Alcock v Commonwealth of Australia

Solicitor for the Second Respondent: Victorian Government Solicitors Office

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 406 of 2012

JUDGE: DODDS-STREETON J DATE OF ORDER: 1 AUGUST 2012 WHERE MADE: MELBOURNE

OTHER MATTERS:

1. Counsel for the applicants informed the court that the applicants would not seek to vary or amend the revised further amended statement of claim filed on 5 April 2011, the subject of the pending application for leave, last mentioned in the order of Ryan J made on 19 April 2011, paragraph 6. On that basis, counsel for the first respondent and the second respondent informed the court that they did not oppose grant of leave. THE COURT ORDERS THAT:
2. The applicant has leave to appeal from the judgment of Tracey J given on 24 May 2012 at Melbourne.
3. Costs be reserved to the Full Court in the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 406 of 2012

JUDGE: DODDS-STREETON J DATE: 1 AUGUST 2012 PLACE: MELBOURNE

Introduction 1 On 1 August 2012, I made the orders set out above, for the reasons that follow. 2 By an application for leave to appeal filed on 7 June 2012, the applicant, Robert James Alcock, sought leave to appeal from the judgment and orders of Tracey J given on 24 May 2012. 3 Tracey J answered a number of questions in relation to a proposed revised further amended statement of claim filed on 5 April 2011 ("FASOC") and published reasons for his decision. Ryan J, on 8 April 2011, for reasons published on 19 April 2011, ordered the questions to be separately determined pursuant to O 29 of the Federal Court Rules 1979 (Cth) ("Federal Court Rules"). 4 The application for leave to appeal was supported by: (1) the affidavit of Noel Stewart Waters sworn on 7 June 2012; (2) written submissions dated 18 July 2012; (3) a draft notice of appeal dated 7 June 2012; and (4) written submissions in reply dated 31 July 2012. 5 The application for leave to appeal was initially opposed by the respondents, the Commonwealth of Australia ("the Commonwealth") and the second respondent, the State of Victoria, but at a late stage of the hearing, the respondents withdrew their opposition on the basis that the applicant would not seek to vary or amend the FASOC, which is the subject of a pending application for leave to rely on it. 6 The following material was filed in opposition: (1) the first respondent's written submissions dated 24 July 2012; and (2) the second respondent's written submissions dated 25 July 2012.

Background 7 The proceeding was commenced by an application dated 16 June 2008 by the applicant and Susan Alcock acting for themselves and in a representative capacity. (At the hearing of the application, I was informed that Ms Alcock was at one point removed as an applicant, but counsel for the applicant indicated that she remained a party). 8 As appears from the materials filed and Ryan J's reasons published on 19 April 2011, his Honour gave directions for the formulation of separate questions against the backdrop of the applicant's "considerable difficulty in framing a statement of claim which the respondents accept discloses a cause of action and is otherwise immune from striking out under O 11 r 16 of the Federal Court Rules" (Alcock v Commonwealth [2011] FCA 392 at [1]). 9 On 4 August 2009, a statement of claim was struck out with leave to file and serve another amended statement of claim and application (Alcock v Commonwealth [2009] FCA 820). On 17 December 2009, Ryan J ordered that a further amended statement of claim and an amended application be struck out with no immediate leave to replead or amend, for reasons his Honour explained in Alcock v Commonwealth [2009] FCA 1478. Ryan J's order was stayed pending the applicant's application to remove the matter to the High Court pursuant to s 40 of the Judiciary Act 1903 (Cth) ("Judiciary Act"), which was later discontinued. 10 Ryan J declined to give the applicant immediate leave to replead or amend without sighting a draft further amended statement of claim to determine whether the previous defects were cured. 11 Following discontinuance of the removal application, the stay imposed on 17 December 2009 was dissolved on 12 November 2010. Ryan J ordered the applicant to file and serve a proposed amended application and further amended statement of claim. His Honour ordered that in the absence of agreement between the parties that such documents "properly disclose a cause of action or otherwise conform with the Rules of this Court, there be a hearing … of an application by the applicant for leave to rely on" such documents. A draft further amended statement of claim was filed and served on 17 December 2010 and was challenged by the respondents. Following some minor amendments to that document, the pleading described as the FASOC was filed on 5 April 2011, and was challenged by the respondents. 12 On 4 March 2011, at a mention before Ryan J, his Honour proposed to order separate questions for determination in the proceeding. The following exchange occurred between Ryan J and Mr King, counsel for the applicant (transcript page 5): HIS HONOUR: … But it does occur to me that these debates about sufficiency of pleadings and whether a particular statement of claim discloses a cause of action can be somewhat sterile, and they haven't progressed this matter very far, and one thing that might commend itself to the parties is the identification of a separate or preliminary question arising in the matter which could be resolved as it were as part of the pleading summons, but would result in a binding ruling, or at least a ruling that the parties could, if so advised, appeal from, which might limit the scope of this action or concentrate the minds of the parties on specific issues. … But I simply say - make those observations to invite your comments. Yours first, Mr King. MR KING: We don't have any objection to that course, your Honour … (emphasis added) 13 Counsel for the Commonwealth did not object to Ryan J's proposal and accepted the task of formulating the first draft of the questions, expressing the hope that the answers would have the potential to dispose of the proceeding. 14 Following a further mention of the proceeding on 8 April 2011, on 19 April 2011, Ryan J ordered the determination of the eight questions, gave incidental directions, and also ordered that: The applicant's application for leave to rely on his revised further amended statement of claim filed herein on 5 April 2011 be adjourned to a date to be fixed by the docket Judge being a date not earlier than the hearing and determination of the questions referred to in paragraph 1 of this Order. 15 The first respondent submitted that the above order made clear that the determination of the eight questions was intended as an anterior step informing the determination of whether the applicant would be given leave to rely on the FASOC. The first respondent further submitted: The possibility that the Applicant might press or reformulate his proposed revised FASC before the hearing of that adjourned application remained open and was not precluded by any order made by Ryan J or (later) by Tracey J. Tracey J's reasons for judgment advert to the possibility that the answers to the questions will not resolve the proceeding. 16 Ryan J directed the formulation of separate questions "in the hope that answers to questions which were agreed to be in controversy between the parties might overcome the pleading difficulties which have bedevilled the applicant or, at least, reduce the areas in which the perceived defects are said to infect the latest version of the statement of claim" (at [4]). 17 The Commonwealth formulated questions to which counsel for the applicant indicated general agreement and following input from the other parties, the court identified the eight questions to be determined.

