FEDERAL COURT OF AUSTRALIA

Alcock v Commonwealth of Australia [2012] FCA 524

THE COURT ORDERS THAT:

1.    The questions ordered to be separately determined be answered as follows:

Question 1: Does the Revised Further Amended Statement of Claim filed herein on 5 April 2011 (FASC) (paragraphs 3 and 4) identify rights of the Applicant that are “property” within the meaning of s 51(xxxi) of the Constitution?

Answer: Yes, but only in respect of the abalone fishing license number A41.

Question 2: If yes to Question 1, in relation to the Applicant’s property identified in the FASC and in the circumstances alleged therein, are any of the following a law of the Parliament with respect to “the acquisition of property” within the meaning of s 51 (xxxi) or executive action which impairs the constitutional guarantee:

2.1    the National Parks (Marine National Parks and Marine Sanctuaries) Act 2002 (Vic) (the Marine Parks and Sanctuaries Act)? (in the circumstances set forth in paragraphs 5-9 of the FASC)

2.2.    the Fisheries Management Act 1991 (Cth) (the Management Act)? (in the circumstances set forth in paragraphs 5 and 27 of the FASC)

2.3.    the arrangement dated 29 October 1997, that commenced on 1 November 1997, under Part 5 of the Fisheries Management Act 1991 (Cth) between the Commonwealth and Victoria (the October 1997 arrangement)? (in the circumstances set forth in paragraphs 5 to 9 of the FASC)

or,

2.4.    any combination of the Marine Parks and Sanctuaries Act, the Management Act and the October 1997 arrangement?

Answer: (as to each part): No.

Question 3: If yes to any of Questions 2.1, 2.2, 2.3 or 2.4, does s 167A(1) of the Management Act entitle the Applicant to compensation?

Answer: Does not arise.

Question 4: Does the FASC (paragraph 13) identify any inconsistency between the Marine Parks and Sanctuaries Act and the Seas and Submerged Lands Act 1973 (Cth) for the purposes s 109 of the Constitution?

Answer: No.

Question 5:     If “yes” to Question 4, what provision or provisions of the Marine Parks and Sanctuaries Act is or are invalid for that reason?

Answer: Does not arise.

Question 6: Is the conduct alleged against the Commonwealth in paragraph 18 of the FASC conduct of the Commonwealth “in trade or commerce” within the meaning of the Fair Trading Act 1999 (Vic) or the Trade Practices Act 1974 (Cth) (as taken to be continued in force by item 6(1) of Schedule 7 to the Trade Practices (Australian Consumer Law) Amendment Act (No 2) 2010)?

Answer: No.

Question 8: Is the Fisheries Act 1995 (Vic) repugnant to the Constitution to the extent that it extended past the low water mark into the Central Zone in Bass Strait and/or impaired or interfered with the applicant’s property rights (paragraph 35 of the FASC)?”

Answer: No

2.    A further directions hearing be fixed for 7 September 2012 at 9:30 am.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

1    This proceeding was commenced in the Court in 2008. The applicant, acting for himself and in a representative capacity, alleged that various statutory provisions, which had been enacted by the Commonwealth and Victorian Parliaments, were invalid for Constitutional reasons. They had had the effect of excluding the applicant and other abalone fishers from certain waters off the coast of Victoria. Those waters, in 2002, had been proclaimed by the State of Victoria to be marine parks and marine sanctuaries. This exclusion had led to economic and other losses being sustained by the applicant and those whom he represented. He claimed a series of declarations of invalidity and orders for compensation and damages.

2    The reason that the proceeding has lingered unresolved for as long as it has is because the applicant has repeatedly failed to produce a viable statement of claim. Such attempts as have been made have either been struck-out or withdrawn following objection by the respondents: see Alcock v Commonwealth of Australia [2009] FCA 820; Alcock v Commonwealth of Australia [2009] FCA 1478. The applicant’s most recent attempt to plead his case is contained in a revised further amended statement of claim dated 17 December 2010 which was filed on 5 April 2011 (“the FASC”). When the respondents raised objections to various aspects of this pleading Ryan J determined that separate questions should be formulated pursuant to the former Order 29 of the Federal Court Rules “in the hope that answers to questions which were agreed to be in controversy between the parties might overcome the pleading difficulties which have bedevilled the applicant or, at least, reduce the areas in which the perceived defects are said to infect the latest version of the statement of claim.”: see Alcock v Commonwealth of Australia [2011] FCA 392 at [4].

