Horta and Others v The Commonwealth of Australia

(1994) 181 CLR 183
(1994) 68 ALJR 620
(1994) 123 ALR 1

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(Judgment by: MASON CJ, BRENNAN J, DEANE J, DAWSON J, TOOHEY J, GAUDRON J, McHUGH J)

Between: Horta and Others
And: The Commonwealth of Australia

Court:

Judges:
MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J

Hearing date: 9 August 1994, 10 August 1994
Judgment date: 18 August 1994

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Judgment by:
MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J

This is a case stated by the Chief Justice pursuant to s.18 of the Judiciary Act 1903 (Cth) in proceedings in which three plaintiffs seek declarations of invalidity of a Treaty to which the Commonwealth of Australia is a party and of two Acts of the Parliament of the Commonwealth which relate to that Treaty. The following statement of the background facts is based upon the agreed facts set out in the case stated.

In December 1975, the Republic of Indonesia ("Indonesia") occupied the territory of East Timor. Since that occupation, Indonesia has remained in effective occupation of that territory and, since 1976, has claimed sovereignty over it under international law. Since 1979, the Commonwealth of Australia ("Australia") has accepted that claim and recognized Indonesia's sovereignty over East Timor.

Australia and Indonesia each claim sovereign rights under international law over respective areas of the continental shelf between the coast of East Timor and the coast of mainland Australia. The area claimed by Australia and the area claimed by Indonesia partly overlap. That area of overlapping claims, which is wholly outside Australian and Indonesian territorial waters, is hereinafter referred to as "the area of the Timor Gap". Between 1979 and 1989, Australia and Indonesia negotiated an agreement to designate the area of the Timor Gap as a "Zone of Cooperation" and to make provision permitting and regulating the exploration for, and the exploitation of, petroleum resources therein, pending a permanent continental shelf delimitation between the two countries in relation to the area. The terms of that agreement between the two nations were embodied in a document entitled "Treaty Between Australia and the Republic of Indonesia on the Zone of Cooperation in an Area Between the Indonesian Province of East Timor and Northern Australia" ("the Treaty") which was executed on behalf of Australia and Indonesia in 1989. Australia recognizes the Treaty as a valid and binding treaty under international law that entered into force on 9 February 1991. The case stated records that Australia "considers that entry into the Treaty and performance of its terms is consistent with (Australia's) obligations under international law".

In 1990, the Commonwealth Parliament, in purported pursuance of the legislative power conferred by s.51(xxix) of the Constitution with respect to "External affairs", enacted the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 ("the Act"). As its preamble indicates and its contents confirm, the Act relates to the Treaty and is directed towards enabling Australia to fulfil its obligations under the Treaty with respect to the area of the Timor Gap. It is unnecessary to examine the provisions of the Act in detail. It suffices to say that its provisions are directed towards establishing the support necessary in Australian law for the establishment of the regime of cooperation for which the Treaty provides, including the establishment of a Ministerial Council and a Joint Authority and the implementation of certain financial arrangements. Contemporaneously, the Parliament also enacted a related statute, the Petroleum (Australia-Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990 ("the Consequential Act"). As its name indicates, the Consequential Act consists mainly of a series of amendments of other Commonwealth legislation which the enactment of the Act was thought to make necessary or desirable. Subject to questions of validity, both the Act and the Consequential Act commenced operation on 18 February 1991.

The proceedings in this Court were instituted by writ and statement of claim in June 1993. In them, the plaintiffs challenge the validity of both the Act and the Consequential Act. The amended statement of claim alleges that each of the three plaintiffs is "East Timorese". Two of the plaintiffs are alleged to be permanent residents of Australia. The third plaintiff is alleged to be an Australian citizen. The amended statement of claim seeks declarations that the two Acts "are not valid laws of the Commonwealth" and that "the making of the Treaty was not within the Executive power of the Commonwealth".

