JT International SA v Commonwealth of Australia

• Jurisdiction: Australia Federal only
• Judge: FRENCH CJ,Gummow J,Heydon,Crennan J.,Kiefel J
• Judgment Date: 05 October 2012
• Neutral Citation: [2012] HCA 43,2012-0815 HCA C
• Court: High Court
• Docket Number: Matter No S409/2011
• Date: 05 October 2012

[2012] HCA 43

HIGH COURT OF AUSTRALIA

French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ

Matter No S409/2011

Matter No S389/2011

Jt International Sa

Plaintiff

and

Commonwealth Of Australia

Defendant

British American Tobacco Australasia Limited & ORS

Plaintiff

and

The Commonwealth Of Australia

Defendant

Representation

G Griffith QC with G A Hill and C O H Parkinson for the plaintiff in S409/2011 (instructed by Johnson Winter & Slattery)

A J Myers QC with M F Wheelahan SC, N J Owens and M J O'Meara for the plaintiffs in S389/2011 (instructed by Corrs Chambers Westgarth Lawyers)

S J Gageler SC, Solicitor-General of the Commonwealth with R Merkel QC, S B Lloyd SC, J K Kirk SC, A M Mitchelmore and J S Cooke for the defendant in both matters (instructed by Australian Government Solicitor)

Interveners

W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland in both matters (instructed by Crown Law (Qld))

M P Grant QC, Solicitor-General for the Northern Territory with R H Bruxner intervening on behalf of the Attorney-General for the Northern Territory in both matters (instructed by Solicitor-General for the Northern Territory)

P J F Garrisson, Solicitor-General for the Australian Capital Territory with M A Perry QC intervening on behalf of the Attorney-General for the Australian Capital Territory in both matters (instructed by ACT Government Solicitor)

A C Archibald QC with C P Young intervening on behalf of Philip Morris Limited in S389/2011 (instructed by Allens Arthur Robinson)

B W Walker SC with C L Lenehan intervening on behalf of Van Nelle Tabak Nederland BV and Imperial Tobacco Australia Limited in S389/2011 (instructed by King & Wood Mallesons)

Constitution, s 51(xxxi).

Tobacco Plain Packaging Act 2011 (Cth), ss 15, 18–27, 30–48.

Competition and Consumer (Tobacco) Information Standard 2011 (Cth), ss 1.5, 3.1, 4.1, 9.13, 9.19–19.20.

Tobacco Plain Packaging Regulations 2011 (Cth), Divs 2.1–2.4, 3.1.

JT International SA v Commonwealth of Australia

British American Tobacco Australasia Limited v The Commonwealth

Constitutional law (Cth) — Legislative power — Section 51(xxxi) — Acquisition of property on just terms — Plaintiffs hold registered and unregistered trade marks and other intellectual property rights in relation to tobacco product packaging — Tobacco Plain Packaging Act 2011 (Cth) regulates appearance of tobacco product packaging and use of trade marks on such packaging — Whether plaintiffs' intellectual property rights, goodwill and rights to determine appearance of tobacco products constitute ‘property’ for purposes of s 51(xxxi) — Whether Act effects an acquisition of plaintiffs' property otherwise than on just terms.

Words and phrases — ‘acquisition of property’, ‘intellectual property’, ‘just terms’, ‘trade marks’.

ORDER

Matter No S409/2011

The demurrer by the plaintiff to the defence of the defendant be overruled.

Judgment be entered in the action for the defendant.

The plaintiff pay the defendant's costs in this action, including the demurrer.

(b) the appellant's conviction for the manslaughter of David Hay be quashed; and

The questions reserved on 28 February 2012 for determination by the Full Court under s 18 of the Judiciary Act 1903 (Cth) be answered as follows:

Question 1

Apart from s 15 of the Tobacco Plain Packaging Act 2011 (Cth), would all or some of the provisions of the Tobacco Plain Packaging Act 2011 (Cth) result in an acquisition of any, and if so what, property of the plaintiffs or any of them otherwise than on just terms, of a kind to which s 51(xxxi) of the Constitution applies?

Answer

No.

Question 2

Does the resolution of Question 1 require the judicial determination of any and if so what disputed facts following a trial?

Answer

No.

Question 3

If the answer to Question 1 is ‘yes’ are all or some, and if so which, provisions of the Tobacco Plain Packaging Act 2011 (Cth) in whole or in part beyond the legislative competence of the Parliament by reason of s 51(xxxi) of the Constitution?

Answer

Does not arise.

Question 4

Are all or some, and if so which, provisions of the Tobacco Plain Packaging Act 2011 (Cth) in whole or in part beyond the legislative competence of the Parliament by reason of the matters raised in pars 10-12 of the statement of claim?

Answer

No.