3    His Honour ordered that eight questions be separately determined. They were (as subsequently amended by leave):

“1.    Does the Revised Further Amended Statement of Claim filed herein on 5 April 2011 (FASC) (paragraphs 3 and 4) identify rights of the Applicant that are “property” within the meaning of s 51(xxxi) of the Constitution?

2.    If yes to Question 1, in relation to the Applicant’s property identified in the FASC and in the circumstances alleged therein, are any of the following a law of the Parliament with respect to “the acquisition of property” within the meaning of s 51 (xxxi) or executive action which impairs the constitutional guarantee:

2.1.    the National Parks (Marine National Parks and Marine Sanctuaries) Act 2002 (Vic) (the Marine Parks and Sanctuaries Act)? (in the circumstances set forth in paragraphs 5-9 of the FASC)

2.2.    the Fisheries Management Act 1991 (Cth) (the Management Act)? (in the circumstances set forth in paragraphs 5 and 27 of the FASC)

2.3.    the arrangement dated 29 October 1997, that commenced on 1 November 1997, under Part 5 of the Fisheries Management Act 1991 (Cth) between the Commonwealth and Victoria (the October 1997 arrangement)? (in the circumstances set forth in paragraphs 5 to 9 of the FASC)

or,

2.4.    any combination of the Marine Parks and Sanctuaries Act, the Management Act and the October 1997 arrangement?

3.    If yes to any of Questions 2.1, 2.2, 2.3 or 2.4, does s 167A(1) of the Management Act entitle the Applicant to compensation?

4.    Does the FASC (paragraph 13) identify any inconsistency between the Marine Parks and Sanctuaries Act and the Seas and Submerged Lands Act 1973 (Cth) for the purposes [of] s 109 of the Constitution?

5.    If “yes” to Question 4, what provision or provisions of the Marine Parks and Sanctuaries Act is or are invalid for that reason?

6.    Is the conduct alleged against the Commonwealth in paragraph 18 of the FASC conduct of the Commonwealth “in trade or commerce” within the meaning of the Fair Trading Act 1999 (Vic) or the Trade Practices Act 1974 (Cth) (as taken to be continued in force by item 6(1) of Schedule 7 to the Trade Practices (Australian Consumer Law) Amendment Act (No 2) 2010)?

7.    Did the Marine Parks and Sanctuaries Act:

7.1.    alter the limits of the State of Victoria; or

7.2.     make provision respecting the effect and operation of any increase or diminution or alteration of territory in relation to Victoria,

so as to come within s 123 of the Constitution?

8.    Is the Fisheries Act 1995 (Vic) repugnant to the Constitution to the extent that it extended past the low water mark into the Central Zone in Bass Strait and/or impaired or interfered with the applicant’s property rights (paragraph 35 of the FASC)?”

4    The issues raised by these questions were argued before me over three days in October 2011. Despite some misgivings I have determined to deal with the questions although various statements, made by counsel for the applicant in the course of argument, suggest that Ryan J’s hopes will not be realised. Notwithstanding the unresolved challenges to the efficacy of the FASC, counsel intimated that the applicant wishes to proceed to trial regardless of any answers which might be provided to these questions but not before the respondents are required to give discovery and, perhaps, to answer interrogatories.

5    Following argument the applicant advised the Court that he did not propose to press certain allegations contained in the FASC. The consequence was that there was no requirement to deal with question 7.

6    It was common ground that I should deal with the questions as on a demurrer. That is, I should proceed as if the facts were as alleged by the applicant in his FASC.

THE CONSTITUTIONAL AND LEGISLATIVE SETTING

7    In 1975 and 1976 the High Court handed down two decisions which established that there was overlapping jurisdiction between the Commonwealth and the States in relation to certain offshore waters. Discussions took place between the Commonwealth and State governments in the wake of these decisions. They led, in 1979, to what became known as the Offshore Constitutional Settlement (“the 1979 Settlement”). This in turn led to the passing of complementary Commonwealth and State legislation to define the respective powers of Federal and State governments.

8    The details of these arrangements are explained in some detail in White and Gaskell, “Australia’s Offshore Constitutional Law: Time for Revision?” (2011) 85 ALJ 504. A summary will suffice for present purposes.

9    In 1973 the Commonwealth Parliament had passed the Seas and Submerged Lands Act 1973 (Cth). The Act asserted Commonwealth sovereignty from the low water mark to 12 nautical miles offshore. This claim was upheld by the High Court in New South Wales v The Commonwealth (1975) 135 CLR 337. The Court rejected a claim by the States asserting sovereignty over coastal waters between the low water mark and three nautical miles offshore.

10    In the following year, however, the High Court, in Pearce v Florenca (1976) 135 CLR 507, held that the States retained power to legislate extra-territorially in respect of fisheries in their coastal waters provided that there was sufficient connection between the State and those waters.

