered by Justice Robertson.  The Chief Justice found it should have been. 

The Chief Justice’s reasoning is entirely set out in paragraph 22.  We say there are two leave grounds which arise from that.  First, there is no reason to treat the operations of Bell Bay Aluminium as at such a low level that they can never engage with the objects in section 3(1)(a).  We say that those sorts of things are exactly what the Act had in contemplation and that there is no reason to treat 3(1)(a) at being at a high level of generality any more than the other considerations are to be dealt with.

Equally, and in view of the time, can I go directly to page 241?  What happened in this case again – to pick up Justice Bell’s point – yes, it could be considered under the catchall 34(2)(g) instead of via the objects under 34(2)(f) but what happened was the learned Chief Justice – the passage is at paragraph 22 – said that those other matters were:

distinct from, and likely unrelated to . . . Thus, it is inapt to say –

With respect, that is a little diffident and we say what has happened there is the Full Court has got into the terrain of the decision‑maker rather than in a Peko‑Wallsend sense saying, well, weight is a matter for you.  But it does underline why it is important that, we say, the errors in relation to 32 and 34 are cleared up. 

FRENCH CJ:   It is a bit hard to see how, given the timeframe for this decision‑making, you can expect a delegate to undertake an economic analysis, as it were, of the impact on the market of particular aspects of a given transaction.

MR RENWICK:   No, but they can have regard to it.

FRENCH CJ:   Well, having regard to it just does not mean look at it.  It means think about it, analyse it and ‑ ‑ ‑

MR RENWICK:   It does, it does.  In this case – I have not had time to take your Honours to the detail – there was toing and froing under the section 77 process whereby questions were asked.  CSL was asked, for example, why have you increased your freight rates by 69 per cent from the last voyage you did for us under the old regime to what you are doing now – a matter of real and obvious significance, we say.  The red light is on.  Those are my submissions, your Honours.

FRENCH CJ:   Thank you very much.  Yes, Ms Stern.

MS STERN:   Your Honours, if I could just deal with one residual matter in relation to the construction points over and above what Mr Renwick has already dealt with and then deal just with the procedural fairness ground briefly.  In answer to your Honour the Chief Justice’s question as to what is the purpose of negotiation, we say that it serves an important role in terms of the transparency of the process and that by reason of that in the interest of the effective administration of the legislation that the process of negotiation cover all reasonable requirements of the shipper so that by the time the matter gets referred to the Minister, or the Minister’s delegate, for decision‑making, those matters have already been dealt with and they will be reported to the Minister.

BELL J:   That is feeding rather a lot into the terms of section 32, is it not, when one looks at 32(3) and the analysis that Chief Justice Allsop made?

MS STERN:   If I could ask your Honours to turn to section 32?  It is at page 25 of the reprint behind tab 1 of the bundle of authorities.  Clearly, negotiation forms an important part of the process and the outcome of negotiation has to be reported and that is apparent from section 32(3).  Section 32(3) – sorry section 32(2).  Section 32(3) requires that in every case those specific matters are referred to, but then over the page at section 32(4), there are additional requirements where the:

application relates to the carriage of cargo –

and in relation to the carriage of cargo there may well be long‑term and potentially wide‑ranging economic consequences from a decision to grant or refuse.

BELL J:   Which in the two‑day period allow this to be taken into account?

MS STERN:   Your Honour, these are parties who are probably entering into negotiations in relation to contracts of carriage as a matter of their bread‑and‑butter occupation.  The reason why we say this aids the efficient administration of the Act is because those are matters that the parties will be well versed in and able to negotiate about.  But if the Minister wants – or the delegate wants to inform him or herself about those matters, there is only the fairly cumbersome option of the section 77 request for information.  We do say it is significant that that cannot be addressed to a shipper.  So, if information as to the requirement of the shipper is sought, that will not stop the clock for the seven‑day period.

FRENCH CJ:   The more prescriptive you make the construction of these provisions the more ground there is for a disputation about their application.  It is illustrated in this case.  The seven‑day process was completed at first instance on 9 October 2012.  Here we are in August 2014 still fighting about it. 

MS STERN:   That is up to your Honour.  Here, there was a three‑month process between the application on 6 August and the ultimate resolution of the issue.

FRENCH CJ:   Yes.