Mr Waters' affidavit 18 Mr Waters, the applicant's solicitor, in his affidavit in support of the leave application, deposed to the applicant's notice of motion filed on 9 November 2010, which sought that Ryan J be excused from further conduct of the matter, the respondents give discovery and inspection of categories of documents referred to in an affidavit of Mr Waters sworn on 9 November 2010, the parties exchange signed statements of evidence and that the matter be set down for trial. 19 Mr Waters deposed that Ryan and Tracey JJ had not listed the notice of motion for hearing and had declined to consider granting leave to amend or to grant discovery. Mr Waters referred to his earlier affidavit dated 9 November 2010, in which he submitted that the respondents should be ordered to make discovery and file evidence and that pleadings should be dispensed with, in favour of points of claim. Mr Waters exhibited points of claim and his unsigned letter to the Commonwealth dated 25 March 2011 proposing amendments to the questions proposed. 20 Mr Waters also deposed to a number of factual matters in relation to compensation paid to licensed fishers under the Fisheries Act 1995 (Vic) ("the Fisheries Act") other than Central Zone abalone fishers, the market value of the applicant's licence, and the losses incurred by the State of Victoria as a result of imposing the National Parks (Marine National Parks and Marine Sanctuaries) Act 2002 (Vic) ("the NP Act"). Mr Waters' affidavit included argument and submissions which were inadmissible. Further, the respondents objected to assertions based on secondhand hearsay and/or for which the ultimate source was unclear. In so far as such factual matters were relevant to the leave application and were otherwise admissible pursuant to s 75 of the Evidence Act 1995 (Cth), I attributed them minimal weight. See United Dairy Power Pty Ltd v Murray Goulburn Co-operative Co Ltd [2011] FCA 762.