The questions reserved in the case stated for the consideration and determination of the Full Court are all ultimately directed to the plaintiffs' claim for the declaration that the Act and the Consequential Act are not valid laws of the Commonwealth. The plaintiffs' primary argument is that the two Acts are not laws with respect to "External affairs" for the purposes of the grant of legislative power contained in s.51(xxix) of the Constitution and are therefore beyond the legislative competence of the Parliament. Ultimately, the foundation of that argument lies in allegations that the Treaty is void under international law and that entry into the Treaty, its terms and the performance of them by Australia are inconsistent with or in breach of Australia's obligations under customary international law or one or other of a number of international Conventions to which Australia is a party. For its part, the Commonwealth denies the justiciability of the question whether the Treaty is or is not valid under international law and whether Australia's entry into and performance of its terms are inconsistent with or in breach of international law. It challenges the standing of each of the three plaintiffs to bring the present proceedings. It argues that, in any event, the enactment of the two Acts was within the legislative competence of the Parliament regardless of whether the Treaty is void or invalid under international law or whether the making of the Treaty or the implementation of its provisions would or would not be inconsistent with Australia's international obligations. The first five questions reserved by the Chief Justice were directed to the issues raised in those various arguments and submissions. They read as follows:

"1.

Are the plaintiffs' allegations:

(a)

that the Treaty is void under international law; and

(b)

that the terms of the Treaty, and entry into and performance of the terms of the Treaty, are inconsistent with or in breach of the Commonwealth's obligations under customary international law, the Charter (the Charter of the United Nations), the ICESCR (the International Covenant on Economic, Social and Cultural Rights), the ICCPR (the International Covenant on Civil and Political Rights), and UNCLOS (the United Nations Convention on the Law of the Sea); justiciable?

2.

Are the plaintiffs' allegations in paragraphs 1, 2(b), 3(b) and 4(b) of the Statement of Claim justiciable?

3.

If the facts on the basis of which the plaintiffs seek standing, to the extent that they are justiciable, were made out, would all or any of the plaintiffs have standing to seek declarations:

(a)

that the making of the Treaty was not within the Executive power of the Commonwealth on the grounds referred to in paragraphs 10-11 of the Agreed Facts; and

(b)

that the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 and the Petroleum (Australia-Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990 are not valid laws of the Commonwealth on the grounds referred to in paragraphs 10-11 and 13 of the Agreed Facts?

4.

If the answer to questions 1 and 3(a) is 'yes', would the making of the Treaty be beyond the Executive power of the Commonwealth:

(a)

if the Treaty were void under international law; or

(b)

if the terms of the Treaty, or entry into and performance of the terms of the Treaty, were inconsistent with or in breach of Australia's obligations under customary international law, the Charter, the ICESCR, the ICCPR or UNCLOS?

5.

If the answer to questions 1 and 3(b) is 'yes', would the enactment of the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 and the Petroleum (Australia-Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990 be within the powers of the Parliament under section 51 of the Constitution:

(a)

if the Treaty were void under international law; or

(b)

if the terms of the Treaty, or entry into and performance of the terms of the Treaty, were inconsistent with or in breach of Australia's obligations under customary international law, the Charter, the ICESCR, the ICCPR or UNCLOS?"

In the course of the hearing, it became common ground between the parties that, regardless of the order in which the questions logically arise, a convenient course for the Court to adopt would be first to consider whether the plaintiffs must clearly fail in relation to Question 5. As we followed the argument, it is also common ground that it is only if that question be answered wholly or partly in the plaintiffs' favour, that is to say wholly or partly in the negative, that it would be necessary for the Court to answer any of the preceding four questions other than Question 3(b). From the plaintiffs' point of view, the explanation of that concession lies, no doubt, in the fact that the plaintiffs' only real argument in support of their contention that affirmative answers should be given to the questions of justiciability raised by Questions 1 and 2 was that the issues to which those questions relate must be resolved by the Court in order to determine whether the Act and the Consequential Act fall within the scope of the legislative power conferred by s.51(xxix). If an affirmative answer is given to both parts of Question 5, the basis of that argument will disappear with the result that in the absence of some other argument Questions 1 and 2 would necessarily be answered adversely to the plaintiffs and Questions 3(a) and 4 would become moot. Accordingly, we turn to a consideration of Question 5.