11    These decisions produced the scope for overlapping jurisdiction.

12    Following the 1979 Settlement the States requested and consented to the Commonwealth enacting legislation to deal with the issue. The Commonwealth responded by passing the Coastal Waters (State Powers) Act 1980 (Cth) (“the SP Act”) and the Coastal Waters (State Title) Act 1980 (Cth) (“the ST Act”).

13    Section 5(a) of the SP Act provided that the States’ legislative power extended to the making of “all such laws of the State as could be made by virtue of those powers if the coastal waters of the State … were within the limits of the State.” “Coastal waters” was defined to mean “the part or parts of the territorial sea of Australia that is or are within the adjacent area in respect of the State” and any sea on the landward side of any part of the territorial sea of Australia within the adjacent area in respect of the State but not within the limits of the State: see s 3(1).

14    Section 5(c) of the SP Act provided that the States’ legislative power extended to making laws with respect to “fisheries in Australian waters beyond the outer limits of the coastal waters of the State, being laws applying to or in relation to those fisheries only to the extent to which those fisheries are, under an arrangement to which the Commonwealth and the State are parties, to be managed in accordance with the laws of the State.”

15    Section 4 of the ST Act conferred on the States the same rights and title to the seabed beneath the coastal waters and the water column and air space above it as if those areas fell within the limits of the States.

16    Both the Commonwealth and State Parliaments enacted specific legislation relating to fisheries as anticipated by s 5(c) of the SP Act. These Acts were the Fisheries Management Act 1991 (Cth) (“the FM Act”) and the Fisheries Act 1995 (Vic) (“the Fisheries Act”). These Acts contained a common definition of coastal waters of a State. They extended to three nautical miles offshore. Both Acts also provided for the making of arrangements between the Commonwealth and a State relating to management of particular fisheries.

17    Victorian fisheries are regulated under the Fisheries Act. The objectives of the Act include making provision for the management and use of Victoria’s fisheries in an efficient, effective and ecologically sustainable manner, protecting and conserving fisheries resources, habitats and eco-systems, promoting sustainable commercial fishing for the benefit of present and future generations and facilitating access to fisheries resources for commercial uses: see s 3.

18    The Fisheries Act prohibits fishing for abalone and other fish in Victorian waters unless a person has a licence to do so: see s 5(1). An “access licence” may be granted under the Fisheries Act authorising the holder, relevantly, to take abalone for sale and, for that purpose, to use and possess particular fishing equipment: see s 38. A licence holder is required to pay any applicable fees, royalties and levies: see s 51(1). Licences may be made subject to conditions: see ss 52 and 54. They are granted for a fixed term: s 51. They are also transferable and renewable: see ss 56 and 57. Provision is made for the cancellation of licences on specific grounds such as the holder ceasing to satisfy eligibility criteria: see s 58. A licence is deemed to be an asset of the estate of the deceased holder: see s 38(7)(a).

19    In 2002 the Victorian Parliament enacted the National Parks (Marine National Parks and Marine Sanctuaries) Act 2002 (Vic) (“the NP Act”). The NP Act established marine national parks and marine sanctuaries. The NP Act amended the National Parks Act 1975 (Vic) by inserting a new s 45A, the effect of which was to render unlawful all fishing in any marine national park or marine sanctuary including fishing by persons who held licences under the Fisheries Act. It was recognised that this new provision might have an adverse economic impact on licence holders. As a result the NP Act inserted a new Part 10 in the Fisheries Act which provided for compensation scheme for those licence holders who were adversely affected. Section 165 of the Fisheries Act provided that the State of Victoria was not liable to pay compensation to any licence holder other than pursuant to the statutory scheme.

QUESTION 1

20    Section 51(xxxi) of the Constitution provides that the Commonwealth Parliament may make laws in respect of:

“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;”

This placitum “has assumed the status of a constitutional guarantee of just terms” and is to be accorded a liberal construction: see Clunies-Ross v The Commonwealth (1984) 155 CLR 193 at 201-2. It therefore operates as a constraint on the exercise of Commonwealth legislative power which effects the acquisition of property.

21    The applicant contends that certain of his property has been acquired in contravention of s 51(xxxi).

22    That property is identified in the FASC as being:

    Abalone Fishing Licence Number A41 granted under the Fisheries Act;

    The expectation of future harvests of abalone;

    Commonwealth rights to harvest abalone;

    A profit à prendre; and

    Commercial interests and good will.

