Neat Domestic Trading Pty Ltd v Awb Ltd

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: Gleeson CJ,McHugh,Hayne,Callinan JJ,Kirby J
• Judgment Date: 19 June 2003
• Neutral Citation: 2003-0619 HCA B,[2003] HCA 35
• Docket Number: S225/2002
• Date: 19 June 2003

[2003] HCA 35

HIGH COURT OF AUSTRALIA

Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ

S225/2002

Neat Domestic Trading Pty Limited

Appellant

and

Awb Limited & Anor

Respondents

Representation:

S J Gageler SC with J K Kirk for the appellant (instructed by Withnell Hetherington)

A Robertson SC with A I Tonking for the respondents (instructed by Allens Arthur Robinson)

Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 3(1), 5(2)(f), 6(2)(f).

Trade Practices Act 1974 (Cth), s 51(1).

Wheat Marketing Act 1989 (Cth), ss 57(1), (1A), (3A), (3B), (6), (7).

NEAT Domestic Trading Pty Limited v AWB Limited

Administrative law — Judicial review — Statutory scheme regulating export of wheat — Consent of statutory authority required for export — Authority precluded from giving consent without approval of nominated company incorporated under Corporations Law — Whether company's withholding of approval was decision of an administrative character made under an enactment — Whether in withholding approval nominated company exercised discretionary power in accordance with a rule or policy without regard to merits of particular case.

ORDER

Appeal dismissed with costs.

1 Gleeson CJ. This appeal concerns a statutory scheme regulating the export of wheat, and the administrative law principles governing the role in that scheme of a corporation representing growers' interests.

2 The regulatory scheme took effect from 1 July 1999. The background, and the government policy, were set out in an Explanatory Memorandum relating to the Wheat Marketing Legislation Amendment Act 1998 (Cth), which amended the Wheat Marketing Act 1989 (Cth) (‘the Act’). The Explanatory Memorandum stated:

‘17. The AWB was established in 1939 to control the marketing of wheat in Australia. It has operated under various Commonwealth statutes with details of wheat marketing changing over time, including deregulation of the domestic market in 1989. The most recent legislation is the Wheat Marketing Act 1989. Under that Act, the AWB has the sole right to export wheat. It also has responsibility for the commercial aspects of wheat marketing through operating wheat pools.

18. Following lengthy discussion, Government and industry have agreed that from 1 July 1999 responsibility for all commercial aspects of wheat marketing will be taken over by a new grower owned and controlled Corporations Law company structure. Consequently, from 1 July 1999, the only ongoing Government involvement (and therefore regulatory impact) in wheat marketing will be in relation to the export monopoly on wheat which will be managed, from that time, by a small independent statutory body.

19. The international market for wheat is distorted by the interventionist policies of other grain producing countries such as the US and EU which use varying forms of domestic support and export subsidy programs. Aggressive use of these programs can substantially reduce international wheat prices.

20. The export monopoly, therefore, provides a tool to conduct the export marketing of Australian wheat to maximise the net returns to growers. It is also considered that the export monopoly provides a net benefit to the wider Australian community.

…

32. The most appropriate option is to legislate the export monopoly on wheat to an independent statutory body to be known as the Wheat Export Authority (WEA). For an initial period of five years the legislation will provide that the new grower company pool subsidiary has an automatic right to export wheat. Requests to export wheat from other than the grower company (as currently happens) would be managed by the WEA to separate regulatory and commercial functions.

33. The WEA would be formed by retaining the “shell” of the existing statutory AWB as a suitably renamed and reshaped independent body. Its functions would be limited to: managing and approving requests to export wheat from organisations other than the pool subsidiary; monitoring the use of the monopoly; and accounting to Government and industry as required on performance of its functions.

34. The WEA would monitor and assess the pool subsidiary's use of its wheat export rights to ensure that the company was using them in accordance with the intentions of Parliament.

…

98. The WEA must consult Company B about all requests for consent to export wheat. In the case of proposed exports in bulk, ie other than by means of bags or containers, a consent may not be given unless nominated company B has first approved the export. This requirement supports the automatic right given by the Bill to Company B to export wheat and reflects the importance of bulk exports in the overall marketing arrangements.’

3 The policy of the legislation appears from par 18. The reason for the policy is stated in pars 19 and 20. Surveillance of the administration of the policy is contemplated in par 34.

