FEDERAL COURT OF AUSTRALIA

Aerial Capital Group Limited v Australian Capital Territory [2013] FCA 1411

THE COURT ORDERS THAT:

1.    The originating application be dismissed.

2.    The applicant pay the respondent’s costs as agreed or taxed.

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

REASONS FOR JUDGMENT

1.    THE ISSUE

1    The applicant, Aerial Capital Group Limited (Aerial), is accredited to operate a taxi network in the Australian Capital Territory (the ACT). The scheme for accreditation is contained in the Road Transport (Public Passenger Services) Act 2001 (ACT) (the Transport Act) and the Road Transport (Public Passenger Services) Regulation 2002 (ACT) (the Transport Regulation).

2    The Transport Regulation was amended with effect from 11 September 2012. The amending regulation, the Road Transport (Public Passenger Services) Amendment Regulation 2012 (No 2) (ACT) (the Amendment Regulation), established a single booking service for all wheelchair-accessible taxi bookings, known as the Wheelchair-Accessible Taxi Centralised Booking Service (the WCBS). By the Amendment Regulation provision was made for the entry into a contract between the ACT and the operator of the WCBS, the effect of entry into which would be to permit the WCBS operator to operate the WCBS. Provision was also made to ensure that if a wheelchair-dependent person requests a booking for a wheelchair-accessible taxi through an accredited provider of a taxi network, such as Aerial, the accredited provider commits an offence if they fail to direct the booking request to a WCBS (rather than, for example, their own affiliated taxi services).

3    Aerial contends that the Amendment Regulation is invalid and seeks a declaration to that effect. According to Aerial, the Amendment Regulation exceeds the power in s 23(1)(a) of the Australian Capital Territory (Self-Government Act) 1988 (Cth) (the Self-Government Act) in that, contrary to that provision, the Amendment Regulation effected an acquisition of property on terms that were not just.

4    Leaving aside a pleading point made by the ACT (that the only question is whether the Amendment Regulation exceeded the power in the enabling statutes, the Transport Act and the Road Transport (General) Act 1999 (ACT)), it is common ground that it is beyond the power of the ACT to make a law that purported to confer a power to make regulations with respect to the acquisition of property other than on just terms. It is also common ground that the principles derived from the authorities about s 51(xxxi) of the Constitution are applicable to s 23(1)(a) of the Self-Government Act. While the ACT contends that Aerial’s application should be dismissed on the basis of the problem with its pleading, issue had otherwise been joined between the parties, the ACT contending that the Amendment Regulation does not involve the acquisition of property. Although I accept that the pleading point is sound, the application should be determined on the substantive basis upon which it has been contested, namely, whether the Amendment Regulation involves the acquisition of property. That said, the point the ACT makes raises another issue; if the Amendment Regulation exceeds the power of the enabling statute because it purports to authorise the acquisition of property on other than just terms, can it be read down so as to be within power?

2.    THE STATUTORY SCHEMES

2.1    The Transport Act

5    The objects of the Transport Act are set out in s 2 and include:

(a)    to provide for the accreditation of the operators of public passenger services and taxi networks that operate in or partly in the ACT; and

(b)    to provide for the licensing of vehicles used as taxis and hire cars in or partly in the ACT; and

(c)    to encourage public passenger services that meet the reasonable expectations of the community for safe, reliable and efficient public passenger services.

6    Section 10 of the Transport Act defines a public passenger service in these terms:

A public passenger service is a service for the transport of passengers for a fare or other consideration by public passenger vehicles along a road or road related area.

7    Part 3 of the Transport Act deals with taxi networks. Sections 28 and 29 define terms as follows:

28 A taxi network is an entity that provides taxi related services to affiliated accredited taxi service operators, including providing (directly or through another entity) a taxi booking service for the network.

29 A taxi booking service is a service provided by or for an accredited taxi network provider that—

(a)    accepts bookings for taxis from people; and

(b)    sends messages about bookings to taxi drivers by electromagnetic energy to equipment in taxis that can receive such messages.