In Polyukhovich v. The Commonwealth ((1) (1991) 172 CLR 501 ), Mason CJ, Deane J, Dawson J, Gaudron J and McHugh J all expressed the conclusion that a law with respect to a matter which is territorially outside Australia is a law with respect to "External affairs" for the purposes of s.51(xxix) of the Constitution ((2) See ibid. at 528-531 per Mason CJ, 599-604 per Deane J, 632 per Dawson J, 696 per Gaudron J and 712-714 per McHugh J). The other two members of the Court, Brennan J and Toohey J, considered that some additional factor was necessary. Brennan J ((3) ibid. at 551.) was of the view that s.51(xxix) confers power to enact "laws affecting affairs" which are geographically external to Australia only if there "be some nexus, not necessarily substantial, between Australia and the 'external affairs' which (the) law purports to affect". Toohey J was of the view ((4) ibid. at 654.) that, even though geographically external to Australia, a "matter does not qualify as an external affair" for the purposes of s.51(xxix) unless it be one "which the Parliament recognises as touching or concerning Australia in some way". Regardless of whether the mere fact that a matter or thing is territorially outside Australia is of itself sufficient to bring a matter or thing within the phrase "External affairs" for the purposes of s.51(xxix) or whether one or other of those additional factors is necessary, it is clear that the area of the Timor Gap and the exploration for, and the exploitation of, petroleum resources within that area all fall within that phrase. Each of those matters is geographically external to Australia. There is an obvious and substantial nexus between each of them and Australia. As the enactment of the Act demonstrates, they are all matters which the Parliament recognizes as affecting or touching Australia. That being so, the enactment of a law with respect to one or all of those matters is prima facie within the legislative power conferred by s.51(xxix).

When one examines the provisions of the Act as a whole, it is clear that it can properly be characterized both as a law with respect to the area of the Timor Gap and as a law with respect to the exploration for, and exploitation of, petroleum resources within that area. Accordingly, it is prima facie a law with respect to "External affairs" for the purposes of s.51(xxix). And that is so regardless of whether the provisions of the Act enable the discharge of the obligations of Australia under the Treaty or give effect to provisions of the Treaty. Indeed, it would be so even if there were no Treaty. The same can be said of the Consequential Act which, at least to the extent that its provisions need support from the external affairs power rather than from the legislative powers pursuant to which the laws which they amend were enacted, clearly derives its general character from, and stands or falls with, the Act.

There can be circumstances in which a law which is prima facie within the legislative power conferred by s.51(xxix) is nonetheless outside the legislative powers of the Parliament by reason of some other provision of the Constitution, express or implied, to which the legislative power conferred by s.51(xxix) is subject. However, no such circumstances exist in the present case. It was submitted on behalf of the plaintiffs that the enactment of the two Acts would be beyond the legislative power conferred by s.51(xxix) if the Treaty were void under international law either on the ground that it was contrary to international law or on the ground that Australia's entry into or performance of it would be in breach of Australia's obligations under international law. There is, however, a short answer to that submission. That answer is that even if the Treaty were void or unlawful under international law or if Australia's entry into or performance of the Treaty involved a breach of Australia's obligations under international law, the Act and the Consequential Act would not thereby be deprived of their character as laws with respect to "External affairs" for the purposes of s.51(xxix). Neither s.51(xxix) itself nor any other provision of the Constitution confines the legislative power with respect to "External affairs" to the enactment of laws which are consistent with, or which relate to treaties or matters which are consistent with, the requirements of international law ((5) Polites v. The Commonwealth (1945) 70 CLR 60 at 68-69 per Latham CJ, 74 per Rich J, 75-76 per Starke J, 77-78 per Dixon J, 79 per McTiernan J, 81 per Williams J; Fishwick v. Cleland (1960) 106 CLR 186 at 196.). In particular, there is simply no basis either in s.51(xxix) or in any other provision of the Constitution for the plaintiffs' submission that the legislative power conferred by s.51(xxix) must be confined within the limits of "Australia's legislative competence as recognized by international law".