Question 5

What order should be made in relation to costs of the questions reserved?

Answer

The plaintiffs pay the defendant's costs.

FRENCH CJ

Introduction

1 The Tobacco Plain Packaging Act 201(Cth) (‘the TPP Act’) imposes significant restrictions upon the colour, shape and finish of retail packaging for tobacco products. It prohibits the use of trade marks on such packaging, other than as permitted by the TPP Act, which allows the use of a brand, business or company name for the relevant tobacco product. Pre-existing regulatory requirements for health messages and graphic warnings remain in place and include, under a recent Information Standard, a requirement for the inclusion of the Quitline logo of the Victorian Anti-Cancer Council and a telephone number for the Quitline service.

2 In two proceedings which were heard by this Court in April this year, the plaintiffs, tobacco companies JT International SA (‘JTI’) and members of the British America Tobacco Group (‘BAT’) 1 argued that, subject to a reading down provision, the TPP Act effected an acquisition of their intellectual property rights and goodwill on other than just terms, contrary to s 51(xxxi) of the Constitution.

3 On 15 August 2012 the Court made orders reflecting the rejection of the plaintiffs' contentions, by majority, on the basis that there had been no acquisition of the plaintiffs' property within the meaning of s 51(xxxi) of the Constitution. I publish my reasons for joining in those orders.

The TPP Act

4 The TPP Act regulates the retail packaging and appearance of tobacco products 2. The Act is superimposed upon pre-existing regulatory requirements for health warnings and safety and information standards applied to tobacco products and their packaging. Its stated objectives include the improvement of public health by discouraging people from taking up smoking, encouraging people to give up smoking, discouraging people from relapsing if they have given it up, and reducing people's exposure to smoke from tobacco products 3.

5 Substantive requirements for the physical features, colours and finish of retail packaging are imposed by ss 18 and 19 of the TPP Act and by the Tobacco Plain Packaging Regulations 2011 (Cth) (‘the TPP Regulations’) made under that Act. Embellishments on cigarette packs and cartons are proscribed 4. Packs and cartons are to be rectangular 5, have only a matt finish 6, and bear on their surfaces the colour prescribed by the TPP Regulations 7. Absent regulation, the colour of the package must be a drab dark brown 8. The use of trade marks on retail packaging of tobacco products is prohibited other than as permitted by s 20(3) which provides:

‘The following may appear on the retail packaging of tobacco products:

• (a) the brand, business or company name for the tobacco products, and any variant name for the tobacco products;

• (b) the relevant legislative requirements;

• (c) any other trade mark or mark permitted by the regulations.’

Section 26 imposes a similar conditional prohibition on the use of trade marks on tobacco products. The term ‘relevant legislative requirement’ in s 20(3)(b) includes a health warning required by the Trade Practices (Consumer Product Information Standards) (Tobacco) Regulations 2004 (Cth) (‘the TPCPI Regulations’) 9 or a safety or information standard made or declared under the Competition and Consumer Act 2010 (Cth) (‘the CCA’).

6 Brand, business, company and variant names for tobacco products which appear on retail packaging must comply with the TPP Regulations 10. They must

not obscure any ‘relevant legislative requirement’ or appear other than once on any of the front, top and bottom outer surfaces of the pack 11.

7 The relevant prescriptive provisions of the TPP Act, ss 18 to 27, are declared by s 27A to have ‘no legal effect other than to specify requirements, and provide for regulations specifying requirements, for the purposes of the definition of tobacco product requirement’. The term ‘tobacco product requirement’ is a defined term which relevantly means a requirement specified in Pt 2 of Ch 2 or in the TPP Regulations made under that Part 12.

8 The registrability of trade marks and designs whose use is subject to constraints imposed by the TPP Act and the TPP Regulations is not to be prejudiced by those constraints. Neither the TPP Act nor the TPP Regulations deprive a trade mark of registrability for non-use, or because the use of the trade mark in relation to tobacco products would be contrary to law 13. Neither the TPP Act nor the circumstance that a person cannot use a trade mark in relation to the retail packaging of tobacco products or on tobacco products is a circumstance making it reasonable or appropriate to refuse or revoke registration of the trade mark, to revoke acceptance of an application for registration, or to register the trade mark subject to conditions or limitations 14. There is a somewhat less elaborate protection for registered designs under the Designs Act 2003 (Cth) 15.

9 It is an object of the TPP Act to give effect to obligations that Australia has as a party to the Convention on Tobacco Control 16. The Act thereby relies upon the power of the Commonwealth Parliament to make laws with respect to external affairs. Part 3 of Ch 1 of the TPP Act entitled ‘Constitutional provisions’ provides for the Act's additional operation in reliance upon the corporations power, the trade and commerce power, and the Territories'...