8    Section 30 of the Transport Act provides for the accreditation of taxi network providers. It states:

The purpose of accreditation under the regulations to operate a taxi network is to ensure that—

(a)    the accredited person has the financial capacity to meet the service standards for the network; and

(b)    the accredited person, and each person who is concerned with, or takes part in, the management of the network, are suitable people to operate the network; and

(c)    the accredited person, and each person who is concerned with, or takes part in, the management of the network, have demonstrated the capacity to comply with the relevant regulations and, in particular, the regulations about—

(i)    the operation of the network; and

(ii)    the supervision and monitoring of affiliated accredited taxi service operators and drivers of taxis operated by affiliated accredited taxi service operators.

9    By s 31(1) of the Transport Act:

A regulation may provide a system for the accreditation of people to operate taxi networks, including, for example—

(a)    the conditions of an accreditation;

…

10    By s 31(2) of the Transport Act:

A regulation may make provision in relation to the accreditation of people to operate taxi networks, including, for example—

(a)    requirements about the suitability of the applicant and each person who will be concerned with, or take part in, the management of the network; and

(b)    capacity to meet service standards; and

(c)    financial viability.

11    Sections 32 and 33 of the Transport Act are key provisions. They provide as follows:

32 A person is entitled to operate a taxi network, in or partly in the ACT, if the person is accredited under the regulations to operate a taxi network.

33 …

(1)    A person commits an offence if—

(a)    the person operates, in or partly in the ACT, a taxi network; and

(b)    the person is not accredited under the regulation to operate a taxi network.

Maximum penalty: 50 penalty units.

(2)    An offence against this section is a strict liability offence.

12    The regulations are dealt with in s 35 of the Transport Act in these terms:

A regulation may make provision in relation to the operation of taxi networks by accredited people, including, for example—

(a)    the affiliation of accredited taxi service operators with networks; and

…

(f)    the operation of, and service standards for, taxi booking services operated by or for networks (including, for example, service standards about when a booking must be transferred to another taxi or a taxi booking service for another taxi network); and

(g)    the numbers and kinds of taxis, and the numbers of taxis with particular equipment (including, for example, baby capsules), operated by affiliated accredited taxi service operators that are to be available at particular times and places; and

(h)    directions that networks may give to affiliated accredited taxi service operators and drivers of taxis operated by affiliated accredited taxi service operators; and

…

(j)    the management of particular kinds of taxis (including, for example, taxis with wheelchair access) and taxi services; and

13    Section 126(1) of the Transport Act provides that:

The Executive may make regulations for this Act.

14    There is an equivalent power for the making of regulations in s 233(1) of the Road Transport (General) Act.

2.2    The Transport Regulation

15    Before (and after) the Amendment Regulation came into force the Transport Regulation provided for the accreditation of people to operate taxi networks (s 5(2)), a taxi network being a “regulated service” under s 6(b). A person seeking accreditation had to apply under s 7 and with its application had to (and still must) provide “proposed service standards”, which are a “a written statement by the applicant about how the applicant will provide a safe, reliable and efficient regulated service and comply with the approved minimum service standards for the regulated service to which the application relates” (s 6A(a)). Section 8 provided (and provides) for mandatory refusal of the application in certain circumstances. Section 9 provided (and provides) for discretionary refusal in certain circumstances. According to the ACT the implication, which I accept, is that if none of the nominated circumstances are engaged there is no residual discretion to refuse an application for accreditation as a taxi network provider. As such, there is no limit on the number of persons who may be accredited as a taxi network provider. This may be contrasted with the system relating to taxi licenses the available number of which is regulated.

16    An accreditation may be issued subject to conditions (s 10(1)). Those conditions may be amended (s 10(2)). A holder of an accreditation must comply with the conditions of accreditation (s 15). If the application for accreditation is approved the person must be given a certificate of accreditation and the accepted service standards in relation to which accreditation was given (s 12(1)). By s 12(4) the maximum period for an accreditation of a taxi network is 6 years. By s 12(5) the accreditation is not transferable. All of these provisions were and remain in the Transport Regulation.

17    Section 74 of the the Transport Regulation before the Amendment Regulation came into force provided that:

(1)    The section applies if—

(a)    a person asks for a wheelchair-accessible taxi through a taxi booking service; and

(b)    the person for whom the booking is being made is a wheelchair-dependent person; and

(c)    a wheelchair-accessible taxi operated by an affiliated taxi service operator is available for hire; and

(d)    the taxi's driver does not accept an offer of the booking.

(2)    The network provider must direct the driver to accept the booking.

Maximum penalty: 10 penalty units.

