Telstra Corporation Ltd v Hurstville City Council

TELSTRA CORPORATION LIMITED and TELSTRA MULTIMEDIA PTY LIMITED v HURSTVILLE CITY COUNCIL, KOGARAH MUNICIPAL COUNCIL, LEICHHARDT MUNICIPAL COUNCIL, PARRAMATTA CITY COUNCIL, PENRITH CITY COUNCIL, RANDWICK CITY COUNCIL, HORNSBY SHIRE COUNCIL, DRUMMOYNE COUNCIL, BURWOOD COUNCIL, CONCORD COUNCIL, STRATHFIELD MUNICIPAL COUNCIL, BAYSIDE CITY COUNCIL, MORELAND CITY COUNCIL, FRANKSTON CITY COUNCIL and YARRA CITY COUNCIL NG 1158 of 1998 And OPTUS VISION PTY LIMITED and OPTUS NETWORKS PTY LIMITED v WARRINGAH COUNCIL, RANDWICK CITY COUNCIL, BLACKTOWN CITY COUNCIL and MORELAND CITY COUNCIL NG 1212 of 1998

KOGARAH MUNICIPAL COUNCIL Second Respondent LEICHHARDT MUNICIPAL COUNCIL Third Respondent PARRAMATTA CITY COUNCIL Fourth Respondent PENRITH CITY COUNCIL Fifth Respondent RANDWICK CITY COUNCIL Sixth Respondent HORNSBY SHIRE COUNCIL Seventh Respondent DRUMMOYNE COUNCIL Eighth Respondent BURWOOD COUNCIL Ninth Respondent CONCORD COUNCIL Tenth Respondent STRATHFIELD MUNICIPAL COUNCIL Eleventh Respondent BAYSIDE CITY COUNCIL Twelfth Respondent MORELAND CITY COUNCIL Thirteenth Respondent FRANKSTON CITY COUNCIL Fourteen Respondent And YARRA CITY COUNCIL Fifteenth Respondent

THE COURT ORDERS THAT: 1. The proceeding be dismissed. 2. The applicants, Telstra Corporation Limited and Telstra Multimedia Pty Limited, pay to the respondents their costs of the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

THE COURT ORDERS THAT: 1. The proceeding be dismissed. 2. The applicants, Optus Vision Pty Limited and Optus Networks Pty Limited, pay to the respondents their costs of the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

KOGARAH MUNICIPAL COUNCIL Second Respondent LEICHHARDT MUNICIPAL COUNCIL Third Respondent PARRAMATTA CITY COUNCIL Fourth Respondent PENRITH CITY COUNCIL Fifth Respondent RANDWICK CITY COUNCIL Sixth Respondent HORNSBY SHIRE COUNCIL Seventh Respondent DRUMMOYNE COUNCIL Eighth Respondent BURWOOD COUNCIL Ninth Respondent CONCORD COUNCIL Tenth Respondent STRATHFIELD MUNICIPAL COUNCIL Eleventh Respondent BAYSIDE CITY COUNCIL Twelfth Respondent MORELAND CITY COUNCIL Thirteenth Respondent FRANKSTON CITY COUNCIL Fourteen Respondent And YARRA CITY COUNCIL Fifteenth Respondent

REASONS FOR JUDGMENT 1 WILCOX J: The questions at issue in these proceedings are, first, whether local authorities in New South Wales and Victoria are entitled to declare and levy rates, or make and levy charges, against telecommunications carriers in respect of the land or airspace occupied by the carriers' cables; and, second, whether particular resolutions levying rates or imposing charges were validly made. 2 The issues arise against a background of community concern at the extent of the broadband cabling that was aerially erected in many parts of Australia during the mid-1990s. However, it is not for the Court to evaluate that concern. These cases turn on legal (including constitutional) issues. 3 These reasons for judgment are structured as follows:

A. The proceedings (i) The parties paras 4 to 6 (ii) The issues paras 7 to 10

B. The facts (i) The Telstra network paras 11 to 24 (ii) The Optus network paras 25 to 30 (iii) The cable situation summarised para 31

C. The council resolutions (i) New South Wales para 32 (ii) Victoria para 33

D. The State legislation (i) New South Wales para 34 (ii) Victoria para 35 to 36

E. Are the charges and rates duties of excise? (i) The context of the issue paras 37 to 41 (ii) The applicants' submissions paras 42 to 57 (iii) The respondents' submissions paras 58 to 73 (iv) The intervener's submissions paras 74 to 79 (v) Conclusions paras 80 to 87

F. Do the State laws fall within cl 60 of Schedule 3 to the 1997 Telco Act? (i) The context of the issue paras 88 to 95 (ii) The applicants' submissions para 96 (iii) The respondents' submissions para 97 to 101 (iv) Conclusions paras 102 to 106 G. The application to the State laws of cl 44 of Schedule 3 to the 1997 Telco Act (i) The context of the issue paras 107 to 111 (ii) The concept of discrimination paras 112 to 116 (iii) The applicants' submissions paras 117 to 126 (iv) The respondents' submissions paras 127 to 130 (v) Discussion paras 131 to 160 H. Is cl 44(1) a law under s51(v) of the Constitution upon which s109 may operate? (i) The context of the issue para 161 (ii) The respondents' submissions para 162 to 167 (iii) The applicants' submissions para 168 to 174 (iv) Conclusions paras 175 to 198 I. Is cl 44(1) invalid on the basis that it effects an acquisition of property otherwise than a just terms? (i) The argument para 199 (ii) Conclusions paras 200 to 203 J. Whether the Court has jurisdiction to determine the administrative law issues (i) The argument paras 205 to 209 (ii) Conclusions paras 210 to 218 K. Whether, as a matter of discretion, the Court ought to exercise its jurisdiction to determine the administrative law issues (i) The argument paras 219 to 222 (ii) Conclusions paras 223 to 231 L. Extraneous purposes: New South Wales (i) Legal principles paras 232 to 237 (ii) The Local Government Association and councils generally paras 238 to 261 (iii) The individual councils' decisions paras 262 to 303 (iv) The applicants' submissions paras 304 to 317 (v) The NSW respondents' submissions paras 318 to 331 (vi) Applicants' submissions in reply paras 332 to 334 (vii) Conclusions paras 335 to 341 M. Extraneous purposes: Victoria (i) The applicants' material paras 342 to 343 (ii) Bayside City Council paras 344 to 359 (iii) Moreland City Council paras 360 to 372 (iv) Frankston City Council paras 373 to 380 (v) Yarra City Council paras 381 to 386 (vi) The applicants' submissions paras 387 to 395 (vii) The Victorian respondents' submissions paras 396 to 402 (viii) Conclusions paras 403 to 411 N. Disposition (i) Liability para 412 (ii) Costs paras 413 to 414

A. The proceedings (i) The parties 4 The first proceeding, in point of time, is brought by Telstra Corporation Limited ("Telstra Corporation") and Telstra Multimedia Pty Limited ("Telstra Multimedia") - collectively "Telstra" or "the Telstra applicants" - against eleven New South Wales local authorities and four Victorian local authorities. The New South Wales respondents are Hurstville City Council, Kogarah Municipal Council, Leichhardt Municipal Council, Parramatta City Council, Penrith City Council, Randwick City Council, Hornsby Shire Council, Drummoyne Council, Burwood Council, Concord Council and Strathfield Municipal Council. The Victorian respondents are Bayside City Council, Moreland City Council, Frankston City Council and Yarra City Council. The Telstra applicants seek 23 separate declarations, the availability of most of which depends on various arguments concerning the invalidity, or non-application, of the State legislation under which charges have purportedly been made and rates levied: s611 of the Local Government Act 1993 (NSW)("the New South Wales Act") and Part 8 of the Local Government Act 1989 (Vic)("the Victorian Act"). However, the Telstra applicants also allege that, even if the State legislation is valid and applicable, the resolutions of all 15 respondents are vitiated on various administrative law grounds. 5 The other proceeding is brought by Optus Vision Pty Limited ("Optus Vision") and Optus Networks Pty Limited ("Optus Networks"), collectively "Optus" or "the Optus applicants". The respondents are three New South Wales local authorities, Warringah Council, Randwick City Council and Blacktown City Council, and one Victorian local authority, Moreland City Council. The Optus applicants also seek declarations to much the same effect as the declarations sought by the Telstra applicants. The Optus applicants also seek orders quashing resolutions of the various respondents. 6 In view of the similarity of the issues raised in the two proceedings, it was agreed they be heard together; the evidence in one proceeding being treated as evidence in the other, to the extent of its relevance. The Telstra applicants were represented by Mr R Conti QC, Mr P Hanks QC and Ms K A Rees and the Optus applicants by Mr T F Bathurst QC and Mr S Gageler. Mr F M Douglas QC and Mr K M Connor appeared for the New South Wales respondents in both proceedings, and Dr G Griffith QC and Mr M Connock for all the Victorian respondents. Mr M J Leeming of counsel appeared for the Attorney General of New South Wales, intervening in connection with one of several constitutional issues identified in notices issued pursuant to s78B of the Judiciary Act 1903.

(ii) The issues 7 As the hearing progressed, many of the issues raised by the applicants were abandoned. By the end of submissions, the following issues remained: (i) whether: (a) s611 of the New South Wales Act, to the extent it authorises New South Wales councils to make, levy and recover charges in respect of the possession, occupation and enjoyment of telecommunications cables erected or placed on, under or over a public place; and (b) Part 8 of the Victorian Act, to the extent it authorises Victorian councils to declare and recover rates and charges on land occupied by telecommunications cables; [A] imposes a duty of excise contrary to s90 of the Constitution, and is therefore invalid; [B] is a law of a State that "relates to the occupancy or use of a building, structure or facility", within the meaning of clause 60 of Schedule 3 to the Telecommunications Act 1997 (Cth) ("the 1997 Telco Act"), and is therefore inapplicable to the subject cables; or [C] discriminates against a carrier, or carriers generally, contrary to clause 44(1) of Schedule 3 to the 1997 Telco Act. (ii) If issue (i) [C] is answered in the affirmative, in respect of either s611 of the New South Wales Act or Part 8 of the Victorian Act, whether cl 44(1) is a law that validly operates to prevent such discrimination having regard to: (a) the extent of the Commonwealth's legislative powers; and (b) s109 of the Constitution. (iii) whether the decision of any one of the New South Wales respondents to make and levy a charge on the applicants was: (a) taken for a purpose, extraneous to s611 of the New South Wales Act - namely to penalise the installation of above-ground telecommunications cables and discourage further installation of any such cables; or (b) taken without regard to a relevant consideration which s611(3) required to be taken into account - namely the nature and extent of the benefit enjoyed by the relevant telecommunications carrier; or (c) so uncertain that it was not a real and genuine exercise of the power conferred by s611; (iv) whether the decision of any one of the Victorian respondents to declare rates and charges on the land, occupied by the subject cables, was taken for purposes extraneous to Part 8 of the Victorian Act - namely to penalise the installation of above-ground telecommunications cables and encourage the relocation of existing cables, and installation of new cables, underground; (v) whether the decision of any one of the Bayside, Frankston and Moreland councils to declare a differential rate on "overhead cable land" in 1998-99: (a) was taken without regard to the considerations prescribed by s161(1)(b) of the Victorian Act; or (b) imposed a differential that was selected without regard to considerations of fairness, or to amenities provided for, or the demands of, "overhead cable land" and other land. (vi) whether the Court has jurisdiction to determine issues (iii), (iv) and (v); and (vii) if so, whether the Court ought to exercise that jurisdiction, having regard to the existence of provisions for challenging the relevant imposts, in both the New South Wales and Victorian Acts. 8 It will be apparent, first, that there is a considerable variation in the overall importance of the Court's decision about particular issues and, second, that there is extensive (but not total) overlap between the issues relevant to the New South Wales respondents and those affecting their Victorian counterparts. 9 In order to understand the first issue, it is necessary to know some facts concerning the telecommunications cable systems. Both sets of applicants furnished detailed evidence about their networks, none of which proved to be contentious. Much of the detail is unimportant. I will attempt a broad summary of that evidence before discussing issue (i). It will also be necessary for me to mention the form of the resolutions of the respondent councils imposing the imposts the subject of these proceedings. 10 Issues (iii), (iv) and (v) require reference to documents concerning the reaction of councils to the overhead cable rollout, including correspondence between various parties and many reports and resolutions. That material is voluminous. If the applicants succeed in relation to either para [A] or para [B] of issue (i), or para [C] of issue (i) read with issue (ii), or if the respondents make good their arguments under (vi) or (vii), it will not be necessary to go to that evidence.

(i) The Telstra network 11 Telstra Multimedia is the holder of a carrier licence under the 1997 Telco Act. That licence enables it to use a network unit to supply carriage services to the public: see Part 3 of the 1997 Telco Act. The term "carriage service" is defined by s7 of that Act as "a service for carrying communications by means of guided and/or unguided electromagnetic energy". 12 Evidence about the Telstra network was given by Martin Ince, until recently General Manager - Infrastructure Planning of Telstra Corporation. Mr Ince deposed that the network used a variety of delivery mechanisms including cable, radio and satellite transmission. The cable network includes exchange buildings that house the equipment needed for connection of one telephony service to another. Cables emanate from those buildings and connect to other exchanges ("the interexchange network") or to service customers in the local area ("customer access network"). The interexchange network is now largely comprised of optical fibre cable, nearly all of which is located underground. The customer access network is constituted by cables containing large numbers of twisted pairs, in which copper is the dominant conductor, with associated electronics. The local exchanges in the relevant local government areas were originally constructed for the purpose of telephony but they have been adapted for use in a broader range of communications, including Telstra's broadband network. 13 Mr Ince explained that a broadband cable network uses a much wider frequency band than that necessary to transmit ordinary speech telephonically. It comprises links between exchanges, links between exchanges and the customer's tap off point and links between the customer's tap off point and the equipment at the customers' premises. It permits the flow of information for a variety of purposes, including information services and cable television. Mr Ince said Telstra's broadband network "was designed to make effective use of existing infrastructure, including the existing exchanges, existing underground ducts (originally installed for the telephony network) and existing electricity poles". He described the factors that led to a detailed design of Telstra's broadband network and said the network comprised: "(a) one headend in each capital city; (b) the installation of nodes in each local exchange; (c) the use, in the vast majority of cases, of existing optical fibre cables to carry signals from the headend to the local exchanges and from the local exchanges to each hub; (d) the installation of a number of hubs each servicing approximately 500 dwellings; and (e) the reticulation of new coaxial cable from the hubs (either underground or aerially) to form the network to which customers may link." 14 Mr Ince said the broadband network utilises the existing optical fibre cable in the interexchange network and adds coaxial cable leading into the customer's premises. "Thus, the broadband network is a hybrid of two types of technologies and is generally known by the name 'Hybrid Fibre Coax' ('HFC') network'". 15 Mr Ince explained the headend is at "the heart of each broadband network". It is the common point at which the signal contents, from various sources, aggregate and is connected by optical fibre to a number of nodes, all of which are located in existing local exchanges. The nodes, in turn, are connected by optical fibre to hub points, from which coaxial cable runs (typically no more than one kilometre) to the tap off point to the customers' premises. 16 Mr Ince said the optical fibre links between the headend and nodes comprise individual fibres selected from the cables that were originally laid down as part of the interexchange voice network; little additional fibre was rolled out. Where additional optical fibre was necessary, it was reticulated in the existing underground ducts that served the voice network. 17 Mr Ince said Telstra's hubs are mostly housed underground in a manhole. However, in some high corrosion areas (where there are high alkaline concentrations in the underground table water) hubs may be installed in an above-ground pedestal. In either situation, the coaxial cables emanating from the hub can be reticulated either underground or aerially. 18 Mr Ince said all the coaxial cables for the HFC network needed to be rolled out; no existing infrastructure could provide the necessary bandwidth. He described the components of the coaxial cables and went on: "The coaxial component of the network is reticulated from each hub either underground or aerially. In the case of aerial reticulation, existing poles (used for power distribution) are used. In the case of underground reticulation, existing underground pipes and ducts/conduits are used. Aerial reticulation of coaxial cables is generally more rapid, more flexible (in the sense that geographical features are less of a barrier to aerial reticulation when compared to underground reticulation), and involves less physical disturbance from installation (unless the underground cables are able to be fitted into existing ducts and the ground surface is not required to be broken to install the underground cables). Telstra's broadband network involves both aerial and underground reticulation of the coaxial cables. For example, in metropolitan Sydney and Melbourne, approximately one quarter of the coaxial cables are reticulated aerially and approximately three quarters are reticulated underground. The functions and performance of the cables, whether reticulated aerially or underground, are identical." 19 Aerial coaxial cable must be supported in span by catenary wire held by bolts secured to poles, which typically also carry electricity conductors and cables, telephony cables and subscriber connections to customer premises and, sometimes, streetlights, street and traffic signs, surveillance equipment and the like. There are agreed clearances of Telstra's coaxial cable from both power conductors and the ground. 20 Underground coaxial cables may be reticulated along with other services, such as water, gas, electricity and sewerage. The arrangement and presence of such services is regulated by agreements embodied in industry codes of practice and protocols. It seems Telstra's underground coaxial network relies primarily on the ducting and access system previously used in connection with the telephony network, with some amplification. 21 In his affidavit, Mr Ince identified the 15 Telstra nodes situated in the areas of the New South Wales respondents to the Telstra proceeding. He also stated the number of kilometres of underground and aerial coaxial cable in each of the 11 local government areas. They total 2092 and 356 respectively. In the four Victorian local government areas, there are seven nodes, 495 kilometres of underground coaxial cable and 509 kilometres of aerial cable. In oral evidence, Mr Ince said the decision whether to use underground or aerial coaxial cabling was "worked out on a case by case basis" having regard to geographic and topographic factors, the availability of spare duct capacity and the like. 22 Mr Ince listed the functions of the broadband network: pay television (Foxtel), high speed internet access and some telephony services. He said the network is also capable of providing other services, such as "smart home" services (remote utility meter reading, remote energy and home management systems, home security services and remote monitoring and interaction with elderly people living at home), information services, education and a range of commercial applications. He referred to the likely convergence of functions using digital technology. 23 In cross-examination by Mr Connor, Mr Ince explained that the ducts used for underground coaxial cables ranged in size from tunnels in the central business districts of Sydney and Melbourne, through which a person could walk, to cables housed in a concrete pipe or directly buried. He agreed that Telstra leases duct space to other carriers. Telstra also leases equipment, with fibre linking, to private individuals, including corporations. However, Mr Ince said that, to his knowledge, Telstra did not lease out individual fibres. 24 During cross-examination by Dr Griffith, Mr Ince acknowledged that the public switched telephone network ("PSTN"), that existed before the recent HFC rollout, used optical fibre transmission; this continues to be used. Telephony services are not offered over the coaxial network, although there is potential to do this. Mr Ince agreed that "the effect of the broadband rollout to use for pay television and other services has been that there has been a further connection by Telstra with coaxial cable from the hub to distribution throughout the areas where there already is a telephony service distributed by copper wire". This has been done on a systematic basis; Telstra targets a particular area of about 500 premises and provides service to all the premises within it. Mr Ince also agreed that, prior to the broadband rollout, "by and large" Telstra's telephony services were being provided underground.

(ii) The Optus network 25 Optus Networks is also a holder of a carrier licence under the 1997 Telco Act. 26 Evidence about the Optus HFC network was provided by several witnesses. They included David Leung, Manager of HFC Network Engineering for Cable and Wireless Optus Limited, the holding company of Optus Vision. Mr Leung said that, as at 30 September 1999, Optus operated: (i) "a national fibre optic backbone stretching through all the major capital cities", and (ii) an HFC broadband local access suburban network passing 2.2 million homes, in Sydney, Melbourne and Brisbane, delivering telephone calls and other telephony products, high speed data (interactive) products and pay television products. 27 Mr Leung said the HFC broadband network rollout commenced in about April/May 1995. As at 1 July 1997, the date of commencement of the 1997 Telco Act, the HFC network system was still in course of construction; it was not finally completed until late 1997 or early 1998. However, construction had been completed by 30 June 1997 in each of the four areas (Warringah, Randwick, Blacktown and Moreland) whose councils are respondents to the Optus proceeding. At that time the Optus HFC cable network provided a local telephone call service, linking either to another Optus subscriber or a Telstra subscriber, some pay television services and high speed data products, only on a trial basis, to schools and a small number of selected customers. 28 Mr Leung, and other witnesses, described the Optus HFC system in some detail. The main differences between the Optus and Telstra systems are, first, that Optus has only one delivery system (HFC), not the dual systems (PSTN and HFC) operated by Telstra; and, second, that the Optus network overwhelmingly comprises aerial coaxial cables. Mr Leung said that, out of about 20,000 km of coaxial cables, only about 250 km is underground; of 4,700 km of optic fibre cable, only about 320 km is underground. Mr Leung also gave figures for the local government areas controlled by the respondents to the Optus proceeding: Warringah 657.5 km of aerial cable (coaxial and optical fibre) to 17.90 km of underground cable, Randwick 374.7 km of aerial cable and 14 km underground cable, Blacktown 707.4 km of aerial cable and 9.27 km of underground cable, Moreland 582.3 km of aerial cable and 2.1 km underground cable. 29 Mr Leung said underground installation would have required Optus either to dig its own trenches, and install ducts, pits, pedestals and turrets, in every street in which cables were to be installed or to colocate Optus' cables and associated facilities with those of Telstra in Telstra's underground ducts. He asserted both options involved costs at least four to five times greater than those associated with aerial installation. Mr Leung also said the first option would have had a significant environmental impact, because of construction noise and disturbance and severance of tree roots; in relation to the second option, there is often insufficient capacity in the Telstra ducts to take the Optus cable as well. 30 Mr Leung claimed there were some operational disadvantages associated with underground cabling. However, during the course of his evidence, it became clear that cost saving and speed of rollout were the primary reasons for the decision to use aerial cabling. Mr Leung said Optus did not make progressive decisions, as it went along, as to whether to use aerial or underground cabling in a particular locality; it was decided at the outset "that we would go aerial as much as we can". That decision was made on financial grounds. Mr Leung was asked why, then, there was some underground cabling. He explained this was lead-in cabling to multiple dwelling units. Mr Leung added that "the network is continually being undergrounded. As the power authorities go underground, we go underground with them."

The cable situation summarised 31 At the end of his cross-examination, I invited Mr Leung to check my understanding of the evidence concerning telecommunications cables in Australia. In the course of doing this, he mentioned some additional matters. Taking them into account, he confirmed the following summary: (i) Before the existence of Optus, there was only one telephone carrier, Telecom; (ii) Telecom delivered its service by the PSTN system, using copper wires; (iii) Initially the PSTN system used extensive aerial cabling but it was progressively placed underground; (iv) Telstra succeeded Telecom and took over the PSTN system; (v) If Optus had been interested only in providing a telephone service in competition with Telstra, it would have been technically possible for this to be done by using the Telstra PSTN system; (vi) In that eventuality, Optus would have needed to come to an access arrangement with Telstra. In practice, that would not have happened until the federal government took steps to allow other companies to have access to the PSTN system. This has happened only recently; (vii) However, Optus was never interested in limiting itself to telephone services; from the outset it was attracted to an HFC network that would enable it to provide pay television and high speed data services, as well as telephony services, on a single cable. For that reason, Optus determined to install its own broadband system. (viii) From a technical point of view, it would have been possible for Telstra and Optus to share the use of a single broadband system, offering all the services each of them now offers. However, bandwidth restrictions may have forced one or both of them to restrict the number of pay television channels they could provide. (ix) A new compression technology known as ADSL is being trialed. This technology will probably enable pay television and internet services to be provided over the copper wire system.

(i) New South Wales 32 The New South Wales respondents all resolved to make a "charge", at a particular rate per kilometre, for a particular financial year. At this stage, it is not necessary for me to reproduce the text of the resolutions. The charge seems generally to have been imposed on "cabling" or "cables". Some0times the resolution was limited to cabling over (or under) "Council property"; which includes public streets and reserves. Sometimes the charge applied to both overhead and underground cabling; sometimes only the former. Sometimes the charge was higher for overhead cabling than for underground cabling; for example, several councils charged $1,000 per km for overhead cabling and $500 per km for underground cabling. The financial years covered by the resolutions tendered in evidence were one or both of 1997-98 and 1998-99.

(ii) Victoria 33 The Victorian respondents declared and levied rates (not charges) on the land occupied by the cables. The rates purported to have been calculated by reference to one of the three bases permitted by s157(1) of the Victorian Act: site value, net annual value or capital improved value.

D. The State legislation (i) New South Wales 34 Section 611 of the New South Wales Act reads as follows: "(1) A council may make an annual charge on the person for the time being in possession, occupation or enjoyment of a rail, pipe, wire, pole, cable, tunnel or structure laid, erected, suspended, constructed or placed on, under or over a public place. (2) The annual charge may be made, levied and recovered in accordance with this Act as if it were a rate but is not to be regarded as a rate for the purposes of calculating a council's general income under Part 2. (3) The annual charge is to be based on the nature and extent of the benefit enjoyed by the person concerned. (4) If a person is aggrieved by the amount of the annual charge, the person may appeal to the Land and Environment Court and that Court may determine the amount. (5) A person dissatisfied with the decision of the Court as being erroneous in law may appeal to the Supreme Court in the manner provided for appeals from the Land and Environment Court. (6) This section does not apply to: (a) the Crown; or (b) the Sydney Water Corporation Limited, the Hunter Water Corporation Limited or a water supply authority; or (c) Rail Access Corporation; or (d) the owner or operator of a light rail system (within the meaning of the Transport Administration Act 1988), but only if the matter relates to the development or operation of that system and is not excluded by the regulations from the exemption conferred by this paragraph." (ii) Victoria 35 Part 8 of the Victorian Act is headed "Rates and Charges on Rateable Land". Section 154(1) provides that, except as provided in the section, all land is rateable. Subsection (2) sets out some exceptions. They include land vested in the Crown, a Minister, a council or a public statutory body, being land that is either unoccupied or used exclusively for public or municipal purposes. Section 155 specifies the types of rates and charges that may be declared on rateable land. They include general rates, the type of rates under present consideration. Section 157 gives councils the option of basing their rates on site value, net annual value or the capital improved value system of valuation. In the last case, s161 permits councils to raise its general rates by the application of a differential rate. 36 It is not necessary to refer to the extensive provisions in Part 8 concerning declaring and recovering rates. However, I note that s156 of the Act imposes primary liability for rates on the owner of the land and s173 deals with the situation where previously unrateable land becomes rateable land.

