Murphyores Inc Pty Ltd v Commonwealth

High Court of Australia|1976-04-14|Before: Murphy JJ, McTiernan J

High Court of Australia Barwick C.J. McTiernan, Gibbs, Stephen, Mason, Jacobs and Murphy JJ. Murphyores Inc Pty Ltd v Commonwealth [1976] HCA 20

ORDER Demurrer allowed with costs. Motion dismissed with costs. Judgment for the defendants in the action with costs.

I have had the advantage of reading the reasons for judgment prepared in this matter by my brother Stephen. I am in agreement with him in his conclusions and generally in his reasoning.

I cannot find any ground upon which to restrain a decision of a Minister, made bona fide, not to lift the prohibition upon export of goods, of which the export is prohibited by the Customs Act, 1901-1973 or by regulations made thereunder. I am clearly of opinion that a decision not to lift the prohibition upon the export of a mineral is not invalidated by the fact that the Minister in making it had regard to the effect that the mining or processing of the mineral had or may have upon the environment.

I agree that the demurrer should be allowed and the action dismissed.

Murphyores Incorporated and Dillingham Constructions Pty. Ltd., the plaintiffs, are the holders of mining leases on Fraser Island, granted and issued by the Governor of Queensland acting by and with the advice of his Executive Council under the provisions of the Mining Act 1968 Q., as amended. Their intention is to export from Australia certain concentrates processed from the minerals mined by them on Fraser Island. To be able to export these concentrates the plaintiffs needed the written permission of the Minister of State for Minerals and Energy since reg. 9 of the Customs (Prohibited Exports) Regulations prohibits the export of the concentrates the plaintiffs are seeking to export unless the approval, in writing, to the exportation of the goods, is obtained from the Minister. In 1974 the plaintiffs sought the Minister's approval for the exportation of the concentrates to be produced from their mines on Fraser Island. On 13th December 1974 the Minister indicated that approval would be forthcoming providing certain conditions were fulfilled.

In December 1974 the Environment Protection (Impact of Proposals) Act 1974-1975, "the Act", was assented to. Section 5 of the Act provides that the object of the Act is to ensure, "to the greatest extent that is practicable, that matters affecting the environment to a significant extent are fully examined and taken into account in and in relation to - (a) the formulation of proposals; (b) the carrying out of works and other projects; (c) the negotiation, operation and enforcement of agreements and arrangements; (including agreements and arrangements with, and with authorities of, the States); (d) the making of, or the participation in the making of decisions and recommendations; (e) the incurring of expenditure, by, or on behalf of, the Australian Government and authorities of Australia, either alone or in association with any other government, authority, body or person, including matters of those kinds arising in relation to direct financial assistance granted, or proposed to be granted, to the States."

Section 11 (1) of the Act provides, inter alia, that for achieving the object of the Act, the Minister may direct that an inquiry be conducted in respect of all or any of the environmental aspects of a matter referred to in any of the paragraphs of s. 5 of the Act. It is further provided by s. 11 of the Act that the Minister shall appoint a Commissioner or Commissioners to be a Commission to conduct an inquiry under s. 11 of the Act and may appoint a person or persons to advise the Commission.

On 12th July 1975 the Minister of State administering the Act, purporting to act under s. 11 (1), directed that an inquiry be conducted in respect of - "all of the environmental aspects of the making of decisions by or on behalf of the Australian Government in relation to the exportation from Australia of minerals (including minerals that have been subjected to processing or treatment) extracted or which may hereafter be extracted from Fraser Island in the State of Queensland" and appointed commissioners, the second and third defendants, to conduct the inquiry. The Minister for Minerals and Energy subsequently informed the plaintiffs that no further export permits would be granted until after the public Environmental Inquiry on Fraser Island was completed and the Commissioner's report was considered.

The plaintiffs brought this action in the original jurisdiction of the High Court and claim -

A declaration that, to the extent to which the Act purported to authorize the Minister of State for the Environment, ("the Minister"), to direct that the inquiry be conducted, the Act is beyond the powers of the Parliament of the Commonwealth and invalid.

Alternatively, a declaration that the action of the Minister in purporting to direct that the inquiry be conducted was not authorized by the Act.

An injunction restraining the second and third defendants from proceeding with the inquiry or from presenting any report to the Minister or any Minister for the time being administering the Act.

A declaration that the Minister for Minerals and Energy is not entitled, in the consideration of an application that may hereafter be made by the plaintiffs or either of them for approval pursuant to reg. 9 of the Customs Regulations for the exportation from Australia of minerals mined from the Fraser Island leases, to take into account: -

(a) any report of the second and third defendants upon the environmental aspects of mining on Fraser Island, or

(b) any environmental aspects of the mining operations involved in winning such minerals.

The case turns on whether it is constitutional for the Minister for Minerals and Energy to have regard to environmental aspects (s. 11 of the Act) when exercising his power under reg. 9 of the Customs Regulations.

There is no doubt that the regulation in question is intra vires s. 51 (i.) of the Constitution and s. 112 of the Customs Act 1901-1973 - cf. Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. [38] , vide per Taylor and Owen JJ. [39] .

(1965) 113 C.L.R. 177. 2. (1965) 113 C.L.R., at p. 196.