18    An operator of a taxi must also be accredited and, by s 101 of the Transport Regulation (before and after the Amendment Regulation came into force) must have an arrangement with an accredited taxi network provider for the provision of a taxi booking service for the taxi. Sections 71 to 73 provided (and provide) for the affiliation of taxi service operators and taxi network providers. By s 114 the driver of a wheelchair-accessible taxi was required to comply with the direction of a network booking service to accept a booking for the taxi for a wheelchair dependent person.

19    The Amendment Regulation provided for the substitution of a new provision as s 74 in these terms:

(1)    This section applies if—

(a)    a person requests a wheelchair-accessible taxi booking through an accredited taxi network provider's taxi booking service; and

(b)    the booking is being made for a wheelchair-dependent person; and

(c)    there is a WCBS operating in the Territory.

(2)    The accredited taxi network provider commits an offence if the accredited taxi network provider's taxi booking service fails to, without delay, direct the booking request to a WCBS.

Maximum penalty: 10 penalty units.

(3)    An offence against this section is a strict liability offence.

20    A WCBS is a wheelchair-accessible centralised booking service provided for in Div 4.3.4B of Pt 4.3 of the Transport Regulation inserted by the Amendment Regulation. Relevant provisions of this new division include the following:

154I In this regulation:

wheelchair-accessible taxi centralised booking service ("WCBS")—

(a)    means a service that—

(i)    accepts bookings only for wheelchair-accessible taxis for wheelchair-dependent people; and

(ii)    sends messages about the bookings to wheelchair-accessible taxi drivers by electromagnetic energy to equipment in taxis that can receive the messages; but

(b)    does not include an accredited taxi network provider's taxi booking service.

21    Section 154J enables the approval of minimum service standards for a WCBS.

22    Section 154K provides that the road transport authority may enter into a contract with a WCBS known as a service contract.

23    By s 154L:

A person is entitled to operate a WCBS in the ACT only if the person holds a service contract for the service.

24    Section 154M provides that:

(1)    A person commits an offence if the person—

(a)    operates a WCBS in the ACT; and

(b)    is not entitled under section 154L to operate the service.

Maximum penalty: 20 penalty units.

(2)    An offence against this section is a strict liability offence.

25    The Amendment Regulation also provided for the insertion of other new provisions in the Transport Regulation including ss 74A and 74B which require a WCBS to direct a driver of a wheelchair-accessible taxi to accept a booking for a wheelchair-dependent person if the taxi is available for hire and, if there is no WCBS, for an accredited network taxi provider to do so in the same circumstances.

26    Section 101A applies if there is a WCBS. An accredited operator of a wheelchair-accessible taxi must have an arrangement in place with a WCBS for the provision of a taxi booking service for the taxi.

27    Section 114 has been amended so that the “booking service” referred to means:

(a)    if there is no WCBS operating in the Territory—an accredited taxi network provider's taxi booking service with which the accredited operator of the taxi is affiliated; or

(b)    if there is a WCBS operating in the Territory—a WCBS through which the wheelchair-accessible taxi may be booked.

3.    THE COMPETING SUBMISSIONS

3.1    Aerial’s case

28    Aerial submitted that its accreditation involves an entitlement to operate a taxi booking service. That entitlement is “property”, property being “the most comprehensive term that can be used and extends to every right or interest, including incorporeal rights” including “innominate and anomalous interests” (citing, in support, JT International SA v Commonwealth (2012) 291 ALR 669; [2012] HCA 43 (the Plain Packaging case) at [366] and [41] respectively and Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 349). Rights derived from statute may be property (Plain Packaging case at [29], [35] and [263], Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 (Davey) at 160B, Commonwealth v WMC Resources Limited (1998) 194 CLR 1; [1998] HCA 8 (WMC Resources) at [14], [45] and [179]). Property need not necessarily be assignable if the right is otherwise “definable, identifiable by third parties… and [has] some degree of permanence or stability” (Australian Capital Television Pty Ltd v The Commonwealth (No 2) (1992) 177 CLR 106 (Australian Capital Television) at 165-166, citing R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 (Meneling) at 342 and Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175 (Ainsworth) at 1247-1248). The accreditation in this case “carries with it an identifiable, stable and valuable legal right; namely, the right to operate a taxi booking service…[and] is analogous to licences and permits that have been treated as constituting property under s 51(xxxi) of the Constitution”.

