Bradken Consolidated Ltd v Broken Hill Pty Co Ltd

145 CLR 107
24 ALR 9

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(Judgment by: MASON, JACOBS)

BRADKEN CONSOLIDATED v BROKEN HILL PTY

Court:

Judges: Gibbs ACJ
Stephen J.
Mason J.
Jacobs J.
Murphy J.

Hearing date: 25 May 1978, 26 May 1978
Judgment date: 5 April 1979

Sydney

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Judgment by:
MASON
JACOBS

An action was commenced in the Federal Court of Australia in which Bradken Consolidated Ltd. and Bradford Kendall Foundries Pty. Ltd. were the applicants and the Broken Hill Proprietary Company Ltd. ("BHP"), the Commissioner for Railways for the State of Queensland ("the Commissioner for Railways"), Commonwealth Steel Company Ltd. ("Commonwealth Steel"), Commonwealth Steel (Moorooka) Pty. Ltd., and Dampier Mining Company Ltd. ("Dampier") the respondents.

The applicants sought injunctions restraining the respondents BHP, the Commissioner for Railways and Dampier, from giving effect to certain contracts arrangements and understandings alleged to be contrary to s. 45 of the Trade Practices Act 1974 as amended. Injunctions were also sought restraining BHP and Dampier from respectively engaging in the practice of exclusive dealing contrary to the provisions of s. 47 (2) of that Act.

Points of claim were filed pursuant to an order of the Federal Court made on 2nd March 1978. A new railway is to be constructed from the area of the Gregory Coal Mine, in respect of which application for a mining lease has been made by a company which has sub-leased or proposes to sub-lease the area to Dampier. It is claimed that BHP and Dampier and BHP, Commonwealth Steel and Commonwealth Steel (Moorooka) Pty. Ltd. are respectively deemed to be related to each other within the meaning of the Trade Practices Act. See s. 4 (2) (b). There is alleged to be a contract arrangement and understanding between the Commissioner for Railways whereby Dampier has agreed to lodge a security deposit with the Commissioner for Railways in an amount sufficient to finance and enable the Commissioner for Railways to build the new railway line and to purchase locomotives and rolling stock necessary to operate it. It is alleged that it is a provision of the said contract that either BHP, Commonwealth Steel, Commonwealth Steel (Moorooka) Pty. Ltd. or Dampier will supply and that the Commissioner for Railways will amongst other things acquire the freight cast steel bogies, draft gear assemblies, draft gear retaining plates and wearplates and headstock striking brackets and coupler carrier plates necessary for the wagons to be constructed for use on the said line from one or other of the abovenamed companies and not by way of the process of competitive tender. Alternatively, it is claimed that there is an understanding in similar terms that the bogies etc. will be acquired by the Commissioner for Railways from either BHP, Commonwealth Steel, Commonwealth Steel (Moorooka) Pty. Ltd. or Dampier. It is claimed that these provisions of any contract arrangement or understanding and the giving effect to them have the purpose or would have or be likely to have the effect of substantially lessening competition within the meaning of s. 45 (3) of the Act.

Then substantially the same allegations are repeated in the points of claim and it is alleged that BHP has provided or agreed to provide finance and/or financial assistance to the Commissioner for Railways on the condition that he will not acquire the described goods directly or indirectly from a competitor of BHP or the other companies. The applicant says that thereby BHP is engaging in trade or commerce in the practice of exclusive dealing contrary to the provisions of s. 47 (e) of the said Act.

Similar allegations are repeated with variations in the names and number of respondents acting in the manner alleged, all containing the allegation that the finance and/or financial assistance is to be provided to the Commissioner for Railways on condition that he will acquire the goods from some one or others of the other respondents and will not acquire the goods otherwise.

The Commissioner for Railways delivered a defence on 20th March 1978. Amongst the matters of defence were the following:

"6. On its proper construction, the Trade Practices Act 1974 as amended (herein referred to as 'the Act') does not apply to the Second Respondent," (i.e. the Commissioner for Railways) "or purport to regulate the conduct of the Second Respondent, in that -

(a)

the Second Respondent is not, and in the Points of Claim is not alleged to be, a trading corporation within the meaning of the Act;

(b)

in terms of the 'Railway Act 1914-1976' or otherwise the Second Respondent: -

(i)

is an instrumentality or agent or authority of the Crown in right of the State of Queensland;

(ii)

represents the Crown in right of the State of Queensland and is entitled to all the rights, powers and privileges thereof;

(c)

The Act is not intended to bind the Crown in right of a State.