In my opinion the Minister can take into account such aspects, as are mentioned above, when exercising his power under reg. 9. Kitto J., with whom Windeyer and Owen JJ. expressly agreed, in Herald and Weekly Times Ltd. v. The Commonwealth said [40] :

A law which qualifies an existing statutory power to relax a prohibition is necessarily a law with respect to the subject of the prohibition. Even if the qualification gives it the additional character of a law upon some other topic - even, indeed, if that other topic be not a subject of federal legislative power - it is still a law with respect to the subject of the prohibition, and is valid if that subject be within federal power. I think this dictum is in point here. The regulation creating the prohibition is a law within the scope of the commerce power. In exercising the power under the regulation to relax the prohibition, it is not necessary that the Minister should have regard only to trade and commercial consideration. 1. (1966) 115 C.L.R., at p. 434.

I would allow the demurrer and dismiss the motion and the suit.

I have reached a clear conclusion adverse to the contentions submitted by the plaintiffs. Regulation 9 of theCustoms (Prohibited Exports) Regulations is in my opinion a valid provision and, in deciding whether approval under that regulation should be granted to the exportation of mineral concentrates, the Minister is entitled to have regard to the effect which the operations by which the minerals are extracted might have on the environment. Such a consideration is not extraneous to the discretion conferred by the regulation, which, in permitting this matter to be taken into account, does not go beyond constitutional power. It follows that an inquiry into that question was validly instituted under s. 11 of the Environment Protection (Impact of Proposals) Act 1974-1975 and that the Minister is entitled to consider the report of the inquiry for the purpose of deciding how he should exercise his discretion under reg. 9. Section 11 of that Act is a valid enactment; the validity of the remainder of the Act does not fall for consideration.

I have had the advantage of reading the reasons for judgment prepared by my brother Stephen and those prepared by my brother Mason. I am in general agreement with both judgments and could not usefully add anything in support of the conclusions that I have expressed.

I would allow the demurrer, dismiss the motion and give judgment for the defendants in the action.

The plaintiffs extract zircon and rutile-bearing mineral sands on Fraser Island, Central Queensland, pursuant to mining leases granted by the State of Queensland. Because the principal markets for zircon and rutile concentrates lie overseas the continued extraction of mineral sands on Fraser Island, and with it any threat which this may involve to the ecological environment of Fraser Island, is largely dependent upon the plaintiffs' continued ability to export these concentrates. Thus, although the control of the plaintiffs' mining operations and of their effect upon the local environment is, no doubt, essentially a matter for the State, the power to prohibit exports, which lies within the legislative competence of the Commonwealth, is inherently capable of having an impact upon the plaintiffs' mining activities and, in consequence, upon the environment of Fraser Island. Hence the present proceedings.

Section 112 of the Customs Act 1901-1973 Cth confers power to prohibit, by regulation, the export of goods from Australia either absolutely or unless prescribed conditions or restrictions are complied with. In exercise of this power reg. 9 of the Customs (Prohibited Exports) Regulations has, since 1973, prohibited the export of a variety of specified goods, including all minerals and any substances produced in the course of their processing or treatment but nor refined products obtained by such processing or treatment nor goods into which products, whether refined or not, have been converted. The plaintiffs' concentrates apparently fall within the terms of this prohibition. The prohibition is not absolute; reg. 9 (3), which itself imposes the prohibition, prescribes a condition compliance with which relieves against the prohibition. The sub-regulation reads:

(3) The exportation from Australia of goods to which this regulation applies is prohibited unless an approval in writing to the exportation of the goods issued by the Minister of State for Minerals and Energy or by an authorized person is produced to the Collector.

The plaintiffs have in the past been permitted to export certain quantities of concentrates but their intended sand mining operations will, in the future, require further approvals and they fear lest those approvals be refused because of what may be considered to be the adverse effect of their sand-mining activities upon the ecology of Fraser Island. In July 1975, pursuant to the Environment Protection (Impact of Proposals) Act 1974 Cth, an inquiry was directed to be made into the environmental aspects of minerals extracted from Fraser Island and the Minister for Minerals and Energy, who had informed the plaintiffs in December 1974 that he would approve of the export of Fraser Island zircon and rutile concentrates, subsequently informed the plaintiffs that he intended to consider the report of that inquiry before deciding whether to allow further export of concentrates.

The plaintiffs contend that the Minister may not have regard to environmental considerations, which they say are not relevant to the question whether or not he should approve of the export of concentrates; they further contend that the Act of 1974 is invalid, as is the inquiry set up under its terms, and they seek an injunction restraining the submission of any report of that inquiry to the Minister for the Environment, fearing, as they say, that it will then reach the hands of the Minister for Minerals and Energy and, if adverse to their interests, will tend to prejudice their prospects of obtaining approval for the export of concentrates.

Mason J., in his reasons for judgment, has described the form and history of this action, thus relieving me of that task. Although the Environment Protection (Impact of Proposals) Act and the Fraser Island Environment Inquiry and its report were to the forefront of the case made by the plaintiffs the critical questions for this Court are, in my view, remote from them. They concern, rather, whether any and, if so, precisely what duties are imposed upon the Minister for Minerals and Energy in the manner of exercise of his power to approve of exports under reg. 9 (3).