The judgment below 21 On 24 May 2012, Tracey J made the following orders: 1. The questions ordered to be separately determined be answered as follows: Question 1: Does the Revised Further Amended Statement of Claim filed herein on 5 April 2011 (FASC) (paragraphs 3 and 4) identify rights of the Applicant that are "property" within the meaning of s 51(xxxi) of the Constitution? Answer: Yes, but only in respect of the abalone fishing license number A41. Question 2: If yes to Question 1, in relation to the Applicant's property identified in the FASC and in the circumstances alleged therein, are any of the following a law of the Parliament with respect to "the acquisition of property" within the meaning of s 51 (xxxi) or executive action which impairs the constitutional guarantee: 2.1 the National Parks (Marine National Parks and Marine Sanctuaries) Act 2002 (Vic) (the Marine Parks and Sanctuaries Act)? (in the circumstances set forth in paragraphs 5-9 of the FASC) 2.2. the Fisheries Management Act 1991 (Cth) (the Management Act)? (in the circumstances set forth in paragraphs 5 and 27 of the FASC) 2.3. the arrangement dated 29 October 1997, that commenced on 1 November 1997, under Part 5 of the Fisheries Management Act 1991 (Cth) between the Commonwealth and Victoria (the October 1997 arrangement)? (in the circumstances set forth in paragraphs 5 to 9 of the FASC) or, 2.4. any combination of the Marine Parks and Sanctuaries Act, the Management Act and the October 1997 arrangement? Answer: (as to each part): No. Question 3: If yes to any of Questions 2.1, 2.2, 2.3 or 2.4, does s 167A(1) of the Management Act entitle the Applicant to compensation? Answer: Does not arise. Question 4: Does the FASC (paragraph 13) identify any inconsistency between the Marine Parks and Sanctuaries Act and the Seas and Submerged Lands Act 1973 (Cth) for the purposes s 109 of the Constitution? Answer: No. Question 5: If "yes" to Question 4, what provision or provisions of the Marine Parks and Sanctuaries Act is or are invalid for that reason? Answer: Does not arise. Question 6: Is the conduct alleged against the Commonwealth in paragraph 18 of the FASC conduct of the Commonwealth "in trade or commerce" within the meaning of the Fair Trading Act 1999 (Vic) or the Trade Practices Act 1974 (Cth) (as taken to be continued in force by item 6(1) of Schedule 7 to the Trade Practices (Australian Consumer Law) Amendment Act (No 2) 2010)? Answer: No. Question 8: Is the Fisheries Act 1995 (Vic) repugnant to the Constitution to the extent that it extended past the low water mark into the Central Zone in Bass Strait and/or impaired or interfered with the applicant's property rights (paragraph 35 of the FASC)?" Answer: No 2. A further directions hearing be fixed for 7 September 2012 at 9:30 am. 22 Tracey J, having set out the history of the proceeding, analysed the constitutional and legislative setting, including the Offshore Constitutional Settlement in 1979 ("the 1979 Settlement") and the passage of the Coastal Waters (State Powers) Act 1980 (Cth) ("the SP Act") and the Coastal Waters (State Title) Act 1980 (Cth) ("the ST Act"). His Honour observed that the SP Act provided for the extension of the State's legislative power to make laws for coastal waters, as defined, and fisheries in Australian waters beyond the outer limits of the coastal waters of the State, only to the extent to which the fisheries were under a management arrangement to which the State and Commonwealth were parties. 23 Tracey J observed that the Commonwealth and State enacted specific legislation in respect to fisheries (being the Fisheries Management Act 1991 (Cth) ("the FM Act") and the Fisheries Act) as anticipated under s 5(c) of the SP Act. 24 His Honour described the provision for a fixed term access licence under the Fisheries Act, without which fishing for abalone and other fish in Victorian waters is prohibited. 25 His Honour referred to the NP Act, which established marine national parks and sanctuaries and rendered unlawful all fishing in any marine park or sanctuary, even by persons holding licences under the Fisheries Act. It also inserted a new Pt 10 in the Fisheries Act, providing a compensation scheme for adversely affected licence holders and provided that the State of Victoria was not liable to pay compensation to licence holders other than pursuant to the statutory scheme.

Question 1 26 Tracey J stated that the following property was identified in the FASOC as property acquired in contravention of s 51(xxxi) of the Constitution. Abalone Fishing Licence Number A41 granted under the Fisheries Act; The expectation of future harvests of abalone; Commonwealth rights to harvest abalone; A profit à prendre; and Commercial interests and good will. 27 Having analysed relevant authorities, his Honour concluded that the licence met the criteria for property within the meaning of s 51(xxxi), but that the other four asserted rights, which appeared to be inextricably linked to the licence, did not.