7. In the alternative, any conduct alleged in the Points of Claim in which, contrary to the provisions of the Act, the Second Respondent is engaging is conduct which is or will result in a preference within the meaning of section 102 of the Constitution: -

(a)

by the Second Respondent to the other Respondents or one or more of them;

(b)

which is not undue and unreasonable, or unjust to any State;

(c)

which has not been adjudged by the Interstate Commission to be undue and unreasonable, or unjust to any State.

8. In so far as the Act purports to prohibit or forbid such conduct on the part of the Second Respondent, the Act: -

(a)

is a law which was or could have been enacted pursuant to the power to make laws conferred on Parliament by Section 51 (i) and Section 98 of the Constitution;

(b)

is or has been enacted contrary to Section 102 of the Constitution;

(c)

is beyond the legislative power of Parliament and is invalid."

On 7th April 1978 this Court ordered that there be removed into this Court so much of that pending cause as is raised in these paragraphs of the defence.

It should next be mentioned that the applicants sought to discontinue against the Commissioner for Railways in this Court but this Court concluded that the nature of the claim and the matters alleged did not make this a practicable course and the application was refused.

When the matter came on for hearing there was no appearance for any respondent other than the Commissioner for Railways. Further, for the applicants it was made clear that no relief was now sought against the Commissioner for Railways. As will appear, this does not affect the substance of the questions raised in the defence or the interest of the Commissioner for Railways in the proceedings and their result. However it was made clear that there was no intention of alleging that the Commissioner for Railways was a trading corporation within the meaning of the Trade Practices Act, but that what was claimed was that the applicants were entitled to relief whether or not that be so. Argument therefore proceeded upon the questions of law raised in pars. 6, 7 and 8 of the defence, which in the light of this elucidation, can be narrowed down to the following questions:

(1) Is the Commissioner for Railways an instrumentality or agent or authority of the Crown in right of the State of Queensland?

(2) If so, is it the legislative intention that the Trade Practices Act should bind the Crown in right of the State of Queensland?

(3) If that is not the legislative intention, does such a contract arrangement or understanding as is alleged with the Crown in right of the State of Queensland or the provision of finance and/or financial assistance to that Crown on the conditions alleged fall within the prohibitions contained in ss. 45 and 47 of the Trade Practices Act?

(4) If the legislative intention in the Trade Practices Act is to bind the State of Queensland, are ss. 45 and 47 laws with respect to trade and commerce which forbid, as to railways, any preference or discrimination by a State or by any authority constituted under a State within the meaning of s. 102 of the Constitution?

Upon the view which we take of the answers which ought to be given to the first three questions, this last question does not arise. We therefore content ourselves with shortly stating that in our opinion s. 102 is concerned with forms of preference and discrimination in those aspects of railways which directly or indirectly result in a preference or discrimination in the use of railways. It is not inconceivable that some particular construction of or failure to construct a railway could be regarded as a preference or discrimination. We do not find it necessary to decide this point, but we are satisfied that a preference or discrimination unrelated in any way to the use of any railway but related only to conditions of contracts for the building thereof or of its rolling stock is not a preference or discrimination within the language of s. 102.

We now turn to the first three questions which we have posed.

(1) Is the Commissioner for Railways an instrumentality or agent or authority of the Crown in right of the State of Queensland?

Section 8 (1) of the Railways Act, 1914-1976 (Q.) provides:

"(1) The Commissioner, representing the Crown, shall be a corporation sole by the name of 'The Commissioner for Railways', and by that name shall have perpetual succession and an official seal which shall be judicially noticed, and shall be capable in law of suing and being sued, and shall have power to take, purchase, sell, exchange, lease, and hold land, goods, chattels, and other property.

The Commissioner, as such corporation, for all the purposes of any Act, shall have and may exercise all the powers, privileges, rights, and remedies of the Crown."