In so stating what I regard as the critical questions I have assumed the validity of reg. 9. Of this there is, I think, no doubt; that it is within the regulation-making power conferred by s. 112 (2) (c) of the Customs Act is well established; it is enough to refer to Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. [41] , where customs regulations prohibiting imports were challenged as ultra vires the Customs legislation which authorized their making [1] and were upheld [2] . That s. 112 (2) (c) and reg. 9 are within the legislative competence of the Commonwealth is clear from Radio Corporation Pty. Ltd. v. The Commonwealth [3] and R. v. McLennan; Ex parte Carr [4] ; the principle underlying the reason for its validity sufficiently appears from what was said by Kitto J. in Herald and Weekly Times Ltd. v. The Commonwealth [5] , and Menzies J. [6] . The federal Parliament, having power to legislate with respect to overseas trade and commerce, is legislating concerning a matter at the very heart of that subject matter when it prohibits the exportation of specified classes of goods, and none the less so when its legislation takes the form of a power to make regulations prohibiting all export of particular classes of goods coupled with a dispensing power. Such a regulation remains one within the four corners of the trade and commerce power since its subject matter is the exportation of goods.

(1965) 113 C.L.R. 177. 2. (1965) 113 C.L.R., at pp. 180-181 (as explained at p. 197). 3. (1965) 113 C.L.R., at pp. 196, 197, 206. 4. (1938) 59 C.L.R. 170. 5. (1952) 86 C.L.R. 46. 6. (1966) 115 C.L.R., at pp. 433, 434. 7. (1966) 115 C.L.R., at pp. 439, 440, 442.

In those instances in which the legislative power of the Commonwealth is granted in purposive terms, as in s. 51 (vi.), it is necessary, in determining constitutional validity, to have regard to purpose and this applies no less to administrative acts than to legislation; hence reference, in such cases as Shrimpton v. The Commonwealth [7] , to the need to ensure that the stream does not rise above its source. But where the source of power is found in non-purposive subject matter, as in s. 51 (i.) the same problem does not present itself. Thus once legislation addresses itself to the subject matter of the prohibition of exports, central to the trade and commerce power, a regulation implementing that prohibition will inherently be within subject matter; so also will be an administrative decision relaxing, or failing to relax, that prohibition in a particular case; so long as that is the nature of the decision it will be within power and there is no question of the stream rising above its source. The source is trade and commerce with other countries and the stream, of legislation, regulation and administrative decision, flows from it and concerns one and the same subject matter, all within constitutional power.

The administrative decision whether or not to relax a prohibition against the export of goods will necessarily be made in the light of considerations affecting the mind of the administrator; but whatever their nature the consequence will necessarily be expressed in terms of trade and commerce, consisting of the approval or rejection of an application to relax the prohibition on exports. It will therefore fall within constitutional power. The considerations in the light of which the decision is made may not themselves relate to matters of trade and commerce but that will not deprive the decision which they induce of its inherent constitutionality for the decision will be directly on the subject matter of exportation and the considerations actuating that decision will not detract from the character which its subject matter confers upon it.

So much for the constitutionality of a decision whether or not to relax a prohibition upon export. A quite distinct question also arises: has the maker of the decision duly exercised his decision-making power or, on the contrary, is his decision vitiated by the nature of the considerations, extraneous to the power conferred, to which he has had regard in arriving at that decision? This question must depend for its answer primarily upon the legislation which confers the power. Where the extent of the power is delineated, perhaps by specific enumeration of matters to be considered, perhaps as a result of implications which may be drawn from the subject matter dealt with, the courts will relieve against excesses of power affecting the rights of a subject. It will be seldom, if ever, that the extent of the power cannot be seen to exclude from consideration by a decision-maker all corrupt or entirely personal and whimsical considerations, considerations which are unconnected with proper governmental administration; his decision will not be a bona fide one since these considerations will, on their face, not be such as the legislation permits him to have regard to. In other instances the task for the court will be to discern what restraints, if any, the legislation places upon considerations to which he may have had regard.

In the present case the Customs (Prohibited Exports) Regulations confer wide powers upon a variety of decision-makers. Regulation 4 prohibits the export of an assortment of goods specified in the Second Schedule to the regulations, ranging from "ships" to the "skeletons of Australian or Tasmanian aboriginals" and it is the Minister of Customs who is given power to relax the prohibition by granting his consent in writing. No express limitation of that power is stated and, in the absence of lack of bona fides in the sense mentioned above, the heterogeneous nature of the goods is in itself enough to dispose of any suggestion that a court should seek to construct limits to the considerations to which the Minister may have regard. The Minister's reasons for permitting the export of dolphins, of anthropological specimens derived from Australian aborigines, of barrage balloons, of cocoa beans, of fortified wine less than six months old, of foreign coins bearing a date earlier than 1901 or of the diaries of Australian explorers (to take but a few instances) must be as various as the goods themselves.

Regulation 5 prohibits the export of an assortment of primary products, subject again to relaxation but in this instance with the approval of the Minister of State for Primary Industry. Again the range of goods is wide, extending from cattle to logs and including molasses, fertilizers and breakfast food made from wheat. The observations made concerning approvals granted under reg. 4 apply equally to those granted under reg. 5.