(i) The context of the issue 37 Section 88 of the Constitution required that uniform duties of customs be imposed within two years of the establishment of the Commonwealth. By s90, on the imposition of uniform duties of customs, the power to impose duties of excise (amongst other things) became exclusive to the Commonwealth Parliament. Since that date, any State legislation that purports to impose an excise duty is, to that extent, invalid. As Barwick CJ commented in Western Australia v Hamersley Iron Proprietary Limited No.1 120 CLR 42 at 56: "… the vesting of exclusive power in the Commonwealth Parliament to impose duties of excise obviously precludes any State Parliament from imposing duties upon the production or manufacture of goods anywhere within the Commonwealth." 38 The applicants contend that, to the extent they authorise the making and levying of charges, or the declaring and levying of rates, each of s611 of the New South Wales Act and Part 8 of the Victorian Act imposes a duty of excise and is invalid. Both the New South Wales and Victorian respondents dispute their imposts are excise duties. They are supported by the intervener, the New South Wales Attorney General. 39 In considering the applicants' contention, it is not to the point that, in each State, the relevant provisions are contained in statutes having an operation and significance going beyond the imposition of financial burdens on telecommunications carriers. In Western Australia v Chamberlain Industries Pty Limited (1970) 121 CLR 1 at 14, Barwick CJ said it is not necessary that the whole of a particular Act be characterised as an excise Act: "… the question is whether the tax as it is, and in the circumstances in which it is, imposed by the Act is a duty of excise: it is not a question as to the nature of the Act which imposes the tax." So the question, in relation to each State Act, is whether the impost is a duty of excise. 40 The elements of a duty of excise were described by Dixon J in Parton v Milk Board (Victoria) (1949) 80 CLR 229 at 258-260. First, it must be a tax; that is, a compulsory exaction for public purposes, not being a fee for services. Second, it must be a tax on goods. Third, the tax must be levied on the goods in the process of their manufacture or before their sale to home consumers. However, it is not necessary that the tax be levied directly on the manufacturer. As Dixon J said at 260: "A tax upon a commodity at any point in the course of distribution before it reaches the consumer produces the same effect as a tax upon its manufacture or production." 41 There is no dispute in the present case as to the continuing correctness of Dixon J's description of an excise duty. Nor is there any dispute that, if the imposts are taxes levied on "goods", the levy takes effect before the goods reach home consumers. The issues, in relation to the s90 point, are, first, whether the imposts are taxes and, if so, whether they are a levy on "goods"; or, as it is put in some of the cases, on a commodity.

(ii) The applicants' submissions 42 Counsel for Telstra point out that "commodity" is a term of wide import. The Macquarie Dictionary defines the word as: "a thing that is of use or advantage" or "an article of trade or commerce". Other dictionaries provide similar definitions. Although counsel did not cite dictionary definitions of "goods", that term has a similar meaning. For example, the Macquarie Dictionary speaks of "possessions, esp. movable effects or personal chattels" and "articles of trade; wares; merchandise, esp what has been transported by land". Counsel for Optus quote the comment by Mason CJ, Brennan and McHugh JJ in Mutual Pools & Staff Pty Limited v Federal Commissioner of Taxation (1992) 173 CLR 450 at 454: "In the context of ss.55 and 90 of the Constitution, the reference to goods as the subject of the tax must be understood in its widest sense. An excise embraces a tax on commodities produced as well as a tax on manufactured articles, … In conformity, with this understanding of the concept of excise, the word 'goods' is defined to include 'commodities'. In determining whether particular objects are properly described as 'goods' or 'commodities', it may be useful to consider whether they are saleable. Although many objects which are unsaleable are not properly described as 'goods' or 'commodities', some objects are properly so described even though they are not saleable. Hence the production by shorthand writers of transcripts was held not to amount to the production of goods because they were not brought into existence for sale as a commodity, but for the purpose of enabling employers to have the benefit of services given in the course of a skilled vocation. On the other hand, reinforced concrete piles manufactured under a bridge-building contract for incorporation into the structure of a particular bridge across a bay, though plainly not saleable on the market, were held to be manufactured articles, and thus goods, before they lost that character upon being incorporated into the structure and forming part of the realty." I have omitted their Honour's case references. 43 In the same case, at 467, Dawson, Toohey and Gaudron JJ said: "`Goods' is not a word of precise meaning but, in the context of excise duties, it signifies articles of commerce or things which, even if not saleable or without any discernible sale value, may be the subject of trading or commercial transactions." 44 Counsel for both sets of applicants emphasise that s90 is a Constitutional provision; accordingly, it is appropriate for the Court to construe the section in a wide and flexible manner, taking account of technological changes. Counsel refer to what was said on that subject by Dixon J in Australian National Airways Pty Limited v The Commonwealth (1945) 71 CLR 29 at 81 and by Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ in Grain Pool of Western Australia v Commonwealth of Australia [2000] HCA 14 at para [22]; 170 ALR 111 at 118. 45 Counsel say this approach is exemplified, in relation to s90, by Hematite Petroleum Pty Limited v Victoria (1983) 151 CLR 599. In that case the High Court, by majority (Mason, Murphy, Brennan and Deane JJ, Gibbs CJ and Wilson J dissenting), held that State legislation imposing licence fees in respect of three pipelines, that were continuously used for the purpose of carrying (respectively) crude oil, liquefied petroleum gas and natural gas from Longford in Gippsland, where they were separated into those components, to their places of distribution near Melbourne, contravened s90 of the Constitution and was invalid. The licence fees were fixed but substantial ($10 million per annum for each pipeline). 46 At 628 Mason J traced the development of meaning of the word "excise". He noted the High Court had rejected "the narrow view" that excise was confined to taxes upon production and manufacture; instead the Court "has adopted the broader view that it extends to taxes upon commodities to the point of receipt by the consumer". However, his Honour pointed out that "the Court has from time to time insisted that there must be a strict relationship between the tax and the goods in order to constitute a tax on goods". After referring to discussion in the authorities about the meaning of that requirement, Mason J said at 632: "That the object of the power was to secure a real control over the taxation of commodities provides strong support for a broad view of what is an excise, one which embraces all taxes upon or in respect of a step in the production, manufacture, sale or distribution of goods, for any such tax places a burden on production. A tax on goods sold, like a tax on goods produced, is a burden on production, though less immediate and direct in its impact. It is a burden on production because it enters into the price of the goods - the person who is liable to pay it naturally seeks to recoup it from the next purchaser. As the tax increases the price of the goods to the ultimate consumer, and thereby diminishes or tends to diminish demand for the goods, it is a burden on production." 47 Mason J went on to say that "it is enough that the tax is such that it enters into the cost of the goods and is therefore reflected in the prices at which the goods are subsequently sold. It is not necessary that there should be an arithmetical relationship between the tax and the quantity or value of the goods produced or sold". At 634 his Honour said the significant features of the fee in issue were: "(1) that it is levied only upon a trunk pipeline, i.e. the gas and fuel Corporation pipeline, the Gas Liquids pipeline and the crude oil pipeline, through which flow the entirety of the hydrocarbons recovered from the Bass Strait fields; (2) that it is a fee payable for permission to operate a pipeline for which the plaintiffs otherwise hold a permit to own and use; (3) that the fee is a special fee which is extraordinarily large in amount, having no relationship at all to the amount of the fees payable for other pipeline operation licences - the fee payable for a trunk pipeline is $10,000,000 whereas the fee payable for any other pipeline is $40 per kilometre; and (4) that the fee is payable before an essential step in the production of refined spirit can take place - the transportation of the hydrocarbons from Longford to Long Island Point where the refinery is situated." 48 Mason J explained, at 634-635: "The coexistence of these features indicates that the pipeline operation fee payable by the plaintiffs is not a mere fee for the privilege of carrying on an activity; it is a tax imposed on a step in the production of refined petroleum products which is so large that it will inevitably increase the price of the products in the course of distribution to the consumer. The fee is not an exaction imposed in respect of the plaintiffs' business generally; it is an exaction of such magnitude imposed in respect of a step in production in such circumstances that it is explicable only on the footing that it is imposed in virtue of the quantity and value of the hydrocarbons produced from the Bass Strait fields. To levy a tax on the operation of the pipelines is a convenient means of taxing what they convey for they are the only practicable method of conveying the hydrocarbons to the next processing point." 49 At 640 Murphy J pointed out that the challenged fees are imposed "on the crude oil and liquefied petroleum gas pipelines which run from one part of the plaintiffs' plant … to another". He said: "There is no practical possibility these pipelines can be used other than for the transportation of hydrocarbons. Transportation by pipeline is thus an integral step in the production process." 50 Brennan J expressed views similar to those of Mason and Murphy JJ. At 658 his Honour said: "Where a tax which takes the form of a licence fee is exacted not in respect of a business generally but in respect of a particular act done in the business, it is a tax upon the doing of that act; where that act is a step in the production, manufacture or distribution of goods, a tax upon that step is burden upon production, manufacture or distribution. And that is so whether or not the tax is calculated upon the quantity or value of the goods produced, manufactured or distributed." 51 For Deane J the critical matter was the particularity of the impost. He said at 667-668 it could not, as a matter of substance, "be seen as a general tax imposed upon the operation of pipelines generally. It is a particular tax imposed upon the operation of each of the specifically identified pipelines". He said at 668: "The magnitude of the tax and its recurrent nature as a revenue outgoing make inevitable the conclusion that the tax is an indirect one in the sense that it will be, and is intended to be, regarded as a component of the costs and expenses of manufacture or production which will, subject to the vagaries of market conditions, be passed down the line to the consumer." 52 There are obvious similarities between the facts in Hematite and those of the present cases. Counsel for both sets of applicants rely heavily on that authority; indeed, they go so far as to submit it is determinative of the present cases. I will return to that submission. First, I should mention the most recent High Court decision regarding s90: Ha v New South Wales (1998) 189 CLR 465. That case involved tobacco licence fees calculated by reference to the value of tobacco sold in a period preceding the licence period. By majority (Brennan CJ, McHugh, Gummow and Kirby JJ, Dawson, Toohey and Guadron JJ dissenting), the Court held the fees were duties of excise and invalid. At 499 the majority said: "Therefore we reaffirm that duties of excise are taxes on the production, manufacture, sale or distribution of goods, whether of foreign or domestic origin. Duties of excise are inland taxes in contradistinction from duties of customs which are taxes on the importation of goods. Both are taxes on goods, that is to say, they are taxes on some step taken in dealing with goods." 53 Counsel for Telstra submit that, although the subject rates and charges "take the form of charges on the cables, as a matter of substance (they) are charges on the content and encoded signals delivered by means of the cables". They say that, as was the case with the pipeline in Hematite, the cables: "(a) are an essential step in the movement of the content and signals into consumption; and (c) do not serve any purpose other than the delivery of the content and the signals." 54 Counsel say the case is to be distinguished from the payment of rates on land occupied by a factory; Telstra's HFC network "is the only means by which the commodities may be distributed and the rates and charges are made and levied in both New South Wales and Victoria by reference to the length of the cables". There is, therefore, they say "a real and direct connection between the rates and charges and the distribution of commodities in this case, which would not be present in the levying of … a rate on land used for industrial purposes." 55 Turning to the question whether the rates and taxes constituted a tax on "goods", or a "commodity", counsel for Telstra argue they "impose a burden on the distribution, and therefore on the production, of the Foxtel content, internet content … and the signals which convey that content to customers". Counsel say that both the content and signals "are things which are of use or advantage, and are articles of trade or commerce". They refer to Logan Downs Pty Limited v Queensland (1977) 137 CLR 59 and Capital Duplicators Pty Limited v Australian Capital Territory [No.2] (1993) 178 CLR 561. Counsel submit: "In principle there is no reason why the meaning of 'goods' in the present context should not extend to electrical signals passing along coaxial cables whether laid underground or erected overhead, or to the content conveyed by means of those signals regardless of whether the mechanism of distribution is described as a 'service' or as a 'product'. The content delivered via Telstra's HFC Network is properly to be equated with content delivered via older and more familiar delivery mechanisms. For example, there is no relevant difference between a video program distributed via the HFC network and a video distributed, as in the Capital Duplicators case, … by means of a video cassette. Similarly, there is no relevant difference between a written document (such as a book, paper or article) distributed electronically via the Internet, and a written publication distributed in paper form via a bookshop. The form of distribution does not matter - what matters is the thing being distributed." 56 Referring to the statements in Mutual Pools set out in paras 42 and 43 above, counsel for Optus note that electricity has been held to fall within a definition of "goods" that included "any form of tangible personal property": see State Electricity Commission of Victoria v Federal Commissioner of Taxation (1999) 99 ATC 5007 at paras 23 (Heerey and Merkel JJ) and 54 (Carr J). Heerey and Merkel JJ said: "The qualifier 'tangible' primarily has the effect of excluding choses in action. Clearly electric power is something subject to the dominion of United. It can be transported from place to place. It can be bought and sold." 57 Counsel also refer to a decision of the Judicial Committee of the Privy Council, The Noordam [1920] AC 904, in which it was held that bearer bonds and securities seized from a steamship were "goods" within the meaning of a war-time Order in Council.

(i) The respondents' submissions 58 Counsel for the New South Wales respondents argue that s611 of the New South Wales Act does not provide for the exaction of taxes but for the making of charges to compensate local authorities for the occupation of their land. They refer to the history of the legislation. 59 Section 105 of the Local Government Extension Act 1906 provided: "(1) A council may make a fair rental charge upon persons who have laid or erected, or may, with the council's permission, lay or erect, pipes, wires, cables, or rails, on, under, over, or through the public and other places under the control of the council. This subsection shall not apply to the Crown. (2) If any dispute arises as to the amount of such rental charge, such dispute shall be finally settled by the decision of the nearest court of petty sessions. Such charges may be made, levied, and recovered by a council as rates." (Counsel's emphasis) 60 Following the repeal of the Local Government Extension Act, an identical provision was included (as s209) in the Local Government Act 1906. However, the High Court held that a provision in this form did not enable a local authority to make a charge where the right to occupy did not derive from it: see The Australian Agricultural Co v Newcastle City Council (1910) 10 CLR 391 and Katoomba Municipal Council v The Katoomba and Leura Gas Company Limited (1917) 23 CLR 292. The principle applied by the High Court was stated by Griffith CJ in The Australian Agricultural Company case at 401-402: "In my opinion each of the phrases 'a fair rental charge', 'with the council's permission,' and 'under the control of the council,' suggests prima facie that the charge is to be made in respect of, and as consideration for, a concession made either by the council itself or by some other agency of the Government to whose rights it has succeeded with regard to the control of public places, and not in respect of the occupation of a public place by persons who have laid and who use the rails &c., in the exercise of a proprietary right, to which the council's right of control is itself subject. The words 'with the council's permission' seem to imply that the subject matter of the enactment is something of such a nature that where there is a council it cannot originate or be continued without their permission, or, in other words, that the act spoken of is one done with reference to a public place which is at the time of doing the act under some control other than that of the person doing it. This prima facie view is strongly supported by a consideration of the history of the law relating to municipalities. By the Act of 1867, which was in force until the Act of 1906, rates were imposed in respect of the occupation of land. Persons, therefore, who occupied part of the soil of a street by rails or pipes were rateable in respect of that occupation. But by the Act of 1906 rates were imposed in respect of ownership and not of occupation. It followed that persons so occupying the soil of streets were no longer rateable in respect of their occupation, and were not rateable at all in respect of the land so occupied, unless they were also the owners of the soil, which in most cases would not be the case. And, even if they were, the ownership in the case of an unconditional dedication of a highway is not beneficial, and the rateable value of the land would be nil. Sec. 209 was, therefore, as was indeed contended by counsel on both sides, enacted to deal with the case. If, however, as in the present case, the land on which the rails are laid is the subject of beneficial ownership in the persons using the rails, they are rateable in respect of it as owners, and there is no apparent reason why they should pay a double charge." 61 Apparently as a result of these decisions, s209 was amended in 1917 so as to substitute for the word "rental", in subs (1), the word "annual" and to make subs (2) refer to "such rent or charge", rather than "such rental charge". 62 The Local Government Act 1906 was repealed and replaced by the Local Government Act 1919. Section 171 of that Act was similar in effect to s209 of the 1906 Act. It also referred to a "fair annual charge" and provided that, in the case of dispute, the amount of the charge should be determined by a court of petty sessions. The new section specified: "The fair annual charge shall be based on the nature and extent of the benefit enjoyed by the person concerned". 63 There are reported cases in which judges of the Land and Valuation Court of New South Wales considered the principles applicable to determination of the nature and benefit derived from occupation of the relevant pipe, wire, pole, cable, tunnel or structure: see Australian Gas Light Company v Glebe Municipal Council (1922) 6 LGR (NSW) 39, Australian Gas Light Company v Annandale Municipal Council (1947) 16 LGR (NSW) 173 and Australian Gas Light Company v Ashfield Municipal Council (1951) 18 LGR (NSW) 236. 64 Counsel for the New South Wales respondents point out that s611 of the current Act retains the essential features of its predecessors since 1917. The section empowers councils to make "an annual charge" on the person in possession, occupation or enjoyment of a rail etc, but only if the rail etc., is "laid, erected, suspended, constructed or placed on, under or over a public place". In other words, say counsel, the charge is a fee for occupying public land or public airspace. The section does not use the word "fair" but the annual charge is required "to be based on the nature and extent of the benefit enjoyed by the person concerned". Moreover, in the event of a grievance about the amount of the charge, this matter is to be determined by the Land and Environment Court of New South Wales. Counsel suggest these features are inconsistent with the notion that the charge is a tax. 65 Further, counsel for the New South Wales respondents dispute that the charge applies to "goods" or "commodities". They point out that the subject cables are used in connection with what are called "telecommunications services", in both the 1997 Telco Act and its predecessor, the Telecommunications Act 1991. They say this terminology coincides with that used in s51(v) of the Constitution, the foundation for both Acts. It will be recalled that s51(v) refers to "postal, telegraphic, telephonic and other like services". In their written submissions, counsel say: "What is being done with the cables is that they are being utilised for the provision of communications services. The atmosphere is used in the same way when television or radio programs are broadcast. The viewing of a broadcast television program is of the same nature as viewing a pay television program where the communication is by cable. It is merely the medium through which the electromagnetic wave travels that is different. Indeed, it is possible to have a pay television system which utilises the atmosphere as the medium through which the electromagnetic wave passes rather than a cable. The fact that the Applicants' cables are used for the purpose of pay television and that they constitute a different medium does not change the nature of what is occurring to that of the distribution of a 'good' or 'commodity'. The standard form of agreements between the Applicants and their customers pursuant to which the cables are used and revenue is derived by the Applicants are also replete with references to 'services' … Significantly, the term 'commodities' first appears in the Applicants' statements of claim and the affidavits of their witnesses. The revenue received is for the provision of wider services and not merely the delivery of a good even if the intangible concept of data could sensibly be described as a 'good' or 'commodity' - see the terms of the agreements. When one examines what is occurring at a physical level, a cable does not 'convey goods' in the way that a pipe conveys oil or gas. Significantly the subject changes form - from a sound or an image into data at the transmitting end, and onto an electric current or an electromagnetic wave in the form of a variation in its amplitude or frequency (analogue) or continuity (digital). The variation is understood by the receiving device which 'reads' the variation and creates sound or images at the receiving end. The supply of electricity is also quite different to the supply of telecommunications facilities even though the same transmission medium may be used eg a wire. Electricity is used in the form in which it is conveyed. Electric current or electromagnetic radiation used for the purpose of telecommunications are not consumed as electricity or electromagnetic radiation." 66 Counsel for the New South Wales respondents seek to distinguish Hematite on two bases. First, they say this is not a case where the exaction "is of such magnitude … that it is explicable only on the footing that it is imposed in virtue of the quantity and value of the hydrocarbons produced from the Bass Strait fields": see Mason J quoted at para 48 above. Nor is it a particular tax imposed on particular pipelines: see per Deane J at para 51 above. Counsel point out that s611 is a provision of general application that has existed, in this or similar form, since 1906. 67 Counsel's second point of distinction fastens on what the customer receives. The Hematite pipelines conveyed what were admittedly goods: crude oil, liquefied petroleum gas and natural gas. They were received in the same form as they were transmitted and were useful in that form. By contrast, say counsel, a pay television subscriber receives from a broadband cable only the right to view a video. The customer receives neither the video itself, as a tangible item of property, nor the intellectual property rights in the contents of that video. That which is received is similar in nature to what is obtained by a person viewing a movie in a cinema or a video that has been rented from a video shop. The viewer receives a service, not goods. Counsel make similar observations about the benefits subscribers receive from telephony and internet services. 68 Counsel for the Victorian respondents concede that rates declared under ss 158, 159, 162 and 163 of the Victorian Act are capable of amounting to taxation. However, they say, they are taxes on the ownership or occupation of rateable land; they are land taxes. Counsel say that, although the concept of "goods" is broad, for excise duty purposes, the High Court has held that duties of excise do not include an impost on the provision of services - see Adams v Rau (1931) 46 CLR 572 at 578-579 - or a tax that comes within other well-known forms of taxation, such as land tax: see Mutual Pools at 454 and 468. Counsel point to the comment by the majority Justices in Ha at 499: "Duties of excise are inland taxes in contradistinction from duties of customs which are taxes on the importation of goods". Building on that comment, they say: "Duties of excise may only be imposed on things which can in principle be the subject of duties of customs; that is, things which are capable of being imported or exported. The separation of taxes on 'goods' (customs or excise) and taxes on land is therefore immutable." 69 Counsel say no question arises as to whether what is transmitted through the Telstra and Optus cables constitutes "goods", so as to be capable of being the subject of an excise duty: "The rates are simply not, either in form or in substance, a tax on that information. Rates would be payable on the space occupied by a cable even if no information at all were to pass through it; and the amounts or rates and changes are in no way related to the volume or value of information transmitted by the cables. If one assumes that the 'content' transmitted via the cables constitutes 'goods', there is in truth no relevant distinction between the present rates and rates imposed on the land occupied by a factory which produces goods. An impost which depends on 'the length of the cables' is relevantly identical to an impost which depends on the space occupied by a factory. In both cases the rate is a cost which must be borne by the producer or distributor, but there is not a sufficient relationship between the rate and the quantity or value of any goods to make it a tax 'on' those goods." 70 Counsel for the Victorian respondents argue "there is no support in the authorities for the view that information passed along a cable constitutes goods in the relevant sense. Every decision in which an impost has been found to constitute a duty of excise concerned the production or distribution of some physical commodity". They refer to Pont Data Australia Pty Ltd v ASX Operation Pty Ltd (1990) 21 FCR 385 in which I had to determine whether encoded electrical impulses were "goods" within the meaning of the Trade Practices Act 1974. That Act defined goods so as to include "gas and electricity". At 421 I said: "It is doubtful whether anyone hearing the word 'goods', in normal parlance, would readily think of electrical impulses. The word generally refers to tangible and visible objects; although it is notable that both the Oxford English Dictionary and the Macquarie Dictionary define 'goods' or 'goods and chattels' as referring merely to 'movable property', without further limitation. But whatever the ordinary meaning of the word, there is here a statutory definition which defines the word - in an inclusive, rather than exclusive, manner - so as to include electricity. It cannot, I think, be doubted that, as Parliament intended the word 'goods' to be understood as including electricity, it also intended it to include encoded electrical impulses'." 71 When the matter went on appeal, a different senior counsel appeared for Pont Data. He abandoned the argument successfully put by his predecessor and conceded that encoded electrical impulses were not included within the definition of "goods": see ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (1990) 27 FCR 460. The Full Court accepted that concession, commenting at 468 that "it does not follow from the inclusion of electricity in the definition that it should be read as if there was a further inclusion, by way of extension of the ordinary meaning of 'goods', so as to draw within the definition encoded electrical signals". 72 The point for present purposes is that, in Pont Data,everybody agreed that, in the absence of a statutory definition ordaining otherwise, even electricity was not "goods"; and it was held that, even where a definition included electricity, the word still did not include encoded electrical impulses, which are, perhaps, analogous to the electromagnetic waves which (with light) flow through the Telstra and Optus cables. 73 Counsel for the Victorian respondents submit: "Describing the information which is transmitted through the cables as 'content' cannot convert it into a commodity comparable to, for example, hydrocarbons or chicory. That 'content' is not used or enjoyed by its purchasers in the form in which it is transmitted and is far removed in character from the marketable commodities which constitute goods in the accepted sense. Indeed, subscribers do not pay to have particular quantities or shipments of 'content' sent to them; rather, they pay for the right to use equipment which decodes the signals that pass along the cables and converts them into pictures and sounds. The transmission of the electronic impulses to a subscriber constitutes an element of the provision of a 'service', both as a matter of ordinary language and in the terms of s.51(v) of the Constitution. No amount of progressive interpretation can convert that provision into a supply of goods so as to attract s.90."

(ii) The intervener's submissions 74 Counsel for the intervener, the New South Wales Attorney General, points out it is common ground between the principal parties that the practical operation of the law, as well as its form, must be examined; this was the reason why the Hematite licence fees were held to be excise duties. He says it is possible to identify goods on which the rates and charges are imposed; namely the optical fibre and coaxial cables owned and installed by the applicants; but these are not goods in the chain of production between manufacturer and consumer. He suggests it was for this reason that the applicants found it necessary to put a case based on the proposition that the electromagnetic signals, or the information they convey, constitute goods; the flaw in that case is that neither the electromagnetic signals nor the information are "goods" within the meaning of s90. 75 In relation to that submission, counsel for the intervener relies primarily on Adams v Rau, in which it was held that shorthand transcripts of judicial proceedings were not "goods" for the purposes of sales tax legislation. At 578-579 Gavan Duffy CJ, Starke J, Dixon J and McTiernan J said: "In this case we cannot think that the description 'manufacture or production of goods or commodities' can properly be applied to any part of the business or operations in which the shorthand writers engage. The work they are required to perform is to make a record of judicial proceedings, or some other oral transaction, and to provide transcripts of the record to the persons concerned therein. The service which they perform cannot first be disintegrated and then part of it examined while the rest is excluded entirely from consideration. Doubtless the transcript 'produced' by the typist from the shorthand writer's dictation is a new entity, and is not the same thing as the pieces of paper on which it was made. Doubtless it is capable of sale. But it is brought into existence, not for sale as a commodity, but for the purpose of enabling the employers to have the benefit of services given in the course of a skilled vocation. The fact that some part of the remuneration is determined by the number and length of the transcripts does not necessarily mean that they are sold as commodities for a price, but only that in fixing the reward for the services the fact is recognized that the transcript shows how much oral matter has been taken in shorthand and how much shorthand has been transcribed. It would be a misuse of English to describe a shorthand writer's employment as the manufacture and production of transcripts." See also per Evatt J at 579. In Mutual Pools (in the passage quoted at para 42 above), Mason CJ, Brennan J and McHugh J referred to Adams v Rau in a manner suggesting they viewed it as continuing to be good law. 76 Counsel for the intervener also cites St Albans City and District Council v International Computers Ltd [1996] 4 All ER 481 at 492-493 in which Sir Iain Glidewell, sitting in the English Court of Appeal, held that a computer disk was within a definition of "goods" in United Kingdom legislation but a computer program was not. 77 Counsel for the intervener distinguishes Hematite on the basis that it involved hydrocarbons, which are unquestionably "goods". He also distinguishes Capital Duplicators. Rebutting a suggestion by applicants' counsel that there is no difference between receiving a video film over the broadband network or from a truck driving along a council road to deliver video cassettes, counsel for the intervener points out that, in the latter case, the customer receives a thing, an article that might be the subject of a trading or commercial transaction; in the former case, the customer receives only the opportunity to view the video. 78 Counsel for the intervener relies on Pont Data. He says that, if it is correct to say that encoded electrical impulses (that is, pulses of electricity) are not "goods", then the position must be a fortiori in relation to signals transmitted, on the evidence, by light - in the case of the optic fibre cables - and by electromagnetic waves - in the case of the coaxial cables. Neither light nor electromagnetic waves are tangible; they have no permanence and dissipate rapidly outside the environment of the cable. 79 Finally, counsel submits it is irrelevant that the information transmitted through the cables may be the subject of intellectual property; the concept of "property" is wider than "goods". Counsel comments this is doubtless why the guarantees in s51(xxxi) and s114 of the Constitution protect "property", not merely "goods". However, s90 refers only to "goods".