29    Aerial acknowledged that the mere extinguishment of a statutory right does not involve the acquisition of property as there must be receipt of something seen from the perspective of the acquirer for there to be an acquisition; something of a proprietary character must accrue, although it may be ‘slight or insubstantial’, the concept of acquisition being liberally construed (the Plain Packaging case at [42], [118], [169]-[170], [302]-[306]). According to Aerial, in the present case, its accreditation, by reason of ss 28, 29, 32 and 33 of the Transport Act:

[c]onfer[s] upon Aerial statutory rights which are valuable to it. They include the right to receive telephone bookings from customers and refer them, for reward, to affiliated taxi operators.

30    Further, the Amendment Regulation, by introducing the new ss 74 and 154M which prohibits Aerial from operating a WCBS:

partially extinguishes that right by creating a class of bookings which Aerial is prohibited from referring to its affiliates, but must instead transfer such bookings to another service – Celltrack [Celltrack is the entity with which the Act entered into a service contract for the purposes of s 154L of the Transport Regulation]. Celltrack may then earn a reward by referring those bookings to wheelchair-accessible taxis despite being neither accredited as a taxi network nor as another entity expressly recognised by the Road Act as being authorised to provide taxi booking services. Celltrack thus receives a statutory benefit which corresponds to that which was taken from Aerial.

31    Aerial rejected the proposition that its statutory right was granted on the basis that it is subject to modification or extinguishment according to the dictates of public policy from time to time (in contrast to Davey and WMC Resources). Contrary to the ACT’s submissions, the statutory scheme “assumes the continued existence of the taxi network’s basic function (being the right to receive and refer bookings), while at the same time allowing standards to be implemented from time to time concerning the manner in which that function may be performed”. The respondent’s submissions to the contrary, according to Aerial:

confuses the power of the Executive to make regulations and service standards for the operation of taxi networks (which power always existed), with the power of the Executive for the effective removal of a class of customers from the taxi network.

32    In Davey, Bienke v Minister for Primary Industries (1996) 63 FCR 567 (Bienke) and WMC Resources, by contrast to the present case, the grant of the right was expressly made subject to the statutory regime as it stood from time to time (see also the Plain Packaging case at [104]). Moreover, it cannot be said that the Amendment Regulation merely regulates the operation of Aerial’s business as the Act submitted. According to Aerial:

At its essence, Aerial’s business is the taking of taxi bookings from the public and the referral of those bookings to its affiliated taxi drivers. A regulation of Aerial’s business would involve prescribing the manner in which that business is conducted. The [Amendment Regulation] goes much further. It prohibits Aerial from conducting its business with respect to a class of customers and requires Aerial to direct such customers to the WCBS.

33    Aerial also rejected the characterisation of this case as one where a mere immunity is extinguished or reduced in scope, without any consequential conferral of rights on somebody else (as referred to in WMC Resources at [16], [79] and [185]-[189] and the Plain Packaging case at [44], [101], and [188]-[189]). This is because the Amendment Regulation not only extinguished Aerial’s right but also conferred rights or benefits on the WCBS, being Celltrack. The right, to receive telephone bookings from customers seeking wheelchair-accessible taxis and refer those bookings to wheelchair-accessible taxis, is the very same right. According to Aerial the “result is in substance a compulsory transfer of part of Aerial’s statutory rights to Celltrack”, a point emphasised by the fact that “Aerial is not only prohibited from taking bookings on behalf of certain customers, but positively obliged by new s 74…to direct their booking requests to Celltrack”. As Aerial put it:

even if the relevant right were inherently subject to extinguishment or diminution, that would not avail the respondent if the effect of the amendment is, in substance, to take part of the right and confer it on somebody else. It is one thing to say that a statutory right is inherently subject to modification by amendments of a regulatory regime in the public interest, but quite another to say that such a right is liable to recall and re-allocation to another person.

34    The facts that Celltrack is subject to a different system of regulation, is supported by government funding, and is not an accredited taxi network operator are immaterial. The relevant fact, submitted Aerial, is that the “right acquired by Celltrack is, in substance, the same right lost by Aerial”.