Regulations 5A, 6, 6A, 6B, 7 and 8 impose a variety of other prohibitions, in each case coupled with a relieving power vested in various Ministers or their departmental officers. Some identify what may not be exported by reference to the country of destination, Southern Rhodesia is an example; others by reference to a combination of goods and destination, no anhydrous ammonia may be exported to any "place in Africa"; others again by reference simply to types of goods, as in the case of sugar, aircraft and various biological substances. Where the relieving power is conferred otherwise than upon the Minister for Customs it would seem that selection is made of a Minister whose department is more or less expert in the goods in question; it cannot affect validity that in some instances it is not the Minister for Customs that exercises the power (Reg. v. McLennan; Ex parte Carr [8] ). Regulations which follow reg. 9 exhibit a similar pattern.

What emerges from this examination is that no general criteria can be inferred which will serve to limit the considerations to which the various Ministers and their officers may have regard in exercise of their power to grant approvals for the export of goods so long as no absence of bona fides in the sense already referred to manifests itself. The very nature of the power to relieve against a prohibition imposed upon the export of classes of goods itself suggests that it may be exercisable having regard to a wide spectrum of considerations. The character of some of the classes of goods export of which is prohibited is clearly inconsistent with any concept that considerations confined to matters of trade and commerce alone may enter into a decision to relax the prohibition. It is enough to refer to the various categories of historical and anthropological interest, some of which I have already mentioned, and to the weapons of war, all dealt with under reg. 4, and also to the goods associated with nuclear reactor construction and atomic energy capacity dealt with under reg. 11. The unrestricted export of goods may produce a wide variety of effects, both within and without Australia. It may stimulate local production, create local shortages, endanger local species of flora or fauna and otherwise affect conditions within the exporting country. It may also produce a variety of effects upon the foreign country to which exports are sent, whether by way of increasing its warlike potential or affecting for good or ill the physical or economic welfare of its people and, perhaps, the attitude of its government towards that of Australia. Again the relations with third party countries and their governments may be involved, as may be the observance of obligations arising under treaties or international conventions on a variety of topics, some quite unconnected with trade and commerce. When such a breadth of considerations is involved only something amounting to lack of bona fides could justify curial intervention in decisions made in the exercise of the power to relax export prohibitions.

It follows from all that I have said that in my view the Minister for Minerals and Energy is free to have regard to the environmental effect of such sand mining operations as the plaintiffs may conduct on Fraser Island in deciding whether or not to allow the export of the plaintiffs' concentrates. He is as much entitled to do so as is the Minister for Customs to have regard to the preservation of dolphins or of Australian historical relics and records; nor need these considerations fall within some head of legislative power of the Commonwealth; it is enough that it is not within that prohibited category to which I have referred, where lack of bona fides invalidates.

The consequence is that the plaintiffs' attempt to prevent the Minister from taking into account, in the future, environmental matters in considering applications for approval for the export of prohibited exports must fail. The declaration sought in this respect must be refused.

The plaintiffs have also sought a declaration of the invalidity of the Environment Protection (Impact of Proposals) Act and of the Fraser Island Environment Inquiry set up pursuant to its provisions and an injunction restraining further inquiry and the presentation of any report. The foundation upon which this further relief is sought rests upon the view that the Minister for Minerals and Energy is restricted in the scope of the considerations to which he may have regard in determining an application for approval to export goods which are prohibited exports. If, as I have concluded, he is not so restricted the plaintiffs must accordingly fail also in respect of this other relief which they seek. Even if, on its proper construction, the Act should be understood on requiring the Minister to pay regard to environmental considerations, the report of the inquiry furnishing him with a source of such information, this would not, on the view which I take, result in any improper matters being introduced into the Minister's deliberations.

I would allow the demurrer and dismiss the motion and the suit.

The plaintiffs are companies which carry on in partnership on Fraser Island in the State of Queensland the business of mining for mineral sands from which they produce zircon and rutile concentrates. They hold certain mining leases and have made application for other mining leases on Fraser Island. Their intention is to export zircon and rutile concentrates to be produced from the minerals extracted from these mining leases. To that end they need the written approval of the Minister for Minerals and Energy to the exportation of the concentrates because reg. 9 of the Customs (Prohibited Export) Regulations prohibits the exportation of the concentrates unless an approval in writing to the exportation of the goods issued by the Minister or by a person authorized in writing by him is produced to the Collector of Customs.

It goes almost without saying that the volume and scale of the plaintiffs' future mining operations depend in part, if not wholly, on the issue of a written approval for exportation. In 1974 the plaintiffs sought the Minister's approval for the exportation of concentrates to be produced from their mining operations on Fraser Island. On 13th December 1974 the Minister indicated that approval would be forthcoming on certain conditions.

On 17th December 1974 the Environment Protection (Impact of Proposals) Act 1974 ("the Act") was assented to. It has since been amended by Act No. 36 of 1975, but this is of no present consequence. On 12th July 1975 the Honourable E. G. Whitlam, the then Minister of State administering the Act, evidently acting under s. 11 (1) of the Act, directed that an inquiry be conducted in respect of "all of the environmental aspects of the making of decisions by or on behalf of the Australian Government in relation to the exportation from Australia of minerals (including minerals that have been subjected to processing or treatment) extracted or which may hereafter be extracted from Fraser Island in the State of Queensland". On the following day the second and third defendants were appointed commissioners to conduct the inquiry. It is not in dispute that the Minister now intends to consider the commissioners' report before making his decision on the plaintiffs' application for export approval.