(v) Conclusions 80 On this aspect of the case, the submissions made on behalf of the respondents and the intervener are to be preferred to those of the applicants. 81 On the question whether the imposts constitute a tax, there may be a distinction between the New South Wales situation and that applying under the Victorian legislation. Counsel for the Victorian respondents concede that Part 8 of the Victorian Act authorises the imposition by councils of rates and charges that may properly be called a "tax". No such concession is made by counsel for the New South Wales respondents in relation to charges under s611 of the New South Wales Act. This is understandable. 82 Rates declared and recovered under Part 8 of the Victorian Act are calculated by reference to the value of the rated land. The value of land primarily depends on market factors. The value may have little or no relationship to the practical benefit (if any) enjoyed by the owner or occupier of the land; perhaps this is particularly true of an occupier of a cable or pipeline. So it is natural to regard rates declared under the Victorian Act as a tax on the land itself. Moreover, Part 8 of the Victorian Act applies to all land, other than public land that is either unoccupied or used exclusively for public purposes. Importantly, it applies to private "land", including a privately owned pipe or cable laid even through a privately held parcel of freehold or leasehold land. There is no element of compensation for the use of publicly owned land. 83 By contrast, s611 of the New South Wales Act applies only to specified types of installations "erected, suspended, constructed or placed on, under or over a public place"; it does not apply to installations in or over privately owned land. So it is possible to see the section as one designed to obtain public compensation for the use, by a particular occupier, of public space. That view of the section is consistent with its history, recalling that the earliest ancestor of the section referred to a "fair rental charge". It is also consistent with the command of subs (3) that the charge "is to be based on the nature and extent of the benefit enjoyed by the person concerned". That command is reinforced by subs (4) which enables an independent authority, the Land and Environment Court, to resolve any dispute about the appropriate amount of the charge. Having regard to all these features, I do not think a charge made under s611 of the New South Wales Act may properly be described as a tax. 84 However, whether or not that view is correct, and accepting that rates declared under the Victorian legislation constitute a tax, it seems to me that, in neither case, is there a tax on "goods". I accept the submissions on that matter made by counsel for the respondents and the intervener. 85 If it is correct to say that, in the absence of a special statutory definition, electricity is not "goods", then a fortiori light and electromagnetic waves are not goods. And it is even more difficult to say that information constitutes "goods". To provide information is to provide a service. That was the point made in Adams v Rau; it applies equally to this case. 86 It is not to the point to contend, as do counsel for Telstra in submissions in reply, that the light and electromagnetic waves convey data prepared specifically for commercial purposes; data that is made available to customers on payment of a fee. That is true, but it merely means the information has commercial value. It remains information, not goods. 87 The applicants' argument that the rates and charges imposed by the respondents infringe s90 of the Constitution must be rejected.

F. Do the State laws fall within cl 60 of Schedule 3 to the 1997 Telco Act?

(i) The context of the issue 88 The Telecommunications Act 1991, the predecessor of the 1997 Telco Act, made provision for the licensing of carriers and dealt with their obligations and reserved rights: see Parts 5 and 6 of the 1991 Act. Part 7 was headed "Carriers' Powers and Immunities". It included s116, which read as follows: "(1) The regulations may provide that specified carriers may engage in specified exempt activities despite specified laws of a State or Territory. (2) A regulation in force because of subsection (1) has effect, according to its tenor, because of this subsection. (3) It is the Parliament's intention that, where a regulation in force because of subsection (1) entitles a carrier to engage in specified exempt activities despite specified laws of a State or Territory, nothing in the regulation or in this section is to affect the operation of any other law of a State or Territory, so far as that other law is capable of operating concurrently with this Act. (4) Nothing in this section affects the liability of a carrier to taxation under a law of a State or Territory." 89 The term "exempt activities" was defined in s5 of the 1991 Act as: "an activity, or conduct, engaged in in the course of, for the purposes of, or otherwise in connection with: (a) installing, maintaining or operating a telecommunications network; or (b) without limiting paragraph (a), supplying, installing, maintaining or operating a facility;" The word "facility" was defined to include "any part of the infrastructure of a telecommunications network". The parties agree it includes the cables the subject of these proceedings. 90 Regulations were made pursuant to s116 of the 1991 Act. They were called the Telecommunications (Exempt Activities) Regulations 1991. Regulation 5 specified a number of activities. They included the construction by a carrier of a facility (sub reg (a)(iii)), the maintenance, repair, refurbishment, alteration or demolition by a carrier of a facility (subreg (b)(iii)) and the installation, certification, operation, repair or removal, by a carrier, of a line, being part of a carrier's telecommunications network (subreg (c)(iii)). Under s5 of the 1991 Act, the word "line" includes a cable intended for use in connection with carrying communications by means of guided electromagnetic energy. 91 Regulation 6 provided that, for the purposes of s116(1) of the Act: "a carrier may engage in the exempt activities set out in regulation 5 despite a law of a State or Territory about: … e) the powers and functions of a local government body; f) the use of land; g) tenancy;" 92 It is agreed between the present parties that all the cables the subject of the challenged rates and charges were installed: (i) during the period of operation of the 1991 Act; and (ii) pursuant to the authority and exemptions that Act conferred, either directly or by regulations made under that Act. 93 Part 7 also included Division 3 (s127A to s135), dealing with carriers' powers to enter land. Those powers included the power, for purposes connected with the supply of a telecommunications service, to "construct a facility on, over or under any land" (s129 (1)(a)) or "attach a facility to any building or other structure" (s129(1)(b)). 94 The 1991 Act was replaced on 1 July 1997 by the 1997 Telco Act. That Act contains Schedule 3, effect to which is given by s484 of that Act. 95 Schedule 3 of the 1997 Telco Act is entitled "Carriers' powers and immunities". Part 1 of the Schedule (cll 1 to 55) contains general provisions, apparently designed to enable the installation of telecommunications facilities on or over private land. Part 2 of the Schedule (cll 56 to 61) contains transitional provisions. These provisions were apparently thought necessary because of the repeal of the 1991 Telecommunications Act. This Part contains cl 60 which reads: "A law of a State or Territory that relates to: a) the standards applicable to: (i) the design; or (ii) the manner of the construction; of a building, structure or facility; or b) the approval of the construction of a building, structure or facility; or c) the occupancy, or use, of a building, structure or facility; or d) the alteration or demolition of a building, structure or facility; does not apply to a building, structure or facility that is owned or operated by a carrier to the extent that the construction, alteration or demolition of the building, structure or facility was or is authorised by: e) section 116 of the Telecommunications Act 1991; or f) Division 3 of Part 7 of the Telecommunications Act 1991; or g) a repealed law of the Commonwealth."

(ii) The applicants' submissions 96 Counsel for each set of applicants say the cables constructed by their clients, that are the subject of the rates and charges in issue in these proceedings, are each a "facility" owned or operated by a "carrier", the construction of which was authorised by s116 of the Telecommunications Act 1991; accordingly s611 of the New South Wales Act and Part 8 of the Victorian Act each constitute a law of a State that falls within para (c) of cl 60 of Schedule 3 to the 1997 Telco Act. The argument is that each of s611 of the New South Wales and Part 8 of the Victorian Act is a law of a State that "relates to" the occupancy or use of a "facility", being the cables. As that facility was constructed under the authority of the 1991 Act, the effect of cl 60 is to exclude the operation of each of those laws.

(iii) The respondents' submissions 97 Both sets of respondents contend the applicants' arguments misread cl 60. Counsel for the New South Wales respondents say the purpose of cl 60 is that set out in the Explanatory Memorandum to the 1997 Bill; the clause was then numbered "55": "This clause ensures that a building, structure or facility that was, when built, authorised by Section 116 of the 1991 Act or Division 3 of Part 7 of the 1991 Act is not made now subject to State laws relating to building approvals, etc. by virtue of the repeal of those provisions of the 1991 Act. This clause is adapted from a similar provision in section 33 of the Telstra Corporation Act 1991 passed as a consequence of what is now Telstra becoming subject to State laws of kinds which have not applied to it, or its predecessors, in the past." (Counsel's emphasis) 98 Counsel point out it was never the position that facilities constructed under the authority of the 1991 Act were exempt from the effects of all State law; carriers were exempt from such laws only in relation to "specified exempt activities"; that is, the activities specified by reg 5 of the Telecommunications (Exempt Activities) Regulations. Those activities include the construction, maintenance, repair etc of a "facility" and the installation of a "line", but neither s611 of the New South Wales Act nor Part 8 of the Victoria Act inhibits those activities. 99 Counsel for the New South Wales respondents emphasise subs (3) and (4) of s116 of the 1991 Act. Subsection (3) indicates Parliament's intention that neither the section nor any regulation "is to affect the operation of any other law of a State or Territory, so far as that other law is capable of operating concurrently with this Act". Subsection (4) provides that nothing in the section affects the liability of a carrier to State taxation. Counsel say: "The non-applicability of a law of a State that relates to the occupancy, or use, of a building, structure or facility is only to the extent that the construction, alteration or demolition of the building, structure or facility was or is authorised by s.116 of the 1991 Act or Division 3 of Part 7 of the 1991 Act. The NSW Councils' submission accords with the intention of the Explanatory Memorandum that relevantly, buildings, structures or facility be not made now subject to State laws relating to buildings approvals etc. by virtue of the repeal of those provisions of the 1991 Act." (Counsel's emphasis) 100 Counsel for the New South Wales respondents also put other arguments concerning cl 60 to which I need not refer. 101 Counsel for the Victorian respondents say that, on the widest view, the exclusion effected by cl 60 applies only to buildings, structures and facilities whose construction was authorised under the 1991 Act or "a repealed law of the Commonwealth". Accordingly, it applies only to structures etc that predate the 1997 Telco Act; but, even in relation to those structures, not so as to exclude Part 8 of the Victorian Act. They argue: "The expression 'relates to' in cl.60 cannot be read as denoting any law of a State which impinges upon the matters set out in paras (a)-(d). Such a reading is not required by authority and would go beyond the ordinary meaning of the phrase (which, like cognate expressions such as 'with respect to', connotes a law directed at or having a substantial connection with a subject matter). Further, such a broad reading would make the clause so broad as to be absurd. A provision in a Crimes Act creating the offence of arson would 'relate to' the 'alteration or demolition' of buildings. … Such a broad reading would also sit uneasily with cl.44(1), which operates in respect of both pre-existing structures and future activities and purports to exclude only State laws which 'discriminate against' carriers. Clause 60 must therefore be read as applying to laws of a State which are directed at, or have as their subject matter, the things mentioned in paras (a)-(d). When understood in this way, it can be seen that cl.60 is directed at a reasonably well-defined body of laws; that is, the laws of a State which control building standards, development approvals and land use. This construction is supported by the transitional role of cl.60. Clause 60 is included among the 'Transitional' provisions in Part 2 of Schedule 3 and was intended merely to prevent buildings and structures which had been constructed under authority conferred by the 1991 Act (assuming its validity) from becoming subject to State building control laws upon the repeal of that Act. It would be illogical if it conferred a sweeping immunity from State laws in respect of the use only of those pre-existing buildings and structures, especially where: (a) section 116 of the 1991 Act did not confer any immunity from State taxing laws; and (b) the Regulations made under s.116 purported only to exclude the effect of State laws 'about' various defined matters including 'town planning', 'the planning, design, siting, construction, alteration or removal of a structure' and 'the use of land."

(iv) Conclusions 102 The respondents' contentions regarding cl 60 are plainly correct. That clause has no relevance to the application of s611 of the New South Wales Act, or Part 8 of the Victorian Act, to a telecommunications facility, even one constructed pursuant to the 1991 Act. 103 The only paragraph in cl 60 that has any conceivable application to the subject statutory provisions is para (c), which refers to "the occupancy, or use, of a building, structure or facility". But I agree with counsel for the Victorian respondents that it cannot be said Part 8 of the Victorian Act "relates to" the occupancy, or use, of a facility within the meaning of that paragraph; and I make the same comment about s611 of the New South Wales Act. The term "relates to" must be a reference to the subject matter of the relevant State or Territory law. When paras (a) to (d) of cl 60 are read together, it is obvious that Parliament was intending to refer to State or Territory legislation concerned with such matters as environmental assessment, town planning and building controls. That was the subject matter of the old s116, and the regulations made under that section, whose continuation it was the purpose of cl 60 to achieve. 104 It will be recalled the old s116(1) authorised the making of regulations to "provide that specified carriers may engage in specified exempt activities despite specified laws of a State or Territory". The exempt activities specified by the regulations (reg 5) were activities by way of construction, maintenance, installation etc. The State and Territory laws specified by reg 6 were laws about environmental assessment and protection, town planning, building control etc. It is true they included "the powers and functions of a local government body". But this must have meant powers and functions in relation to the specified activities; that is, construction, maintenance, installation etc. The powers and functions could not have included a reference to a local government body's taxing power; that would have been inconsistent with s116(4) of the Act. Nor, I believe, did it include a power to make a charge under s611 of the New South Wales Act; that was not a power the exercise of which could stand in the way of construction, maintenance or installation of a telecommunications facility. 105 As it seems to me, the applicants' argument overlooks the words (in cl 60) "to the extent that". Those words indicate - as might anyway be expected in a transitional provision - that the exemption being conferred is no more than a continuation of the exemption previously enjoyed; the exclusion of the State law applies to a particular building, structure or facility only to the extent that the construction, alteration or demolition of that building, structure or facility was authorised by the prior Commonwealth law. Clause 60 does not generally exclude the application of State law to a building, structure or facility that was authorised by the prior Commonwealth law. It does not exclude s611 of the New South Wales Act or Part 8 of the Victorian Act. 106 The applicants' claims based on cl 60 of Schedule 3 to the 1997 Telco Act must be rejected. G. The application to the State laws of cl 44 of Schedule 3 of the 1997 Telco Act (i) The context of this question 107 As previously mentioned, Part 1 of Schedule 3 of the 1997 Telco Act contains general provisions, as distinct from the transitional provisions in Part 2. Part 1 includes "Division 8 - Miscellaneous", which Division contains cl 44(1). The subclause relevantly reads: "(1) The following provisions have effect: (a) a law of a State or Territory has no effect to the extent to which the law discriminates, or would have the effect (whether direct or indirect) of discriminating, against a particular carrier, against a particular class of carriers, or against carriers generally; (b) without limiting paragraph (a), a person is not entitled to a right, privilege, immunity or benefit, and must not exercise a power, under a law of a State or Territory to the extent to which the law discriminates, or would have the effect (whether direct or indirect) of discriminating, against a particular carrier, against a particular class of carriers, or against carriers generally; (c) without limiting paragraph (a), a person is not required to comply with a law of a State or Territory to the extent to which the law discriminates, or would have the effect (whether direct or indirect) of discriminating, against a particular carrier, against a particular class of carriers, or against carriers generally." The word "carrier" is defined by the 1997 Telco Act as "the holder of a carrier licence". As mentioned in paras 11 and 25 above, Telstra Multimedia and Optus Networks is each a holder of a carrier licence. 108 Counsel for both sets of applicants contend that cl 44(1) renders ineffective, against their clients, both s611 of the New South Wales Act and Part 8 of the Victorian Act. The argument is that each of these provisions is a "law of a State" that discriminates, or would have the effect of discriminating, against their licensed carrier client, or a particular class of carriers or against carriers generally. 109 Counsel for the respondents dispute that the statutory provisions have the claimed discriminatory effect; they say cl 44(1) has no application to those provisions. 110 Counsel for the respondents also argue that, in any event, cl 44(1) is invalid. They give two reasons; the first being stated in two ways: (a) (i) on a proper analysis, cl 44(1) is not a law about telecommunications, so as to be supported by s51(v) of the Constitution, but rather a law about discrimination, in relation to which the Commonwealth has no relevant legislative power; alternatively, (ii) because of the adoption in cl 44(1) of the indeterminate concept of discrimination, it cannot be said that either of the relevant State laws is "inconsistent with" cl 44(1), so as to be invalidated under s109 of the Constitution; (b) if cl 44(1) is otherwise valid, it effects an acquisition of property other than on just terms, and so fails to comply with s51(xxxi) of the Constitution. 111 There is an overlap between the alternatives postulated in relation to reason (a). I will deal with them together in this, and the next, section of my reasons. I will deal with reason (b) in section I.

(ii) The concept of discrimination 112 The word "discriminates" is not defined in the 1997 Telco Act. Accordingly, counsel agree that the word must be given its usual English language meaning. They cite various High Court decisions dealing with the concept of discrimination. 113 In Street v Queensland Bar Association (1989) 168 CLR 461 the question was whether a rule of the Supreme Court of Queensland regarding the admission of barristers offended s117 of the Constitution. That section forbids "any disability or discrimination" against a resident of one State that would not equally apply to a resident of another State. The rule required applicants for admission as barristers to have, and assert, an intention of practising principally in Queensland. The High Court unanimously held this requirement breached s117. Their Honours rejected the argument that discrimination was negated by the circumstance that the rule applied equally to Queensland residents and residents of other States; it was necessary to look beyond the form of the rule and consider its effect. 114 At 488 Mason CJ said the requirement "may have a discriminatory effect in relation to an out-of-State resident for the simple reason that it may apply unequally by subjecting him to a greater burden or disadvantage than that imposed on a resident of the legislating State". His Honour gave the analogy of a prohibition on wearing a turban. He said that, on its face, such a prohibition is "applicable to all persons without distinction, but in effect is a discrimination based upon religious grounds because its only impact will fall upon adherents of a creed or religion which requires the wearing of turbans". The other members of the Court adopted a similar approach: see Brennan J at 508-512, Deane J at 531-532, Dawson J at 545-548, Toohey J at 558-560, Gaudron J at 569-571 and McHugh J at 581. 115 The New South Wales respondents particularly mention a short passage in the judgment of Gaudron J at 570-571: "Although in its primary sense 'discrimination' refers to the process of differentiating between persons or things possessing different properties, in legal usage it signifies the process by which different treatment is accorded to persons or things by reference to considerations which are irrelevant to the object to be attained. The primary sense of the word is 'discrimination between'; the legal sense is 'discrimination against." 116 The concept of indirect discrimination was subsequently discussed by Gaudron and McHugh JJ in Castlemaine Tooheys Limited v South Australia (1990) 169 CLR 436 at 478 and by the whole Court in Waters v Public Transport Corporation (1991) 173 CLR 349. The latter case is notable for a succinct explanation, by Dawson and Toohey JJ at 392, of the distinction between direct and indirect discrimination: "A distinction is often drawn between two forms of discrimination, namely 'direct' or 'disparate treatment' discrimination and 'indirect' or 'adverse impact' discrimination. Broadly speaking, direct discrimination occurs where one person is treated in a different manner (in a less favourable sense) from the manner in which another is or would be treated in comparable circumstances on the ground of some unacceptable consideration (such as sex or race). On the other hand, indirect discrimination occurs where one person appears to be treated just as another is or would be treated but the impact of such 'equal' treatment is that the former is in fact treated less favourably than the latter. The concept of indirect discrimination was first developed in the United States in relation to practices which had a disproportionate impact upon black workers as opposed to white workers. Both direct and indirect discrimination therefore entail one person being treated less favourably than another person. The major difference is that in the case of direct discrimination the treatment is on its face less favourable, whereas in the case of indirect discrimination the treatment is on its face neutral but the impact of the treatment on one person when compared with another is less favourable."

(iii) The applicants' submissions 117 Counsel for both sets of applicants place reliance on the explanatory memorandum presented to Parliament in relation to the Telecommunications Bill 1996, the Bill for the 1997 Telco Act. The clause enacted as cl 44 was cl 42 in the Bill. The explanatory memorandum gave this explanation of that clause: "This clause provides that a State or Territory law has no effect to the extent to which it discriminates, or has the effect of discriminating, directly or indirectly against a carrier, or a user or potential user of a carrier's services. It is based on s.120 of the 1991 Act. The clause is intended to deal with laws which have an indirect effect of discriminating against carriers or users of carrier services, not just a law which, for example, on its face treats a person differently to someone else. The indirect discrimination which this clause is intended to prevent includes the following examples: · laws that impose a burden on facilities of a carrier that is not imposed on similar facilities (for example a tax on 'street furniture' which is in effect discriminatory against carriers because other bodies owning such equipment such as electricity authorities would be exempt from paying that tax); · laws which have the effect of giving powers or immunities to a person or body in relation to the installation, maintenance or operation of a facility which do not apply to carriers generally (for example, where a public utility may rely on general land access powers given to that utility under State or Territory law to install telecommunication facilities without obtaining the approvals which would ordinarily be required for that activity under the law of that State or Territory); and · laws which discriminate against people by reason of their use of the facilities of a carrier." 118 Counsel for the applicants argue that both s611 of the New South Wales Act and Part 8 of the Victorian Act operate in a manner that discriminates against licensed telecommunications carriers. They say other entities which have installed pipes, cables, poles and similar structures in or over public roads and public places are not made liable to charges under s611 or rates under Part 8. 119 In relation to New South Wales, counsel note: (i) by virtue of s611(6)(b), the section does not apply to Sydney Water Corporation, and other water supply authorities; (ii) by virtue of s611(6)(c), the section does not apply to Rail Access Corporation; (iii) by virtue of s611(6)(d), the section does not apply to the owner or operator of a light rail system; (iv) by virtue of s46 of the Transport Administration Act 1988 (NSW), the section does not apply to the Roads and Traffic Authority of New South Wales; (v) by virtue of s50 of the Electricity Supply Act 1995 (NSW), a "network operator" (that is, the owner of an electricity system or an electricity distributor) is not liable to a local council for any "annual or other periodic or special charge" in respect of any electricity works located in a public reserve or public road or the space occupied by any such works; and (vi) by virtue of s40(1) of the Pipelines Act 1967(NSW), s611 of the Local Government Act "does not apply to or in respect of a pipeline the construction or operation of which is authorised by a licence". 120 The Victorian provisions are: (i) s46(1A) of the Electricity Industry Act 1993 (Vic) which declares that, despite anything to the contrary in the Local Government Act, "land is not occupied land for the purposes of that Act" (and so rateable) "merely because any pole, wire, or cable of a distribution company, transmission company or generation company is on, under or over that land"; (ii) s52(2) of the Gas Industry Act 1994 (Vic) which makes a similar declaration in relation to "any pipe or system of pipes for, or incidental to, the conveyance of gas for sale by retail"; and (iii) s154(2)(b) of the Local Government Act itself which exempts from rating public or municipal land used for "public or municipal purposes", including such purposes as water, drainage, sewerage, public transport and traffic control. 121 Counsel for Telstra argue that, if s611 of the New South Wales Act authorises the New South Wales respondents to impose charges on a "carrier" in respect of cables, it authorises an imposition that cannot lawfully be imposed on some other entities that use public roads and other public places as the site of their cables, pipes etc. Similarly, in relation to rates under Part 8 of the Victorian Act. Counsel for Telstra say it is immaterial that the other entities are not business competitors of the applicants; "where one entity is burdened and another entity is exempt from that burden, discrimination is established in principle, even though the paths of the two entities may never cross". They say the expression "carriers generally", in cl 44(1), reinforces this point: "discrimination may occur even though the entities advantaged by the discrimination are involved in different activities from the entities disadvantaged by the discrimination." 122 Telstra's counsel treat the explanatory memorandum as "part of the context" of the clause, "which can and should be considered before attributing a meaning to cl 44(1)" (counsel's emphasis). In support of that submission they cite passages in two decisions of the High Court: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at para 69. Counsel say this approach "allows a ready answer to be given to a basic question: what is the class with which carriers are to be compared when deciding whether a State or Territory law discriminates or has the effect (direct or indirect) of discriminating against carriers?" 123 Counsel for both sets of applicants contend that, if carriers are subject to a tax on "street furniture", from which any other "street furniture" owner is exempt, the tax is discriminatory and rendered ineffective by cl 44(1). Although the explanatory memorandum gives the example of electricity authorities, counsel do not limit themselves to the owners or operators of electricity infrastructure. They say the term "street furniture" is wide enough to include such things as bus shelters, seats, traffic light poles, public toilets, traffic control signs and information signs. Optus adduced evidence of the existence of these structures in the areas governed by the various respondents and the fact that they were not the subject of charges under s611 of the New South Wales Act or rates under Part 8 of the Victorian Act. 124 Counsel for Telstra observe that the respondents do not claim to provide any service or benefit to telecommunications carriers that is not provided to other utilities. 125 Counsel for Optus claim discrimination occurs in three ways: (i) the relevant State laws discriminate against carriers generally in that they do not provide to carriers the exemptions applicable to other persons in a like position; they say this is direct discrimination of the type mentioned in the second dot point in the explanatory memorandum (see para 117 above); (ii) because no similar impost is imposed on cables containing, for example, copper wires, the making and levying of the subject charges and rates, in reliance on the State laws, discriminates against the class of carriers owning and using fibre optic and coaxial cables in the subject local areas; they say this is direct discrimination of the type contemplated by the first dot point; and (iii) the making and levying of the charges and rates discriminate against Optus Vision, as a carrier owning or using predominantly overhead, as distinct from underground, fibre optic and coaxial cables. 126 In relation to item (iii), counsel point out that the Warringah and Randwick charges for overhead cable are double those for underground cables; Blacktown's charges relate only to overhead cabling; Moreland rated underground cables but provided a 100% rebate.