MS STERN:   That is something we obviously rely upon on our procedural fairness grounds as well.  But one further matter, in answer to Justice Bell’s question, is that the negotiation under section 32(4) is in relation to the application.  So it is not just in relation to the matters in section 32(3)(a) and (b).  We say it is in relation to the application more broadly so that those matters can then be fed into the Minister’s decision‑making in a way which will serve the competing objects of the Act.  So that was all I wanted to add to that.

If I could turn to the procedural fairness ground and the procedural fairness ground is raised in our summary of argument at page 276.  We just make the two preliminary points:  firstly, that this is a process of decision‑making which is aimed to serve the object of the Act which is efficiency and reliability and that favours prompt decision‑making; secondly, as your Honour the Chief Justice has already observed, there is a very tight timeframe for decision‑making under section 54 of the Act of the seven business days for lodgement.  In those circumstances, we make four points in support of our procedural fairness grounds. 

FRENCH CJ:   Can I just ask you to try and put those in the framework of this being a special leave application?

MS STERN:   Your Honour, I well appreciate that.  But the key matter that we rely upon – if I could ask your Honours to turn to page 142 of the

application book - at paragraph 195, Chief Justice Allsop’s judgment, fourth line in that paragraph.  What his Honour the Chief Justice has found is that:

There is no doubt that CSL were aware of the issue and put submissions on it.  But they were not given Rio Tinto’s submissions, in circumstances where there was no pressing time constraint not to, and where the point was central.

We say two points arise from that.  In circumstances where there is a finding that CSL was aware of the issue and had put submissions on the issue, we say that this is a stringent and unnecessary elevation of the requirements of procedural fairness to require that they be given the submissions themselves.  Secondly, we say that the observation that there is no pressing time constraint fails to give due regard to the legislative scheme. 

So the first point we make is as to the stringency of the requirements which we say go beyond what procedural fairness would otherwise be recognised as requiring where somebody is already aware of the issue and has put submissions on the issue.  Secondly, we say that there is no guidance from the Full Court as to when the obligation under this legislative scheme would apply more generally is to provide verbatim accounts of information or underlying documents as opposed to giving an individual merely a fair opportunity to answer the gist or substance.

The third point we would make is that this leaves the Minister and the law in a state of uncertainty because it is not clear when underlying material or full content of submissions has to be put to a court in order to accord procedural fairness.  Our fourth point, responding possibly most directly to your Honour the Chief Justice’s point, is that while there is some factual inquiry necessary for this ground, it is factually discrete.  It relies upon documents which would likely be before the Court in any event if special leave were to be granted and it is a matter of considerable practical significance to the ongoing application of the Act. 

Your Honour, those are the only points I wish to make in addition to what is in the summary of argument on the procedural fairness ground.  

FRENCH CJ:   Thank you, Ms Stern.  The Court will adjourn briefly to consider what course it should take.

AT 9:58 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.01 AM:

FRENCH CJ:   We will not need to trouble you, Mr Street.

In four applications Rio Tinto Shipping Pty Ltd and the Minister for Infrastructure and Transport seek special leave to appeal against decisions of the Full Court of the Federal Court of Australia that decisions of the Minister by his delegate made on 9 October 2012 and 14 December 2012 to grant variations of a temporary coastal shipping licence under the Coastal Trading (Revitalising Australian Shipping) Act 2012 (Cth) were affected by errors of law.

The applications raise questions about the construction of the objects provision of the Act, section 3(1)(a), the level of generality at which it is to be interpreted and the matters properly relevant for consideration when applying that object to the exercise of the delegate’s discretion.  There is a related question about the effect of the delegate’s putative misconstruction of section 3(1)(a) and whether matters considered by the delegate on the basis of that misconstruction in the event are properly able to be considered under the provisions of section 34 of the Act.

The applications also raise questions about the construction of sections 32 and 34 of the Act and the matters that may be taken into account in reference to those provisions, properly construed.  There is a further question whether the Minister’s delegate was properly found to have denied the respondent, CSL Australia Pty Ltd, procedural fairness. 

In our opinion special leave should be refused in all of these applications.  As Chief Justice Allsop observed, the Act requires prompt decision‑making by the Minister in respect of applications for licences and variations of licences.  The construction which the Full Court adopted is consistent with that statutory scheme.  The constructional questions in this case are intertwined with the particular factual matrix.  Those factors, combined with the absence of any practical effect were any of the appeals to succeed, indicate that these cases are not suitable vehicles for the grant of special leave. 

In each case special leave will be refused with costs.

AT 10.03 AM THE MATTERS WERE CONCLUDED