It follows that both parts of Question 5 of the case stated must be answered in the affirmative. As has been said, it is common ground that that answer to both parts of Question 5 makes it unnecessary for the Court to answer Questions 1, 2, 3(a) and 4.

It must be emphasized that the fact that we have, at the suggestion of the parties, first considered whether Question 5 must in any event be answered adversely to the plaintiffs should not be understood as lending any support for the contention that, if Question 5 had been answered differently, the various questions of international law which the plaintiffs wished to raise would be justiciable in this Court in these proceedings. In particular, nothing in this judgment should be understood as lending any support at all for the proposition that, in the absence of some real question of sham or circuitous device to attract legislative power, the propriety of the recognition by the Commonwealth Executive of the sovereignty of a foreign nation over foreign territory can be raised in the courts of this country ((6) See, e.g., Chow Hung Ching v. The King (1948) 77 CLR 449 at 467.).

There are two further questions reserved by the case stated challenging the validity of the two Acts. Logically, Question 3(b) should be answered before proceeding to a consideration of the issues which they raise. The case was, however, argued on the basis that it is convenient to address those two additional questions and to adopt the approach that, if each of them must obviously be answered adversely to the plaintiffs, it is unnecessary to answer Question 3(b). We are prepared to adopt that course.

The two additional questions are as follows:

"6.

If the answer to question 3(b) is 'yes', are the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 and the Petroleum (Australia-Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990 invalid:

(a)

by virtue of the operation of section 81 of the Constitution;

(b)

on the ground that they purport to provide for the collection by Indonesia of taxation revenue that would otherwise have been payable to the Commonwealth;

(c)

on the ground that they contain an impermissible delegation to Indonesia of Commonwealth legislative power with respect to taxation;

(d)

on the ground that they impose an incontestable tax?

7.

If the answer to question 3(b) is 'yes', are the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 and the Petroleum (Australia-Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990 invalid on the ground that they purport to provide for the delegation of the executive power of the Commonwealth to the Ministerial Council and the Joint Authority contrary to section 61 of the Constitution?"

It can be said at once that neither question raises any issue of real substance and that, for reasons which can be summarily stated, both questions must be answered wholly in the negative.

Question 6 challenges the validity of the two Acts by virtue of the provisions relating to taxation contained in the Act or the Treaty. Question 6(a) must be answered in the negative for the reason that the Acts do not provide for any moneys received by Australia to be dealt with or appropriated otherwise than in accordance with s.81. The same answer must be given to Question 6(b). Indeed, in a context where there is nothing in the Acts which either authorizes Indonesia to collect tax on behalf of Australia or imposes an obligation upon anyone to pay tax to Indonesia, there is simply no plausible argument which supports the giving of an affirmative answer to it. Question 6(c) must be answered in the negative for the reason that the Acts do not delegate Commonwealth "legislative power with respect to taxation" to Indonesia. Any legislative power exercised by Indonesia pursuant to the international regime which the Treaty and the Act establish will be the legislative power of the government of that country. In so far as Art.29(3) of the Treaty (which provides that Australia will not exercise legislative power in a particular way without the consent of Indonesia) is concerned, the Act does not give legislative effect within Australian law to that provision. That is an undertaking given by Australia on the international level. It is necessarily ineffective to confine the scope of the legislative powers conferred upon the Parliament by the Constitution. Question 6(d) must be answered in the negative for the reason that, as has been said, the Acts do not impose upon anyone any obligation to pay tax to Indonesia. Nor do they impose upon anyone any obligation to pay any other "incontestable tax". Question 7 must be answered in the negative for the reason that there is nothing in the Constitution which precludes the conferral of any executive power which the Act confers upon the Ministerial Council and Joint Authority.

It follows that the questions reserved in the case stated should be answered as follows:

Questions 1, 2, 3 and 4: unnecessary to answer.

Question 5(a): yes

5(b): yes

Question 6: no

Question 7: no

The effect of those answers to the questions reserved is that the action must fail. The appropriate course to be followed is for the matter to be listed before a Justice so that, in the absence of some sufficient reason to the contrary, an order can be made dismissing the action. The plaintiffs must pay the costs of the case stated.