(iv) The respondents' submissions 127 Counsel for the New South Wales respondents take the test of discrimination to be that stated by Gaudron J in Street, quoted in para 115 above, whether "different treatment is accorded to persons or things by reference to considerations which are irrelevant to the object to be attained". Counsel say the object to be attained by s611 "is to enable persons who possess, occupy and enjoy public space, whether with the council's consent or otherwise, to be charged in substance an occupation rent". Counsel say it is not relevant to determine whether s611 applies to other bodies. They go on: "If, on the other hand, clause 44(1) is validly concerned with the treatment afforded to persons other than telecommunications carriers under section 611, then a failure to charge such persons under this section does not constitute discrimination because there is in fact a real distinction between those persons or entities and telecommunications carriers." 128 As I understand the submission, the distinction arises because telecommunications carriers have a greater impact on the local environment than other entities. This distinction is relevant, according to the argument, because councils are concerned with protection of the local environment. Although the object of s611 is to enable councils to raise revenue from the use of public space, in exercising the power given by the section, a council is entitled to consider how that use impacts on other interests with which it is concerned. 129 Alternatively, say counsel for the New South Wales respondents, the application is premature: "There is no discrimination with respect to section 611 per se. The issue of whether the charges are discriminatory in the relevant sense under clause 44(1) involves a review of the effect of the charges having regard to their quantum. This matter is still the subject of appeal to the Land and Environment Court and, accordingly, that avenue must be exhausted prior to consideration of the issue of discrimination in this case. It is a reason that the Court should decline also to review the decisions on administrative law grounds." 130 In relation to the question whether Part 8 of the Victorian Act is discriminatory, counsel for the Victorian respondents put similar submissions to those of their New South Wales counterparts in relation to s611 of the New South Wales Act.

(v) Discussion 131 There is a question as to the ambit of the proscribed discrimination. Is cl 44(1) only concerned with discrimination that appears on the face of the particular State law that is intended to be deprived of effect? Or is it also concerned with discrimination against a carrier or carriers by reason of the operation of that law against the background of all relevant facts and the whole of the relevant State law? 132 Each of the three paragraphs in cl 44(1) refers to "a law of a State or Territory"; that is, a particular law. Each of them uses the words "to the extent to which the law discriminates". That must be a reference to the same law as was previously referred to; that is, the particular law that is "a law of a State or Territory". So, if the paragraphs made no other provision, the question posed in the preceding paragraph would be answered by selecting the first alternative. It would be necessary only to read and consider the impugned law itself. 133 However, each paragraph makes an alternative provision: "or would have the effect (whether direct or indirect) of discriminating". This alternative requires the reader to look beyond the impugned law and consider its effect. In doing this, it seems necessary to have regard to all relevant matters, including the facts and any other relevant law. 134 If one State law provides for the imposition of a burden upon all members of a class, and a second State law relieves some members of that class from that burden, it is possible to analyse the resultant situation in either of two ways. One might say it is the second law that is discriminatory; by releasing the selected members of the class from the burden, the second law has the effect of indirectly discriminating against the unrelieved class members. On this approach, assuming its validity, cl 44(1) would render ineffective those provisions of the two State laws - the provisions listed in paras 119 and 120 above - that exempt various entities from the burden of s611 of the New South Wales Act and Part 8 of the Victorian Act. That result would leave s611 and Part 8 in effect against telecommunications carriers. It would yield no comfort to Telstra or Optus. 135 The other way of looking at the situation is to read the two laws together. On this approach, it may be said the combined effect of the two laws is to impose the burden on some, but not all, members of the class; accordingly, the package of laws discriminates against those members of the class who are left to bear the burden. 136 It seems to me this is the most realistic manner of describing the postulated situation. The issue of discrimination ought not be allowed to turn on the form of the legislation, but on its substantial effect. On that basis, it is necessary to consider both the first and second law, and the factual situation. 137 Applying that approach to the present issue, it is necessary, in considering whether (assuming its validity) cl 44(1) of Schedule 3 to the 1997 Telco Act applies to s611 of the New South Wales Act and Part 8 of the Victorian Act, to have regard, not only to those provisions but also the relieving laws of the relevant State, as identified in paras 119 and 120 above. 138 These conclusions accord with the approach taken by counsel for the applicants. Counsel suggest they lead to no problem in practice; it is necessary only to ask whether a particular carrier is subjected to a burden by s611 or Part 8 which does not apply to all carriers, or whether carriers generally are subjected to a burden that is not equally shared by other utilities. As mentioned, counsel for the applicants use the word "utilities" very broadly, so as to include even traffic control authorities in respect of street signs. 139 Counsel's approach receives some support from the example offered in the explanatory memorandum. However, the task of the Court is to construe the statute. The Court is entitled to refer to the explanatory memorandum only in order to confirm an apparent meaning, or resolve an ambiguity, obscurity, or apparent absurdity, in the statute: see s15AB of the Acts Interpretation Act 1901. Contrary to the submission of counsel for Telstra, the Court is not entitled to consider the explanatory memorandum before attributing a meaning to the legislation. Neither of the passages (in CIC Insurance and Project Blue Sky) cited by counsel goes that far. 140 In CIC Insurance the point was made, by Brennan CJ, Dawson J, Toohey J and Gummow J at 408, that it was well settled, at common law, that "the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure". They said "the context (should) be considered in the first instance, not merely at some later stage when ambiguity may be thought to arise". Their Honours thought it was relevant to this task to consider a Law Reform Commission report on which the statute was based. But they made no reference to the explanatory memorandum. 141 In Project Blue Sky McHugh, Gummow, Kirby and Hayne JJ said at para 69: "The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. In Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397, Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. Thus, the process of construction must always begin by examining the context of the provision that is being construed." 142 As it seems to me, there are two difficulties about the notion that courts should examine the explanatory memorandum before attributing a meaning to the statute under consideration. First, to do this would conflict with the limitations contained in s15AB of the Acts Interpretation Act. Section 15AB allows resort to extrinsic material (including an explanatory memorandum: see s15AB(2)(a)) for specific purposes, not generally. Second, construction of a statute by reference to the explanatory memorandum would be to allow the explanatory memorandum to supplant the statute, not merely to provide a confirmation of its meaning or to resolve an ambiguity, obscurity or apparent absurdity. 143 I will later consider whether the explanatory memorandum in this case is able to resolve an ambiguity or obscurity in cl 44(1). Attention must first focus upon cl 44(1) itself. 144 Clause 44(1) uses the word "discriminates", a word whose application often raises difficulties. It certainly does so in the present context. For example, Optus argues it is discriminatory for a State law to enable a council to make a charge, or declare a rate, on overhead, but not underground, cables; or to fix different dollar amounts in relation to overhead and underground cables. Yet many might think that, having regard to the fact that overhead cables have a greater visual impact on the local environment than underground cables, difference in treatment is warranted. Certainly, this was the view taken by many people associated with the making of the charges and rates, as the evidence in this case establishes. 145 It is arguable that the difference in treatment is not irrelevant to the object to be attained: the raising of revenue in a manner that is conducive to protection of the local environment. It may be permissible, as the respondents suggest, for a decision about the imposition of charges or rates on cables, or a decision about their quantum, to take into account the impact of the cables upon the use and enjoyment of public lands and the environmental effects of the cables. Whether a distinction as to quantum is permissible in New South Wales, having regard to the criterion contained in subs (3) of s611, is another matter. 146 It is arguable that both s611 of the New South Wales Act and Part 8 of the Victorian Act have the effect (at least) of discriminating against carriers generally, as compared with some other bodies that place cables in or over public space: see para (a) of cl 44(1). Similarly, it is arguable that these State laws provide for a power (the power to make a charge under s611 or to declare a rate under Part 8) whose exercise would discriminate, or have the effect of discriminating, against carriers generally, as compared with other such bodies: see para (b) of cl 44(1). However, some people might think there is a valid distinction between infrastructure providing essential services, such as water supply, sewerage and drainage (or even electricity or gas), on the one hand, and telecommunications cables providing pay television, internet access and a second telephone network, on the other. 147 There may also be people who see a justification for distinguishing between commercial entities that are wholly or substantially privately-owned, such as Telstra and Optus, and publicly-owned entities. People of that persuasion might argue there is no need to impose a charge or rate on publicly-owned entities in order to obtain community recompense for the entity's use of public land; the benefit of that use is reflected in the entity's profit, which enures for the community. 148 There may even be room for distinction amongst publicly-owned entities. For example, there may be a question whether it is appropriate to deal in the same way with a cable installed by a profit-making, although publicly-owned, entity such as a New South Wales electricity distributor and something provided by way of a free public service, such as a traffic sign erected by a road authority. Might the imposition of charges and rates on facilities provided free of charge to members of the public tend to discourage the provision of such facilities, to the detriment of the community? 149 It is not my purpose to express any view about the legitimacy of these distinctions; but merely to make the point that discrimination, in this context, is a matter about which there are bound to be differences within the community. Those differences will arise, not because any particular view is demonstrably correct or incorrect, but simply because of differences in personal attitudes and opinions; even differing economic and political philosophies. Who is right and who is wrong is not a question that can be proved in a court or demonstrated by logical argument. 150 Statutes designed to deal with discrimination are usually drafted in such a way as to avoid problems like those I have mentioned. For example, the three federal statutes relating to particular forms of personal discrimination provide clear guidance as to the nature of the discrimination with which they deal: see ss9 to 16 and 18B to 18C of the Racial Discrimination Act 1975; ss 5 to 7B and 14 to 28A of the Sex Discrimination Act 1984; ss 5 to 9 and 15 to 28 of the Disability Discrimination Act 1992. The criteria are stated in objective terms. This makes it possible for a court to determine whether a particular law, policy, act or omission constitutes discrimination proscribed by one of those Acts. But cl 44(1) states no criteria by which it may be determined what differences are legitimate and what are illegitimate. The subclause leaves evaluation entirely to the reader. However, the reader's evaluation will inevitably reflect his or her personal attitudes; it will inevitably be a judgment about which it may be expected reasonable people will have other opinions. 151 The applicants' contention is that the problem is resolved by the explanatory memorandum. I have doubts about the propriety of that course. As it seems to me, the applicants really invite the court to use the explanatory memorandum, not to determine any ambiguity about the word "discriminate", but to decide how cl 44(1) may be applied in a particular factual situation. That is an invitation to use the explanatory memorandum as a substitute for the statute, not for any of the purposes set out in s15AB of the Acts Interpretation Act. 152 Even if resort is had to the explanatory memorandum, it does not resolve the problem. That document, also, involves the making of judgments as to the legitimacy of differences. The explanatory memorandum repeats the word "discriminates" in the opening sentence of the relevant passage. The third sentence of that passage makes it plain it is not enough that the law "on its face treats a person differently to someone else"; there must be "an indirect effect of discriminating against carriers or users of carrier services". So the question remains whether there is a justification for the difference. 153 The first dot point refers to "laws that impose a burden on facilities of a carrier that is not imposed on similar facilities". In this context, what are "similar" facilities? A clue is attempted by the parenthetical comparison between carriers and electricity authorities. The entities are not functionally similar. Are their facilities "similar", to the point when any differentiation in treatment is discriminatory, if one set of "street furniture" (a term that presumably covers cables) is underground whereas the other is erected overhead? Are all overhead wires "similar" to each other for the purpose of considering what public impost should be placed upon them, notwithstanding the substantial difference in thickness (and therefore visual intrusiveness) between an electricity reticulation cable and a broadband telecommunications cable? Minds would differ on both these points. 154 Neither the second nor third dot point in the explanatory memorandum seems to have any relevance to the present problem. 155 As it seems to me, the explanatory memorandum does little to resolve the problems of application of cl 44(1). 156 There are two arguments, actually or potentially put against the applicants, about which I can be clear. 157 First, if the application to carriers of s611 of the New South Wales Act is discriminatory, it is no answer that the affected carrier has a right of appeal to the Land and Environment Court. That Court may review the amount of a charge imposed by a council. However, if the charge is legally valid, the Court will necessarily rule there be a charge of some amount, simply because the possession of the pipe etc must be of some benefit to the person concerned; yet, in the case of excluded entities, the end result must be no charge under s611. Discrimination would remain; the only consequence of the right of appeal to the Land and Environment Court is that its extent may be reduced. 158 Second, I have considered whether it would matter that there may be utilities, other than carriers, caught by s611 or Part 8. I do not think so. It cannot be answer to a claim of discrimination against a particular person or group of persons (as compared with the bulk of people in a like situation) that the discriminator also discriminates against some other persons. 159 I have decided not to express a conclusion as to whether, as a matter of construction, cl 44(1) applies to s611 of the New South Wales Act or Part 8 of the Victorian Act. If I were to do so, I would only be voicing a personal opinion about the legitimacy of differences. Because cl 44(1) does not express any criteria as to what differences between affected persons are discriminatory, I would not be expressing a conclusion based upon my interpretation of the law or facts found by me. 160 This decision does not cause difficulty in my resolving the issues raised by cl 44(1). I have come to the conclusion that cl 44(1) is not a law upon which s109 of the Constitution may operate so as to render a State law ineffective. I will pass to that matter.

H. Is cl 44(1) a law under s51(v) of the Constitution upon which s109 may operate??

(i) The context of the issue 161 The Commonwealth Parliament has no direct power to strike down, or render ineffective, State legislation, to forbid the exercise of power granted by State legislation or to exempt a person from complying with that legislation. However, the Commonwealth Parliament may legislate on a topic committed to it under the Constitution. If it does so, and there is any State law inconsistent with the Commonwealth law, "the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid": see s109 of the Constitution. The inconsistency may occur in either of two ways: one, there may be a direct inconsistency, or, two, the Commonwealth law may evince an intention to make exhaustive or exclusive provision on the subject, thereby bringing s109 into play in relation to any State legislation on the same subject: see per Mason J in The Queen v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 562-564. An intention to make a Commonwealth law the exclusive and exhaustive law upon a subject within Commonwealth legislative power may be revealed either expressly or by implication. A provision which expressly excludes the operation of State law will generally be treated as an expression of intention that the Commonwealth law be exclusive and exhaustive.

(ii) The respondents' submissions 162 Putting aside, for the moment, the argument concerning acquisition of property, counsel for the respondents put three submissions. First, they say that cl 44(1) is not a law about telecommunications which, they concede, is a topic within the scope of Commonwealth constitutional power (s51(v) of the Constitution); but rather a law about discrimination, which is not. Consequently, the clause is not a valid Commonwealth law. Second, counsel argue that, even if the clause is a valid Commonwealth law, it does not set up an inconsistency with State law capable of triggering s109 of the Constitution. Third, they say that s109 is merely concerned with inconsistency of laws. It enables the Commonwealth law to prevail, but it does not authorise the Commonwealth to strip a person of rights or powers conferred by a State law - as cl 44(1)(b) purports to do - or to exempt a person from compliance with a State law - as cl 44(1)(c) purports to do. The last submission is encapsulated in the following extract from the New South Wales respondents' written submissions: "Clause 44(1) seeks to render State laws of 'no effect', to prohibit the 'exercise of power' under State laws, and to excuse 'compliance' with State laws 'to the extent to which the law discriminates, or has the effect (whether direct or indirect) of discriminating against a particular carrier, against a particular class of carriers, or against carriers generally'. It does so directly and without invoking section 109 of the Constitution. Any 'invalidity' of a state law can only arise through the operation of section 109. Otherwise a State law must be given full faith and credit throughout the Commonwealth: section 118 of the Constitution."(Counsel's emphasis) 163 Counsel for the New South Wales respondents say Division 7 of Schedule 3 of the 1997 Telco Act defines, for the purpose of s109 of the Constitution, the field of operation of the statute. Division 7 is entitled "Exemptions from State and Territory laws". The Division is concerned with the extent to which activities authorised by other Divisions of the Schedule are exempt from the operation of relevant State and Territory laws. But counsel argue that cl 44(1) - which is in Division 8 of the Schedule headed "Miscellaneous" - "seeks to do something quite different to Division 7". Counsel say: "Under clause 44(1) the State laws are treated as valid in the section 109 sense, and in different ways the operation of those laws is sought to be affected. Clause 44(1)(a) purports to render the State law of no effect 'to the extent to which the law discriminates, etc'. Clause 44(1)(b) purports to prohibit the exercise of a power under State law 'to the extent to which the law discriminates, etc'. Clause 44(1)(c) purports to excuse compliance with a State law 'to the extent to which the law discriminates, etc'. Clause 44(1) is inconsistent with provisions of the Constitution concerning the status of State laws as laws, and their operation and effect as such. Valid State laws must, subject to section 109 of the Constitution, be treated as having status as laws, and having operation and effect as such, throughout the Commonwealth: section 118. The status of a State law as law, and its effect and operation as such, are protected from Commonwealth law except to the extent that section 109 applies to render the State law 'invalid'." (Counsel's emphasis) Counsel conclude that cl 44(1)(a) "may be seen as having the character of a law with respect to State constitutional power", cl 44(1)(b) "as having the character of a law with respect to the operation of State laws" and cl 44(1)(c) "as having the character of a law with respect to the status of State laws as such". 164 Counsel for the Victorian respondents put similar submissions. They say: "If cl 44(1) is to achieve its stated aim, it must do so by triggering the operation of s.109 of the Constitution. There is no other means by which the Commonwealth may exclude or limit the operation of State laws. In opening, counsel for Telstra appeared to foreshadow a submission that cl.44 does not affect the 'validity' of State laws, but exempts Telstra from compliance with such laws to the extent that they relevantly discriminate. But the Commonwealth has no general power to grant exemptions from compliance with State laws. The Commonwealth can exclude the operation of State law only by enacting a valid Commonwealth law that is inconsistent with it, and thereby triggering the operation of s.109. Support must be found in one of the heads of power in ss 51 and 52 of the Constitution for the Commonwealth law." 165 Counsel make the point that the Commonwealth cannot exclude the operation of a State law upon a subject outside Commonwealth power. Nor can it bring s109 into play by a legislative declaration that a class of State laws is not to operate, divorced from any Commonwealth regulation or control of the relevant subject. They say: "Section 109 is triggered by a Commonwealth law which deals with a subject within Commonwealth legislative power and a State law that is inconsistent with it. The Commonwealth cannot declare an inconsistency to exist where there is none. Such a law would not deal with any subject matter of Commonwealth legislative power." 166 Counsel for the Victorian respondents argue "there is no power in the Commonwealth Parliament to make a law providing that a State law on a certain subject is to be allowed to operate only if it satisfies certain criteria or to modify or exclude the operation of State laws in particular situations". They say "such a law in substance attempts to treat s109 as a source of legislative power to exclude State laws"; "it operates as a law concerning State laws, not as a law directed at any subject matter of Commonwealth legislative power". 167 Counsel for the Victorian respondents submit: "Clause 44(1) does not mark out a field within which the regime of the Telecommunications Act is intended to be exclusive and exhaustive. It cannot be read as an example of a provision indicating an intention to 'cover the field'. On the contrary, it is an attempt to control the operation of State laws by reference to the manner in which they deal with or affect a particular subject. Paragraph (a) of cl 44 provides that a State law 'has no effect' if (but only if) it discriminates against a carrier; and paragraph (b) purports to deny any right, privilege, immunity or benefit arising under a State law if (but only if) it discriminates in that manner. … cl 44(1) is not a law with respect to any subject of Commonwealth legislative power."

(iii) The applicants' submissions 168 The applicants' response to these submissions is that cl 44(1) provides a protection to carriers against a discriminatory burden imposed on carriers by s611 of the New South Wales Act and Part 8 of the Victorian Act. Counsel for Telstra say: "(a) Clause 44(1) can be seen to confer an immunity, right or protection on a carrier or on carriers generally. If s611 or Part 8 authorise the imposition on a carrier of a financial burden, that burden will have a discriminatory effect and each of s611 and Part 8 will purport to take away that right or protection. That interference by a law of a State with an immunity, right or protection conferred by a law of the Commonwealth produces inconsistency within s109. (b) Putting the matter slightly differently, if s611 or Part 8 attempt to impose a financial burden on a carrier or carriers, that burden is greater than the burden contemplated by cl 44(1), so that there is 'direct collision': Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 at 258. (c) Clause 44(1) marks out an area relating to the operations of carriers to be regulated exclusively by the Commonwealth. Its effect is to identify the area where entry by a State will produce inconsistency and invalidity for the State law within s109 of the Constitution: Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 108-109; Western Australia v The Commonwealth (1995) 183 CLR 373 at 469." 169 Counsel submit: "The effect of s109 on s611 and Part 8 would not be to impose absolute invalidity. The State laws would remain valid, although rendered inoperative to the extent of the inconsistency, for so long as the inconsistency remains; and with the extent of the inconsistency depending on the text and operation of the respective (State and Commonwealth) laws". 170 Counsel for Telstra argue that the submissions for the Victorian respondents summarised in paras 164 to 167 are stated too broadly. They say: "The Commonwealth can legislate to protect entities performing functions within federal power from selected State laws". 171 In relation to the argument that cl 44(1) does not mark out a field within which the regime of the Telecommunications Act is intended to be exclusive and exhaustive, counsel put some propositions which, they suggest, are supported by the judgment of Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ in Western Australia v The Commonwealth (1995) 183 CLR 373 (the Native Title Case): ". Where the Commonwealth has the power to prescribe an exclusive statutory regime, a Commonwealth law expressing an exclusion of the operation of a State law is not construed as an attempt to invalidate the State law directly but as an expression of intention that the Commonwealth law should have exclusive operation - at 467-468. . Unless the terms used preclude such a construction, the form of expression does not take the law outside Commonwealth power - at 468.2. . Even if the Commonwealth law were to identify what State laws should be 'valid' or 'invalid', the use of those terms will not take the Commonwealth law outside power. In accordance with s15A of the Acts Interpretation Act 1901, such terms must be construed as having a meaning supported by Commonwealth power - at 469.3. Similarly, the reference in cl 44(1)(a) to a State law having no effect is to be read as meaning 'having no effect on a carrier' - meaning that a carrier is immunised or protected from such laws. Such a meaning is no more than a 'prescription of the conditions on which State laws may be operative' - at 469.8." 172 The statement in the joint judgment, intended to be summarised in the second dot point, is: "It is construed as an expression of intention that the Commonwealth law should have exclusive operation. Being construed as a declaration of intention that the Commonwealth law should operate exclusively of State law on the topic, the Commonwealth law is within power." (My emphasis) 173 Counsel for Telstra respond to the contention that cl 44(1) is not a law with respect to "postal telegraphic and other like services", within s51(v) of the Constitution, by saying that the clause "confers rights or privileges on those entities which provide telegraphic, telephonic and other like services". They cite a passage in the judgment of Kitto J in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 7: "Under that section (s51 of the Constitution) the question is always one of subject matter, to be determined by reference solely to the operation which the enactment has if it be valid, that is to say by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes; it is a question as to the true nature and character of the legislation: is it in its real substance a law upon, 'with respect to', one or more of the enumerated subjects, or is there no more in it in relation to any of those subjects than an interference so incidental as not in truth to affect its character?" 174 Applying that test, counsel say, cl 44(1) "is plainly a law with respect to the subject matter of s51(v). Clause 44(1) is a law which has an actual and immediate operation within the field assigned to the Commonwealth as a subject of legislative power (namely, the operations of those entities which are authorised to provide telegraphic, telephonic and other like services)". Counsel go on: "If the Commonwealth can, when legislating with respect to trade and commerce between the States, legislate to protect an entity engaged in that trade and commerce from State taxes (Australian Coastal Shipping Commission v O'Reilly (1962) 107 CLR 46 at 56), the Commonwealth can legislate to protect an entity engaged in providing s51(v) services from those State laws which have the effect of discriminating against the providers of such services."