35    Aerial submitted also that the ACT’s submissions about the Amendment Regulation merely adjusting competing rights in an area of activity should not be accepted. According to Aerial:

[t]he breadth of that principle should not be overstated. It does not appear to have been applied by the High Court, in the broad terms seemingly adopted by the respondent, since Nintendo Co Ltd v Centronics Systems Pty Ltd [(1994) 181 CLR 134 (Nintendo)] The reasoning of the majority in Airservices Australia v Canadian Airlines [(1999) 202 CLR 133; [1999] HCA 62 (Airservices] and Theophanous v Commonwealth [(2006) 225 CLR 101; [2006] HCA 18 (Theophanous)] turned on the narrower proposition that s 51(xxxi) of the Constitution does not apply in circumstances where a requirement for just terms would be irrelevant or incongruous (e.g. taxation, penalties and forfeitures). Reasoning of the kind relied on by the respondent was criticised by McHugh J in Airservices [at [332]-[341]] and by Callinan J in Smith v ANL Ltd [(2000) 204 CLR 493; [2000] HCA 58 (Smith v ANL) at [175]-[181]] (where other members of the majority said [at [43]] that, apart from heads of power which necessarily contemplate interferences with property (such as taxation), s 51(xxxi) takes away from other Commonwealth powers “all content which otherwise would enable the compulsory acquisition of property”).

In ACT v Pinter [(2002) 121 FCR 509; [2002] FCAFC 186 at [95]] Black CJ held that where it has been established that a proprietary right, which has been created by statute where no property interest previously existed, is not inherently liable to modification or extinguishment, the principle referred to above provides no ground for saying that the relevant law is not a law with respect to the acquisition of property. This is because the exercise of characterisation is substantially the same as that undertaken in order to determine whether statutory property rights are of a nature that can be subject to an acquisition.

Applying this reasoning, Aerial’s arguments would not be defeated using this argument if the Court has already found that the [Amendment Regulation] has effected an acquisition. In any case, the taking away of a segment of Aerial’s business, and the allocation of that segment to the WCBS contractor, lies at the heart of the reform intended to be effected by the [Amendment Regulation]. It cannot be described as merely incidental.

36    Aerial also characterised the ACT’s submissions as creating:

a false dichotomy between a legislative scheme for the protection of the public and a scheme under which property rights are created. These two functions are compatible, not mutually exclusive. It is in the community’s interest to encourage accredited taxi network operators to invest in better taxi booking services for the community. A scheme which confers stable rights on accredited taxi network operators provides the certainty operators need to commit to such investments.

37    The Amendment Regulation thus involves an acquisition of Aerial’s property but without providing just terms as, in Aerial’s words, “no provision has been made for monetary compensation to Aerial, or for any augmentation of its rights that could be regarded as a quid pro quo”. The ACT’s argument that if there is an acquisition of property the terms of the acquisition are just because it “constitutes a ‘fair dealing’ between Celltrack, accredited network operators and the members of the broader community” should not be accepted. If correct, it means that “community interests” should be considered in determining what is just. According to Aerial the ACT’s submission:

is clearly contrary to decisions of the High Court and recent considered dicta by one of its members [the Plain Packaging case at [235]-[236] and Georgiadis v Australian and Overseas Telecommunications Commission (1994) 179 CLR 297 (Georgiadis) at 308, 310 and 311, and Smith v ANL at [8]-[9], [51], [54], 110]-[113], and [198]]. As Brennan J observed in [Georgiadis at 310-311], the purpose of the guarantee of just terms is to ensure that people whose property is compulsorily acquired, presumably for public benefit, are not required to sacrifice their property for less than its worth.

38    In response to the ACT’s argument that the Amendment Regulation should be read down having regard to ss 5, 6 and 43 of the Legislation Act 2001 (ACT) (the Legislation Act), so that, if effecting an acquisition of property on other than just terms, the Amendment Regulation should be read so as not to effect such an acquisition (in Aerial’s case the practical result being that s 74(2) of the Amendment Regulation would not apply to Aerial for so long as it held its current accreditation), Aerial made two points. First, the argument involves reading in a transitional provision which is outside the scope of any legitimate reading down of a regulation so it is within power. Second, the provisions of the Amendment Regulation, ss 101A, 114 and 154I in particular, disclose a manifest contrary intention to the operation of the law as the ACT proposes; the manifest intention is that the law operate as a whole or not at all.

