Bradken Consolidated Ltd v Broken Hill Pty Co Ltd [1979] HCA 15;

Bradken Consolidated Ltd v Broken Hill Pty Co Ltd [1979] HCA 15; - HCA 1979 case summary — Zoe

[6]

GIBBS A.C.J. The present proceedings were commenced in the Federal Court of Practices Act"). The applicants are companies, one of which manufactures specialized railway equipment. The first, third, fourth and fifth respondents are companies and the second respondent is the Commissioner for Railways of the State of Queensland ("the Commissioner"). The allegations made by the applicants in the points of claim which they have filed in the Federal Court may be summarized as follows. A new railway is to be constructed to provide access from the Gregory Mine to an existing railway in Queensland, and for that purpose the Commissioner intends to purchase the rolling stock, including wagons, necessary to operate it. The Commissioner has entered into a contract, arrangement or understanding with the fifth respondent by which it is provided that either the first, third, fourth or fifth respondent will supply the freight cast steel bogies and other specialized equipment necessary for the wagons to be constructed and that the Commissioner will acquire such equipment from either the first, third, fourth or fifth respondent and not by way of competitive tender as in the past. The Commissioner has also entered into a contract, arrangement or understanding with the first respondent to accept supply of this equipment from the first respondent or from the third, fourth or fifth respondent. These contracts, arrangements or understandings are said to have the purpose, or to be likely to have the effect, of substantialy lessening competition within the meaning of s. 45 (3) of the Trade Practices Act and the applicants seek orders restraining the Commissioner and the first and fifth respondents from giving effect to their provisions. It is further alleged that both the first respondent and the fifth respondent have provided or agreed to provide financial assistance to the Commissioner, on condition that the Commissioner will not acquire the specialized railway equipment from a competitor of the respondent companies, or on condition that the Commissioner will acquire the equipment from the third or fourth respondent. It is said that the first and fifth respondents are thereby engaging in the practice of exclusive dealing contrary to s. 47 (2) of the Trade Practices Act, and orders are sought restraining those respondents from engaging in that practice. By his defence the Commissioner raised a number of points of law which shortly stated are as follows:

[10]

3. The applicants thereupon sought to discontinue the proceedings as against the Commissioner, although they wished to continue the proceedings against the respondent companies. The Commissioner opposed this course, as he was entitled to do. All the relief sought, if granted, would have invalidated, in whole or in part, a transaction to which the Commissioner was a party. The orders sought under s. 45 of the Trade Practices Act, if made only against the respondent companies, would affect the rights of the Commissioner just as much as if they were made against him as well. By those orders the respondents would be enjoined from supplying the equipment to the Commissioner, and if the Commissioner, knowing that the court had made such an order, received the equipment he would aid and abet a contravention of the order and be a party to a contempt of court. The orders under s. 47 of the Trade Practices Act were never sought against the Commissioner, but if made they would prevent the respondents from providing finance to the Commissioner on conditions to which he had agreed. In these circumstances the question arose whether the Trade Practices Act affects the interests of the Commissioner in that way, and the Commissioner was entitled to remain a party to the proceedings unless the applicants entirely abandoned their present claims, which they were not prepared to do. The applicants indicated that they wished to amend their points of claim in the Federal Court, to raise a new case that the respondent companies had, contrary to the Trade Practices Act, engaged in conduct (precontractual conduct it was called) in which the Commissioner played no part. Nothing that I have said is intended to indicate that the Commissioner would be a necessary party to the proceedings if that were the only case presented against the respondent companies - that question is not before us and I express no views upon it. However, the applicatnts made it clear that they wished to persist, if only in the alternative, in their present claims against the respondent companies, based on the allegations made in the points of claim in their present form, and in those circumstances the fact that they proposed to add further claims had no bearing on the question whether they were entitled to discontinue the proceedings as against the Commissioner. (at p113)