The making of contracts by the Commissioner for Railways is subject to the provision in s. 95 (1) that no contract shall be of any force or effect unless or until the same has been approved and ratified by a Minister of the Crown by writing under his hand. By s. 96 (1) contracts are to be in the corporate name of the Commissioner and by s. 96 (3) contracts made in accordance with the section are declared to be binding on the Commissioner of Railways on behalf of the Crown as well as on all other parties thereto. Further, in particular relation to the construction of railways the approval of the plans by Parliament is necessary (ss. 33 and 34) and after approval the Governor in Council may cause the railway to be constructed and may give such directions to the Commissioner as appear expedient for the execution of the works (s. 35). There can be no doubt that the Commissioner for Railways is an instrumentality agent or authority of the Crown in right of Queensland.

(2) If so, is it the legislative intention that the Trade Practices Act should bind the Crown in right of the State of Queensland?

The principal argument submitted on this question is that a legislature is presumed to bind the Crown in all capacities except its capacity as sovereign of the legislating polity. Therefore the Trade Practices Act would be presumed in the absence of contrary legislative intention (as is now expressed in s. 2A of the Act) not to bind the Crown in right of the Commonwealth but would be presumed to bind the Crown in right of a State. Therefore, it is said, a legislative intention rebutting this presumption must be found in the Trade Practices Act and it cannot be so found.

But is there any such presumption?

In Minister for Works (WA) v. Gulson (1944) 69 CLR 338 Latham C.J. and McTiernan J. concluded that there was and they adhered to that view in Essendon Corporation v. Criterion Theatres Ltd. (1947) 74 CLR 1 . In the latter case, Latham C.J. stated that upon this question the members of the court who dealt with it in Gulson's Case (1944) 69 CLR 338 were equally divided in opinion (1947) 74 CLR, at pp 12-13 . With great respect we do not think that that is correct. Rich and Williams JJ. were no doubt the members of that Court who were referred to by Latham C.J. as taking a view contrary to his own and that of McTiernan J. However, it appears to us that Starke J. also expressed a contrary view which upon examination may be regarded as even more strongly to the contrary than that of Rich and Williams JJ. when he said (1944) 69 CLR, at p 358 :

"Ordinarily it may be said, as was said in Attorney-General v. Donaldson (1842) 10 M & W 117, at p 124 (152 ER 406, at p 409) , that prima facie the law as made by Parliament is made for subjects and not for the Crown. And, assuming, that which I am not prepared to concede, that the Commonwealth can regulate the land policies of the State in relation to their tenants under the defence power, still such regulations would require the most explicit and the clearest words. The regulation in the present case certainly uses general words, but that is not enough . . . "

It is true that he went on to examine the nature of the particular legislative provisions but it seems to us that this was done by way of reinforcement of the effect of the presumption that the statute binds subjects and not the Crown. We accept the analysis and the conclusion on this question of Taylor J. in Commonwealth v. Bogle (1953) 89 CLR 229 , at p 279 that the Crown in all its capacities is prima facie not bound by a statute unless this is provided for expressly or by necessary implication. In the last mentioned case the existence of the presumption was implictly recognized by Fullagar J. (1953) 89 CLR, at p 259 with whom Dixon C.J. and Webb and Kitto JJ. agree. The same view was taken in Commonwealth v. Rhind (1966) 119 CLR 584 , at p 598 by Barwick C.J., with whom McTiernan J. agreed (1966) 119 CLR, at p 600 , and by Menzies J. (1966) 119 CLR, at p 606.

Starke J. in Gulson's Case (1944) 69 CLR 338 , at p 358 emphasizes that it is always a question of construction of the particular statutory provision. This is not inconsistent with the existence of the presumption which he then states because the "necessary implication" that the Crown is intended to be bound may appear from the nature of the statutory provisions and the whole subject matter of the legislation; but at the same time it must be borne in mind that in that kind of case what is being sought in the statute is an implication which is "necessary", and that is a test not easily satisfied. Pirrie v. McFarlane (1925) 36 CLR 170 may be regarded as a case where that test was found to be satisfied and the actual result may on that ground be open to criticism.