Question 2 28 Tracey J concluded that the FM Act and the arrangement made under it in October 1997 predated the NP Act, and neither instrument effected any acquisition of the applicant's property. If s 45A of the NP Act impinged on the applicant's property rights under the licence, it was done pursuant to Victorian legislation. 29 His Honour stated that s 51(xxxi) of the Constitution only placed a constraint on the power of the Commonwealth Parliament to acquire property. 30 His Honour reasoned that as any relevant property right of the applicant in November 2002 was derived from the licence under the Fisheries Act, given that the FM Act was in force before the Fisheries Act, it was difficult to comprehend how the FM Act could operate to acquire the applicant's property, as it did not and could not authorise the Parliament of Victoria to acquire specific property which did not exist when the FM Act came into force. 31 Further, his Honour observed that the applicant's argument faced the difficulty that his licence was defeasible and it was open to the regulator to limit the areas from which abalone could be harvested. The NP Act effected such a change and the Fisheries Act authorised the variations, thus qualifying the applicant's rights under the licence so that it did not constitute property within the meaning of s 51(xxxi). Such a variation did not constitute an acquisition of property, because the right thus varied had no existence apart from statute. 32 Tracey J also noted that s 45A of the NP Act varied entitlements enjoyed under the licence, but did not involve the transfer of benefit to any third party and thus no acquisition was effected. 33 His Honour analysed ICM Agriculture Pty Ltd v The Commonwealth of Australia (2009) 240 CLR 140, Arnold v Minister Administering the Water Management Act 2000 (2010) 240 CLR 242 and Spencer v The Commonwealth (2010) 241 CLR 118 ("Spencer"), on which the applicant relied in support of his arguments that there was an acquisition of property. His Honour considered that those authorities did not assist the applicant.

Question 4 34 Tracey J found that there was no relevant inconsistency between the NP Act and the Seas and Submerged Lands Act 1973 (Cth), as there was no intention that the latter should cover the field occupied by the NP Act. Rather, the Seas and Submerged Lands Act established the Commonwealth's sovereignty over areas including the Central Zone, while the NP Act created marine parks and sanctuaries and prohibited fishing in areas including places in the Central Zone. There was, however, no basis for inferring an intention for the Seas and Submerged Lands Act exclusively to regulate the creation and operation of marine parks and sanctuaries. Indeed, s 16(1)(b) provided to the contrary, (subject to exceptions). Nor did any provision of the NP Act seek to derogate from the Commonwealth's assertion of sovereignty over its territorial waters and exclusive economic zone.

Question 6 35 Tracey J stated that while the FASOC did not provide details of the representations alleged therein, he assumed that the representations were made. His Honour stated that it was necessary for the applicant to plead conduct of the Commonwealth which bore a trading or commercial character, but nothing in the FASOC alleged that the Commonwealth was involved in the applicant's business or the abalone fishing industry. Nor did the alleged representations constitute conduct of the Commonwealth in trade or commerce.

Question 8 36 His Honour rejected the applicant's contention that the Fisheries Act was repugnant to the Constitution based on s 123 of the Constitution.