4 In the above paragraphs, AWB is the Australian Wheat Board. The ‘new grower company pool subsidiary’ referred to in par 32, which is also ‘nominated company B’ referred to in par 98, is AWB (International) Limited (‘AWBI’), which is, in turn, a wholly owned subsidiary of AWB Limited. Both are companies limited by shares, and incorporated under the Corporations Law of Victoria. The shares in AWB are divided into classes. One class of shares, whose holders control the board of directors, and which carry voting rights, but not the right to receive dividends, can only be held by wheat growers. AWB and AWBI together make up the ‘new grower owned and controlled Corporations Law company structure’ referred to in par 18.

5 The statutory provision enacted to give effect to the policy explained above is s 57 of the Act, which is as follows:

‘57 Control of export of wheat

• (1) A person shall not export wheat unless:

  • (a) the [Wheat Export] Authority has given its written consent to the export of the wheat; and

  • (b) the export of the wheat is in accordance with the terms of that consent.

  Penalty:

  • (a) in the case of a natural person - $60,000; or

  • (b) in the case of a body corporate - $300,000.

• (1A) The prohibition in subsection (1) does not apply to nominated company B.

• (2) An offence against subsection (1) is an indictable offence.

• (3) The Authority's consent to the export of wheat may be limited to the export of the wheat in specified circumstances, in accordance with specified requirements or by a specified person.

• (3A) Before giving a consent, the Authority must consult nominated company B.

• (3B) The Authority must not give a bulk-export consent without the prior approval in writing of nominated company B. For this purpose a consent is a bulk-export consent unless it is limited to export in bags or containers.

• (3D) An application for a consent under this section must be accompanied by such fee (if any) as is prescribed by the regulations. The fee is payable to the Authority.

• (3E) The Authority must issue guidelines about the matters it will take into account in exercising its powers under this section.

• (4) In proceedings for an offence against subsection (1), a certificate signed by the Chairperson and:

  • (a) stating that the Authority did not consent to the export of particular wheat; or

  • (b) setting out the terms of a consent given by the Authority;

  is prima facie evidence of the matters set out in the certificate.

• (5) The prohibition in subsection (1) is in addition to, and not in substitution for, any prohibition by or under the Customs Act 1901 or the Export Control Act 1982.

• (6) For the purposes of subsection 51(1) of the Trade Practices Act 1974, the following things are to be regarded as specified in this section and specifically authorised by this section:

  • (a) the export of wheat by nominated company B;

  • (b) anything that is done by nominated company B under this section or for the purposes of this section.

• (7) Before the end of 2004, the Authority must conduct a review of the following matters, and give the Minister a report on the review:

  • (a) the operation of subsection (1A) in relation to nominated company B;

  • (b) the conduct of nominated company B in relation to:

    • (i) consultations for the purposes of subsection (3A); and

    • (ii) the granting or withholding of approvals for the purposes of subsection (3B).’

6 Section 57(7) reflects the reference in par 32 of the Explanatory Memorandum to ‘an initial period of five years’. Of course, the review and report might not result in any alteration of the scheme, but in considering the meaning and effect of s 57, it is material to note that the conduct of AWBI (nominated company B) in the granting or withholding of approvals for the purposes of sub-s (3B) is to be the subject of political review and accountability.

7 Sub-sections (3A), (3B) and (6) are of direct relevance to this appeal.

8 The appellant is a domestic and international grain trader. On a number of occasions before 1 July 1999 the appellant was granted permits for the bulk export of wheat. On six occasions between November 1999 and January 2000 the appellant sought the consent of the Wheat Export Authority to the bulk export of durum wheat. In five cases, the proposed destination was Italy; in one case it was Morocco. In each case AWBI declined to give its approval, and the Authority was obliged to withhold consent.

9 The appellant, being a competitor of AWBI in relation to the export of wheat, complained that AWBI was contravening the Trade Practices Act 1974 (Cth). It was confronted with the problem of s 57(6) of the Act, which refers to s 51(1) of the Trade Practices Act. That section provides that, in determining whether there has been a contravention of the Trade Practices Act of a kind of possible relevance to the present case, anything specifically authorised by legislation must be disregarded. The appellant endeavoured to...