23    The respondents accept that a licence, issued under the Fisheries Act may (subject to the question of defeasibility to which I will return) properly be characterised as property within the meaning of s 51(xxxi). They deny that the other items fall within the concept of property for the purposes of the placitum.

24    It is implicit in the FASC that the applicant held a licence under the Fisheries Act to fish for abalone in the Central Zone on 16 November 2002 when the NP Act provisions relating to the prohibition of fishing in marine parks and sanctuaries, came into force.

25    The concession by the respondents relating to the characterisation of such licences is properly made. In Commonwealth v Western Mining Corporation Limited (1996) 67 FCR 153 a Full Court of this Court was called on to determine whether an exploration permit issued under Commonwealth legislation constituted “property” within the meaning of s 51(xxxi). Although divided on other issues the Court unanimously held that the relevant licence did constitute “property” in the necessary sense. Black CJ (at 161) referred to the dictum of Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175 at 1247-8 that:

“Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.”

Beaumont J (at 187) held that a statutory licence constituted “property” in the necessary sense if it conferred substantial rights, was liable to cancellation only for sufficient cause, did not require continual adjustment and amounted to a statutory but assignable title. Cooper J (at 202) equated exploration permits with broadcasting licences which had been held, by some members of the High Court, in Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106, to constitute property within the meaning of s 51(xxxi) because broadcasting licences also conferred significant rights, were only revocable for cause and were, subject to regulatory approval, transferrable.

26    The licence presently under consideration meets these criteria. It confers a valuable right. It is granted for a fixed term. It is assignable. It is only liable to cancellation upon cause being shown. In the event of the death of the licence holder the licence is deemed to be an asset of his or her estate.

27    The other four asserted rights appear to be inextricably linked to the licence. Certainly the expectation of future harvests and the applicant’s commercial interests and good will exist only because of the applicant having held the licence.

28    The licence itself did not vest in the applicant a cause of action under general law. Nor did it create an interest based on any antecedent rights held by the applicant under the general law: see Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 at 584. The applicant was unable to identify any authority which supported the proposition that the granting of the licence gave rise to new and additional property rights for the applicant.

29    There is no suggestion in the FASC that the applicant enjoyed any rights, as a member of the public, to fish for abalone in the Central Zone (or anywhere else) prior to the enactment of the licensing scheme under the Fisheries Act. Even had the applicant enjoyed such rights they would have been abrogated upon the commencement of the licensing scheme: see Harper v Minister for Sea Fisheries (1989) 168 CLR 314 at 334-5.

30    The applicant did not explain how he obtained a profit à prendere in the abalone fishery in the Central Zone. Once the Fisheries Act was in force no such right could be created at common law. Prior to its enactment no such right could have arisen at common law because the common law recognised that the right to fish in tidal waters or in the sea was a right of the public in general and was not dependent on any proprietary title: see Attorney-General (British Columbia) v Attorney-General (Canada) [1914] AC 153 at 169-171, 173, 175.

31    The applicant advanced no arguments to support his contention that the expectation of future harvests or his “commercial interests” could constitute property.

32    Question 1 should be answered: Yes, but only in respect of the abalone fishing licence number A41.

QUESTION 2

33    Given the answer to question 1 the only property of the applicant which might be subject to question 2 is the statutory licence.

34    Question 2 asks whether any of or a combination of the NP Act, the FM Act or an arrangement made between the Commonwealth and the State of Victoria in October 1997 constituted a law of the Commonwealth Parliament with respect to “the acquisition of property” within the meaning of s 51(xxxi) of the Constitution.

35    The legislative scheme and the operation of the arrangement were explained by Ryan J in Alcock v Commonwealth of Australia [2009] FCA 820 at [4]-[8] as follows:

“[4]    In order to understand the competing contentions of the parties, it is necessary, first, to set out some of the history of legislative control of the disputed areas. Section 71 of the Fisheries Management Act 1991 (Cth) (“the FMA”) enables the Commonwealth to make an arrangement with the State or States represented on a Joint Authority that the Joint Authority is to have the management of a particular fishery in waters relevant to that State or to any of those States. “Joint Authority” is defined in s 4 of the FMA to mean an authority established by or under s 61 of that Act which, in turn, empowers the Commonwealth to make an arrangement with a State or States for the establishment of a Joint Authority “consisting of the Commonwealth Minister together with the appropriate Minister or Ministers of that State or those States.” Section 72 then provides, in relation to a particular fishery in waters relevant to a State the management of which has not been entrusted to a Joint Authority under s 71, that;

‘(1)    The Commonwealth may make an arrangement with a State with respect to a particular fishery in waters relevant to the State, not being a fishery to which an arrangement under section 71 applies:

(a)    that the fishery (being a fishery wholly or partly in the coastal waters of the State) is to be managed in accordance with the law of the Commonwealth; or

(b)    that the fishery (being a fishery wholly or partly in waters on the seaward side of the coastal waters of the State) is to be managed in accordance with the law of the State.