Grant of leave to appeal 37 The appellate jurisdiction of the Federal Court is conferred by s 24 of the Federal Court of Australia Act 1976 (Cth), which relevantly provides: (1) ... the Court has jurisdiction to hear and determine: (a) appeals from judgments of the Court constituted by a single Judge exercising the original jurisdiction of the Court; … (1A) An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal. 38 The principles governing the grant of leave to appeal from an interlocutory judgment are well established. While the court has a discretion to grant leave which is, in terms unfettered, it is ordinarily necessary to satisfy the two interrelated factors identified in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 ("Décor v Dart") at 398-400 (endorsed by McHugh, Kirby and Callinan JJ in Bienstein v Bienstein (2003) 195 ALR 225 at [29] (at 231)) described by the Full Court in Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156 ("Samsung"), at [26] as follows: In this court, it is well established that the relevant test (or "litmus test") for whether leave to appeal from an interlocutory judgment will be granted, comprises the following two integers: (1) Whether, in all the circumstances of the case, the decision is attended by sufficient doubt to warrant its being reconsidered by the Full Court; and (2) Whether substantial injustice would result if leave were refused supposing the decision to be wrong. 39 In Luck v University of Southern Queensland [2009] FCAFC 73, Rares J discussed the policy basis for the requirement that an appeal from an interlocutory judgment requires leave, as follows, at [98]: These are important considerations going to the administration of justice by the court not merely in this matter but generally: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400 per Sheppard, Burchett and Heerey JJ. As they said, the Parliament evinced a policy in s 24(1A) of the Federal Court of Australia Act against the bringing of interlocutory appeals except where the court, acting judicially, finds reason to grant leave. And, their Honours pointed out that when the court comes to exercise that discretion on a particular application, it has to have regard to the important distinction to be observed between an interlocutory decision given on a point of practice or procedure and an interlocutory decision determining a substantive right, where leave will be more readily granted: Décor 33 FCR at 399-400; see also Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 per Gibbs CJ, Aickin, Wilson and Brennan JJ. Generally, unless some control is kept by the court over the former category of interlocutory proceedings, litigants with considerable resources or litigious dispositions could at will transfer all exercises of discretion in interlocutory applications from a judge exercising the Court's powers summarily to dispose of litigation that ought never to have been instituted into substantive claims before a Full Court. Of course, each case must depend upon its own circumstances. Moreover, when the Court considers the question of the grant of leave to appeal, it will be attentive to the substantive context in which the primary judge determined the matter. 40 It is necessary for an applicant to satisfy both elements (Ogawa v University of Melbourne (No 2) [2004] FCA 1275). The applicant in this case did not press the suggestion in his written submissions that the Federal Court Rules 2011 (Cth) established a predisposition to grant leave to appeal. 41 Although both elements of the test should be considered, they may be mutually balanced. In Construction, Forestry, Mining and Energy Union v Radisich [2010] FCA 1004, McKerracher J stated that the tests for leave of sufficient doubt and whether substantial injustice would result "bear upon each other, so that the degree of doubt which is sufficient in one case may be different from that required in another. Ultimately, a discretion must be exercised on balancing of considerations" (at [17]). 42 In the light of his answers to the above questions, his Honour found it unnecessary to consider the remaining questions. 43 The authorities contain various descriptions of what is meant by sufficient doubt in this context. As Collier J stated in Welsh v Digilin Pty Ltd [2008] FCA 78 at [8]: Previous decisions of this Court indicate that issues that are relevant as to whether a decision is attended by sufficient doubt to warrant reconsideration include the following: - a decision may be of "sufficient doubt" where a contrary position is reasonably arguable (Tamberlin J in Johnston v Cameron [2002] FCAFC 251 at [65]) or the view taken by the trial judge is debatable (Davidson v Fesl [2005] FCAFC 183 at [22] - leave to appeal is not necessarily granted simply because the reviewing court does not agree with every aspect of the trial judge's reasons (Energex Ltd v Alstom Australia Ltd [2005] FCAFC 215 at [65]) and - leave is more readily granted where substantive issues, rather than points of practice, are at issue (Rivera v United States of America [2004] FCAFC 154 at [13], M111 of 2003 v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 97 at [8]). 44 In Samsung, the Full Court reiterated that the test in Décor v Dart was appropriate for the general run of cases, but "should not, however, be applied as if it were some hard and fast rule. Each case must be considered on its merits" (at [29]). 45 The Full Court in Samsung referred to Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 ("Johnson Tiles") in which French J (with whom Beaumont and Finkelstein JJ agreed) stated at [43] in relation to a grant of leave to appeal from an interlocutory decision: If the order, the subject of the application for leave to appeal, is concerned with the mechanics of the pre-trial process then the scales are likely to be weighted against the grant of leave. However if while interlocutory in legal effect it has the practical operation of finally determining the rights of the parties "a prima facie case exists for granting leave to appeal" - Ex parte Bucknell (1936) 56 CLR 221 at 225; Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400; Minogue v Williams [2000] FCA 125 at [18]. If a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed the decision is treated as interlocutory. However leave will usually be granted in such a case if there is any doubt about the decision at first instance - Little v Victoria [1998] 4 VR 596 at 598-600 and 601 (Callaway JA, Buchanan JA agreeing). 46 The Full Court in Samsung referred to French J's analysis in Johnson Tiles and stated at [31]: On the spectrum described by his Honour, the grant or refusal of an interlocutory injunction may have a significant impact upon the scope and outcome of the proceedings. If the practical effect of the relevant interlocutory decision is to finally determine the rights of the parties, a prima facie case exists for granting leave to appeal. 47 The Full Court in Samsung also referred at [32] to Ex parte Bucknell (1936) 56 CLR 221 ("Bucknell"), where the High Court (Latham CJ and Rich, Dixon, Evatt and McTiernan JJ) considered the principles which should govern the grant of leave to appeal from an interlocutory judgment of a Supreme Court of a State or Territory pursuant to s 35(1) of the Judiciary Act. In Bucknell, at 225-226, the High Court stated: But any statement of the matters which would justify granting leave to appeal must be subject to one important qualification which applies to all cases. It is this. The court will examine each case and, unless the circumstances are exceptional, it will not grant leave if it forms a clear opinion adverse to the success of the proposed appeal. There is one class of case which raises little difficulty. If the interlocutory order, being an order of the character specified in sub-pars 1, 2 or 3 of s 35(a), has the practical effect of finally determining the rights of the parties, though it is interlocutory in form, a prima facie case exists for granting leave to appeal. For example, a judgment for either party on a demurrer might, in effect, be decisive of the whole litigation. Although such a judgment would often be interlocutory, it might be final in determining the issue between the parties, and, in such a case, leave would be granted almost as of course. Again, an order giving leave to sign final judgment is in its form interlocutory (Cox Brothers (Australia) Ltd v Cox (1934) 50 CLR 314 ; [1934] ALR 193). Yet in its effect it is final. But, in such a case, the court is under a duty to take care that a defendant who is unlikely to succeed in his appeal does not by appealing to this court and obtaining a stay, defeat the very purpose of proceedings by way of summary judgment. 48 The Full Court in Samsung concluded at [33]: In Ex parte Bucknell, the High Court emphasised the importance of the court considering the practical operation or effect of the interlocutory order from which leave to appeal is sought. Leave should readily be granted if, as a practical matter, the interlocutory order has the effect of determining the whole of the proceeding or an important issue in the proceeding.