In Gulson's Case (1944) 69 CLR 338 Rich and Williams JJ. relied for their conclusion on the unity and indivisibility of the Crown. On the other hand Latham C.J. said that unity and indivisibility of the Crown, when stated as a legal principle, tended to dissolve into verbally impressive mysticism. The relevance of this concept to the question now being considered has been questioned. See, for example, Hogg, Liability of the Crown (1971), pp. 194, 198- 199. However, it seems to us that Rich and Williams JJ. correctly related the principle of interpretation to the principle upon which they relied. The concept of the unity and indivisibility of the Crown is not denied by the recognition that there are different sources of legislative, executive and judicial power. Indeed, it is only when there are such different sources that the concept becomes important at all. What it means in its application to Australia is that there is one country under the rule of a body of law even though the sources from which the law emanates are different in different cases; that the law binds everyone whom it is intended to bind no matter from which legislative source it springs by virtue of the Constitution, provided that it is a law which it was within the legislative competence of that source to enact and which remains a valid law under the Constitution. That was the effect of the decision in the Engineers' Case (1920) 28 CLR 129 and that decision has never been overturned even though a limitation has been placed on its application to particular situations as a result of development which culminated in the decision in Commonwealth v. Cigamatic Pty. Ltd. (in Liquidation), the Cigamatic Case (1962) 108 CLR 372 . This being the position, it would seem to us that at least as between the Commonwealth and the States there should be an identical presumption of legislative intention not to bind the Crown.

The concept first developed in R. v. Sutton (1908) 5 CLR 789 that a legislature intends to bind all organs of government other than the organ of government of that legislature is a concept which wholly fails to take account of the fact that there is one body of law applicable to any particular citizen or in any particular part of Australia even though it may be and usually is a composite body of law. The body of statutory law, whatever its source, is presumed to be law applying to subjects, not to the Crown, and we can see no reason why in this respect any distinction should be drawn between the various legislative sources of that body of law.

It may further be added that in the case of the Trade Practices Act nothing less than a positive presumption of legislative intention to bind the Crown in right of the States would avail the applicants. Section 2A expressly provides that subject to the section the Act (other than Pt X) binds the Crown in right of the Commonwealth in so far as the Crown in that right carries on a business, either directly or by an authority of the Commonwealth. Even if there were no presumption of an intention not to bind the Crown in right of a State but likewise no presumption of an intention to bind that Crown, so that it was necessary to examine the particular nature of the provisions made by the statute, the expression of an intention to bind the Crown in right of the Commonwealth and the absence of a like expression in respect of the Crown in right of the States would as a matter of construction lead to the conclusion that the Crown in right of the States was not intended to be bound.

(3) If that is not the legislative intention, does such a contract arrangement or understanding as is alleged with the Crown in right of the State of Queensland or the provision of finance and/or financial assistance to that Crown on the conditions alleged fall within the prohibitions contained in ss. 45 and 47 of the Trade Practices Act?

In order to give an affirmative answer to this question it is sufficient to rely simply on the fact that the Commissioner for Railways is an agent authority or instrumentality of the Crown stated by his incorporating statute to represent the Crown. To strike down the contracts arrangements or understandings alleged would affect the exercise by the Commissioner for Railways, representing the Crown, of a right to enter into such contracts arrangements or understandings and to obtain finance in the manner alleged. Further, it would affect the exercise by the Governor in Council of the powers conferred by s. 35 of the Railways Act. The Queensland Act differs from the New South Wales Act examined by Kitto J. in his dissenting judgment in Wynyard Investments Pty. Ltd. v. Commissioner for Railways (NSW) (1955) 93 CLR 376 , at p 400 . The considerations which led Kitto J. to expess. dissent in that case are not applicable in the present case. He said: Telephone Apparatus Manufacturers' Application [1963] 1 WLR 463 ; [1963] 2 All ER 302 ; (1963) LR 3 RP 462 , the absence of an intention to bind the Crown in right of Queensland will not only exonerate it from the direct application of the statutory provisions but will also exonerate from the application of those provisions the contracts arrangements or understandings made by that Crown and the other parties thereto as well.

For these reasons we would hold that the second named respondent by par. 6 (b) and (c) of his defence raises matters which in law are a bar to the granting of the relief sought in par. 34 (1) and (2) of the points of claim and to the granting of the relief sought in par. 34 (3) and (4) of the points of claim in so far as that relief is sought upon the basis of the allegations contained in the points of claim.