(iv) Conclusions 175 During the course of oral argument, Dr Griffith remarked "this is the only real issue in the case". I would not go that far; but I have found it the most troublesome issue. Three views have been argued: (i) Because cl 44(1) does not give any certain relief to telecommunications carriers, but only protects them against "discrimination", it is not a law about telecommunications (supported by s51(v) of the Constitution), but a law about discrimination, devoid of constitutional support; (ii) As the clause is located in telecommunications legislation, and relates to licensed telecommunications carriers, it must be regarded as a law about telecommunications supported by s51(v) of the Constitution; however, it does not provide the explicit exclusion of State law which is necessary for there to be an inconsistency between Commonwealth and State law, within the meaning of s109 of the Constitution; (iii) The clause is about telecommunications and it sets up a regime of non-discrimination which prevails over any discriminatory State regime. 176 If either of the first two views is correct, the question posed for this section of my reasons must be answered in the negative; cl 44(1) is not a law under s51(v) of the Constitution upon which s109 may operate. It would follow that cl 44(1) does not protect Telstra or Optus against councils' exercise of their powers under s611 of the New South Wales Act or Part 8 of the Victorian Act. 177 I think one thing is clear: paras (b) and (c) of cl 44(1) are devoid of legal effect. As the respondents argue, the Commonwealth has no direct power to interfere with the operation of State law. The Commonwealth's only power is to pass constitutionally valid legislation that is inconsistent with State law, in which case the Commonwealth law prevails and the State law is invalid to the extent of the inconsistency (s109). A valid Commonwealth law may render a State law of no effect; but the Commonwealth has no power to enact legislation directly removing a right, privilege, immunity or benefit conferred under State law, or commanding a person not to exercise a power conferred by State law or excusing compliance with a State law; as paras (b) and (c) purport to do. 178 However, the point is somewhat academic. If cl 44(1)(a) is a valid law of the Commonwealth, that prevails over s611 of the New South Wales Act and Part 8 of the Victorian Act in relation to licensed carriers, that would be sufficient for the applicants' purposes. If either State law is rendered ineffective by para (a) of cl 44(1) in relation to licensed carriers, it would follow that nobody is entitled to a right, privilege, immunity or benefit, or to exercise any power, under that law in relation to licensed carriers; similarly nobody is required to comply with that law in so far as it affects licensed carriers. 179 Clause 44(1) of Schedule 3 is part of an Act relating to telecommunications. There is no doubt that Parliament intended to rely on s51(v) as the constitutional foundation for the legislation, including for cl 44(1). Nor is there any doubt that, if it had wished to do so, Parliament could have exempted licensed carriers from financial impositions imposed by State law. That much has been clear since the decision in Australian Coastal Shipping Commission v O'Reilly in 1962, at least. 180 The issue in Australian Coastal Shipping Commission was the constitutional validity of a Commonwealth provision that the Commission (a statutory body established under Commonwealth law and owned by the Commonwealth) "is not subject to taxation under a law of a State or Territory of the Commonwealth to which the Commonwealth is not subject". The Court held this exemption to be a law falling within the trade and commerce power conferred by s51(i) of the Constitution. Dixon CJ, with whom Kitto, Taylor and Owen JJ agreed, said at 56: "Given the power in reference to a subject matter of legislation to set up a federal governmental corporation, the power of the Parliament extends to excluding the imposition of State taxes on its operations and the exclusion of liability on the part of the corporation to State taxes upon its activities. The fact that a government agency is set up at all brings under consideration the question whether its operations should or should not be exposed to State taxes. How that question should be decided is a matter of policy. But the legislative power under which, ex hypothesi, the agency is validly set up must surely be enough to enable the legislature to decide it. The various taxes of the six States the liability for which might otherwise be incurred in the course of the activities of what is called the National Shipping Line may have been considered something to which it is desirable that the Commonwealth Line should not be exposed. Once that view is taken it appears to be sufficiently clear that the legislative power must extend to excluding the imposition upon the activities of the Commonwealth Line of such taxation." 181 The Australian Coastal Shipping Commission was an entity wholly owned by the Commonwealth government. Clause 44(1) of Schedule to the 1997 Telco Act applies to every licensed carrier, irrespective of ownership. But I do not think that difference takes the case outside the principle enunciated by Dixon CJ. The Commonwealth Parliament might exercise its constitutional legislative power in respective of a particular topic by authorising a privately owned entity to take particular action. If the Commonwealth took that course, it would have the competence to prescribe the legal regime that was to apply to the discharge by the entity of that function. This regime might include exemption from a liability under State law to which the Commonwealth considered the entity ought not be exposed. It follows that the Commonwealth Parliament could have decided that licensed telecommunications carriers ought not be exposed to State or Territory financial impositions: (i) of any kind; (ii) that did not apply to the Commonwealth itself; or (iii) of a particular type; for example, land tax or payroll tax. 182 In any of these cases, the Parliament could have enacted legislation to give effect to its view; being legislation that expressly excluded the selected class of impositions. Had it done so, the State law making the imposition would have been inconsistent with the federal law exempting carriers from the imposition; s109 would have applied. The Commonwealth law would have prevailed and the State law, to the extent of the inconsistency, would have been invalid; that is, of no effect as long as the Commonwealth law remained in operation. 183 Botany Municipal Council v Federal Airports Authority (1992) 175 CLR 453 provides an example of this situation. The case concerned the validity of a regulation made under the Federal Airports Corporation Act 1986 authorising a licensee (a contractor to carry out works at or near Sydney airport) to carry out those works "in spite of a law, or a provision of a law, of the State of New South Wales that … relates to … environmental assessment". The appellant, the local authority for the area, contended (amongst other things) that the regulation was invalid because it purported to displace a State law. Counsel argued that a Commonwealth law, by operation of the Constitution, might have that effect, but it could not do so directly. 184 The High Court unanimously rejected that argument. At 463 the Court said the most obvious answer to it is that the regulations "have a wider purpose". They establish a licensing regime regulating the engagement of contractors who are to carry out any part of the works. At 464-465 the Court said: "Regulation 9(2) is designed to ensure that the carrying out of the works and the exercise of the rights is governed by, and is in accordance with, the environmental standards as defined by the Regulations, that is, the Commonwealth standards, and to ensure that the work authorized by Commonwealth law is neither prevented nor hindered by State law. To attain those two objects, reg. 9(2) confers upon a contractor an immunity from liability under State law in respect of what he or she does in accordance with a licence granted by the Chief Executive Officer. Legislation which attains those objects and confers that immunity is necessarily inconsistent with State law and therefore becomes inoperative by operation of s.109 of the Constitution. Viewed in this way, reg. 9(2) is plainly valid. This is not a case in which the Commonwealth law is aimed at preventing or controlling State legislative action rather than dealing with a subject matter assigned to the Commonwealth Parliament. Nor is it a case in which the Commonwealth law invalidly seeks to displace or expand the operation of s109." Their Honours quoted the remarks of Dixon CJ in Australian Coastal Shipping Commission set out above. 185 It will be noted that the regulation in issue in the Botany case directly and unconditionally overrode the relevant State law. Unlike the position that arises in relation to cl 44(1)(a) of Schedule 3 to the 1997 Telco Act, the regulation did not allow the effect of Commonwealth law to depend upon, or be affected by, the content of the State law. 186 The Commonwealth Parliament did not determine that telecommunications carriers, as entities carrying out a function subject to regulation by Commonwealth law, should be relieved of the burden of State taxation. It did not legislate so as to exempt licensed carriers from compliance with State laws, but only to protect them against discrimination. It follows from the course taken by the Commonwealth that the question whether or not licensed carriers in a particular State are subject to the financial imposts otherwise applicable under State law is made to depend, not upon the Commonwealth law itself, but upon the law of the State. This is not a case, as in the Native Title case (see para 172 above), of "a declaration of intention that the Commonwealth law should operate exclusively of State law on the topic", but rather a case where the effect of the Commonwealth law is made to depend on the terms of the State law. 187 The distinction is not a mere technicality. Legislation in the form of cl 44(1) has a propensity to disturb the federal/State balance by influencing the manner in which a State legislates in respect of a subject within its own legislative domain. As the applicants' argument concedes, consistently with cl 44(1)(a), any State could levy rates or charges against carriers' infrastructure on or over public land; the condition of being able to do so would be that the State was prepared to make such amendments to its policies and laws as were necessary to avoid "discrimination". On the applicants' argument this would require the State to ensure that similar rates or charges were able to be levied against other infrastructure owners, whether or not the State wished to expose those owners to the rates and charges. 188 The point is that cl 44(1) does not necessarily relieve licensed carriers of an imposition that the Commonwealth Parliament considers to be an unreasonable burden on an entity carrying out a function governed by Commonwealth law, as in Australian Coastal Shipping Commission and Botany Municipal Council. Rather, cl 44(1)(a) operates to put States and Territories in the dilemma of either foregoing revenue from licensed carriers that, even in the judgment of the Commonwealth Parliament, would not be an unreasonable burden for licensed carriers to bear or, alternatively, changing their own policy about a matter totally within State jurisdiction and taxing hitherto exempt entities. 189 Discrimination is an inappropriate concept to act as a trigger for the operation of s109 of the Constitution. People should know what law they are to obey. If it is clear, on the face of the law itself, that the Commonwealth Parliament has enacted a law that covers a particular field, a reader will know it is not necessary to obey a State law that lies within that field. The same observation applies to a case where it is apparent, on the faces of the Commonwealth and State laws, that they are mutually inconsistent and cannot both be obeyed. One or both laws may present difficulties of interpretation, but the inconsistency will appear from the terms of the laws themselves. If cl 44(1)(a) was limited to the words "to the extent to which the law discriminates", it might be said that a person need do no more than read that clause, and the State law imposing the burden, in order to determine whether the clause applied; although the person would still have to make a value judgment as to whether the State law "discriminates" against a particular carrier, a particular class of carriers or against carriers generally. However, as I have observed, cl 44(1)(a) also covers the situation where the relevant State law "would have the effect (whether direct or indirect) of discriminating". This necessarily requires reference to other laws of the relevant State or Territory and, as this case shows, to factual matters; the situation is far removed from the simple test embodied in s109 of the Constitution: "(w)hen a law of a State is inconsistent with a law of the Commonwealth …". 190 I have considered whether the High Court decisions concerning the Racial Discrimination Act point away from the views just expressed. I have in mind, particularly, Mabo v Queensland [No.1] (1988) 166 CLR 186 and the Native Title case. In both those cases, the High Court considered s10 of the Racial Discrimination Act which states: "(1) If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin." 191 In Mabo [No.1] a majority of the High Court held that this subsection was inconsistent, within the meaning of s109 of the Constitution, with s3 of a 1985 Queensland statute that declared certain islands to have become "vested in the Crown in right of Queensland freed from all other rights, interests and claims of any kind whatsoever" and to have become "waste lands of the Crown" able to be dealt with as such. The basis of this ruling was that, on the assumption that the plaintiffs could establish the existence of common law native title rights, s3 acted in a racially discriminatory manner by extinguishing all legal rights which take their origin from native law and custom, while confirming all legal rights which take their origin from the Queensland Crown lands legislation: see per Brennan, Toohey and Gaudron JJ at 215 and per Deane J at 230-231. 192 One of the issues in the Native Title case was the validity, having regard to s109 of the Constitution, of 1993 Western Australian legislation that purported to extinguish native title and replace it with statutory rights of usage. The Court held this legislation was inconsistent with s10(1) of the Racial Discrimination Act. The rationale of that holding was stated by Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ at 437: "If a law of a State provides that property held by members of the community generally may not be expropriated except for prescribed purposes or on prescribed conditions (including the payment of compensation), a State law which purports to authorise expropriation of property characteristically held by the 'persons of a particular race' for purposes additional to those generally justifying expropriation or on less stringent conditions (including lesser compensation) is inconsistent with s10(1) of the Racial Discrimination Act." 193 It will have been noted that s10(1) of the Racial Discrimination Act does not, in terms, invalidate legislation that discriminates on the basis of race. Indeed the subsection does not use the word "discriminate". The subsection attacks racial discrimination by removing the discriminatory restriction from the legislation. It provides that, where rights given by another law are restricted on a racial, colour, national or ethnic basis, those rights shall apply without restriction. Where it is impossible to remove a restriction imposed by State law, consistently with the purpose of that law, as in Mabo [No.1] and the Native Title case, the State law is in conflict with s10(1) of the Racial Discrimination Act and inoperative during the currency of that subsection. 194 Section s10(1) of the Racial Discrimination Act is clearly a law about discrimination. It is a valid law: see Koowarta v Bjelke-Petersen (1982) 153 CLR 168. But that is because it carries into effect an international convention to which Australia is a party, the International Convention on the Elimination of all Forms of Racial Discrimination. The legislation is supported by the external affairs power: see s51(xxix) of the Constitution. The fact that s10(1) of the Racial Discrimination Act is valid does not mean the Commonwealth has a general power to legislate in relation to discrimination. 195 Another difference between s10(1) of the Racial Discrimination Act and cl 44(1)(a) is that the former provision relates only to a restriction that appears on the face of the particular discriminatory law. It is not necessary for the reader to consider whether the law imposing the restriction has the effect (direct or indirect) of discriminating. Moreover, the target restriction relates to "a right that is enjoyed by persons"; there is no need for a value judgment about fact situations. 196 I believe that nothing in the racial discrimination cases is inconsistent with the view I have expressed about cl 44(1)(a) of Schedule 3 of the 1997 Telco Act. 197 I summarise my view about cl 44(1)(a) in this way: (i) Clause 44(1)(a) appears in legislation which is concerned with telecommunications, a matter within the legislative competence of the Commonwealth pursuant to s51(v) of the Constitution; (ii) It would have been open to the Commonwealth, using s51(v), to provide that State law, or particular State laws, should not apply to licensed carriers; (iii) However, the Parliament did not do this. Instead, in cl 44(1), it imposed a regime that required an inquiry and value judgment on the question: whether the imposition of a particular State law would have the effect of discriminating against a particular carrier, a particular class of carriers or carriers generally. (iv) The effect of this regime is not to proscribe the imposition on licensed carriers of any burden imposed by relevant State law - that burden may be retained in a non-discriminatory way - but to proscribe "discrimination" against carriers in respect of that burden. (v) There is a question whether it is more appropriate to say that: (a) the result is a law about discrimination, rather than telecommunications; or (b) it is a law about telecommunications, and discrimination against telecommunications carriers, but is not a law that is inconsistent with the relevant State laws, within the meaning of s109 of the Constitution. (vi) In my view, sub-para (b) better describes the situation. However, it does not matter which description is adopted; on either view cl 44(1)(a) is ineffective to exclude otherwise applicable State law. 198 In my opinion, the applicants' case on cl 44(1) should be rejected.

I. Is cl 44(1) invalid on the basis that it effects an acquisition of property otherwise than on just terms?

(i) The argument 199 Counsel for the New South Wales respondents argue that, if cl 44(1) of Schedule 3 to the 1997 Telco Act has the effect for which the applicants contend, it is invalid because it permits non-consensual occupation of the respondents' land without providing just terms for that occupation. Counsel refer to s51(xxxi) of the Constitution which empowers the Commonwealth Parliament to enact legislation with respect to "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws".

(ii) Conclusions 200 Having regard to my view that cl 44(1) is ineffective to protect the applicants against s611 of the New South Wales Act and Part 8 of the Victorian Act, it is not essential for me to reach a conclusion about this argument. However, it seems to me without substance. 201 I do not doubt that legislation conferring a right to occupy land may accurately be characterised as legislation effecting an acquisition of property: see Minister for the Army v Dalziel (1944) 68 CLR 261. However, cl 44(1) does not do that. The sub-clause assumes a right to occupy, derived elsewhere. It merely seeks to restrict the operation of State laws in respect of the occupation. It is difficult to see how legislation like that effects an acquisition of property. 202 Even if there was an acquisition, there is a short answer to the respondents' argument. Section 591(1) of the 1997 Telco Act provides: "(1) If: (a) apart from this section, the operation of this Act would result in the acquisition of property from a person otherwise than on just terms; and (b) the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution; the Commonwealth is liable to pay compensation of a reasonable amount to the person in respect of the acquisition." Subsection (3) of s591 gives to the terms "acquisition of property" and "just terms" the same meanings as in s51(xxxi) of the Constitution. Subsection (2) provides for assessment of the appropriate compensation in this Court, failing agreement between the parties. 203 The obvious intent of s591 was to prevent any invalidity arising, by reason of the 1997 Telco Act effecting an acquisition of property otherwise than on just terms. If, contrary to my view, cl 44(1) effects an acquisition of property, this would not lead to the invalidity of the subclause; it would merely mean the Commonwealth is liable to pay compensation for the acquisition.

J. Whether the Court has jurisdiction to determine the administrative law issues

(i) The argument 204 During the course of submissions, counsel used the term "administrative law issues" to refer to issues (iii), (iv) and (v), identified in para 7 above. There is a question whether the Court has jurisdiction to determine those issues. The question is raised only by the New South Wales respondents. No doubt this is because the argument of lack of jurisdiction turns on provisions contained in the New South Wales Land and Environment Court Act 1979. 205 The Land and Environment Court has jurisdiction to determine the administrative law issues that arise in connection with the charges imposed by the New South Wales respondents. Section 16 of the Land and Environment Court Act vests jurisdiction in the Land and Environment Court, including jurisdiction to hear and dispose of a matter, not otherwise within jurisdiction, "that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act". Section 19(h) of the Land and Environment Court Act confers jurisdiction on the Court to hear and dispose of "any other appeals, references or other matters which an Act provides may be heard and disposed of by the Court …". This must include appeals under s611(4) of the Local Government Act. 206 Section 20(1)(e) of the Land and Environment Court Act confers on the Land and Environment Court "Class 4" jurisdiction to hear and dispose of (amongst other proceedings) "proceedings referred to in subsection (2)". Subsection (2) gives the Court "the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of proceedings … to enforce any right, obligation or duty conferred or imposed by a planning or environmental law …". Subsection (3) defines a "planning or environmental law" so as to include Chapter 15 of the Local Government Act 1993. Section 611 is contained in Chapter 15. 207 Section 58 provides a right of appeal to the Supreme Court in respect of proceedings within the Court's Class 4 jurisdiction. 208 Section 71(1) of the Land and Environment Court Act is as follows: "Subject to section 58, proceedings of the kind referred to in section 20(1)(e) may not be commenced or entertained in the Supreme Court." 209 Counsel for the New South Wales respondents submit: "The provisions of section 71(1) evince a clear legislative intention to exclude judicial review by the Supreme Court. Whilst not a privative clause which seeks to exclude judicial review entirely … the meaning of the State law ascertained in its legislative context is clearly to exclude judicial review of the decision of the relevant Councils here under attack in Courts other than the Land and Environment Court of New South Wales. The Federal Court does not have jurisdiction to hear a matter arising under section 20(1)(e) of the Land and Environment Court Act 1979 (Smith v Smith (1986) 161 CLR 217 at 237-8 and 251; The Rochester Communications Group Pty Ltd v Adler (1996) 65 FCR 572; Edensor Nominees Pty Ltd v ASIC (1999) 168 ALR 676; Turner v Official Trustee of the Bankrupt Estate of Turner [1999] FCA 1817 (F.C.))."

(ii) Conclusions 210 In Smith v Smith the question was whether the Family Court of Australia had power to approve a deed under which a person released his rights to make an application under the Family Provision Act 1982 (NSW) in respect of a deceased person. The Family Provision Act provided for approval of such deeds by the Supreme Court of New South Wales. The Family Court was being asked also to approve a maintenance agreement, a function clearly within its jurisdiction. 211 The High Court held the Family Court had no accrued or other jurisdiction to exercise the power of approval conferred on the Supreme Court. There were two reasons for this conclusion. First, approval of the maintenance agreement and approval of the deed of release did not fall within the same "matter", so as to trigger the accrued jurisdiction of the Family Court in respect of approval of the deed of release. Second, the Family Provision Act makes a release effective only if approved by the Supreme Court; an approval by the Family Court would not satisfy that condition. 212 Beaumont J adopted the second of these reasons in holding, in Rochester Communications Group, that the Federal Court is unable to exercise jurisdiction under s275(1) of the Industrial Relations Act 1991 (NSW). That subsection provides that "the Industrial Court (that is, the Industrial Court of New South Wales) may make an order declaring wholly or partly void, or varying" certain types of agreements if "the Industrial Court" reaches one or more of six specified findings. 213 In Edensor Nominees a Full Court of this Court determined that, although the Federal Court had accrued jurisdiction to hear a claim of breaches of s615 of the Corporations Law, it had no power to make orders under ss737 and 739 of that law for payment to shareholders of a sum of $28.5 million. The reason was that the sections empowered "the Court" to make such orders. The words "the Court" were defined to include the Federal Court, but only when the Federal Court was "exercising the jurisdiction of this jurisdiction", that is, of the relevant State. Yet, the Full Court said, in the light of Re Wakim; Ex parte McNally (1999) 163 ALR 270, it must be concluded that the Federal Court could not be invested with State jurisdiction. 214 An application was made to the High Court for special leave to appeal against the Full Court's decision in Edensor Nominees. That application was referred to a Bench consisting of all seven members of the Court. On 30 August 2000, the Court announced that the declarations of the Full Court concerning lack of jurisdiction would be set aside and that the Full Court of the Federal Court should hear and determine the merits of Edensor Nominees' appeal. The High Court has not yet published reasons for that decision. 215 In Turner a Full Court determined that the Federal Court had jurisdiction to determine an issue between the Official Trustee in Bankruptcy and the son of a bankrupt concerning a transfer of land, but the Federal Court was not entitled to exercise the power, conferred specifically on the Supreme Court of New South Wales, to give a direction to the Registrar General under s138 of the Real Property Act 1900 (NSW). 216 I do not think any of the authorities cited by counsel for the New South Wales respondents indicates this Court lacks jurisdiction to determine the administrative law issues raised in this case. In order to determine those issues, it is not necessary for the Court to exercise a power that is conferred by name on some other court, as in Smith v Smith, Rochester Communications Group or Turner. Nor is it necessary for the Court to rely on jurisdiction conferred on it by a State legislature, as was the perceived problem in Edensor Nominees. Provided only that the administrative law issues arise out of the same substratum of fact as the federal issues - and nobody suggests to the contrary - the Court is able to exercise the jurisdiction conferred on it, by the Commonwealth Parliament, in s32 of the Federal Court of Australia Act 1976: see Fencott v Muller (1983) 152 CLR 570. 217 The effect of s71 of the Land and Environment Court Act is to exclude the jurisdiction of the Supreme Court of New South Wales to determine the administrative law issues that are raised in this case. But s71 makes no reference to this Court. Nor could it, as a State Act, validly exclude a jurisdiction conferred on this Court by federal legislation. 218 This Court has jurisdiction to determine the administrative law issues raised in the case.

K. Whether, as a matter of discretion, the Court ought to exercise its jurisdiction to determine the administrative law issues

(i) The argument 219 The New South Wales respondents submit that, even if this Court has jurisdiction to determine the administrative law matters, it ought not do so, as a matter of discretion. The basis of that submission is that the administrative law matters raised by issue (iii) in para 7 are all matters of which the Land and Environment Court may take cognizance in an appeal under s611(4) of the New South Wales Act. 220 The Victorian respondents do not submit that the Court should decline to determine the administrative law issues; indeed they ask me to determine all the issues raised by any party. 221 Division 3 of Part 8 of the Victorian Act provides for review of rating decisions. Section 183 allows an affected person to challenge, before the Victorian Civil and Administrative Tribunal, a decision of a council to classify land as land of a particular type or class for differential rating purposes. This would seem to cover the matters referred to in issue (v), as stated in para 7 above. 222 Section 184(1) of the Victorian Act gives a right of appeal to the County Court to a person aggrieved by a rate or charge imposed by a council under the Act, but only on the grounds specified in subs (2) of that section. None of those grounds covers the argument of extraneous purpose that arises under issue (iv) in para 7 above.

(iii) Conclusions 223 This Court undoubtedly has a discretion as to whether or not it should determine an issue arising under State law that comes to the Court as part of its accrued jurisdiction: see Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 457-458 (Barwick CJ) and Stack v Coast Securities (No.9) Pty Ltd (1983) 154 CLR 261 at 294-295 (Mason, Brennan and Deane JJ). In Philip Morris Barwick CJ commented: "there would need to be very good reasons why a court which could resolve the whole matter should refuse or fail to do so. Generally speaking, one would expect that a court, once its federal jurisdiction is excited or attracted, would proceed to resolve the whole matter …" That general approach was endorsed in Stack. 224 Although the factual situation varies as between the two States, the questions of principle that fall to be resolved under issue (iii)(a), in relation to the New South Wales respondents, are essentially the same as those which need to be determined, in relation to the Victorian respondents, under issue (iv). Although the question always is whether a particular decision was taken for an extraneous purpose, the argument put by the present applicants does not turn upon the detail of what happened within a particular council, but rather, in respect of both sets of applicants and both sets of respondents, whether the decisions of the councils were affected by either or both of two extraneous purposes: inflicting a penalty on carriers who constructed above-ground telecommunications cables and encouraging carriers to relocate existing cables, and to construct future cables, underground. The applicants' arguments in respect of that question depend substantially upon extensive documentary material, in respect of each State. 225 As I see the situation, it would not be possible for the applicants to litigate the extraneous purposes issue, as against the Victorian respondents, in the County Court. Perhaps they could raise the issue in the Supreme Court of Victoria but this would still mean that two courts, the Supreme Court of Victoria and the Land and Environment Court of New South Wales, would be asked to deal with the same questions of principle. 226 This Court is already seized of the extraneous purposes issue as part of the "matter" attracted to the Court in exercise of its federal jurisdiction. The Court has both the evidentiary materials and the submissions of counsel relating to the issue. Under those circumstances, it would be inappropriate for the Court to decline to determine the issue, and thereby force the applicants to relitigate it in two other courts. 227 Sub-issue (b) of issue (iii), which arises only in respect of New South Wales, requires consideration of the nature and extent of the benefit enjoyed by a telecommunications carrier in using public land. The submissions made in relation to this issue call into question the method of determining benefit that was applied by the New South Wales respondents. Although counsel have limited themselves to a contention that the adopted method conflicted with the decision of Sugerman J in Australian Gas Light Company v Annandale Municipal Council, there is obviously more to the issue than that. Its proper resolution would require consideration of evidence that is not yet before the Court. Accordingly, it would be inappropriate for me to address the issue. 228 Sub-issue (c) also arises only in respect of New South Wales. As I understand the applicants' position, this sub-issue turns on the form of the various council resolutions; the sub-issue does not raise any matter of general importance. 229 I think that issues that depend on the detail of a particular property, or the way in which the matter was dealt with by a particular council, including the form of any particular resolution, are best left to be considered, on a "one-off" basis, by the specialist tribunal appointed for that purpose, the Land and Environment Court of New South Wales. 230 Similarly, the differential rate question, raised as issue (v), ought to be left to the appropriate Victorian tribunal; presumably the Victorian Civil and Administrative Tribunal. 231 For the above reasons, I will exercise my discretion, in relation to the administrative law issues: (i) by dealing with the matters referred to in issues (iii)(a) and (iv) of the issues set out in para 7; and (ii) by declining to deal with issues (iii) (b), (c) and (v). L. Extraneous purposes: New South Wales (i) Legal principles 232 In Warringah Shire Council v Pittwater Provisional Council (1992) 26 NSWLR 491 at 507-511, Kirby P summarised the legal principles that apply to a claim that a local authority has taken a statutory decision for a purpose extraneous to the enabling legislation. That summary has not been subjected to criticism in this case and I gratefully adopt it. I will set out such passages as appear to be directly applicable to this case, omitting some of his Honour's references to authority. "1. A local government authority, established pursuant to the Act, has large powers both as a legal corporation and as one established to perform functions of local government to control the working and business of local government under the Act. The powers conferred on a local authority must be given meaning in the light of the structure of the statute establishing it and the duty owed by the authority to all of its ratepayers: see Bromley London Borough Council v Greater London Council [1983] 1 AC 768 at 821. … The exercise of those powers is, as s 84 of the Act provides, subject to the provisions elsewhere contained in the Act, … It is also subject to the general law. But, if a local government authority uses its statutory powers bona fide and reasonably, its actions will not be interfered with by courts exercising judicial review: Westminster Corporation v London and North-Western Railway Co [1905] AC 426; 2. The common law requires that a donee of statutory powers … must exercise such powers strictly for the purposes for which the powers have been given, ultimately by Parliament. Unreviewable administrative action is a contradiction in terms, at least in the case of the exercise of statutory powers. The donee of statutory powers, being a public authority, may only act reasonably and in good faith and upon lawful and relevant grounds of public interest. This is so because the powers are given only in order that they may be used for the public good: see, eg, R v Tower Hamlets London Borough Council; Ex parte Chetnik Developments Ltd [1988] AC 858 at 872. Such powers are not to be exercised for extraneous, illicit or irrelevant purposes or purposes that can be catalogued as extraneous to the reasons behind the legislative grant of power. The exercise of powers for such purposes is described as an 'abuse' or an 'excess' of powers. Being limited in its powers, a local government authority, its council and employees must take care to remain within the powers given by Parliament and to exercise those powers reasonably and in good faith: … 3. Good general intentions or even misguided philanthropy will not sustain an exercise of powers by a body enjoying powers limited by Parliament: see Roberts v Hopwood [1925] AC 578. Such an exercise will be ultra vires. Thus, in Sydney Municipal Council v Campbell [1925] AC 338, the council was empowered by statute to resume land required for the purpose of 'carrying out improvements in or remodelling any portion of the city'. It also enjoyed powers to open up new public streets and to widen or extend public ways. Ostensibly for the purpose of extending a city street, the council resolved to resume an area of land. No plan for improvement or remodelling had been decided upon by the council. It was concluded that the Council, when it resolved to resume the land, had not been actuated by the stated authorised purpose but by an unauthorised (and therefore improper) purpose of enabling the Council to benefit from an expected increase in the value of the land on re-sale. The exercise of power was struck down by the Privy Council. There are many like cases in Australia, in England and elsewhere: … 4. In the nature of human affairs, it is rare that individuals, still less corporations such as local government authorities, act as they do exclusively for a particular purpose. It is of the nature of human motivation (and still more, if it can be ascertained, the motivation of corporations governed and directed by numerous individuals) that their purposes are complex and multifarious. From this truism a controversy has arisen as to the extent to which an illicit, irrelevant or impermissible purpose for the exercise of statutory powers will render that exercise beyond power, with the serious consequences that follow. In England, the courts have adopted a test which requires the complainant to prove that the 'achievement of the irrelevant, illicit or unlawful purpose was the dominant purpose of the donee of statutory power in doing what it did'. … In Australia, a different test has been adopted which makes it more difficult to establish the improper purpose ground of review. In Thompson v Randwick Municipal Council (1950) 81 CLR 87 at 106 the High Court held that an abuse of power occurs if the purpose of the administrator is an improper one and 'a substantial one' in the sense that no attempt would have been made to exercise the power if it had not been for that purpose. The test has been criticised as internally contradictory: …. But whatever the test, it is difficult to establish an improper purpose. Without a right to reasons conferred by law, there will often be evidentiary difficulties. Furthermore, where a decision maker is a collective body, discerning its intentions, purposes and motives will necessarily be more problematical: …" 233 In relation to the last-mentioned matter, there has been a divergence in view as to whether it is permissible to go behind the formal resolution of a corporation in order to discern the purpose of its action. In Baiada v Baulkham Hills Shire Council (1952) 87 WN (Pt 1) (NSW) 222(n) at 228, Roper CJ in Eq said: "It is, I think, impossible for a court of law to determine the motives of a corporation aggregate. One member may be minded to support some action for some reason or motive and another for another. The corporate mind can only be read in the corporate resolution and action". 234 In Tooth & Co Ltd v Lane Cove Municipal Council (1967) 87 WN (Pt 1) (NSW) 361 Street J made a ruling about interrogatories that presupposed it was legitimate to explore the motives of individual councillors. This approach was criticised by Else-Mitchell J in KCR Pty Ltd v Orange City Council (1968) 16 LGRA 153 at 157. Else-Mitchell J preferred to follow Baiada. 235 In Dunlop v Woollahra Municipal Council [1975] 2 NSWLR 446 at 484-485 Wootten J referred to the issue and commented: "If, one says, as in Baiada's case, that 'the corporate mind can only be read in the corporate resolution and action', corporations would be largely immune from judicial control of administrative abuse. Corporations must be held responsible through those who act on their behalf, whether an act is performed by one person or by a number. Doubtless there may be problems of mixed motives as between individuals, as indeed there often are within an individual, but it is better for the courts to grapple with the true facts, however difficult this may be, than to shut out the realities of corporate action by arbitrary rules of evidence." [footnotes omitted] 236 This view has prevailed. See, for example, the discussion in Parramatta City Council v Hale (1982) 47 LGRA 319 at 335-336 (Street CJ) and 348 (Moffitt P). As Warringah itself demonstrates, courts have been prepared to go behind the formal resolution of a corporate body for the purpose of considering a complaint that a statutory decision made by it was actuated by extraneous purposes. I think the current situation is accurately stated in the written submission by counsel for Telstra: "7.23 It is well‑settled, therefore, that the purposes of, and considerations taken into account by, Councils are best inferred from the documents brought into existence by their officers (primarily reports to the Council but also memoranda and the like leading up to those reports) and the resolution of the Councils in response thereto. In particular, where a recommendation is adopted without more, it can and ought properly be inferred that the 'intentions, purposes, motives, beliefs and state of mind' of the Council (as a collegiate body) are as disclosed in the reports and other documents brought into existence by its officers." 237 However, as Kirby P pointed out in Warringah, it must still be shown that, absent the extraneous purpose, the impugned decision would not have been made.