(2)    If, under an arrangement, a fishery is to be managed in accordance with the law of a State, the arrangement may, if required by the Commonwealth, provide for giving effect to Australia’s obligations under international law (including international agreements) in relation to the fishery.’

[5]    Section 77 of the FMA then provides, so far as is relevant, that;

‘If an arrangement under this Division provides that:

(a)    a particular fishery is to be managed in accordance with the law of a State; … …

this Act, other than this Division, does not apply in relation to that fishery, or that part of the fishery, except in relation to:

(c)    foreign boats; and

(d)    operations on and from foreign boats; and

(e)    persons on foreign boats; and

(f)    matters that occurred before the arrangement took effect.’

[6]    An “arrangement under this Division” referred to in s 77 includes an arrangement of the kind contemplated by s 72 for the management of a particular fishery in waters relevant to a State. In October 1997 an arrangement (“the Arrangement”) was entered into between the Commonwealth and Victoria “in relation to the fishery for invertebrates to be managed under State law in waters relevant to Victoria.” The Arrangement was expressed to commence “at 0.00 hours on 1 November 1997” and to apply to:

‘all activities by way of fishing in all waters relevant to Victoria described in clause 4 of this Arrangement for all invertebrates of Phylum Crustacea, Phylum Mollusca and Phylum Echinodermata when taken by any fishing method other than trawling (including but not limited to board trawling, midwater or pelagic trawling and Danish seining)’

[7]    Subject to exclusions in respect of areas in the vicinity of Wilson’s Promontory, the Bunurong Marine Park and the Harold Holt Marine Reserves, the Arrangement was expressed to apply to;

‘… the area of waters bounded by [a] line [drawn between various points]:

    …

[8]    Clause 5 of the Arrangement stipulated that ‘the fishery is to be managed in accordance with the laws of the State of Victoria.’”

The Central Zone fell within the defined area of waters off the Victorian coast.

36    The FM Act and the arrangement made under it in October 1997 both pre-dated the enactment, in 2002, of the NP Act. Together, these instruments empowered the Victorian Parliament to regulate abalone fisheries in Victorian coastal waters. Neither of these instruments effected any acquisition of the applicant’s property.

37    To the extent that it could be said that s 45A of the NP Act impinged on the applicant’s property rights under the licence, this was done pursuant to Victorian legislation.

38    Section 51(xxxi) of the Constitution only places a constraint on the power of the Commonwealth Parliament to acquire property.

39    Any relevant property right which the applicant enjoyed in November 2002 was derived from the licence which he held under the Fisheries Act. Given that the FM Act was in force before the Fisheries Act it is difficult to comprehend how it can be said that the FM Act operated to acquire the applicant’s property. The FM Act did not and could not authorise the Parliament of Victoria to acquire specific property which did not exist at the time at which the FM Act came into force.

40    The applicant’s argument confronts two further difficulties. The first is that, under the Fisheries Act, his licence, during the entire period during which he held it, was defeasible. The legislative scheme provided for the imposition of conditions on the licence during its currency. It was open to the regulator at any time to limit the areas within the Central Zone from which abalone could be harvested under the licence. The NP Act effected such a change. The provisions of the Fisheries Act which authorised the variations so qualified the applicant’s rights under the licence that it did not constitute property which could be acquired within the meaning of s 51(xxxi) of the Constitution. Furthermore, such a variation to the entitlements did not constitute an acquisition of property. This is because what occurred was the modification of a right, granted by the permit, which had no existence apart from statute. Any proprietary rights which attached to the permit were liable to defeasance. Upon their defeasance, there could be no acquisition of property for the purposes of s 51(xxxi): see Bienke at 584-7; Commonwealth v WMC Resources Limited (1998) 194 CLR 1 at 38, 51-5, 73-5.

41    The second problem is that it cannot be said that s 45A of the NP Act brought about an acquisition of the applicant’s property. What it did was to vary the entitlements he enjoyed under the licence. This did not involve the transfer of any relevant benefit to any third party. In the absence of any such transfer no acquisition was effected: see Commonwealth v WMC Resources Limited at 16-7, 35-6, 48, 51-2 and 71-2.

42    The applicant sought to rely on a trilogy of recently decided cases which, it was submitted, supported his contention that each part of question 2 should be answered in the affirmative.