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10. See also per Griffith C.J. (1908) 5 CLR, at p 796 ; per Barton J. (1908) 5 CLR, at p 801 ; and per Isaacs J. (1908) 5 CLR, at p 814 . It is clear that in reaching this conclusion at least four of the Justices expressly relied on what they conceived to be the fact that the Crown as head of the Commonwealth Government is a separate juristic person from the Crown as head of the State government: see per Griffith C.J. (1908) 5 CLR, at p 797 ; per O'Connor J. (1908) 5 CLR, at pp 804-805 ; per Isaacs J. (1908) 5 CLR, at p 813 ; and per Higgins J. (1908) 5 CLR, at p 817 . Barton J. probably acted on the same view (1908) 5 CLR, at p 801-802 . The consequence of holding that the Crown in right of a State was a separate and distinct person from the Crown in right of the Commonwealth was stated by O'Connor J. (1908) 5 CLR, at p 805 , to be that the King's representative in a State, outside the exercise of his powers, is "no more than an individual subject of the King". Griffith C.J. and Barton J. appear to have based their decision also on the fact that the Customs Act was passed in the exercise of an exclusive power (1908) 5 CLR, at pp 797, 803-804 , although it is difficult to see what significance that fact has apart from the circumstance that the Crown of the State was a juristic person separate from the Crown of the Commonwealth. Roberts v. Ahern [1904] HCA 17; (1904) 1 CLR 406 is cited with approval in some of the judgments, although it seems difficult to reconcile the view accepted in that case with the principle of R. v. Sutton [1908] HCA 26; (1908) 5 CLR 789 . The actual decision in R. v. Sutton [1908] HCA 26; (1908) 5 CLR 789 may be supported on the ground that it appeared by necessary implication that the Customs Act was intended to bind the States, since otherwise its provisions might have been rendered ineffective, as Isaacs J. pointed out (1908) 5 CLR, at pp 812-814 . The decision was followed in Attorney-General (N.S.W.) v. Collector of Customs for N.S.W. [1908] HCA 28; (1908) 5 CLR 818 , where the Government of New South Wales was held liable to pay customs duty on steel rails imported for use in connexion with the government railways. (at p117)

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14. The question now under consideration again fell for decision in Minister for Works (W.A.) v. Gulson (1944) 69 CLR 388 . In that case it was held by Rich, Starke and Williams JJ. (Latham C.J. and McTiernan J. dissenting) that the National Security (Landlord and Tenant) Regulations of the Commonwealth did not bind the Crown in right of the State. Latham C.J. (1944) 69 CLR, at pp 347-353 and McTiernan J. (1944) 69 CLR, at pp 359-361 regarded R. v. Sutton [1908] HCA 26; (1908) 5 CLR 789 as authoritative. Rich J. and Williams J., on the other hand considered that R. v. Sutton (74) is inconsistent with the accepted principle of the unity of the Crown, and that its authority had been destroyed by the Engineers' Case (1920) 28 CLR, at pp 152-153 : per Rich J. (1944) 69 CLR, at pp 356-357 , per William J. (1944) 69 CLR, at pp 356-357 . William J. further said that R. v. Sutton [1908] HCA 26; (1908) 5 CLR 789 was inconsistent with two decisions of the Privy Council (Liquidators of the Maritime Bank of Canada v. Receiver-General of New Brunswick (1892) AC 437 and In re Silver Brothers Ltd. (1932) AC 514 and that some statements in the Engineers' Case (1920) 28 CLR, at pp 153, 154 , which I have already quoted in part, " can only mean that the Crown in right of a State is only bound by Commonwealth legislation when the legislation shows expressly or by implication an intention to that effect" (1944) 69 CLR, at p 367 . He referred also to Broken Hill Associated Smelters Pty. Ltd. v. Collector of Imposts (Vict.) [1918] HCA 29; (1918) 25 CLR 61 . The third member of the majority, Starke J., delivered reasons which have been differently understood by different readers. The headnote to the case suggests that Starke J. based his conclusion solely on the construction of the regulations, and the same view was apparently taken by Latham C.J. in Essendon Corporation v. Criterion Theatres Ltd. [1947] HCA 15; (1947) 74 CLR 1, at pp 12-13 and was certainly accepted by Owen J. in Public Curator (Q.) v. Morris (1951) 51 SR (NSW) 402, at p 410 . The reasons for judgment given by Starke J. were expressed in the following words (1944) 69 CLR, at p 358 :