(ii) The Local Government Association and councils generally 238 There exists, in New South Wales, an organisation called the Local Government Association of New South Wales ("LGA"). The organisation was incorporated by s3 of the Local Government Associations Incorporation Act 1974 (NSW). All the members of LGA are councils: see s5 of the Act. The Act does not state the LGA's objects. They are presumably stated in the organisation's constitution, a copy of which must have been lodged in the office of the Corporate Affairs Commission prior to gazettal of the incorporation of the Association: sees3 of the Act. The constitution may be amended: see s7. The constitution of LGA is not in evidence . However, having regard to the membership of the Association, and the statutory requirement for the holding of an annual conference (see s8), it may be inferred that LGA was intended to act as an adviser and representative body for municipal councils - the Act also provided for incorporation of a separate body for shire councils, the Shires Association of New South Wales. It is consistent with its presumed functions that LGA should provide information and advice to municipal councils in relation to the performance of their functions and their exercise of powers, and that LGA should represent them in making representations to government entities and other organisations. 239 On 12 April 1996 Councillor Peter Woods, President of LGA, issued a notice calling all "Mayors and General Managers or their delegates" to an "Overhead Cable Strategy meeting" at LGA's premises in Sydney. The notice stated the meeting was intended to discuss: "• the implications of the successful NSW Supreme Court action against Optus Overhead cables • ongoing action to achieve a long‑term resolution of this issue." 240 The reference to "the successful NSW Supreme Court action" was presumably a reference to Concord Council v Optus Network Pty Ltd(1996) 131 FLR 294; 90 LGERA 232, a case in which four councils obtained injunctive and declaratory relief restraining Optus from continuing, or commencing, a rollout of broadband cable until after Optus had provided the councils with detailed information as to its plans, and allowed them an opportunity to comment on the plans. 241 There is no evidence as to what happened at the meeting called by Councillor Woods, assuming it was held. However, on 17 May 1996 Parramatta City Council forwarded to LGA a copy of advice it had received from Sir Maurice Byers QC and Mr Peter Tomasetti of counsel in relation to the use of s611 of the Local Government Act in respect of Optus cables. 242 On 31 May 1996 Councillor Woods wrote to all metropolitan mayors reporting on discussions he was having with the federal Minister for Communications and urging them not to accept a proposal, apparently made by Optus, that councils should consent to overhead cabling in return for a fee of $40 (over five years) per power pole. 243 The legal advice provided to Parramatta City Council was considered by the LGA executive on 7 June 1996. The executive resolved to establish what it called "a section 611 Task Force" with the following terms of reference: "• to establish differential and justifiable rates for the levying of aerial and underground telecommunications cables under section 611 of the Local Government Act • to advise the Executive on the feasibility, costs and benefits, and likely council support for a test case under section 611 of the Local Government Act." 244 The decision was reported to member councils in weekly circular 24/96. The report included the comment: "Section 611 provides that 'a council may make an annual charge on the person for the time being in possession, occupation or enjoyment of a rail, pipe, wire pole, cable, tunnel or structure laid, erected, suspended, constructed or placed on, under or over a public place'. This section does not apply to the Crown but does currently apply to AGL, who make significant annual payments to councils. The Act provides that the rate charged should be based on 'the nature and extent of the benefit enjoyed' by the person concerned, providing a strong basis for differential rates between underground and overhead cabling. On this basis, the Associations anticipate that the power may provide a significant disincentive to aerial cabling and a basis for negotiation in areas where aerial cabling is already erected, while also generating income from the use of councils' assets for a profit‑making activity by telecommunications carriers." The reference to "AGL" is, I apprehend, a reference to Australian Gaslight Company, a distributor of natural gas throughout the Sydney metropolitan area. 245 The circular also referred to the then current Senate inquiry into privatisation of Telstra and the opportunity this presented to councils to make submissions regarding the extent to which Telstra and telecommunications carriers should be excluded from State and local government regulation and the "impact of duplication of infrastructure and the extent to which this can be reduced by sharing." 246 The task force reported to the meeting of the LGA executive held on 2 August 1996. The executive resolved: "1. That the Association approach council(s) that already have Optus overhead and Telstra underground cables installed to ascertain their support for raising an invoice against Telstra and Optus under section 611 of the Local Government Act. 2. That a rating schedule for underground and overhead cables be established, based on the costs and impacts that may accrue to local communities from underground and overhead cables and with regard to other considerations under section 611 of the Act. 3. That a further report be provided to the next Executive meeting." 247 On 22 August 1996 Councillor Woods called a meeting of mayors from the Sydney, Hunter and Illawarra regions "to discuss ongoing activity with regard to telecommunications facilities generally and overhead cabling in particular". Councillor Woods identified "a number of current issues that would benefit from collective discussion and action by local government". He said they included: "• the use of section 611 of the Local Government Act to rate telecommunications carriers and to provide incentives for the undergrounding of cables • the implications arising from council acceptance of Optus offers • the future direction of the activities of the Local Government Association in this area • current revisions to the national legislation." 248 It appears the meeting was held. It made several decisions, including that the task force be asked "urgently to consider a recommended charging mechanism under s611 of the Local Government Act 1993 and the Association's future direction in this regard". 249 The task force met to discuss this question on more than one occasion. It caused LGA to obtain advice from Bentleys, chartered accountants. Bentleys' report made some recommendations as to how charges might be tied to benefits, as required by s611(3) of the New South Wales Act. Bentleys drew on the 1922 decision in Australian Gaslight Company v Glebe Municipal Council, where the Land and Valuation Court endorsed a charge calculated by reference to AGL's net profit. But Bentleys suggested a variation of this. The accountants thought a reasonable levy rate for the cables (apparently either overhead or underground) would be in the range of $275 to $500 per kilometre. They considered it would be reasonable to add a component, in respect of overhead cables, reflecting the cost saving attaching to such cables, as distinct from underground cables. They estimated the cost saving as $100,000 per kilometre. The accountants thought it would be not unreasonable for the overhead component charge to be in the range of 5% to 10% of this saving. The report drew heavily on information about charges paid by AGL in respect of gaslines. 250 Councillor Woods convened a meeting of metropolitan mayors and their technical support staff to discuss this advice. The meeting was held on 24 November 1996. It was provided with an updated report from Bentleys dealing with comments made by task force members about the earlier report. One of those comments was that "it would be more beneficial to receive the overhead cable charge in a lump sum rather than over an extended period". Bentleys expressed the view that "attention should focus on the income generating potential of this levy rather than its potential for being a means of forcing carriers to lay cables underground". 251 The meeting of 28 November 1996 was attended by representatives of 27 Sydney metropolitan councils. There was apparently considerable discussion about methods of calculating s611 charges, some attention being given to a method proposed by Parramatta City Council that differed from Bentleys' recommendations. After the meeting, LGA issued a media release that included the following information: "Metropolitan mayors and their representatives meeting in Sydney this morning have unanimously resolved that councils in NSW should take immediate steps to begin charging pay‑TV cable carriers for their cable networks on public land. While pay‑TV carriers have obtained temporary exemption from state and local planning laws, they are nonetheless obliged to pay Local Government charges. Councils in NSW can charge businesses under section 611 of the Local Government Act when a benefit is obtained by the use of public space. For example, councils can charge companies which have overhead walkways crossing public roads and can charge industries which have chemical pipelines crossing under public roads between facilities. This morning's meeting decided that each carrier should be taxed on the basis of: • the length of the cable network that it has in a local area (whether underground or overhead) • additionally, on the basis of the length of cable network which it runs above ground (to save installation costs) in a local area." 252 The media release then set out an example: "In a typical metropolitan council area, a carrier may have a network of 500 kilometres. If the council charges $400 per kilometre for all cable, and an additional $800 per kilometre for overheading, then the cost for the carrier will be: • $200,000 if all the cable goes underground • $600,000 if all the cable goes overhead." 253 The media release quoted Councillor Woods as saying the effect of the differential between overhead and underground charges is to provide "a major cost incentive to go underground". Councillor Woods was also quoted as referring to "a major incentive for carriers to collocate their facilities and share cables where feasible". 254 The material in the media release was widely publicised. 255 LGA obtained advice from Deacons Graham and James, solicitors, about the formal requirements for making a charge. This was reflected in a briefing paper sent to all metropolitan councils about 6 December 1996. The covering memorandum contained the following: "The primary objectives of imposing this charge are: • to provide an incentive for the carriers to go underground with cabling • to recognise that the carriers are using publicly owned space to generate private profit. Legal advice to the Association confirms that the annual charge is required to be identified and included in a council's draft management plan for the year in accordance with the provisions of Part 2 of Chapter 13 of the Local Government Act 1993. It is recommended that notice of the charge be served after 1 July 1997, pursuant to Section 546 of the Act, but that the charge be made retrospective to 1 January 1997. Attached is a paper setting out the background, the legal aspects and the basis of the formula on which the charge is calculated and which you might find useful in preparing a report to the Council. The Association requests that all possible effort to be made to present this matter to a council meeting prior to the Christmas period so that a decision is not delayed by recesses over the holidays." 256 On 13 December 1996 Councillor Woods sent a memorandum to all metropolitan mayors in which he referred to the earlier memorandum and the steps it recommended. His memorandum went on: "Step 3 in that process required councils to determine the values to be applied in the formula for: • the dollar amount per kilometre for the cables component • the dollar amount per kilometre for the overhead cables component which also requires determination of the percentage levy rate and dollar amount of cost saving per kilometre. It has previously been stated that the primary purpose of this charge is not to increase general revenue but to provide an incentive for the carriers to go underground with cabling and to recognise that the carriers are using publicly owned space to generate private profit. Therefore it is important that all councils are seen by the telecommunications carriers, as well as the State Government and the community, to be consistent in the calculation of the charge. I therefore recommend that all metropolitan councils support the adoption of a common figure for each component of the charge. This will require a formal resolution of your council being passed and recorded. Based upon advice received by the Association and forwarded to councils in the background paper, the recommended figures are: • $500 per kilometre for the all cables component • $500 per kilometre for the overhead cables component. This figure is based upon a levy rate of 10 per cent and a cost saving per kilometre of $100,000. Your support in this matter is requested." 257 Shortly after this memorandum was sent, the Telecommunications Bill 1996 was debated in the Senate. LGA lobbied for deletion of the clause that ultimately became cl 44 of Schedule 3 of the 1997 Telco Act. LGA was not able to obtain deletion but amendments were made to the Bill which caused LGA to believe the legislation might be unconstitutional. Accordingly, in April 1997, Councillor Woods wrote to all metropolitan mayors urging "all councils to continue to include a s611 charge on telecommunications carriers in their management plan for 1997/98 using the formula previously recommended by the Association". 258 It was apparently thought desirable that charges be made before the commencement of the 1997-98 financial year. On 25 June 1997 Councillor Woods wrote a letter to all mayors in the Sydney, Hunter and Illawarra regions in which he referred to discussions "with the other State and Territory Associations about the legal and political options" and added: "In the meantime, I urge all councils who have included a S611 charge on telecommunications carriers in their management plan for 1997/98 to serve notice of the charge from 1 July 1997. Councils which have not made provision for the charge are urged to do so using the formula previously recommended by the Association. Details of the charge can be obtained by contacting the Association's Planning Policy Officer, Darryl Fitzgerald. It has previously been stated that the primary purpose of this charge is to recognise that the carriers are using publicly owned space to generate profit. Serving notice of the charge will demonstrate to telecommunications carriers, as well as the Federal Government and the community, that we are committed to this task. I look forward to your continued support in this important matter of principle and Local Governments legitimate rights to protect the community's amenity." 259 At its meeting of 2 October 1997, the LGA executive noted a report dated 3 September 1997 concerning a survey of the 52 councils in the Sydney, Hunter and Illawarra regions. The survey revealed that 34 councils had resolved to make a s611 charge in respect of cables; 18 had not. 260 At about that time, apparently, individual councils began to levy the charges by forwarding notices to Optus and Telstra. They were met with letters denying liability for the charges. It seems that, consistently with those denials, Telstra and Optus lodged appeals against the levies with the Land and Environment Court of New South Wales. As I understand the position, by agreement between the parties, each of those appeals has been stood over generally, pending the conclusion of this proceeding. If this proceeding is ultimately unsuccessful, it will be open to Telstra and Optus to litigate in the Land and Environment Court the formal validity of the particular charge in relation to which the appeal is brought, the question whether the charge is "based on the nature and extent of the benefit enjoyed by" the relevant telecommunications carrier and the amount of the charge: see s611(2), (3) and (4). 261 It is not necessary to refer to the correspondence that ensued between the two carriers and the various councils, the legal advice provided to LGA, or the subsequent contacts between LGA and member councils concerning the legal advice and the making of the levies. These include a meeting during 1998 at which there was discussion, amongst other topics, of the possibility of making charges against electricity distribution authorities if (as was then being proposed) those authorities should be privatised. (iii) The individual councils' decisions 262 Counsel for Telstra extracted the material relevant to the making of s611 charges over cables by the eleven New South Wales councils that are respondents to the Telstra proceeding. I will summarise this material, adopting the order in which the New South Wales respondents are named in the proceeding instituted by Telstra. 263 Hurstville: It appears Hurstville City Council resolved on 11 June 1997 to make a s611 charge against cables for the financial year 1997-98. The evidence does not reveal any surrounding material, and it suggests that Hurstville Council was not represented at the meeting held by LGA on 28 November 1996. However, I have no doubt Hurstville councillors would have been aware, at least in general terms, of the position taken by LGA. Hurstville imposed a charge of $275 per kilometre. 264 The legal advice given by Sir Maurice Byers was made available to Hurstville Council and provided to councillors in November 1997. 265 On 17 June 1998 Hurstville Council resolved to make a s611 charge at the rate of $275 per kilometre on cabling (overhead and underground) for the 1998-99 financial year. 266 Kogarah: According to a report submitted to a meeting of Kogarah Municipal Council held on 16 December 1996, that council received a letter from LGA "requesting that Council consider the imposition of charges on telecommunication carriers". The meeting resolved to write to LGA "indicating its support for the levying of a charge on telecommunications carriers". It also resolved that such a charge be included in the 1997-98 management plan. This was done. The 1997-98 management plan, adopted on 23 June 1997, imposed a basic charge of $500 per kilometre for overhead cables. A similar charge was made on 22 June 1998 in relation to the 1998-99 financial year. 267 Leichhardt: On 25 June 1997, Leichhardt Municipal Council adopted a management plan that included a s611 charge for 1997-98 on cables at the rate of $500 per kilometre of underground cable and an additional $500 per kilometre for overhead cable. This charge was repeated at the same rate in the 1998-99 management plan. 268 Parramatta: As will be apparent from the narrative already recounted, Parramatta City Council was a pioneer in consideration of the use of s611 in relation to telecommunications cables. The earliest mention of the issue in the documents tendered in evidence is a minute of a council meeting held on 24 July 1995 in which it is noted: "Councillor Hyam requested that a report be submitted to Council on the feasibility of Council charging for services such as cable television conduits that are installed on or under Council's roadways. The Lord Mayor advised that this would be done." 269 It seems Parramatta Council sought advice from its solicitors, Storey & Gough. They advised that s611 was available for the purpose. A valuer was engaged to advise council. 270 Early in 1996, Parramatta Council received favourable advice from Sir Maurice Byers and Mr Tomasetti. On 16 April the council provided a copy of this advice to LGA. In a report to council dated 6 May 1996, two officers referred to the annual charges paid to council by AGL ($207,804.17 in the previous year) and claimed there was potential for this sum to be exceeded by cable charges made on Optus. 271 On 6 May 1996 Parramatta Council relevantly resolved as follows: "(a) Council advise the Local Government Association:- (i) of the legal advice received from Council's Solicitors, Storey and Gough and the joint advice from Peter Tomasetti and Sir Maurice Byers, Q.C. in regard to Section 611 of the Local Government Act, 1993 and its implications in relation to OPTUS; (iii) Council is obtaining valuations for the purpose of setting a charge for OPTUS cables, both above and below ground, in the Parramatta Local Government Area; (iv) Council considers that the additional charge for above ground cabling will benefit other actions currently being taken by other councils against OPTUS; (v) Council is investigating the status of Sydney Water, Telstra and Integral Energy under their relevant Acts to determine if charges under Section 611 are able to be made. (b) Any charges received under Section 611 of the Local Government Act, 1993 … be allocated to maintenance and upgrading of the Civil Infrastructure of Council." 272 During the remainder of 1996, Parramatta Council had considerable contact with its valuer in relation to the assessment of a proposed charge, having regard to the benefit received by Optus. This came to overlap with the advice being provided to LGA by Bentleys. The council became involved in debate between the valuers about the appropriate way to make the assessment. 273 Mr R T Hartley, Director - Technical Services of Parramatta Council, prepared a report dated 12 December 1996 in which he recounted the earlier steps taken by the council and the advice recently received from LGA. He made recommendations that included the following: "(a) Council resolve to levy a charge under Section 611 of the Local Government Act on all Telecommunications carriers. (b) The charge be in accordance with the recommendation of the Local Government & Shires Associations in their minute dated 6 December 1996. (c) The total charge be based upon the following:- Component A - All cables component $500 per km Component B - Overhead cable component 10% levy rate and a dollar amount cost saving per km of $100,000 and Manager - Civil Works be authorised to determine the levy under the Associations formula. (d) The levy be included in the 1997/98 draft management plan and be retrospective to 1 January 1997." 274 These recommendations were adopted by the council. The 1997-98 management plan showed a charge for overhead cables of $1,000 per kilometre and for underground cables of $500 per kilometre. 275 Parramatta City Council made a similar charge in relation to 1998-99. 276 Penrith: The earliest document in the Penrith City Council file appears to be a memorandum of 14 October 1996 from a council officer to Councillor O'Toole, providing information as to the circumstances under which Optus (and Telstra) erected above-ground cables. 277 On 3 February 1997, Penrith Council considered a report by an officer, David Burns, in which reference was made to the recently announced Telecommunications National Code, to operate from 1 July 1997. The new code would require telecommunications carriers to comply with local planning requirements in respect of new work, but subject to transitional provisions pursuant to which "carriers can continue to complete works without council approval". Mr Burns referred to s611 of the New South Wales Act and the advice that council had recently received from LGA. He said the councils' Legal Officer had considered the legal advice and agreed with the conclusions. Mr Burns recommended: "The rates as recommended by the Local Government Association of NSW ($500 per km for all cables component and $500 per km additional charge for the overhead cables component) be adopted and included in the 1997/98 Management Plan Schedule of Fees & Charges." 278 Council adopted the recommendation. The 1997-98 management plan, approved on 16 June 1997, included charges at the recommended rate. 279 It is not clear from the evidence whether a similar charge was imposed for the 1998-99 financial year. 280 Randwick: In June 1996 Randwick Municipal Council decided to accept Optus' offer to pay a fee of $8 per pole per year for five years, subject to certain conditions. In December 1996 the council executed an agreement providing for such payments. The agreement included a clause preserving the council's "existing or future rights to charge levies or annual rates under the Local Government Act 1993 or any other Commonwealth or State law". Council acknowledged that Optus did not agree council had any such right. 281 It seems Randwick was kept apprised of the activities of LGA. The management plan for 1997-98, adopted by the council on 24 June 1997, imposed a charge of $500 per kilometre (reduced to $275 for Optus for five years) with an overhead component charge of $500 per kilometre. 282 It is not clear whether a similar charge was made in respect of 1998-99. 283 Hornsby: Hornsby Shire Council resolved on 24 July 1996 to "adhere to its original resolution opposing aerial cabling" and that a "further report be prepared as to the legal issues relating to possible fees and charges and/or rates levied on carriers and people connecting". 284 Hornsby council officers were involved in the meetings organised by LGA in the latter half of 1996. Councillors appear to have been informed of what was occurring. However, it seems no formal resolution was made until 12 March 1997, when council resolved: "1. A charge on any person for the time being in possession, occupation or enjoyment of a telecommunications cable laid, erected, suspended , constructed or placed on, under or over a public place be included in the draft management plan for 1997/98; 2. This charge be based on $500 per kilometre for overhead cabling; 3. The General Manager report at the next meeting on an appropriate fee for underground cabling; and 4. The Executive Manager, Works continue to liaise with the Local Government Association regarding a consistent and appropriate method of determining the length of cable within the Shire." 285 The council appears not to have adopted a recommendation from its Executive Manager that there also be a charge of $300 per kilometre on underground cables. 286 It is not clear whether Hornsby Shire Council made a charge on telecommunications cables in respect of 1998-99. 287 Drummoyne: A report was presented to Drummoyne Municipal Council on 17 December 1996 regarding the LGA meeting of 28 November 1996. The council passed a resolution that included the following: "THAT Council: 1. Levy all telecommunications carriers under section 611 of the Local Government Act for their use of public spaces for profit. 2. Apply the following values in the formula for the levy: * $500 per kilometre for the all cables component. * $500 per kilometre for the overhead cables component. This figure is based under a levy rate of 10% and a cost saving per kilometre of $100,000. 3. Calculate the annual charge in accordance with the values adopted in point 2 above." 288 The 1997-98 management plan included this item. The position in relation to 1998-99 is unclear. 289 Burwood: Judging by copies of invoices that are included in the evidentiary material, Burwood Council made charges in respect of both overhead and underground cables of $100 per kilometre for the financial year 1998-99. So far as I can see, there is no material suggesting a 1997-98 charge.