43    The first of these cases was ICM Agriculture Pty Ltd v The Commonwealth of Australia (2009) 240 CLR 140. The Commonwealth and some States had entered into an agreement which was designed to preserve water resources. One aspect of the scheme was that States could propose projects which might attract funding provided by the Commonwealth through a commission established under Commonwealth law. The State of New South Wales proposed a project. It was accepted. A funding agreement was entered into pursuant to which the Commonwealth would contribute to the cost of the project. Under the agreement the State was to convert all bore water licences in the area, which had been granted under an old State Act to aquifer access licences granted under a more recent enactment.

44    Two of the issues raised in the proceeding were whether the replacement of one form of licence with another constituted an acquisition of property within the meaning of s 51(xxxi) and whether it was open to the Commonwealth to grant financial assistance to a State on terms and conditions which required the State to acquire property on other than just terms.

45    All members of the Court, apart from Heydon J, held that no acquisition of property was effected by the legislation requiring the replacement of the bore licences with access licences. French CJ, Gummow and Crennan JJ so held (at 180) because the water was a natural resource and the State had always had the power to limit the volume which anyone could take. Their Honours went on:

“The changes of which the plaintiffs complain implemented the policy of the State respecting the use of a limited natural resource, but that did not constitute an ‘acquisition’ by the State in the sense of s 51(xxxi). Nor can it be shown that there has been an acquisition in the necessary sense by other licensees or prospective licensees.”

46    Hayne, Kiefel and Bell JJ accepted that the bore licences were a species of property, but held (at 202) that there had been no relevant acquisition because “the State gained no identifiable or measurable advantage from the steps that have been taken with respect to the plaintiffs’ water licences and entitlements”.

47    French CJ, Gummow and Crennan JJ also dealt with the s 96 point, holding (at 170) that ss 96 and 51(xxxvi) of the Constitution do “not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms”. Their Honours held (at 168) that it was unnecessary to consider whether an informal arrangement or understanding between the Commonwealth and a State pursuant to which the State agreed to acquire property otherwise than on just terms, might attract the operation of s 51(xxxi).

48    Abalone, like sub-terranian water is a fluctuating natural resource. They are both susceptible of State regulation utilising a licensing regime. The modification of the terms and conditions pursuant to which a licence is held under such a regime does not, as their Honours held, constitute an acquisition of property. While the licence holder may have a property interest in the licence he or she has no such interest in the natural resource. Moreover, the State itself cannot be said to gain any measurable advantage for itself as a result of the variations to the licensing arrangements.

49    The arrangements between the Commonwealth and the State of Victoria which are the subject of present attention do not include any attempt by the Commonwealth to require the State to acquire the applicant’s property as a condition of the granting of funding for the operation of the marine national parks and marine sanctuaries. Indeed there was no evidence of any money being provided by the Commonwealth under the 1997 arrangement.

50    The second case relied on by the applicant was Arnold v Minister Administering the Water Management Act 2000 (2010) 240 CLR 242. This case also arose out of the legislative arrangements considered in ICM. The majority of the High Court (Heydon J dissenting) followed ICM and held that the replacement of the bore licences with aquifer access licences did not effect an acquisition of property within the meaning of s 51(xxxi) of the Constitution.

51    The third case was Spencer v The Commonwealth of Australia (2010) 241 CLR 118. This Court had determined, prior to the High Court’s reasons in ICM being published, that a proceeding should summarily be dismissed. The applicant had pleaded that certain restrictions which had been imposed on the clearing of vegetation on his farm constituted an acquisition of his property on other than just terms. Although the restrictions were imposed under New South Wales laws he pleaded that the State laws formed part of a scheme which was designed to avoid the limitation imposed on the Commonwealth Parliament by s 51(xxxi). The acquisition had occurred pursuant to or as a result of the operation of certain Commonwealth legislation which authorised the Commonwealth to enter into such agreements. That legislation provided that the Commonwealth could enter into an agreement with a State to provide financial assistance in relation to projects for the management and protection of natural resources. Payments could be made subject to conditions imposed under such an agreement. The restrictions imposed by the State on the removal of native vegetation were introduced to further such arrangements between the Commonwealth and the State. The plaintiff’s pleading also left open the possibility of the existence of an informal arrangement under which the Commonwealth would provide funds to New South Wales if New South Wales passed laws of the kind which aggrieved the applicant.

52    The plaintiff succeeded on his appeal to the High Court. He did so because:

“The decisions at first instance, and in the Full Court, proceeded from the premise that the existence of any arrangement or understanding of the kind apparently relied on by the applicant was constitutionally irrelevant. But, as has been pointed out, that question was expressly reserved for future consideration by three members of the majority in ICM, and cannot be regarded as foreclosed from argument”.