The plaintiffs in a suit commenced by statement of claim sought an interlocutory injunction restraining the second and third defendants from conducting the inquiry. When the motion came on for hearing before me, the only relief which I granted was an interlocutory injunction restraining the second and third defendants from exercising their powers to compel the plaintiffs to give evidence and produce documents before the inquiry. However, the parties having agreed to convert the motion into a motion for a perpetual injunction, I directed that there should be argued before a Full Court the question as to what orders should be made on the motion.

It is this question, together with a demurrer to the statement of claim which has been filed by the defendants, which now comes before the Court. In the intervening span of time the second and third defendants have completed the inquiry and prepared their report, without the advantage of participation by the plaintiffs in the proceedings, the plaintiffs having elected, notwithstanding an invitation by the second and third defendants, not to participate in those proceedings. By an arrangement between the parties, the second and third defendants deferred the presentation of their report to the Minister administering the Act pending the hearing in this Court.

To meet the new circumstances the plaintiffs at the hearing sought an injunction restraining the second and third defendants from presenting their report to the Minister administering the Act and a declaration that the Minister for Minerals and Energy is not entitled in the consideration of any application pursuant to reg. 9 of the Customs (Prohibited Export) Regulations to take into account any report of the second and third defendants and any environmental aspects of the mining operations in winning such minerals. Moreover, counsel for the plaintiffs sought an interlocutory injunction at the conclusion of the argument to restrain the second and third defendants from presenting their report pending the delivery of judgment but, by a majority, this application was refused.

The first, and as it seems to me, the principal issue for determination, is as to the nature and scope of the power to approve exportation of goods which is conferred upon the Minister or his authorized officer by reg. 9 of the Customs (Prohibited Export) Regulations. If the regulation is to be construed as imposing a duty to consider and determine an application for approval to export, and if the scope of the power excludes what might be described as the environmental aspects of mining operations intended to yield the ore from which the concentrates proposed to be exported are to be produced, then the plaintiffs are entitled to succeed, subject only to a consideration of the provisions of the Act.

The Customs (Prohibited Export) Regulations make no provision for the making of applications for approval for exportation of goods. This circumstance, together with the form of reg. 9, is relied upon to support the submission that the regulation creates no duty to consider and determine an application for approval to export. The regulation, it will be noted, prohibits exportation unless a written approval issues and is produced to the Collector. With reference to the similarly worded provisions contained in the Customs (Prohibited Import) Regulations, Taylor and Owen JJ. said in Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. [9] that the language in which the condition is expressed did not create a duty the performance of which may be enforced by mandamus. However, a majority of the Court, Kitto, Menzies and Windeyer JJ., there held that the regulation, which was in all respects indistinguishable from reg. 9 in this case, created a duty to consider an application. Kitto J., in a judgment in which Menzies J. agreed, expressed the reason for reaching this conclusion in the following words [10] :

It is a general principle of law, applied many times in this Court and not questioned by anyone in the present case, that a discretion allowed by statute to the holder of an office is intended to be exercised according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself: Sharp v. Wakefield [11] . The courts, while claiming no authority in themselves to dictate the decision that ought to be made in the exercise of such a discretion in a given case, are yet in duty bound to declare invalid a purported exercise of the discretion where the proper limits have not been observed. Even then a court does not direct that the discretion be exercised in a particular manner not expressly required by law, but confines itself to commanding the officer by writ of mandamus to perform his duty by exercising the discretion according to law. This statement, in my view, correctly and authoritatively expresses the principle which should be applied to a power to approve exportation conferred in the form in which reg. 9 is expressed. 1. (1965) 113 C.L.R. 177, at pp. 197-199. 2. (1965) 113 C.L.R., at p. 189. 3. [1891] A.C. 173, at p. 179.

It is not to the point to say that the regulation makes no provision for the making of applications and still less that it does not explicitly impose on the Minister a duty to determine applications. The existence of the discretion attracts the principle of construction enunciated by Kitto J. It is implicit in what has been said that the existence of the discretion implies the existence of a duty to determine any application that is made.

Once it is established that there exists a duty to determine an application for approval to export goods, the crucial question is how far the ambit of this discretion extends. For the plaintiffs it was submitted that the discretion does not travel beyond considerations described as "trading policy" considerations. The scope of the Customs Act 1901-1973 and of the relevant regulations was limited to considerations of this kind, so it was urged, and it followed that the ambit of any discretion conferred by the regulations must be similarly confined. Secondly, it was submitted that unless the discretion was so confined by construction it would exceed the constitutional power to legislate with respect to trade and commerce with other countries. This power, so the argument ran, does not enable the Commonwealth Parliament to regulate and control the environmental aspects of mining in Australia, even mining which is carried on for the purpose of exporting concentrates.

It is convenient to examine the constitutional argument first. The power conferred by s. 51 (i.) enables the Parliament to prohibit, regulate and control the importation and exportation of goods, matters which lie at the heart of trade and commerce with other countries. So much at least is established by the decisions of this Court beginning with Crowe v. The Commonwealth [12] and Radio Corporation Pty. Ltd. v. The Commonwealth [13] , and ending with Poole v. Wah Min Chan [14] and Reg. v. McLennan; Ex parte Carr [15] . In McLennan's Case this Court affirmed the validity of s. 112 of the Customs Act and the Customs (Prohibited Export) Regulations made pursuant to the power conferred by that section.

(1935) 54 C.L.R. 69. 2. (1938) 59 C.L.R. 170. 3. (1947) 75 C.L.R. 218. 4. (1952) 86 C.L.R. 46.