Sufficient doubt 49 The applicant submitted that the primary judge's reasons were significantly flawed in various respects. The applicant submitted that the reasons mischaracterised the applicant's allegations in the FASOC, contained internal inconsistencies and logical flaws, analysed significant issues inconsistently with High Court authority, failed properly to articulate legal tests and generally approached the question of property inappropriately. 50 The applicant submitted that the primary judge should have answered in the affirmative for each category of property claimed. 51 The applicant submitted that his Honour misdescribed the property rights claimed, adopted an unduly narrow test of property under s 51(xxxi) and drew conclusions on issues which required evidence. In particular, the applicant complained that he did not claim that "the Commonwealth rights to harvest abalone" were his property rights, as his Honour erroneously assumed. 52 The applicant contended that his Honour ignored the pleaded "quota rights" which were "separate to licences and are saleable … and are arguably property". 53 The applicant submitted that the primary judge failed to recognise that "goodwill and linked future profits are property", and erroneously held that property was limited to a valuable right granted for a fixed term which is assignable. 54 The applicant submitted that his Honour erred in relation to the question of acquisition in stating that s 51(xxxi) of the Constitution only constrained the Commonwealth's power to acquire property, which misstated the provision and overlooked the possibility acknowledged in Spencer that State law could be invalidated under s 51(xxxi) if it were an instrument to avoid the constitutional restriction on the Commonwealth. 55 The applicant submitted that the primary judge failed to consider his argument on that point which, together with internal inconsistency and an overly condensed judgment which did not acknowledge the complexities, sufficed to raise sufficient doubt. Further, his Honour incorrectly reasoned that a property right could not be acquired by modification. 56 The applicant submitted that ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 ("ICM"), Smith v ANL Ltd (2000) 204 CLR 493, Newcrest Mining (WA) Ltd v Commonwealth (1990) 190 CLR 513 and Commonwealth v Tasmania (1983) 158 CLR 1 at least raised sufficient doubt about the correctness of the primary judgment. The applicant contended that Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 was distinguishable and, in any event, overtaken by ICM. 57 The applicant also submitted that the primary judge failed to consider his allegation (the truth of which should have been assumed) that the State obtained a benefit. 58 The applicant submitted that the primary judge erred in applying Gibbs J's reasoning in Robinson v Western Australian Museum (1977) 138 CLR 283 and overlooking his argument that the State law in this case was an exercise of sovereignty. 59 The applicant submitted that the primary judge misread the FASOC in concluding that it contained no allegation that the Commonwealth was engaged in conduct in trade or commerce. 60 The respondents submitted that many of the applicant's criticisms of the primary judge's reasons were based on undue scrutiny of words and phrases taken out of context. 61 The respondents submitted that no sufficient doubt informed his Honour's fundamental reasoning or conclusions, which accorded with orthodox principle. 62 The respondents submitted that the authorities on which the applicant relied did not, on analysis, support the propositions for which he contended. Further, the legal analysis was complicated by the FASOC's lack of clarity and the absence of agreed facts. 63 Counsel for the first respondent submitted that Spencer did not, on a normal reading, support a conclusion of invalidity of State legislation but conceded that the issue was "tricky" and that strands, at least, of the applicant's argument were reasonable propositions.