See at 138 (per Hayne, Crennan, Kiefel and Bell JJ).

53    As a result it could not be said that the applicant had no reasonable prospect of successfully prosecuting the proceeding. So much had to be established before the power of summary dismissal could be exercised pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth).

54    In his FASC the applicant alleges that his property was acquired pursuant to the NP Act and that this Act was “made in furtherance of an agreement” between the Commonwealth and the State of Victoria. Alternatively, it was pleaded that the property was acquired under the NP Act “pursuant to or in furtherance of an informal agreement or arrangement or joint venture not part of the formal arrangement” between the Commonwealth and the State of Victoria made under the FM Act and the Fisheries Act.

55    It must be assumed, for present purposes, that these allegations can be established and that the question left open by three of the members of the majority in ICM might, at trial, be resolved favourably to the applicant.

56    Even if it were to be determined that the Commonwealth could not, consistently with the requirements of s 51(xxxi), enter into an informal arrangement of this kind, it would not follow that legislation passed by the State pursuant to such arrangements would be invalidated even if it were found to be furthering a Commonwealth purpose of acquisition on less than just terms.

57    It is not necessary to explore this issue further because, as I have already found, the applicant would fail, in any event, because, on the pleaded facts, no acquisition of property has occurred within the meaning of s 51(xxxi) of the Constitution whether under legislation, a formal or informal agreement or otherwise.

58    The authorities relied on by the applicant do not, therefore, assist his arguments. On the contrary, they establish that no relevant acquisition of property has occurred.

59    Each part of question 2 should, therefore, be answered: No.

QUESTION 3

60    The answers to questions 1 and 2 render it unnecessary to answer question 3.

QUESTION 4

61    Question 4 is not happily drafted. It asks whether a particular paragraph of the FASC (paragraph 13) identifies any inconsistency between the NP Act and the Seas and Submerged Lands Act for the purposes of s 109 of the Constitution? Paragraph 13 identifies no such inconsistency. It simply reads:

“Further or alternatively the acquisition act is invalid pursuant to Constitution section 109 as being inconsistent with Seas and Submerged Lands Act 1973 with respect to the Central Zone its waters and seabed.”

A purely literal reading of question 4 could readily justify a negative answer.

62    I am, however, prepared to assume that the question seeks to raise the possibility that some relevant inconsistency may exist between the Commonwealth and State Acts.

63    A relevant conflict may arise in one of two broad ways: when there is a direct conflict between a Commonwealth and a State law or where it is not possible to point to a textual conflict between the laws but the Commonwealth legislation manifests an intention to “cover the field” to the exclusion of the States: see Jemena Asset Management (3) Pty Ltd v Coinvest Limited (2011) 280 ALR 206 at 214-217.

64    The applicant’s submissions do not point to any provisions of the two Acts which might be said to give rise to a direct inconsistency. I can discern none.

65    Indirect inconsistency could only arise if it could be demonstrated that the Seas and Submerged Lands Act was intended by the Commonwealth Parliament to cover the field occupied by the NP Act. An examination of the two Acts discloses no such intention.

66    What the Seas and Submerged Lands Act does, relevantly, is to establish the Commonwealth’s sovereignty over its territorial sea and exclusive economic zone. Those areas include the Central Zone.

67    The NP Act creates marine parks and sanctuaries and prohibits fishing in those areas. Those areas include places in the Central Zone.

68    The only field which the Seas and Submerged Lands Act might be understood as covering to the exclusion of the States is the assertion of Commonwealth sovereignty. There is no basis for inferring an intention for the Commonwealth Act exclusively to regulate the creation and operation of marine parks and sanctuaries. On the contrary, s 16(1)(b) provides that the provisions of Part II of that Act:

“(b)    do not limit or exclude the operation of any law of a State or of the Northern Territory in force at the date of commencement of this Act or coming into force after that date, except in so far as the law is expressed to vest or make exercisable any sovereignty or sovereign rights otherwise than as provided by the preceding provisions of this Part.”

69    No provision of the NP Act (and, particularly, s 45A) falls within the exception to s 16(1)(b).

70    In Robinson v Western Australian Museum (1977) 138 CLR 283 at 306 Gibbs J, speaking of the Seas and Submerged Lands Act, said that:

“No question of inconsistency can arise in the case of any State law not within [the] exception [to s 16(1)(b)] unless and until the Parliament has enacted further legislation in exercise of the sovereignty asserted by s 6. … The whole purpose of s 16[(1)(b)] is to make it clear that the Act itself does not affect the validity of State legislation taking effect within the territorial sea, except such legislation as is expressed to vest any sovereignty in or to make any sovereignty exercisable by any person other than the Crown in right of the Commonwealth. In other words s 16[(1)(b)] is only concerned to invalidate State laws which expressly assert sovereignty contrary to the Commonwealth’s assertion.”