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15. The question was again discussed in Essendon Corporation v. Criterion Theatres Ltd. Latham C.J. (1947) 74 CLR, at pp 12-13 and McTiernan J. (1947) 74 CLR, at pp 27-28 , on the one hand, and Rich J. (1947) 74 CLR, at p 15 and Williams J. (1947) 74 CLR, at p 30 , on the other, repeated the views which they had respectively expressed in Minister for Works (W.A.) v. Gulson [1944] HCA 27; (1944) 69 CLR 338 , but the fifth member of the Court, Dixon J., did not discuss the matter. In The Commonwealth v. Bogle (1953) 89 CLR 299, at p 254 Williams J. again re-asserted his former views, with which Taylor J. in effect agreed, saying that the rule as stated by Rich J. in Gulson's Case [1944] HCA 27; (1944) 69 CLR 338 must now be taken to be the true rule (1953) 89 CLR, at p 275 . Finally in The Commonwealth v. Rhind (1966) 119 CLR 584 Barwick C.J. (1966) 119 CLR, at pp 598-599 and Menzies J. (1966) 119 CLR, at pp 606-607 , without discussion, held that the rule of construction that the Crown is not bound by a statute except by express mention or necessary implication applied to a State Act with the consequence that the Act did not apply to the Crown in right of the Commonwealth. Their decision of the question whether the State Act did so apply depended on the operation which they gave to the rule of construction. McTiernan J. agreed with the reasons of the Chief Justice (1966) 119 CLR, at p 600 . The other members of the Court, Taylor and Owen JJ., decided the case on other grounds. It appears right to say that the ratio decidendi of the majority was that the rule of construction applies although the statute was passed by the legislature of a State and the Crown concerned is the Crown in right of the Commonwealth. However, the question was not the subject of discussion, and McTiernan J. who had formerly voiced opinions contrary to those which he there appears to have accepted without comment may have intended to decide the case on the construction of the section without recourse to the presumption. (at p121)

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19. In Clark v. Downes (1931) 145 LT 20, at p 22 Romer L.J. said: "The Acts not binding the Crown, it is the duty of the courts so to construe the Acts that the Crown and its property are in no way prejudicially affected by the Acts." It was accordingly held in that case, which was followed in Rudler v. Franks (1947) KB 530 , that a successor in title of the Crown was not bound by the Rent Restriction Acts, which did not bind the Crown; one reason given for this decision was that if those Acts did apply as soon as the property passed out of the ownership of the Crown the value of the Crown's reversion would be diminished. Those cases were doubted by Denning L.J. in Bank voor Handel en Scheepvaart N.V. v. Slatford (1953) 1 QB 248, at p 294 (a decision which was reversed on appeal to the House of Lords (1954) AC 584 . Much the same principle as that applied by Romer L.J. seems to have been the basis of the decision in Doyle v. Edwards (1898) 16 NZLR 572 , where it was held that a statutory exemption of Crown property from the operation of building by-laws extended to the case of a building erected on Crown land held by a tenant under the Crown, because otherwise "serious liabilities would be imposed on the Crown" (1898) 16 NZLR, at p 574 . That case has since been followed in New Zealand: Lower Hutt City v. Attorney-General (N.Z.) (1965) NZLR 65 ; Wellington City v. Victoria University (1975) 2 NZLR 301 . The decisions of this Court in Roberts v. Ahern [1904] HCA 17; (1904) 1 CLR 406 and Broken Hill Associated Smelters Pty. Ltd. v. Collector of Imposts (Vict.) [1918] HCA 29; (1918) 25 CLR 61 appear also to be cases where persons who were not servants or agents of the Crown were held immune from legislation which did not bind the Crown, because the application of the legislation to them would have prejudiced the interests of the Crown. It is not necessary to explore the limits of this principle. The present case is in my opinion a stronger one than In re Telephone Apparatus Manufactures' Application (1963) 1 WLR 463; (1963) 2 All ER 302; (1963) LR 3 RP 462 where it was held that an agreement to which the Crown was not a party was exempt from registration under the Restrictive Trade Practices Act, 1956 (U.K.) because registration of the agreement would be prejudicial to the interests of the Crown (1963) 1 WLR, at pp 474-475, 477, 482-483; (1963) 2 All ER at pp 308, 310 , 313; (1962) L.R. 3 R. P., at pp. 485, 488, 494-495. . To hold respondent compaines have made with the Commissioner, so as to frustrate those transactions, would be to give that Act an operation which would affect prejudicially the interests of the Crown. Since the Trade Practices Act does not bind the Crown, it does not have that effect. (at p124)

At a glance

Court

Decision date

Source

Judgment (124 paragraphs)

Bradken Consolidated Ltd v Broken Hill Pty Co Ltd [1979] HCA 15; (1979) 145 CLR 107 (5 April 1979)

Parties

Legislation Cited (7)

Cases Cited (24)