The power to legislate with respect to trade and commerce with other countries, including as it does power to prohibit and regulate the exportation of goods from Australia, necessarily comprehends the power to select and identify the persons who engage in, and the goods which may become the subject of, that activity: see Huddart Parker Ltd. v. The Commonwealth [16] ; Australian National Airways Pty. Ltd. v. The Commonwealth [17] . It is then for Parliament in its wisdom or for the person to whom Parliament delegates the power to decide who may export and what goods may be exported. The means and the criteria by which this choice is to be made are for Parliament to decide. There is nothing in the subject matter of the constitutional power which justifies the implication of any limitation on Parliament's power of selection. It does not follow, for example, that because the subject of the power is trade and commerce, selection of the exporter or of the goods to be exported must be made by reference to considerations of trading policy.

(1931) 44 C.L.R. 492. 2. (1945) 71 C.L.R. 29.

It is enough that the law operates on the topic of trade and commerce with other countries. A law which absolutely or conditionally prohibits exportation of goods is a law that operates on that topic. It is not a law which ceases to deal with that topic because it confers a discretion, unlimited in scope, to permit exportation of particular goods. In this respect it differs from a law whose connexion with the subject matter of power is more remote, when the limits of a statutory discretion may become important in characterizing the law. See, e.g., the cases on the defence power dealing with the National Security (Economic Organization) Regulations (Shrimpton v. The Commonwealth [18] ; Dawson v. The Commonwealth [19] ).

(1945) 69 C.L.R. 613. 2. (1946) 73 C.L.R. 157.

The point here is that by imposing a conditional prohibition on exportation, a prohibition which may be relaxed according to the exercise of a discretion, the law is dealing with exportation of goods, a matter at the heart of trade and commerce with other countries. It is not to the point that the selection may be made by reference to criteria having little or no apparent relevance to trade and commerce; it is enough that the law deals with the permitted topic and it does not cease to deal with that topic because factors extraneous to the topic may be taken into account in the relaxation of the prohibition imposed by the law. It is now far too late in the day to say that a law should be characterized by reference to the motives which inspire it or the consequences which flow from it.

What I have said has often been asserted in the cases. In Huddart Parker Ltd. v. The Commonwealth [20] it was held that s. 3 of the Transport Workers Act 1928-1929 authorized a regulation requiring that in the employment, engagement or picking-up of waterside workers for oversea and inter-State vessels priority should be given to persons who were members of the Waterside Workers' Federation. Such a provision, notwithstanding its industrial aspects, was considered to be a valid law under s. 51 (i.). Dixon J. (with whom Rich J. agreed) said [21] :

The question who shall take part in such an operation is to be determined by the legislative power which governs the operation. The question who shall be preferred amongst those ready to take part in it, is one of the same order. Once the power over the matter is established, it becomes irrelevant how, or upon what grounds, or for what motives it is exercised It is true that the provision adopts a description of the persons who are to be so preferred which has no apparent relation to any characteristic of inter-State or oversea commerce. No doubt it is also true that such a description was adopted because of the industrial consequences of requiring preference to members of an organization bound by an award. But these features of the law do not appear to me to deprive it of its character of a law with respect to trade and commerce with other countries and among the States. It obtains that character from the circumstance that it directly regulates the choice of persons to perform the work which forms part of or is an incident in inter-State and external commerce. 1. (1931) 44 C.L.R. 492. 2. (1931) 44 C.L.R., at pp. 515-516.

To the same effect is the decision in Victorian Stevedoring and General Contracting Co. Pty. Ltd. v. Dignan [22] , where Dixon J. said:

I think an enactment which does operate directly upon an activity or transaction forming a part of such commerce does not cease to be a law in respect to trade and commerce with other countries and among the States because it may equally be referred to some other legislative category. The difficulty must always be great in deciding whether such an enactment is a law with respect to such commerce when it appears from its very terms that the motives which guided the lawgivers were connected with matters belonging to the other category. But I do not think the words "with respect to" in sec. 51 are directed so much to the purpose of the law as to its relevance and operation. 1. (1931) 46 C.L.R. 73, at pp. 103-104.

A similar view was expressed by Evatt and McTiernan JJ. in Crowe v. The Commonwealth [23] . However, the plaintiffs sought to extract support from the observations of Dixon J. in that case where his Honour said [24] :

It is for the Parliament to declare what exportation shall be allowed or forbidden. Its authority over exportation is complete, and what it may forbid unconditionally, it may allow conditionally. If the conditions which it imposes or authorizes are of such a nature that the law appears only ostensibly and not actually to be a law with respect to trade and commerce with other countries, it will fall outside the power. But no such question arises in the present case. The conditions actually prescribed are all relevant to trade and commerce. His Honour was there dealing with a statutory provision on the footing that its professed purpose was to control the sale and distribution of fruit after export. Consequently it became important to show that all the prescribed conditions had a relevance to trade and commerce. 1. (1935) 54 C.L.R., at pp. 94-96. 2. (1935) 54 C.L.R., at p. 90.