This passage was quoted with approval by the High Court in Port MacDonnell Professional Fishermen’s Association Inc v State of South Australia (1989) 168 CLR 340 at 373.

71    No provision of the NP Act seeks to derogate in any way from the Commonwealth’s assertion of sovereignty over its territorial sea and exclusive economic zone.

72    For these reasons, question 4 will be answered: No.

QUESTION 5

73    My answer to question 4 renders it unnecessary to answer question 5.

QUESTION 6

74    Paragraph 18 of the FASC alleges that the Commonwealth:

“[B]y its servants or agents has in trade of [sic] commerce engaged in conduct which is misleading or deceptive or likely to mislead or deceive in contravention of Fair Trading Act 1999 [Vic] sections 4 and 9 and/or the Australian Consumer Law under Competition and Consumer Act 2010 [Cth].

Particulars of Conduct

(a)    The [Commonwealth] by its servant or agents represented to the Applicant that upon receiving and renewing his licence the [Commonwealth] would not take any steps to mulct or interfere with the licence unless revoked for just cause, which was in error and/or was a representation as to the future in respect of which the Applicant relies on section 4;

(b)    The [Commonwealth] represented that it would take such reasonable steps as were available to it to conserve the value and integrity of the licence granted by it, which was in error and/or was a representation as to the future;

(c)    The conduct of the [Commonwealth] in entering into and maintaining the informal arrangement whereby the [Commonwealth] or [the State of Victoria] or both acquired the property of the Applicant.”

75    Question 6 asks whether this alleged conduct of the Commonwealth was undertaken “in trade or commerce” as that phrase is defined in Victorian and Commonwealth trade practices legislation.

76    The FASC does not provide any details of when, where and by whom the particularised representations attributed to the Commonwealth were made. It must, however, for the purpose of answering the question be assumed that such representations were made. The question then becomes whether they were made by the Commonwealth “in trade or commerce”.

77    The applicant must plead conduct of the Commonwealth which bears a trading or commercial character: see Concrete Constructions (NSW) Pty Ltd v Nelson (1991) 169 CLR 594 at 604. It is not sufficient that the conduct be merely in connection with trade or commerce: it must be conduct in trade or commerce: see Concrete Constructions at 614.

78    These terms bear the same meaning in the Fair Trading act 1999 (Vic): see Houghton v Arms (2006) 225 CLR 553 at 565.

79    The applicant was engaged in the business of abalone fishing. He did so pursuant to a licence granted under a Victorian Act. There is nothing in the FASC which alleges that the Commonwealth was in any way involved in the applicant’s business or was itself engaged in the abalone fishing industry. Whilst the representations attributed to the Commonwealth might be understood to relate to the trading or commercial activities undertaken by the applicant under his licence, it cannot be said that they constituted conduct of the Commonwealth in trade and in commerce: see State of New South Wales v RT and YE Falls Investments Pty Ltd (2003) 57 NSWLR 1 at 132 and Unilan Holdings Pty Ltd v Kerin (1992) 35 FCR 272 at 277.

80    Question 6 should, therefore, be answered: No.

QUESTION 8

81    Paragraph 35 of the FASC reads:

“… the [State of Victoria] has made a law repugnant to the Constitution and in breach of the Australia Acts s 5 by making Fisheries Act 1995 to the extent same extended past the low water mark into the Central Zone and/or impaired or interfered with the property … of the Applicant.”

82    In argument, the applicant relied on s 123 of the Constitution to found the allegation of repugnancy.

83    Section 123 provides:

“The Parliament of the Commonwealth may, with the consent of the Parliament of a State, and the approval of the majority of the electors of the State voting upon the question, increase, diminish, or otherwise alter the limits of the State, upon such terms and conditions as may be agreed on, and may, with the like consent, make provision respecting the effect and operation of any increase or diminution or alteration of territory in relation to any State affected.”

84    The first difficulty which confronts the applicant is that s 123 does not place any constraints on a State legislature. Rather it empowers the Commonwealth Parliament, subject to certain conditions, to vary the limits of a State. Such constraints as are imposed fall on the Commonwealth Parliament.

85    The further difficulty for the applicant is that it is not correct to assert that the Fisheries Act alters the limits of Victoria. It does no more than provide for the extra-territorial operation of Victorian law.

86    The answer to question 8 is: No.

Associate:

Dated:    24 May 2012