Substantial injustice 64 The applicant submitted that although the answers to the separate questions in this case were interlocutory, they effectively finally determined the rights of the parties and, as recognised in Bucknell, there was a prima facie case for leave, which should be granted almost as a matter of course. The applicant submitted that he would suffer substantial injustice if leave to appeal were refused, because the impact of the orders effectively disposed of his entire case adversely by means of interlocutory proceedings. Effectively, in the absence of leave, the applicant's proceedings would be finished and the right to appeal rendered nugatory. 65 The applicant, in written submissions, also asserted prejudice in the form of a number of alleged errors by the primary judge and Ryan J. In particular, the applicant submitted that Ryan J erred in ordering the determination of the separate questions and Tracey J's amendment of the questions also constituted error, as the procedure was inappropriate and there was no power to order it. 66 The respondents initially submitted that a grant of leave to appeal was inappropriate, as no substantial injustice was demonstrated and the answers to the separate questions were in no way tantamount to a final disposition of the applicant's proceeding. Leave to appeal was therefore, on any view, premature. The first respondent submitted that: 7. In spite of the hope expressed on behalf of the Commonwealth on 4 March 2011 that the questions to be posed would be potentially dispositive of the proceeding, it cannot now be said that Tracey J's judgment is dispositive of the proceeding. That is because: 7.1. the Applicant has not accepted that the questions are such as could dispose of the issues in the proceeding; 7.2. there is nothing precluding the Applicant from pressing for hearing of his pending application for leave to rely upon the revised FASC; 7.3. there is nothing precluding the Applicant from reformulating his proposed FASC before pressing for hearing of his pending application for leave to rely upon it; 8. Unless and until one of the events in paragraphs 7.2 or 7.3 above occurs and results in an order of the Court, there is no certainty as to how the answers to the questions contained in Tracey J's judgment will impact on the Applicant's claims in the proceeding. The Applicant's application to rely on his proposed revised FASC (or any substitute pleading) has not yet been heard and determined: it remains pending pursuant to paragraph 6 of Ryan J's orders made on 19 April 2011, referred to in paragraph 5.10 above. For this reason, at present it is premature to contend that the [sic] Tracey J's judgment precludes the Applicant from presenting his case for determination by the Court. 67 As the first respondent submitted: 5.12. The possibility that the Applicant might press or reformulate his proposed revised FASC before the hearing of that adjourned application remained open and was not precluded by any order made by Ryan J or (later) by Tracey J. Tracey J's reasons for judgment advert to the possibility that the answers to the questions will not resolve the proceeding.