The plaintiffs also endeavoured to find support in the Radio Corporation Case [25] and in O'Sullivan v. Noarlunga Meat Ltd. [26] . In the first case Latham C.J. observed that in giving consents to importation of goods under customs and customs tariff legislation the responsible authority exercises the powers so as to carry out government policy. His Honour went on to say that trade policy generally determines both the character and volume of imports from particular countries in relation to the policy of a government and that it was impossible to support the proposition that such matters as those mentioned were extraneous to considerations of trade and commerce [27] . The Chief Justice was merely denying the argument that the matters mentioned were extraneous to considerations of trade and commerce. It is too much to take from these remarks support for the plaintiffs' proposition.

(1938) 59 C.L.R. 170. 2. (1954) 92 C.L.R. 565. 3. (1938) 59 C.L.R., at p. 181.

Likewise, upon examination the Noarlunga Case [28] does not support the plaintiffs. In evaluating what the Court had to say about the validity of the Commerce (Meat Export) Regulations it is necessary to bear in mind that there was a difference between the regulations which were under attack in that case. Regulation 4B prohibited the exportation of meat and meat products unless certain conditions were satisfied and reg. 5 prohibited the use of any premises for the slaughter of meat for export unless the premises were registered. Regulation 99 imposed a penalty for contravention of reg. 5. Fullagar J. (with whom Dixon C.J. and Kitto J. agreed) answered the attack upon reg. 4B by saying [29] : "The power given by s. 51 (i.) extends to authorizing the total prohibition of the export of any commodity, and a fortiori it includes a power to prohibit the export of any commodity except upon compliance with prescribed conditions."

(1954) 92 C.L.R. 565. 2. (1954) 92 C.L.R., at pp. 595-596.

His Honour recognized that this was no answer to the attack which had been made on reg. 5 which he thought gave rise to the question "whether the Commonwealth power with respect to trade and commerce with other countries extends to authorizing legislation regulating and controlling the slaughter of meat for export", a question which he answered in the affirmative.

That the challenge to regs 4B and 5 raised two different questions of power and that the answers involved two different approaches highlights a fundamental misconception which pervaded the plaintiffs' argument. It is one thing to say that the trade and commerce power does not enable the Commonwealth to regulate and control directly matters standing outside the subject matter of power, such as the environmental aspects of mining in Queensland. It is quite another thing to say that the Commonwealth cannot in the exercise of that power make laws which have a consequential and indirect effect on matters standing outside the power, even by means of prohibiting conditionally engagement in trade and commerce with other countries. It is no objection to the validity of a law otherwise within power that it touches or affects a topic on which the Commonwealth has no power to legislate.

These principles have been applied more recently outside the field of trade and commerce, the most notable example being in Herald and Weekly Times Ltd. v. The Commonwealth [30] , where Kitto J. said with reference to the power conferred by s. 51 (v.):

any provision which operates to create or delimit a power in given circumstances to relax in favour of a television station the general prohibition upon television transmission has, of necessity, by reason of the very fact that it has that operation, the character of a law with respect to television services. It is not necessary, in order that a provision so operating shall be within the constitutional power, that the persons, things, situations or events referred to in it shall themselves possess characteristics which supply a further link with the subject of television services The question is quite different from that which arises where a purported exercise of a statutory power to grant licences upon conditions is attacked as having been actuated by a purpose extraneous to the power. A law which qualifies an existing statutory power to relax a prohibition is necessarily a law with respect to the subject of the prohibition. Even if the qualification gives it the additional character of a law upon some other topic - even, indeed, if that other topic be not a subject of federal legislative power - it is still a law with respect to the subject of the prohibition, and is valid if that subject be within federal power. 1. (1966) 115 C.L.R., at pp. 433-434.

This passage makes it clear that if an unqualified prohibition against participation in an activity is within constitutional power, a qualified or conditional prohibition is necessarily within power.

R. v. Barger [31] , which might have been thought to assist the plaintiffs, can no longer be regarded as having authority. It depended on the now discredited doctrine of reserved powers. The minority who rejected this doctrine had no difficulty in holding the legislation to be valid. The decision of this Court in Fairfax v. Federal Commissioner of Taxation [32] , it should now be acknowledged, swept away the last vestigial remnants of Barger's Case [31] .

(1908) 6 C.L.R. 41. 2. (1965) 114 C.L.R. 1. 3. (1908) 6 C.L.R. 41.

So much for the constitutional argument. On principle and authority there is no reason deriving from the limits of constitutional power with respect to trade and commerce which requires that the discretion to issue a written approval should be confined, as the plaintiffs would suggest.

There remains for consideration the plaintiffs' argument based on the scope and purpose of the Customs Act and the Customs (Prohibited Export) Regulations. It was said, correctly, that the subject matter and the scope and purpose of a statutory enactment may enable a court to pronounce the reasons given for the exercise of a statutory discretion to be extraneous to any objects the legislature had in mind (see Water Conservation and Irrigation Commission (N.S.W.) v. Browning [33] ). This much may be conceded. But the point at which the argument breaks down is when it asserts that the environmental aspects of mining operations proposed to be carried on for the extraction of ore for the concentrates intended to be exported are extraneous to the scope and purpose of the Customs Act and the Customs (Prohibited Export) Regulations.