290 Concord: The position in relation to Concord Council is also obscure. There are copies of invoices in the evidentiary material, addressed to both Telstra and Optus and relating to both 1997-98 and 1998-99. However, I have not been able to find the actual council resolutions. 291 Strathfield: Finally, amongst the eleven New South Wales councils named in Telstra's proceeding, on 17 June 1997 Strathfield Municipal Council adopted a management plan for 1997-98 that included a charge of $500 per kilometre for "cables erected by telecommunications carriers". It is not apparent whether that charge was repeated in 1998-99. 292 Three New South Wales councils are named as respondents to the Optus proceeding. One of them is Randwick Municipal Council, already mentioned. The others are Warringah Shire Council and Blacktown City Council. 293 Warringah: It seems Optus notified Warringah Council in November 1994 that it intended to install a fibre optic and coaxial cable and video television network within the area, using a combination of aerial and underground construction. The council responded on 20 December 1994 with a letter advising Optus of its concern about the likely visual impact of the aerial cables and seeking a demonstration, so the degree of impact could be assessed. Optus did not reply to that letter or provide a demonstration. 294 However, Optus had contact with the Warringah Council during 1995, when it argued that aerial cabling was less environmentally intrusive than underground cable. Council was unconvinced. On 14 September 1995 council reiterated its objections to overhead cables and requested Optus to cease the construction program it had commenced a few days earlier. Optus did not respond. It continued to install cables, including overhead cables. 295 On 10 October 1995 Warringah Council considered a report of its Director, Technical Services in which reference was made to the possibility that Telstra, also, would construct aerial cables. The Director commented upon the adverse effect of aerial cables, both in relation to visual pollution and road use. The Director made the comment: "Both Optus and Telstra are building parallel cable television network infrastructure. It is difficult to understand why these providers are not cooperating with each other to build one distribution network to be shared by both carriers (and the other cable television providers). This would not only be the least cost solution for the construction of this infrastructure but would also minimise the detrimental effects of the proposed networks on the environment of Warringah." 296 The Director made some recommendations that were endorsed by the council's General Manager and apparently adopted by council. They included the following: "2. That council advise Optus Vision, Telstra, Austel and the Minister for Communications, Arts and Tourism, the Honourable Michael Lee MP that: (a) Council as a matter of policy normally requires all new public utility cabling or wiring infrastructure to be laid underground to prevent visual pollution and to achieve a high level of protection against service disruption. (b) Council formally objects to the construction of the bundled aerial communications cable networks on the basis of the increased visual pollution and the subsequent reduction of the visual amenity of the area of Warringah. (c) Council objects to the duplication of infrastructure and asks the Minister to formally intervene and instruct the general telecommunications carriers Optus and Telstra to utilise a combined distribution network in the area of Warringah in order to minimise wasted resources, reduce environmental damage and minimise disruption to the community. (d) That the Director Technical Services explore whether or not Council is able, under Section 611 of the Local Government Act, to charge Optus an annual fee for occupation of Council's road reserves." 297 It seems none of the advisees took any notice of resolution 2(a), (b) or (c). After the change of federal government in March 1996, Warringah Council made representations to the new Minister, Senator Alston, but to no effect. The cable rollout continued. 298 In January 1997 Warringah Council received advice from Blake Dawson Waldron, solicitors instructed by it, concerning the availability of s611 in respect of telecommunications cables. A council officer calculated the likely revenue that would result from a charge. 299 On 4 March 1997 council considered a ten page report from its Acting General Manager dealing with the history of the rollout and council's reaction to it, the LGA report of 6 December 1996, the memo from Blake Dawson Waldron, the appropriate formula for calculating a charge and the ranges of charges per kilometre suggested by LGA. The report included this reference to the purpose of the charge: "It is intended that revenues from the Section 611 charge be allocated to a fund to support undergrounding of all cables. Also, it is recognised that the differential charge may provide an incentive for carriers to install their cables underground. Where a carrier has more than one cable in the same location, only one cable will be charged for. The overhead component will be charged wherever a carrier has overhead cable, irrespective of whether that carrier has underground cable in the same location." 300 The Acting General Manager's report addressed the issue of discrimination in this way: "This charge will be opposed by the telecommunications carriers and the matter will most likely be resolved in the courts. Discrimination will be a key issue. Council's legal advice is that Section 120(b) of the Telecommunications Act can be interpreted to allow discrimination on the basis of environmental effect. Based on length of cables and not carrier revenues, and structured to provide an incentive for telecommunications carriers to place their cables underground, the charge is rationally related to the purpose of reducing the adverse environmental effects of aerial broadband telecommunications cables and is unrelated to the fact that the person charged is a telecommunications carrier. It could be argued that the fact that Council does not levy a charge on energy Australia under Section 611 constitutes discrimination against carriers, but Council is prevented from charging electricity suppliers by Section 7L of the Electricity (Amendment) Act 1993. This may be considered as positive discrimination benefiting electricity suppliers and not discrimination against telecommunications carriers. Where Council is not currently prevented by law from levying a Section 611 charge, it does so. Council currently charges the Australian Gas Light Company approximately $68,000 per year. The Local Government Association calculates the AGL Section 611 levy from independently audited figures, raises invoices for each council area, and forwards each invoice to the relevant council. The councils then invoice AGL directly." (Original emphasis) 301 The report referred to the new telecommunications legislation, whose form was still uncertain, but which was likely to commence on 1 June 1997. The Acting General Manager considered that, notwithstanding uncertainty stemming from the new legislation, but having regard to the time frame needed for a s611 charge, council should resolve to give public notice of a draft plan of management that included a charge to take effect from 1 July 1997. Council adopted that resolution. 302 On 24 June 1997 council adopted a management plan for 1997-98 that included the imposition of an annual charge under s611 of the New South Wales Act on all telecommunications carriers for their use of a public place within the Warringah local government area, this being at the rate of "$500 per kilometre for the all cables component, and $500 per kilometre for the overhead cable component". 303 Blacktown: Blacktown Municipal Council was advised by its Director of Financial Services to include a s611 charge on telecommunications carriers. This recommendation was adopted on 16 April 1997. A charge at the rate of $264 per kilometre was included in the 1997-98 management plan adopted by council on 18 June 1997. The evidence does not disclose whether or not a similar charge was levied for the 1997-98 financial year.