Discussion 68 The application for leave to rely on the FASOC remains pending. Such leave has neither been formally opposed, nor, perforce, refused at this stage. Before me, however, counsel for the first respondent stated that it would oppose a grant of leave to rely on the FASOC and acknowledged that in the light of the answers to the separate questions, such leave would almost certainly be refused. 69 In principle, however, there was nothing to prevent the applicant from producing and seeking leave to rely on a new proposed amended pleading which would not fall foul of the answers to the questions. The applicant had previously asserted, including before Tracey J, that the answers would not be dispositive of the proceeding. The possibility of a new and different proposed pleading was, as the respondents submitted, a critical impediment to a grant of leave to appeal, as although the answers related to a particular proposed pleading (to which the respondents objected on bases additional to the controversies addressed by the answers) there could be no certainty about the final form of the applicant's pleading. Such fluidity rendered any appeal inappropriate. Moreover, the opacity of the FASOC would create difficulties in an appeal from the answers which were tied to it. 70 In the course of the hearing, the applicant made clear that he no longer asserted that the answers were not dispositive. Counsel for the applicant frankly stated that no revised proposed pleading which assumed the correctness of and took into account the answers to the separate questions could be drafted, as the answers struck out the heart of the applicant's case. Counsel for the applicant stated that the fundamental case outlined in the original application (which, despite some uncertainty, appeared to be the only extant application) was also untenable in light of the answers. Counsel further submitted that any uncertainty about the future outcome of the proceeding was illusory, as in practice (given that the applicant now disavowed any possibility of a pleading which differed in fundamental allegations from those rendered untenable by the answers), the respondents would oppose, and his Honour would refuse, leave to rely on the FASOC. Although the proceeding would not thereby stand dismissed, the substantive effect would be the same. 71 The applicant emphasised, and it was not disputed, that Ryan J had, in ordering the determination of separate questions, envisaged that there could be an appeal from the answers. So much was freely conceded by the respondents. Counsel for the first respondent acknowledged that the questions were central and had been drafted specifically in order to elicit answers which would be dispositive of the proceeding. An agreed statement of facts was also contemplated, but was never produced. 72 It became clear that the respondents' opposition to leave to appeal from the answers to the separate questions was largely based on their apprehension that the hope of obtaining dispositive answers had not been realised, given that the applicant had maintained that the answers were not dispositive and remained entitled to seek to rely on the FASOC or an alternative proposed pleading. Further, Tracey J had expressed reservations about whether answers to the separate questions would achieve their intended goal. 73 The applicant's concession at the hearing that no fundamentally different pleading could be produced and the undisputed likelihood that leave to rely on the FASOC, or any substantially similar pleading, would be refused, disposed of a fundamental impediment to leave to appeal. The practical problem of a "moveable feast" was eliminated. 74 The ordering of determination of separate questions was, not, in my opinion, beyond power or erroneous. The application for leave to appeal did not relate to Ryan J's orders. Any challenge to the validity of Ryan J's orders on the form of the questions should have been made at an earlier stage. Further, the material before the court indicated that the applicant, initially at least, did not oppose the determination of separate questions, albeit he subsequently pressed for the alternative course sought in the notice of motion referred to in Mr Waters' affidavit. 75 In my view, the order for the determination of the questions fell within the scope of O 29 r 1 of the Federal Court Rules, as the questions were raised by the pleadings or otherwise questions in the proceeding. As a controversy framed by the pleading on which the applicant sought to rely in the proceeding, they were within the scope of the matter before the court. 76 Nevertheless, I was persuaded that a refusal of leave to appeal could result in substantial injustice to the applicant and inconvenience to all parties and the Court. The answers, as a matter of substance, could, in all the circumstances, be tantamount to the dismissal of the proceeding. The adoption of the separate question procedure envisaged an appeal from the answers, and absent leave to appeal, may have placed the applicant in a worse position than if the hearing of the application for leave to rely on the FASOC had proceeded. It may have imposed a higher hurdle to resisting the effective dismissal of the proceeding, than would otherwise have applied. A different test (potentially less onerous for the applicant than in the present leave application) would have applied. In a strike out application, the respondents would have been required to establish that the FASOC failed to disclose a reasonable cause of action, and, save in a very clear case, strike out would not be justified. 77 In contrast, under the procedure adopted in this case, the learned judge addressed and determined competing arguments. His Honour was not required to, and did not, express a view as to whether it was "plain and obvious" that the FASOC raised no reasonable cause of action. 78 It was common ground that if his Honour were now required to determine an application for leave to rely on the FASOC (or any other pleading which depended on allegations in conflict with or contrary to the answers) independently of objections on other grounds, such as lack of clarity, leave would very probably, if not inevitably, be refused. 79 There was thus a likelihood that if leave to appeal from the answers to the separate questions were denied, the applicant would be refused leave to rely on the FASOC and an application for leave to appeal from that decision which would significantly, but not entirely, replicate the present application would then be made. The validity of the answers to the separate questions, while not, perhaps, as central to an application for leave to appeal from a refusal of leave to rely on the FASOC as it is to the present application, would still be highly relevant. 80 In addition to rendering almost inevitable a very similar, if not identical leave application, which would be wasteful of the resources of the parties and the Court, the refusal of leave to appeal from the answers to the separate questions could, on some contingencies, create problematic outcomes. If, for example, leave to appeal from a refusal to permit the applicant to rely on the FASOC were granted, subsequent remittal to the primary judge may be inappropriate, given his Honour's answers, which are adverse to the applicant's fundamental case. 81 The legislation relevant to the determination of the answers was complex and voluminous. Elements at least of the applicant's case were, as counsel for the first respondent acknowledged, arguable. While the applicant's criticisms of the primary judge's reasons did not appear compelling, the relevant legislation was complex and voluminous and elements, at least, of his case were, as counsel for the first respondent acknowledged, arguable. I was satisfied that substantial injustice was established. The answers to the questions effectively disposed of the proceeding, or the principal elements thereof, adversely to the applicant. Further, appeal was expressly contemplated when the procedure was adopted and the applicant may have been disadvantaged by its adoption if refused leave. A refusal of leave was also likely to lead to a repeat, in substance, of the present application, not only wasting the parties' and the Court's resources, but potentially producing significant anomalies and complexities. 82 In such circumstances, when it became clear that the applicant would not seek to amend the FASOC, a very slight degree of doubt sufficed to satisfy the first element of the test in Décor v Dart. Accordingly, I considered it appropriate to grant leave on the basis described above. I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.