Castlemaine Tooheys Ltd v South Australia

Castlemaine Tooheys Ltd v South Australia - [1990] HCA 1 - HCA 1990 case summary — Zoe

[11]

The 1975 Act, which came into operation on 1 January 1977, introduced a mandatory scheme regulating the use and sale of beverage containers in South Australia. The scheme had three principal elements. The first was a mandatory deposit which was refundable on the return of beverage containers. In the case of glass containers, the deposit was refundable by a retailer who sold containers of that particular description, upon delivery of the container to the retailer (s. 7), and, in the case of a non-glass container, the deposit was refundable by a collection depot upon delivery of the container to the depot (s. 12). The second element was the establishment of collection depots for non-glass containers of particular descriptions, each with a delineated collection area (s. 9). Thirdly, there was a prohibition on the sale of beverages in ring-pull containers (s. 13). A "refund amount" in relation to a container of a class, kind or description was defined to mean an amount not exceeding 5 cents prescribed in relation to containers of that class, kind or description (s. 4). The regulations prescribed a refund amount of 5 cents in relation to any container. Regulation 5(1) declared glass containers being refillable beer bottles to be exempt containers to which the 1975 Act did not apply. The effect of the exemption was that no deposit was payable in relation to refillable beer bottles in use by competitors of the Bond brewing companies. The competitors of the companies are Carlton and United Breweries Ltd. ("C.U.B."), The South Australian Brewery Co. Ltd. ("S.A.B.") and Cooper and Sons Ltd. ("Coopers"). The beer sold by C.U.B. in South Australia is brewed and packaged in Victoria and transported to South Australia. It is sold in refillable bottles. The refillable bottles are returned to Victoria for cleaning and washing. S.A.B. and Coopers, which brew beer in South Australia, predominantly use refillable bottles. To this extent the Bond brewing companies were at a disadvantage because the mandatory deposit of 5 cents applied to its non-refillable bottles. However, there were other advantages flowing from the use of non-refillable bottles and the exemption did not therefore place the plaintiffs at a discernible competitive disadvantage so long as the amount of the deposit differential did not exceed 5 cents.

[41]

The 1986 Act and the new regulations disadvantaged the Bond brewing companies in two respects. First, their non-refillable bottles became subject to a refund amount of 15 cents whereas the refillable bottles of their competitors, C.U.B. and the South Australian brewers, were subject to a refund amount of 4 cents only. According to the defendant, a refund of 6 cents per non-refillable bottle for twelve months and thereafter a refund of 4 cents per non-refillable bottle would have been sufficient to ensure the return of non-refillable bottles at the same rate as refillable bottles. This concession may have been prompted by the circumstance that regulations providing for refunds of that order were tabled in the South Australian Parliament in November 1986. These regulations were disallowed in the Legislative Council but their introduction was in apparent recognition of the fact that the existing regulations providing for refunds of 15 cents and 4 cents for non-refillable and refillable bottles respectively invited challenge in this Court. The plaintiffs believe that a 4 cent deposit would be immediately effective to ensure the return of non-refillable bottles at the same rate as refillable bottles with a 4 cent deposit. According to the special case, a 4 cent deposit is now sufficient to ensure a reasonable and adequate rate of return of refillable bottles. The difference between the prescribed amounts of 15 cents and 4 cents resulted in a price differential which made the Bond brewing companies' product non-competitive. Before the commencement of the 1986 Act, the "bottle cost" (excluding transport costs but including deposit and costs of return or disposal system) of the products of the Bond brewing companies was 16 cents per bottle. The "bottle cost" in the case of S.A.B. was 16.65 cents per bottle. Following the introduction of the 1986 Act and the regulation imposing a 15 cent deposit on non-refillable bottles, the "bottle cost" of the products of the Bond brewing companies was 26 cents per bottle. The "bottle cost" in the case of S.A.B. remained at 16.65 cents per bottle.

[82]

It would extend the immunity conferred by s. 92 beyond all reason if the Court were to hold that the section invalidated any burden on interstate trade which disadvantaged that trade in competition with intrastate trade, notwithstanding that the imposition of the burden was necessary or appropriate and adapted to the protection of the people of the State from a real danger or threat to its well-being. And it would place the Court in an invidious position if the Court were to hold that only such regulation of interstate trade as is in fact necessary for the protection of the community is consistent with the freedom ordained by s. 92. The question whether a particular legislative enactment is a necessary or even a desirable solution to a particular problem is in large measure a political question best left for resolution to the political process. The resolution of that problem by the Court would require it to sit in judgment on the legislative decision, without having access to all the political considerations that played a part in the making of that decision, thereby giving a new and unacceptable dimension to the relationship between the Court and the legislature of the State. An analogous field is the legislative implementation of treaty obligations under s. 51(xxix) of the Constitution. The true object of the law in such a case is critical to its validity. The Court has upheld the validity of legislative provisions if they are appropriate and adapted to the implementation of the provisions of the treaty: The Commonwealth v. Tasmania (the Tasmanian Dam Case) [23] ; Richardson v. Forestry Commission [24] . See also Herald and Weekly Times Ltd. v. The Commonwealth [25] . But if the means which the law adopts are disproportionate to the object to be achieved, the law has not been considered to be appropriate to the achievement of the object: the Tasmanian Dam Case [26] ; South Australia v. Tanner [27] . There is a compelling case for taking a similar approach to the problem now under consideration.

[88]

In this context, the plaintiffs assert that, in the light of the difference in the refund amount, the purpose in disadvantaging the sale of beer in non-refillable bottles was to discriminate against the Bond brewing companies as interstate brewers in favour of the domestic brewers in South Australia. The defendant resists this conclusion for three reasons: first, that 15 cents is also fixed by reg. 7(b) as the refund amount for a non-refillable container for a low alcohol wine-based beverage; secondly, that the fixing of the refund amount at 15 cents advantaged C.U.B. as much as the domestic brewers so long as C.U.B. supplied beer in refillable bottles; and, thirdly, that the need to conserve energy resources requires or justifies more severe burdens on the sale of beer in non-refillable bottles. The first reason given by the defendant is not persuasive. If the refund amount fixed for non-refillable beer bottles far exceeded what was thought necessary to ensure the success of the scheme for the return and collection of containers, the relevant provision was not appropriate and adapted to that end; the fact that a like refund amount is fixed for non-refillable containers for low alcohol wine-based beverages cannot affect that conclusion. As for the second reason, the impact of the provision on C.U.B. might tend to suggest that the intended legislative object was not to discriminate against interstate brewers. However, it is not a conclusive consideration. It does not negate the purpose of discriminating against interstate trade consisting, in the main, of the trade of the Bond brewing companies (cf. Exxon Corporation v. Governor of Maryland [28] ). After all, it was the growing market share of those companies, not C.U.B., that threatened the market share of the domestic brewers. Discrimination in the relevant sense against interstate trade is inconsistent with s. 92, regardless of whether the discrimination is directed at, or sustained by, all, some or only one of the relevant interstate traders.

At a glance

Court

Decision date

Before

Source

Judgment (108 paragraphs)

Parties