In the very nature of things the policy considerations and reasons which may as a matter of sound judgment inspire a government to permit (or forbid) the exportation of goods are so multifarious and diverse that the scope and purpose of the Customs Act and the Customs (Prohibited Export) Regulations are a fragile foundation for building a conclusion that certain policy considerations and reasons stand within that scope and purpose and all others are excluded. There is, I should have thought, every reason for supposing that, within the framework of customs legislation, a discretion to permit the exportation of goods by way of relaxation of a prohibition, a discretion which is not expressed to be subject to any limitation, was intended to be wide enough to embrace every consideration reflecting advantage or disadvantage, benefit or prejudice to Australia, flowing from the approval or refusal of an application. There is, as I have already pointed out, no constitutional reason for excluding these considerations. What is more, in the Noarlunga Case [34] Fullagar J. suggested that the trade and commerce power might even extend to "the factory or the field or the mine" in particular circumstances. And when one bears in mind the Commonwealth's character as a national government it is difficult to perceive why considerations of the kind referred to have no relevance or importance.

One result of the grant of approval to exportation of the plaintiffs' concentrates is that there will be established on Fraser Island large-scale sand mining operations. To my mind the consequences of establishing such operations, consequences which will flow from an exercise of the discretion in favour of the plaintiffs, are factors which are inherently material to the exercise of that discretion, in the absence of some clear indication that they are excluded by the Customs Act and the Customs (Prohibited Export) Regulations. It is perhaps not without some importance that the discretion is reposed by reg. 9 in the Minister for Minerals and Energy or a person authorized by him. This in itself provides some indication that mining considerations fall within the purview of the discretion and I see no reason why mining considerations should be divorced from the environmental aspects of mining operations.

It follows, therefore, that it is my opinion that the discretion conferred by reg. 9 extends to a consideration of the environmental aspects of the mining operations which the plaintiffs propose to carry on in order to produce concentrates for export. The regulation consequently enables the Minister to take into consideration the report of the commissioners on those matters, including the question whether the plaintiffs have observed or are likely to observe the conditions of the mining leases which they hold or for which they have applied.

In the light of this conclusion it is unnecessary for me to examine separately the validity of the Act. The challenge to its validity and the alternative challenge to the validity of the inquiry established under that Act were dependent upon the plaintiffs making good their contention that the discretion given to the Minister for Minerals and Energy was limited in scope. Once this contention fails, the challenge to the validity of the inquiry and to the Act under which it was established disappears.

Section 5 (1) states that the object of the Act is to ensure, to the greatest extent practicable, that matters affecting the environment are fully examined and taken into account in and in relation to -

(d) the making of, or the participation in the making of, decisions and recommendations;

by, or on behalf of, the Australian Government and authorities of Australia Section 6 enables the Governor-General to approve administrative procedures for the purpose of achieving the object of the Act, being procedures that are consistent with relevant laws, as affected by regulations made under the Act. Section 6 (2) specifically states that "the approved procedures" may provide for -

(e) inquiries in accordance with this Act, and action to be taken in respect of reports resulting from such inquiries;

Section 11 (1) enables the Minister, for the purposes of approved procedures or for achieving the object of the Act, to direct that an inquiry be conducted in respect of all or any of the environmental aspects of a matter. Section 11 (2) authorizes the appointment of commissioners to conduct the inquiry.

By an order made on 20th June 1975 under s. 6 of the Act the Governor-General approved administrative procedures for the purpose of achieving the object of the Act. These procedures include provisions relating to inquiries established under s. 11 (2).

The inquiry in this case was established under s. 11 (2). It is an inquiry into the environmental aspects of a matter referred to in s. 5 (1) (d), the matter being the making of a decision by the Minister under reg. 9 of the Customs (Prohibited Export) Regulations on the plaintiffs' application. On the views which I have expressed as to the nature of the discretion created by that regulation the approved procedures are consistent with the regulation. The inquiry was therefore in my opinion validly established.

For these reasons I would allow the demurrer and dismiss the motion and the suit.

I agree that the demurrer should be allowed and that the motion and suit should be dismissed. I do not wish to add anything to the reasons expressed by Stephen J. and Mason J.

The Environment Protection (Impact of Proposals) Act 1974 is valid. Regulation 9 of the Customs (Prohibited Exports) Regulations is also valid. There is a duty to consider an application for approval under this regulation (Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. [35] ). In considering the application, the Minister may have regard to the national policies not only in trade and commerce, but in other areas such as the economy, foreign affairs, defence and as, in this case, the environment.

The Minister has a duty to observe the mandate in s. 8 of the Act, which provides:

Each Minister shall give all such directions and do all such things as, consistently with any relevant laws as affected by regulations under this Act, can be given or done by him -

(a) for ensuring that procedures for the time being approved under this Act are given effect to in and in connexion with matters dealt with by the Department administered by him and that any authority of Australia in relation to which he has ministerial responsibilities observes, and assists in giving effect to, those procedures; and

(b) for ensuring that any final environmental impact statement formulated in accordance with those procedures, and any suggestions or recommendations made in accordance with those procedures, are taken into account, in matters to which they relate, in the Department administered by him and by any authority of Australia in respect of which he has ministerial responsibilities.

Section 11 of the Act was validly brought into operation. It provides for inquiry and report to the Minister by a Commission in respect of environmental aspects of matters referred to in s. 5 (which includes the making of decisions by or on behalf of the Australian Government). The Minister may have regard to the results of the inquiry which was instituted.

These conclusions are enough to dispose of the case. There are some questions of fundamental importance underlying the case, which need not be resolved now.

The demurrer should be allowed. The motion should be dismissed, and there should be judgment for the defendants.

At a glance

Court

Decision date

Before

Source

Judgment (103 paragraphs)

Parties