(iv) The applicants' submissions 304 Counsel for Telstra drew attention to the structure of the New South Wales Local Government Act. The Act is divided into 18 Chapters, some of which contain material of general application throughout the statute and some of which are concerned with particular council functions. 305 Counsel referred to the purposes of the Act, as set out in s7. That section reads: "The purposes of this Act are as follows: (a) to provide the legal framework for an effective, efficient, environmentally responsible and open system of local government in New South Wales, (b) to regulate the relationships between the people and bodies comprising the system of local government in New South Wales, (c) to encourage and assist the effective participation of local communities in the affairs of local government, (d) to give councils: · the ability to provide goods, services and facilities, and to carry out activities, appropriate to the current and future needs of local communities and of the wider public · the responsibility for administering some regulatory systems under this Act · a role in the management, improvement and development of the resources of their areas, (e) to require councils, councillors and council employees to have regard to the principles of ecologically sustainable development in carrying out their responsibilities." 306 Counsel also mentioneds8, which sets out the charter of each council. It is sufficient to note the charter includes: ". to provide directly or on behalf of other levels of government, after due consultation, adequate, equitable and appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively … . to properly manage, develop, protect, restore, enhance and conserve the environment of the area for which it is responsible, in a manner that is consistent with and promotes the principles of ecologically sustainable development . to have regard to the long term and cumulative effects of its decisions . to bear in mind that it is the custodian and trustee of public assets and to effectively account for and manage the assets for which it is responsible … . to raise funds for local purposes by the fair imposition of rates, charges and fees, by income earned from investments and, when appropriate, by borrowings and grants …" 307 Subsection (2) of s8 requires a council "in the exercise of its functions" to "pursue its charter". 308 Chapter 5 of the Act refers to functions of councils. However, it does not list them. Rather, it provides that a council has the functions conferred or imposed on it by or under the Local Government Act itself (see s21) or any other Act or law (see s22). Section 23 provides that a "council may do all such things as are supplemental or incidental to, or consequential on, the exercise of its functions". 309 Chapter 6 concerns the service functions of councils; that is, the provision of goods, services or facilities, and the carrying out of activities, "appropriate to the current and future needs within its local community and of the wider public", subject to relevant laws. 310 Chapter 7 deals with councils' regulatory functions. Chapter 8 concerns ancillary functions. 311 It is unnecessary to refer to Chapters 9 to 14, which concern the constitution of councils, their governance, staffing, organisation and accountability. However, Chapter 15 is important. It deals with finance and authorises the imposition of rates, fees and charges, including charges under s611. Chapter 16 creates certain offences. Chapter 17 deals with enforcement and Chapter 18 contains miscellaneous provisions. 312 Counsel for Telstra submitted that the evidence as to the activities of LGA, and of the respondent New South Wales councils, in relation to s611 charges on telecommunications carriers, demonstrates that "each of the NSW councils, in resolving to make and levy the charge, acted in accordance with the advice, recommendations and urgings of the LGA", and that "in so doing the NSW councils … adopted the purposes of the LGA in ensuring that the councils made and levied the charge". Counsel say this was done expressly in the case of every council except Leichhardt Council, and implicitly by Leichhardt. They claim "the NSW councils were acting in concert with each other and the LGA. On this basis, their common knowledge and common purposes must inform any consideration of the evidence for the purposes of the claim that they each acted for an extraneous purpose". 313 Counsel for Telstra argue the evidence demonstrates that: "(a) The NSW councils did not make and levy the charges for the purpose of raising revenue. Indeed, that purpose was: (i) never expressly referred to in the resolutions of the various meetings of Mayors … or … Councils identified in [the evidence] as an object of the charging strategy; and (ii) was expressly disavowed on more than on occasion: (b) The NSW councils did make and levy the charge for the following purposes: (i) to act as a disincentive to any further rollout of aerial broadband cables and to act as an incentive for the undergrounding of existing aerial broadband cables, by imposing a financial burden on such cables … (ii) by reason of (i), to respond to perceived 'community outrage' in respect of the appearance of aerial broadband cables and their impact on visual amenity … (iii) to punish the carriers for their previous treatment of Local Government, which was perceived to be 'high handed' … and (iv) to give recognition to the fact that the carriers are using public spaces to generate profit …" 314 The submission identified only one occasion of disavowal of the purpose of raising revenue: see para (a)(ii). This was the statement in the letter of Councillor Woods of 13 December 1996 to the mayors of all metropolitan councils: "It has previously been stated that the primary purpose of this charge is not to increase general revenue but to provide an incentive for the carriers to go underground with cabling and to recognise that the carriers are using publicly owned space to generate private profit." 315 When they turned to the question whether the purposes of the NSW councils were authorised, counsel for Telstra said that, as s611 does not expressly identify the purposes for which a charge may be made, consideration must be given to the scope and purpose of the Act. They note the manner in which the Act is structured and go on: "Many judicial review cases of administrative actions by Councils involve the compulsory acquisition of land - e.g. Sydney Municipal Council v Campbell [1925] AC 338; Thompson v Randwick Municipal Council (1980) 81 CLR 87. Councils retain that power in s 186 of the NSW LG Act. In Campbell's case, an acquisition of land for the stated purpose of lengthening a street was set aside, the true purpose having been discerned to be enabling a profit to be obtained on re-sale. In Thompson's case, the acquisition of land additional to land required for a new street was set aside in circumstances where the sale of the additional land was intended for profit to fund the new street. In both cases, the purpose of profit-making was held not to be authorised by the then provisions of the Act. No doubt the same result would follow today in respect of the same circumstances. Although the form and content of the NSW LG Act is different from its predecessors, it would be unexceptionable to suggest that he compulsory acquisition power now contained therein does not extend to the acquisition for the purpose of making profit, even if the profit made is earmarked for use for an authorised purpose. That unexceptionable result follows despite the provisions of ss 7, 8 and 24 setting out in relatively sweeping terms the purpose of the NSW LG Act, the Council's charter and the service functions of Councils. In other words, not all of those purposes can be authorised for each and every one of a Council's functions. To a claim of a compulsory acquisition for the purpose of making profit to fund, for example, a youth program, it would be no answer to state that the Council has a power to compulsorily acquire land (s 186), one of the purposes of the NSW LG Act is for the council to provide services appropriate to the needs of its community (ss 7 and 24) and that the needs of children are specifically identified as part of the council's charter (s 8(1)). The compulsory acquisition, the applicants submit, would be for an extraneous purpose in law, just as the acquisitions were struck down for that same reason in Campbell's and Thompson's cases. By analogy, it cannot be the case that because Councils have a role in the 'management, improvement and development of the resources of [their] areas' and a requirement to have regard to 'ecologically sustainable development' in carrying out their responsibilities (s 7(d) and (e)), those matters become relevant (that is, authorised purposes and considerations permitted to be taken into account) to the exercise of each and every council function. To the contrary, they are relevant to only certain functions of Councils - particularly, their service functions under Chapter 6 (relating to lands managed by councils or 'public land', which excludes public roads) and their regulatory functions (under Chapter 7 and other statutes such as the Environmental Planning and Assessment Act 1979)." 316 After dealing at some length with a hypothetical case, counsel proceeded: "Contrast the revenue raising functions of Councils with their functions in Chapter 6 of the L G Act 1993 relating, in particular, to 'public land' (that is, community or operational land vested in or under the care of Council), which excludes public roads. Councils are given power to lease or licence community land (s 45(c)) and can deal with operational land as a private owner. In respect of community land (which may only be leased or licensed, not sold or exchanged), these powers are constrained by (amongst other things) plans of management required to be prepared for such land (s 46) and the prescribed 'core objectives' of the land (s 36 E-N). In determining whether to lease or licence community land, it follows from the prescribed core objectives that it must be a lawful purpose for the Council to seek to achieve a particular environmental outcome. The same proposition, however, does not follow in respect of the revenue raising powers of Councils. On this basis, the applicants submit that all of the purposes for which the NSW councils made and levied the charges are extraneous to the purpose of the revenue raising powers in the NSW councils. The only purpose which is authorised for the making of a rate or a charge is to raise revenue in accordance with the L G Act 1993. The raising of revenue, however was the one purpose for which the NSW councils clearly did not act. Indeed, the NSW councils were at pains to ensure that it was understood that they were not acting for the (base) purpose of raising revenue, but for a higher purpose - namely, those purposes identified in [the passage quoted in para 313 above]" 317 Counsel for Optus adopted the submissions of counsel for Telstra. They contended the "evidence supports the inference that the purpose of the making and levying the charges by each of Warringah, Randwick and Blacktown was to subject overhead cables to a punitive levy so as to provide an incentive to carriers to place their cables underground". (v) The NSW respondents' submissions 318 Counsel for the New South Wales respondents challenge the proposition that the provisions contained in ss 7 and 8 of the New South Wales Act (purposes and charter) are irrelevant to the making of a charge under s611. They refer particularly to paras (a), (d) and (e) of s7 and note the definition of the term, "principles of ecologically sustainable development", used in para (e). The Act's Dictionary contains a lengthy statement of the principles and programs that make ecologically sustainable development achievable. They include: "(d) improved valuation, pricing and incentive mechanisms - namely, that environmental factors should be included in the valuation of assets and services, such as: (i) polluter pays - that is, those who generate pollution and waste should bear the cost of containment, avoidance or abatement, (ii) the users of goods and services should pay prices based on the full life cycle of costs of providing goods and services, including the use of natural resources and assets and the ultimate disposal of any waste, (iii) environmental goals, having been established, should be pursued in the most cost effective way, by establishing incentive structures, including market mechanisms, that enable those best placed to maximise benefits or minimise costs to develop their own solutions and responses to environmental problems." 319 As I understand counsel's argument, ss 7 and 8 are intended to have general application to council decisions, to the extent they are capable of being applied; so that, in making a decision about the imposition of charges, councils are entitled (perhaps bound) to consider, first, the need for an "environmentally responsible" system of local government in New South Wales (s7(a)); second, the role of councils in "the management, improvement and development of the resources of their areas" (s7(d)); and, third, the adoption of "improved valuation, pricing and incentive mechanisms" under which the "polluter pays", users of goods and services pay prices based on the full costs of providing goods and services "including the use of natural resources and assets" and environmental goals are "pursued in the most cost effective way, by establishing incentive structures, including market mechanisms" (s7(e) and para (d) of the definition of "principles of ecologically sustainable development".) 320 Counsel for the NSW councils do not dispute their clients were aware of the activities of LGA in respect of overhead cabling. But they do dispute that this awareness supports the contention of counsel for Telstra about adopting the purposes of LGA: see para 313 above. 321 Counsel for the New South Wales respondents also challenge the claim that the councils acted in concert with each other. They say: "This submission would effectively enable Telstra to attribute to each of the Councillors of each of the Councils here in consideration, the knowledge of the LGA and of its officers and of the officers of each of the Councils who had any involvement in this matter notwithstanding … in almost all cases, none of the material emanating from the LGA was before the members of Council, at the time when they resolved to make their decision to make the charges." 322 Counsel for the NSW respondents point out there is a distinction between the making of a charge, by council in general meeting, and the subsequent levying of the charge, by council officers. They contend: "Matters which were within the knowledge of individual officers of the management of the various Councils in the time between the making and levying of the relevant charges cannot be called in aid of a submission as to the purpose of individual councillors at the time when resolutions were passed making the charges." 323 Counsel for the NSW respondents referred to various passages in Dunlop and Parramatta City Council v Hale. They submit: "What those passages emphasize is that it is the state of mind of the particular body in question in passing the particular resolution which is in question, and that in circumstances such as this, where a conclusion is sought to be ascertained by way of inference, the court should only come to a conclusion after anxious consideration, but when the inference is available and ought to be drawn, the Court should not hesitate to give effect to the inference it has drawn." 324 Counsel accept it is well settled that a court may look at reports put before a collegiate body in order to determine what matters it took into account in reaching its decision. But they say this is not well settled in relation to the establishment of the body's purpose; indeed it is contrary to recognised authorities in the field. They note a passage from the decision of Cussen J in Re The Mayor &c. of the City of Hawthorn; Ex parte Co-operative Brick Co Ltd (1909) VLR 27 at 51-52: "So far as the question of bad faith is concerned, if it is meant by this that individual councillors were actuated by improper motives in giving their votes, I find no evidence of the fact, and even if there was, I find great difficulty in seeing how such a contention could be given effect to. Each councillor may be actuated by many reasons, each having some different reasons from the others, and it seems to me almost, if not quite, impossible to penetrate into their minds. It must at least be necessary to show that the improper motive was the sole or dominant one, and that but for it a majority would have voted against adopting the by-law. The ratepayers and councillors honestly voting for the by-law would be placed in a false position if the by-law could, perhaps after a long time, be upset on such a ground. These considerations make one think that the furthest the Court can go is to look at the object and effect of the by-law, to be gathered from its language, and possibly by applying it in a general way to the existing state of legislation, and to the conditions of things existing in the locality." 325 That passage was cited with approval in Arthur Yates & Co Pty Ltd v The Vegetable Seeds Committee (1945) 72 CLR 37 by Latham CJ at 69 and Dixon J at 82-83. 326 Counsel for the NSW respondents question whether s611 is a purposive power at all. They refer to a comment of Latham CJ in Vegetable Seeds at 68: "… the purpose of legislation is to be ascertained by considering the true nature and operation of the law and the facts with which it deals, and … not by examining the motives of the legislative authority … No such limitation applies in the case of administrative acts. It is true that if a power to perform an administrative act is conferred with no reference to purpose, no inquiry into purpose (in the sense of result or consequence desired and intended to be achieved) is relevant. But if such a power is given only for a particular purpose, the power can be validly exercised only for that purpose." (emphasis added) 327 Counsel go on: "The existence of any particular purpose as being relevant to the exercise of power under section 611 is not readily discerned. …It is certainly not a power which has a specific purpose such as the provision considered in Campbell's case where there was a power to resume land for the purpose of remodelling and improving the city' In Thompson v RandwickCorporation the powers conferred upon the Randwick Corporation in issue were held to be powers which had to be authorized for purposes authorized elsewhere in the relevant legislation. Where there are no specific conditions imposed upon the exercise of the statutory power, as to the purposes which can properly form the basis of exercise of the power, the discretion is unconfined except in so far as the subject matter and the scope and purpose of the statutory enactmenet may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view (Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 489, 505 per Dixon J; R v Australian Broadcasting Tribunal; ex parte 2 HD Pty Ltd (1979) 144 CLR 45, 49; Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24, at 40 per Mason J). If there is any validity in the suggestion that Council must form a purpose for the purpose of exercising its powers under section 611, that purpose could only be challenged if it fell outside the scope and purpose of the Local Government Act particularly as defined in sections 7 and 8." 328 Counsel distinguish Campbell and Thompson on the basis that, in each of those cases, the legislation authorised compulsory acquisition of land only for a designated purpose. They then say: "Amongst the matters which the relevant Councils will be entitled to take into consideration in determining whether or not to make a change [sic] are the matters set out in s.7 and s.8 of the NSW Local Government Act, including the concept of ecologically sustainable development and Council's function in this area including as part of this "incentive mechanisms" as referred to in the definition of that conception. It is also appropriate to consider the fact that the Council's charter includes the principle that it must bear in mind that it is a custodian and trustee of public assets and has to effectively account for and manage the assets for which it is responsible. It may also raise funds for local purposes by the fair imposition of rates, charges and fees." 329 Counsel say the objective of s611 is "well capable of being understood": "It is to enable Councils to obtain a fair and reasonable return for land in their municipality which is utilized for purposes such as those here under consideration. If as a result of exercising their powers under s 611 it has the added consequence that an ecologically satisfactory result can be achieved then this does not invalidate the exercise of the power. Having regard to the terms of the section, and the rights of appeal which exist under s 611(4) any charge which could in fact be made could not do otherwise than reflect the nature and extent of the benefit enjoyed by the person concerned." 330 Counsel for the New South Wales respondents specifically addressed the reliance by their opponents upon the paragraph in the memorandum from LGA of 6 December 1996 mentioned at para 255 above. They point out, correctly I think, that there is no evidence that this document "ever came to the attention of councillors who voted in favour of resolutions to make the relevant charges some six or more months later." Anyway, they say the terms of the paragraph merit consideration: "(a) The only reference to revenue is 'general revenue' which may fairly be seen to be a reference to the rates and charges normally collected by Council to fund their operations. (b) There is a recognition that carriers ought to be made to pay for using publicly owned space to generate private profit which is an objective at the core of s 611. (c) There is also a reference to the provision of an incentive for the carriers to go underground. This is entirely consistent with the Council's powers to provide incentives in relation to ecologically sustainable development', and even without recourse to that specific objective is entirely defensible as a consequence of the making of appropriate charges under s 611." …" 331 Counsel say that councils should "seek to achieve consistency in charges of this nature which if properly applied would not vary significantly from place to place." (vi) Applicants' submissions in reply 332 It is desirable to mention two points made by counsel for Telstra in written submissions in reply. First, they say: "the states of mind of individual councillors are irrelevant. What is relevant is the purpose of the collegiate body, which is best evidenced by the documents brought into existence by its officers and others, placed before the collegiate body in one form or another, and adopted (either wholly or in part) by the collegiate body." 333 Second, in the submissions in reply counsel analyse the correlation between the LGA recommendations and the NSW respondents' decisions: "First, the LGA recommended that the charges be made on a length of cable basis, and not any other basis (such as revenue derived from the cables). All councils made a charge on the length of cable basis. Secondly, the LGA recommended that the charge be made in respect of two components described as all cables' and overhead cables'. All councils, other than Hornsby and Hurstville, adopted the 'all cables' and 'overhead cables' distinction. Hurstville did not distinguish between the two, but the only documents which Hurstville has produced … refer to the advice from the LGA and the charge being set in that context. For its part, Hornsby clearly determined that it would only deviate from the LGA advice to the extent necessary to provide what that Council perceived to be a greater incentive for the underground of cables. …" 334 Notwithstanding the above, counsel say that "Telstra does not allege that any of the NSW respondents was effectively acting under dictation"; however, they were acting in concert and in accordance with the program recommended by LGA. (vii) Conclusions 335 A notable feature of the case is the paucity of evidence concerning the decisions of the various councils to make the s611 charges. The operative decision, in each case, was a resolution to adopt a management plan in which such charges were included. In some cases, there is evidence of one or prior resolutions of the relevant council by which the council foreshadowed the making of the charge. In each case, that resolution adopted the report of a council officer containing information relevant to the imposition of the charge, including information about the activities of LGA. Where that happened, the Court must conclude the council took that information into account in making its decision: see Parramatta City Council v Hale at 346. However, it does not follow that the council adopted all the purposes expressed, at any time, by LGA or its officers or executives. Individual councillors may have read or heard media reports attributing views to LGA officers or executives. Individual councillors may have engaged in discussions with such persons. But none of those circumstances means any councillor, still less any council, must be taken to have adopted those views, or any purposes they might have included. A councillor might take into account a multitude of matters, some perhaps bearing one way and some the other, before making a decision actuated by only one of them; or none of them. As Cussen J said in the Hawthorn case: "Each councillor may be actuated by many reasons, each having some different reasons from the others." 336 I see nothing wrong with a council officer, or a councillor, taking into account the views of LGA, or its President, or any other officer or executive in respect of a matter such as this. The broadband rollout affected most (if not all) councils in the Sydney metropolitan area and, apparently, also some in the Hunter and Illawarra regions. It raised issues of common concern, an adequate response to which required an understanding of the relevant technology, and of complex legislation. It was appropriate that LGA, the representative body of municipal councils, should examine these matters and make recommendations to its member councils as to their desirable response, provided LGA did not seek to dictate how member councils should exercise their statutory powers. When LGA concluded one option was the imposition of a charge under s611, it was appropriate it should obtain legal and accounting advice as to that course and convey the advice to its members. The role played by LGA in relation to this issue was presumably part of what member councils had in mind when they created, or later joined, the association. 337 It would have been wrong for any council to have regarded itself as bound by views expressed by LGA; so that the council's decision was not a free and genuine expression of council's best judgment but a mere rubber stamping of a decision taken by somebody else. However, there is no evidence that this occurred. Counsel for Telstra expressly disclaimed the suggestion that any council acted under dictation. 338 I note that many, although not all, the respondent councils, chose to adopt the rates per kilometre recommended by LGA. However, these rates were within the range recommended by Bentleys, as reasonably reflecting the nature and extent of the benefits enjoyed by telecommunications carriers. 339 Although it is impossible to determine to what extent individual councillors were aware of the views expressed on behalf of LGA, it is reasonable to infer they were aware of public concern about the unsightliness of overhead broadband cables. It is also reasonable to infer that many, if not most, councillors were actuated (at least in part) by a desire to encourage telecommunication carriers to place their cables underground. However, contrary to the submission of counsel for the applicants, this does not invalidate the decisions to make the charges. Section 611 is not to be considered in isolation from the remainder of the Act. It is located in a Chapter of the Act that is concerned with finance; however, the whole of the Act is informed with the purposes stated in s7 and the charter set out in s8. 340 One of the purposes of the Act is to provide a legal framework "for an effective, efficient, environmentally responsible and open system of local government in New South Wales": sees7(a). Another is to require councils "to have regard to the principles of ecologically sustainable development in carrying out their responsibilities" (sees7(e)), including the making of decisions under Chapter 15. The principles of ecologically sustainable development include the "polluter pays" principle. The word "polluter" includes the visual polluter. The principles include the notion that users of services (including users of telecommunications services) should pay prices based on the full cost of providing those services, including the use of natural resources and assets (such as public land). Further, incentive structures should be established to encourage "those best placed to maximise benefits and minimise costs to develop their own solutions and responses to environmental problems". It might cogently be argued that the imposition of a charge for use of public land by a commercial organisation, being a charge that fairly reflects the nature and extent of the benefit enjoyed by that organisation, fell squarely within the charter rules that the councils were obligated bys8(2) of the Act to observe. At the least, as it seems to me, it was open to the respondent councils to take into account the purposes of the Act, as specified ins7, and the terms of the charter, set out ins8. 341 In my opinion, there is no substance in the applicants' claim that the decisions of the NSW respondents, or any of them, to make the subject s611 charges were invalidated by pursuit of extraneous purposes. M. Extraneous purposes: Victoria (i) The applicants' material 342 There is an organisation called the Municipal Association of Victoria ("MAV"). However, the applicants do not suggest MAV played a leading role in the decisions of any of the four Victorian respondents to make and levy rates affecting the applicants' cables. Accordingly, their counsel have not made any submissions concerning that organisation. 343 Counsel do, however, direct attention to evidence concerning the decisions of each the respondent councils. I will summarise that evidence. (ii) Bayside City Council 344 The earliest document in evidence is a letter dated 18 March 1996 from Maddock Lonie and Chisholm, solicitors, advising the council that items of plant and equipment owned or used by Optus were rateable. The solicitors suggested an expert valuation be obtained. 345 Before any rate was made, Bayside Council was invited to be represented at a meeting, convened for 21 October 1996 by the Executive Officer of the City of Darebin on behalf of an organisation called "Cables Downunder Campaign". Apparently, Bayside Council was represented at that meeting, and also at follow-up meetings, at which legal issues were canvassed and there was some discussion about lobbying the federal government in relation to the form of the new telecommunications legislation. 346 The evidence includes an "Urgent Media Alert" relating to a proposed ceremony on 23 June 1997 at which the four councils (Bayside, Moreland, Frankston and Yarra), that are respondents to the Telstra proceeding, would announce "a major new rating initiative". The media alert indicated that the mayors of the four councils, dressed in full regalia, would be raised in a cherry picker to inspect overhead cables at the intersection of two streets in the City of Yarra. According to an internal memorandum, the event was timed to maximise the chance of getting news of the ceremony onto the evening's electronic news broadcasts. 347 A media release issued at the time of the ceremony said: "Four Victorian Councils today announced they will start charging rates on cables laid by telecommunications carriers. From July 1 companies with overhead or underground cables in the cities of Yarra, Moreland, Frankston or Bayside will pay a rate per kilometre. The rate will apply to all future cables and reflect the number of services the cable delivers as well as the number of service suppliers using it. With local cable networks covering more than 300 kms in each municipality, the new levy is expected to reap tens of thousands of dollars for local government. Speaking on behalf of the five councils, the Mayor of Yarra, Cr Linda Hoskins, said the cable rate was struck in response to community concern over the continuing rollout of overhead cabling. 'It's also consistent with user pay principles and is responsible government', Cr Hoskins said. 'We have Queen's Counsel advice that there are legal precendents [sic] for setting such a rate.' The Councils' new rate applies from 1 July when Australia's telecommunications market becomes fully deregulated. 'We are serving notice on all future service providers that Victorian councils are serious about protecting our visual amenity and charging rates to which we are entitled." 348 The ceremony went ahead as planned. It received extensive publicity. 349 On 5 August 1997 Bayside Council adopted a resolution declaring the rates for 1997-98. The resolution apparently had the effect of rating the telecommunications cables in the city. 350 The four Victorian respondents formed a group called "CORE Campaign Working Group". "CORE" was an acronym for "commercial operators' rate equity". Bayside was represented on CORE by a staff member. 351 The evidence includes a CORE draft document headed "Telecommunications and Private Utility Infrastructure Rating Strategies" that identified "three important issues"; viz: "• all private utility services occupying public land or space for commercial gain or reward should pay a fair business related return for that occupation, as is the requirement for all other business operations; • the implementation of a differential rate would provide a direct incentive for the underground installation of cables rather than their installation overhead; • Councils have an obligation to their communities to charge rates that are justifiable." 352 The document went on: "It is now necessary to progress the development of the rating methodology and to subsequently implement a rate levy on both telecommunications and private utility infrastructure." 353 The working group prepared a valuation brief in which it was said "the actual principle at issue is the entitlement to a fair business return for the commercial use or occupation by corporations which were previously exempt because of their public nature". 354 The evidence includes a file note concerning a meeting of 3 March 1998 of representatives of the CORE group and MAV. The file note includes these statements: "In principle agreement was expressed to the concept that there should be taxing of all commercial use of community assets including VPC, boating harbours and use of all space and underground assets of councils. The approach was one of councils reclaiming their own tax base." 355 There is a deal of material in the tendered folders about the making of valuations on cables. It is unnecessary to go to that material. However, I note that, on 7 May 1998, a Yarra City Council officer reported to other members of the group that a valuation study for five council areas, including those of the four respondents to the Telstra proceeding, "is now complete and indicates that the Rate return to the Councils would be significantt". 356 On 18 May 1998, a Bayside Council committee noted a report from council's financial services manager dealing with CORE's activity and the making of valuations. The report quoted the "three important issues" set out in para 351 above. It was resolved to recommend the declaration of rates of $13,565.51 against Optus Vision and $23,536.00 against Foxtel Cable Pty Ltd. 357 The committee's report and recommendations were adopted by the full council on 25 May 1998. Shortly thereafter, rate notices were issued. 358 On 23 June 1998 Bayside Council joined in a media release that stated as follows: "Bayside Council has joined four other Victorian Councils in serving rate notices on Optus Vision and Foxtel for every kilometre of cable installed in streets by the two Pay TV operators. Bayside received legal advice from a Queen's Counsel in 1997, along with the cities of Melbourne, Yarra, Frankston and Moreland, which cleared the way for them to rate the land which is occupied by Pay TV operators within the meaning of the Local Government Act (1989). The exact rate, applied to the pay TV operators, has been determined by experienced valuers and is calculated on a per kilometre basis. This includes cables underground or attached poles. Mayor Alex del Porto said the cable rate has been issued in response to community concerns about visual amenity and equity. 'The setting of a cable rate is consistent with the principle of user pays. We need to ensure that Pay TV operators address some of the costs associated with their activities. 'Shop owners in most Victorian councils must pay rates and charges for the right to place tables and chairs or A-frames on the footpath, yet large multinational operators have claimed exemption from council rates. This is just not right,' said Mayor del Porto. 'We are acting as a responsible Council by acting on legal advice from a Queen's Counsel that advised us that relevant Government Acts and legal precedents substantiate the right of councils to set this rate. While we hope that Optus Vision and Foxtel will pay the rates as specified, it is most likely they will challenge us in court.' The rate covers the period 1 July 1997 to 30 June 1998 and applies to the cable assets of Foxtel and Optus Vision." 359 On 13 July 1998 Bayside Council resolved to declare a differential rate in respect of rateable and "overhead cable land", as defined in the resolution. Rate notices were subsequently served on several telecommunications carriers pursuant to that resolution. (iii) Moreland City Council 360 Moreland City Council was one of the councils involved in "Cables Downunder" and, subsequently, CORE. 361 The council held a public meeting on 8 October 1996, in order to allow members of the community to express their opinions about overhead cabling. Following that meeting, it seems the council allocated funds to a campaign against an aerial rollout by Telstra. 362 In March 1997, Moreland Council prepared a "strategy" in which it argued the desirability of infrastructure sharing. The strategy document referred to the possibility of imposing "rate penalties on carriers who duplicate an existing network". The evidence does not establish whether or not this document was adopted by Council. 363 On 26 May 1997 Moreland Council resolved to contribute up to $4200 "to Yarra and other Councils to develop a rating strategy". Council also resolved to contribute $5200 to an MAV campaign "for advocacy and research into retrospective undergrounding of power lines in Victoria." 364 On 23 June 1997 the mayor of Moreland Council participated in the announcement of the "new rating initiative" mentioned in paras 346-348 above. Later that day council considered a report by the Director City Strategy called "Cable Update - Rating" that included the following: "2. Policy Implications Moreland City Council has adopted a policy of trying to get all aerial infrastructure underground by the year 2010. The rating strategy is one component to achieve that outcome. 3. Background Council resolved to contribute $4200 with Yarra City Council and other Councils to develop a rating strategy for the telecommunication carriers and other aerial infrastructure. Legal advice has now been received that states that telecommunication companies and their facilities which includes cabling are rateable. It is intended that telecommunications carriers are assessed and rated effective from July 1 1997. The actual details of the valuation of these facilities will not be finalised prior to 1 July 1997, but will be backdated. Further work will be required on the rating of Telstra. It is important that 1 July 1997 is the commencement date of this rating strategy as this is the date of the new regulations of the telecommunications industry with the prospect of other companies constructing aerial cabling. 4. Issues Moreland Council has been working towards the urban improvement of Moreland with one of the main components being the undergrounding of all cables: powerlines and telecommunication cables. The web of cables above the city streets adds significantly to the urban blight and Councils are working together to try to achieve the undergrounding of all cables by the year 2010. Rating carriers is consistent with the rating responsibilities and powers of Councils. In this case, Council would want to offer an incentive to companies to underground their infrastructure. It is anticipated that this will be achieved by Council offering a rate concession to those carriers with underground facilities. In order to ensure the undergrounding of all infrastructure it is proposed that revenue raised from the rating of infrastructure should be placed in a special fund that could be used as Council's contribution to achieving eventual undergrounding." 365 The report included four recommendations: "1. Council agree in principle to rate from 1 July 1997, telecommunication carriers and their facilities. 2. Council consider setting aside any revenue obtained from rating telecommunication carriers to a special fund for the undergrounding of all cables. 3. A further report be prepared for Council on the valuation and the rating proposal. 4. Council adopt the principal of offering a rate concession to those carriers with facilities underground." 366 These recommendations were unanimously adopted. 367 It seems that preliminary valuation advice was received by Moreland Council at about this time. There was discussion about the appropriate method of determining rateable value. However, the Director City Strategy formed the opinion that the rating issue extended beyond telecommunications cables. In a report to the council meeting held of 22 September 1997, the Director said: "The rating issue is larger than just the telecommunication cables. With the privatisation of a number of public authorities, the exemption from rating that they had because of their status as a public body needs to be reviewed. It could be argued that they should be treated in the same way as other private corporations for rating purposes. In order to share the rate burden, local governments are obliged to ensure that all rateable properties and facilities pay their fair share of rates. It could be argued that in the case of rating where there are commonalities across a number of local governments, the issue should be taken up by the relevant peak body as the results will benefit all local governments in Victoria and not just a few. It is extremely difficult for a few local governments to resource fairly extensive and detailed projects such as the rating issue. However, should the local peak body be unable, for some reason, to project manage this issue it may be preferable for some local governments to continue with the project. The annual amount estimated as income from rating the two carriers for Moreland is approximately $140,000 per annum. To implement the rating valuation may possibly incur considerable legal costs. However, these need to be weighed up against the long term benefits to the wider community of sharing the rate burden across all rateable properties and facilities." 368 The council resolved to ask "VLGA" (presumably the Victorian Local Government Association), with MUA, "to develop a valuation methodology for the rating of telecommunications cables". 369 A progress report on the development of a rating strategy was provided to council on 6 February 1998. The report made the point that differential rating would yield a greater revenue benefit than use of the general rate. 370 On 9 June 1998 Moreland Council noted the return of the supplementary valuation in respect of telecommunications cables, effective from 1 July 1997. Council authorised the use of this valuation to levy such rates as are payable by reason of the return of the valuation. Council added: "2. a) Council record that it will grant a concession of 100% in relation to any general rates payable by reason of the ownership or occupation of any underground cable used by a telecommunications carrier. b) Council record that in its opinion, the grant of such a concession would assist the proper development of the municipal district or preserve places in the municipal district which are of environmental interest." 371 Rate notices for the year 1997-98 were issued on 12 June 1998. 372 On 29 July 1998 Moreland Council resolved to adopt a differential rate for 1998-99, using a formula similar to that adopted by Bayside Council. Instead of allowing a 100% rebate for underground cables, Moreland Council used different rates of capital improved value, the overhead rate being about four times the underground rate. (iv) Frankston City Council 373 Frankston City Council was also involved in the campaign against aerial cables. Staff attended meetings of Cables Downunder Campaign. On 17 September 1996 Council's General Manager, Planning and Economic Development wrote to MAV proposing MAV coordinate development of a "rating system for the use of public land by private utility companies". 374 A paper prepared, at about that time, by another Frankston Council officer claimed this council "first thought of using a rating system to provide a deterrent for carriers in the deployment of aerial infrastructure." 375 Frankston Council was one of the councils involved in the rate initiative launch on 23 June 1997. Councillors were informed of the launch and the "three basic principles for pursuing the rating of carriers" set out in para 351 above. Shortly before 23 June, the councils had received legal and valuation advice about the new system. That advice was included in a report to a Frankston Council meeting of 30 June 1997 at which it was resolved: "A. That Council support the notion of striking a supplementary rate for Telecommunications for the 1997/98 financial year … C. That Frankston City, in consultation with other Councils, develop a consistent valuation methodology for the Telecommunications rate and report back to Council with these findings prior to striking the rate." 376 The report discussed by Frankston Council on 30 June 1997 included these statements: "The Carriers will probably challenge the striking of the rate and imply that a new rate will push up the price of their services. However, there is already a cost to the community generated by the carriers activities, such as the loss of amenity to our streets caused by additional aerial cabling, the additional cost of street tree maintenance, the devaluation of road reserves created by damage caused by the activities of carriers. In addition, like all private enterprises, the cost of using land and infrastructure owned by other entities is something that needs to be accounted for in the costing of their service delivery. On the other hand Council is responsible for ensuring the community as a whole benefits from the rates collected from carriers for their use of public land." 377 The remainder of 1997, and the first few months of 1998, were spent in developing a valuation methodology. This was done in conjunction with other councils, and with expert valuation advice. A report was received in April 1998 and a supplementary valuation return, effective at 1 July 1997, was supplied in May. It was formally received by council at a meeting held on 26 May 1998. 378 A covering report to council referred to the CORE group of councils having the prime aim "to ensure that whenever possible all private enterprises pay their 'fair share' of rates and charges to local Councils." The report also noted the possibility, in future years, of rating the overhead component as a higher differential rate "to compensate for the detriment to the visual amenity of the municipality". 379 Pursuant to the council resolutions of 26 May 1998, rate notices for the 1997-98 financial year were issued on 27 May. 380 On 30 June 1998 Frankston Council resolved to adopt a differential rate for 1998-99, the overhead rate being about three times that of the underground rate. (v) Yarra City Council 381 As will be apparent from earlier references, Yarra City Council was actively involved in the campaign against the rollout of aerial cable. 382 On 2 May 1997, Prue Digby, Chief Executive Officer of Yarra Council, wrote to other councils suggesting it was "an opportune time to address rating of communications carriers". Ms Digby said: "The concept of a Council charging a rate for their overhead cables is an effective and legitimate strategy for raising funds to achieve the long term vision of may Councils. In the short term pursuit of this strategy will help ensure that carriers such as Optus and Telstra will act in a more responsible manner." Ms Digby convened a breakfast meeting for 8 May 1997. 383 This initiative resulted in the obtaining of legal and valuation advice which was considered at a meeting of representatives of six councils held on 17 June 1997. It seems that meeting gave rise to the "new rating initiative" that was launched, with the participation of the mayor of Yarra, on 23 June 1997. 384 Yarra City Council was one of the councils that developed the valuation methodology used in the supplementary valuation returns, effective from 1 July 1997, supplied to participating councils in May 1998. It seems Yarra Council adopted its supplementary valuation return shortly before 27 May 1998, the day on which it forwarded 1997-98 rate notices to telecommunications carriers. 385 On 1 July 1998 the mayor of the City of Yarra issued a media release announcing service of the rate notices. He said: "If a community asset (public land) is being used for private profit, the community has a right to a reasonable payment for the use and maintenance of its asset (public land or space) ... Optus Vision and Telstra/Foxtel have been getting a free ride at the expense of other business and household ratepayers". 386 On 27 August 1998 Yarra Council issued a Valuation and Rate Notice to Telstra for 1998-99. Yarra did not apply differential rating. (vi) The applicants' submissions 387 Counsel for Telstra direct attention to s6 of the Victorian Act detailing the purposes of a council. That section reads: "Purposes of a Council 6. (1) The purposes of a Council are-- (a) to provide for the peace, order and good government of its municipal district ; and (b) to facilitate and encourage appropriate development of its municipal district in the best interests of the community; and (c) to provide equitable and appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively; and (d) to manage, improve and develop the resources of its district efficiently and effectively. (2) It is the intention of Parliament that the provisions of this Act be interpreted and every function, power, authority, discretion and duty conferred or imposed by or under this or any other Act on a Council be performed or exercised so as to give effect to the purposes and objectives of Councils." 388 Section 7 sets out objectives of a council, to achieve its purposes. 389 Counsel for Telstra argue: "s6(2) does not mean that every power given to a council can be used for every purpose or objective listed in ss6 or 7. It means only that, where there is a link between the relevant power and a purpose or objective, the power is to be construed and exercised so as to advance that purpose or objective." 390 As previously noted, Part 8 of the Act confers on councils the power to make and levy rates and charges on land. Counsel for Telstra say this is connected with the objective stated in s7(h) of the Act: "To raise funds for local purposes by the equitable imposition of rates and charges and by obtaining borrowings and grants;" 391 Counsel for Telstra note that each of the four Victorian respondents was a member of CORE. On the basis of that fact, they submit the four councils "acted in concert with each other"; "their common knowledge and common purpose must inform any consideration of the evidence in the context of this claim for review that each of the Victorian councils acted for an extraneous purpose". Counsel contend the documents tendered in evidence demonstrate that the Victorian respondents "made and levied the rates and charges for a number of purposes" namely: "(a) to provide a deterrent to the carriers in deploying aerial infrastructure; (b) to respond to community concern in respect of the rollout of overhead telecommunications cable and its effect on visual amenity; (c) to encourage telecommunications carriers to place their cables underground; (d) to make a public statement that commercial enterprises which profit from the use of public land ought to pay for that privilege on a 'user pays' principle; and (e) to raise funds for local purposes including, in particular, money to carry out a program of undergrounding the overhead cables." 392 Counsel contend those purposes were not authorised by the legislation. They argue that, as in the New South Wales Act, each part of the Victorian Act deals with a discrete matter; the power of Victorian councils to make and levy a general rate may be exercised only for the purpose of raising funds to be used for "local purposes". Counsel suggest the finance purpose of Part 8 is demonstrated by the detailed provisions in that Part regarding the preparation and publication of budgets and recovery of unpaid rates and charges. 393 Counsel say that, even if the councils were anxious to raise funds from the rating of cables, their purposes were mixed. They refer to ten documents in which references are made to deterring telecommunications carriers from erecting aerial cables, responding to community concern over the visual damage occasioned by aerial cables, and the like. None of the ten documents emanated directly from a council meeting, or is proved to have been placed before a council meeting. 394 Counsel for Telstra also contend it was an improper purpose for the Victorian councils to seek to raise revenue that might be used to assist the undergrounding of cables.. 395 Optus does not put any separate submission in relation to the extraneous purposes of Moreland City Council, the only Victorian council against whom it proceeds. Optus adopts Telstra's submissions. (vii) The Victorian respondents' submissions 396 Counsel for the Victorian respondents made some comments about CORE. They noted that, in 1996, "there was great concern in relation to the Telstra and Optus cable rollout". They mentioned four primary concerns: "(a) duplication of cables given the limited sharing of facilities; (b) the impact of substantial and extensive aerial infrastructure on matters such as visual amenity, aesthetics and vegetation; (c) widespread community concern and dissatisfaction associated with the labyrinth of aerial infrastructure; (d) the failure to lay cables underground." 397 Counsel mentioned the litigation that occurred in Victoria, as in New South Wales, when councils attempted to prevent or control the cable rollout. Counsel went on: "The cable roll out was, of course, a new issue facing local governments and a matter which councils were required to consider and respond to in the context of their overall local government purposes, objectives, functions and responsibilities. Because the concern was shared by most (if not all) municipalities, a cooperative approach was taken by a number of councils. One of the primary issues councils were obligated to explore was the rating issue." 398 Counsel then referred to a number of documents prepared in connection with the CORE campaign, or by council officers. Counsel claim these documents demonstrate the interest of councils in developing a rating regime for telecommunications carriers that would be "equitable and appropriate". Counsel observe there was a strong feeling that it was inappropriate for privately owned bodies to have free use of public land for commercial purposes. This feeling extended, in Victoria, to the free use of street cabling by the recently-privatised electricity companies. 399 In dealing with the allegation of improper purposes, counsel for the Victorian respondents acknowledge "that one of the matters taken into account and considered when exploring the rating issue was the community desire to minimise aerial infrastructure and encourage the undergrounding of cables". But they contend that was "a perfectly proper and appropriate matter for a local government to consider when faced with this new issue". 400 Counsel say the purposes for which the rating power may be used include: "(a) the purpose of raising revenue for one or more of the purposes or objectives referred to in sections 6 and 7 of the Victorian Act; (b) the purpose of raising revenue in order to carry out one or more of its functions; (c) to ensure that the rating provisions are applied to those subject to their terms"; 401 Counsel submit that, even if it was demonstrated that the substantial purpose of levying the rates was to encourage underground cabling, and to obtain revenue that might be used to assist future underground cabling, these would not be extraneous purposes. Counsel point to the purposes of a council, set out in s6(1) of the Act. Counsel also mention council's objectives and functions. They say there is no basis for Telstra's submission that the power to make and levy a general rate may be used only for "the narrow purpose of raising funds." This is particularly true of a differential rate, in relation to which s161(2)(a) of the Act requires council to "specify the objectives of the differential rate which must be consistent with the equitable and efficient carrying out of the Council's functions." 402 Counsel for the Victorian respondents reply to their opponents' suggestion of improper behaviour, in "acting in concert", by saying their clients' behaviour is merely an example of councils fulfilling the objective ins(b) of the Act: "To co-ordinate with other public bodies to ensure that services and facilities are provided and resources are used effectively and efficiently". (v) Conclusions 403 Many of my observations in relation to the New South Wales respondents apply equally to the argument that the decisions of the Victorian councils are invalidated by reason of their pursuit of extraneous purposes. As in the case of the New South Wales councils, there is no evidence of anything that occurred during the course of debate at any of the council meetings at which consideration was given to the imposition of the subject rates. Some officers' reports are in evidence. Where it is established that a particular report was before a particular council during the meeting at which a particular resolution was passed, it may be inferred that the contents of the report were taken into account by those members of council who assented to the resolution. However, as I pointed out in para 335 above, it does not follow that all (or any) of the matters mentioned in the report actuated any particular councillor, still less council as a whole, to make any particular decision. 404 All four councils were involved in CORE. However, the evidence does not establish that any CORE campaign material was endorsed by any council. I accept that individual councillors are likely to have come across some of the CORE campaign material; or, at least, to have been familiar with the sentiments expressed by CORE. The evidence shows that statements made on behalf of CORE were widely publicised. However, that does not mean it is proper to attribute to any particular councillor, or body of councillors, all (or any) of the views expressed by CORE. 405 As in the case of the New South Wales respondents, I prefer to decide this issue on a more fundamental basis than the applicants' difficulty in proving the purposes underlying the relevant resolutions. I do not accept the applicants' submission that the power of a Victorian council to declare rates on rateable land is a discrete power divorced from its other functions. 406 There are at least two problems about the applicants' arguments. First,s6(2) of the Victorian Act proclaims the intention of the Victorian Parliament that "every function, power, authority, discretion and duty conferred or imposed by or under this or any other Act on a Council be performed or exercised so as to give effect to the purposes and objectives of Councils." The functions, powers, authorities and duties conferred by the Act include the function of levying rates under Part 8 of the Act. The purposes of the Act include the "good government" of the municipal district (s6(1)(a), the encouragement of "appropriate development" of the district (s6(1)(b)) and the efficient and effective management, improvement and development of the district's resources (s6(1)(d)). All these statements of purpose are relevant to the proper management of public land, such as streets, the control of infrastructure development on that land and its maintenance for public use and enjoyment. Furthers7(a) makes it an objective of council to "facilitate the involvement of members of the community … in the development, improvement and co-ordination of local government" ands7(d) sets an objective to "represent and promote the interests of the community and to be responsive to the needs of the community". The effect of these provisions, read withs6(2), is that, in exercising their powers, the respondent councils were obliged to listen to members of the community, promote the interests of the community and be responsive to community needs. If there was concern within the community about the proliferation of overhead cables resulting from the broadband rollout, this was a matter that the councils were obliged to take into account in determining whether or not, and if so how, to exercise powers given to them by the Act. 407 The second difficulty about the applicants' argument is that it assumes the councils had a discretion whether or not they would rate the cables. It seems to me that assumption is incorrect. Section 154(1) of the Act provides that "all land is rateable", other than land caught by the exceptions referred to ins154(2). It is now conceded by Telstra and Optus that the cables are "land", within the meaning ofs154(1), and that none of the exceptions ins154(2) applies. It follows that the cables are rateable. Section 155 gives a council a discretion as to the type of rates and charges it will declare in respect of any particular year; ands157 allows the council to choose its system of valuation. However, as I understand the scheme of the Act, if a council decides to declare a general rate for a particular year, using a particular system of valuation, that decision applies to all rateable land within the municipal district. The members of council need have no intention concerning, or even knowledge of, land burdened by the rate. The resolution applies, by force of the Act itself, to each parcel of rateable land (s154) and the owner of each parcel of rateable land (s156). 408 In a Further Memorandum of Advice, furnished to the Victorian respondents on 13 August 1997, Mr Stuart Morris QC said: "If a telecommunications carrier occupies rateable land, the carrier should be rated; as should all other carriers or relevant occupiers of rateable land". I understand this to have been intended as a statement of law, not advice about policy. On that understanding, I agree. 409 The comments made in the last two paragraphs do not apply to a council's decision to impose a differential rate. Section 161 of the Act applies to rateable land in respect of which the council has declared a general rate, unders155 of the Act, and elected, unders157, to use the capital improved value system. In such a case, the council may declare a differential rate for particular land, but only if the rate complies with the requirements ofs161(2). Necessarily, the council will need to consider the "types or classes of land" to which the differential rate will apply, although not necessarily the particular parcels of land.. 410 As I previously indicated, I do not propose to deal with the applicants' challenge to the decisions of three councils (Bayside, Moreland and Frankston) to declare differential rates, for the year 1998-99, over the "land" constituted by the cables. So I make no comment about the application ofs161 in these cases. I mention the section only to recognise that it operates as an exception to the general principle, earlier mentioned, that a resolution to declare a rate affects all rateable land within the municipal district regardless of councillors' knowledge about, or attitudes to, particular parcels of land or their owners. A complaint of extraneous purpose really needs to be directed to the resolution declaring the rate for the year, not to a resolution to receive a supplementary valuation in order that council officers may go through the mechanical processes of levying (s158(3)) and collecting (ss 167-181) the rate. 411 The challenge to the decision of the Victorian councils, in relation to improper purpose, must fail. N. Disposition (i) Liability 412 In para 231 above, I indicated that the only substantial issues I would determine would be issues (i), (ii), (iii)(a) and (iv), as identified in para 7. I have decided each of those issues adversely to the applicants. It follows that each proceeding ought to be dismissed. As I have elected, in the exercise of my discretion, not to determine issues (iii)(b), (iii)(c) and (v), my order of dismissal will not preclude those issues being considered by a court or tribunal of competent jurisdiction. (ii) Costs 413 During the course of their submissions, counsel for the Victorian respondents drew attention to the abandonment of many of the grounds of challenge pleaded against their clients by the applicants. Counsel suggested that, even if they failed in relation to a surviving ground, their clients should have the benefit of a costs order in respect of the abandoned grounds. Furthermore, counsel for both sets of respondents take the position that, if the applicants are successful on one ground, but not all grounds, the Court should take into account the applicants' limited success in determining what proportion of their costs should be allowed against the respondents. 414 Having regard to my conclusion that both proceedings should be dismissed, these complications do not arise. It is appropriate for me to make a general order for costs in favour of the respondents in each matter. I mention the matters raised by counsel only against the possibility of a different view being taken on appeal about one or more of my conclusions. I certify that the preceding four hundred and fourteen (414) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

Counsel for the Telstra applicants: Mr R Conti QC, Mr P Hanks QC and Ms KA Rees

Solicitors for the Telstra applicants: Mallesons Stephen Jacques

Counsel for the Optus applicants: Mr T F Bathurst QC and Mr S J Gageler Solicitors for the Optus applicants: Gilbert and Tobin

Counsel for the New South Wales respondents: Mr F M Douglas QC and Mr K M Connor

Solicitors for the New South Wales respondents: Deacons

Counsel for the Victorian respondents: Dr G Griffith QC and Mr M Connock

Solicitors for the Victorian respondents: Maddock Lonie & Chisholm

Counsel for the Attorney General Mr M J Leeming of New South Wales:

Solicitor for the Attorney General Crown Solicitor for New South Wales of New South Wales:

Dates of hearing: 26-27 April 2000; 2, 4, 5 May 2000

Date of judgment: 21 December 2000