3.2    The ACT’s case

39    The ACT’s overall submission was put as follows:

a)    the Road Transport (Public Passenger) Services Act 2001 (ACT) (Transport Act) and the Road Transport (Public Passenger Services) Regulation 2002 (Transport Regulation) provide for a flexible statutory scheme, directed to the objective purpose of encouraging public passenger services that meet the reasonable expectations of the ACT community for safe, reliable and efficient public passenger services;

b)    any “rights” associated with the accreditation issued to the applicant (Aerial) and other taxi network providers were always subject to the form which that scheme took from time to time, including through the power to make provision in the regulations in relation to the operation of taxi networks by accredited people;

c)    it follows that there has been no “acquisition of property” within the meaning of s 23(1)(a) of the Australian Capital Territory (Self-Government) Act 1988 (Cth) (Self-Government Act) and that Aerial’s claim should be dismissed;

40    In support of these propositions the ACT emphasised the history of the regulation of taxis in the ACT. Before 2000 taxi owners and operators were regulated but not taxi network operators or booking services. Taxi network operators and booking services were first regulated by the Road Transport (General) Regulation 2000 (ACT) and thereafter by Transport Act and Transport Regulation. The ACT said it was relevant to note that “from the inception of the authorisation of taxi networks, their continued exercise was subject to regulations and standards that could change from time to time”. Sections 35 and 126 of the Transport Act, consistent with this fact, vest in the Executive a power to make regulations in relation to the operation of taxi networks by accredited people. This power is available to be exercised from time to time. Accordingly, as the ACT put it:

the accreditation of a person as a taxi network provider does not create an immutable right to operate a taxi network in a particular fashion determined at the time of accreditation and then set in stone. On the contrary, the legislative scheme is (and has always been) that the obligations and constraints on such providers are subject to variation by regulations.

41    Further, the broader textual and historical context on which the ACT relied was said to be:

important in understanding what is meant in s 32 of the Transport Act by a person who is accredited under the regulations to operate a taxi network being “entitled” to operate a taxi network. The “entitlement” is no more than shorthand for the immunity conferred by an accreditation from the general prohibition in s 33 on operating a taxi network. The liberty to operate a taxi network formerly available to the world at large became exercisable only by those persons holding a relevant “entitlement” or “accreditation” And such “rights” as are bound up in that “entitlement” are and always were subject to the comprehensive scheme of regulation created by the Transport Act and Transport Regulations, including… in the operation of a booking service and the manner in which those bookings are handled.

42    The flexibility of regulation of passenger services, thus, reflects the objects of the Transport Act in s 2 including the object to “encourage public passenger services that meet the reasonable expectations of the community for safe, reliable and efficient public passenger services” (s 2(c)).

43    Against this background, the ACT denied that:

the Transport Act meaningfully confers something that is properly called a right. What it confers is an immunity in relation to suit under s 33(1) (and possibly s 34), which is the relaxation of a statutory prohibition. It is not a right that is meaningfully enforceable against anyone.

…the “right” to operate was never more than an ability to operate lawfully in accordance with whatever regulatory scheme was imposed.

44    The ACT made the point that s 74(2) of the Transport Regulation, which lies at the heart of Aerial’s complaint, does not confer any enforceable right on the WCBS operator. Rather, it imposes a public duty on accredited taxi network providers. The provision does not transfer what was Aerial’s property to the WCBS operator for two reasons. First, Aerial’s accreditation gave it no right. Second, the WCBS operator is also given no such right. If, as is the case, “that which is said to have been acquired must be a benefit or advantage of a proprietary nature that “corresponds” or “correlates” to that which has been taken” (Smith v ANL at [7], ICM Agriculture v Commonwealth (2009) 240 CLR 140; [2009] HCA 51; (ICM) at [82]-[84] and the Plain Packaging case), Aerial must fail because:

    the context is a statutory regime which must be flexible in order to respond to changing reasonable expectations about and circumstances relevant to this form of public transport;

    Aerial’s “entitlement” did not extend beyond the statutory permission (for such time as it held a relevant accreditation) to operate a taxi network subject to the requirements of the regulations (as in the Plain Packaging case at [104]);

    Aerial’s “entitlement” thus possessed a “congenital infirmity” equivalent to the statutory rights considered by the High Court in WMC at [75], Attorney-General (NT) v Chaffey (2007) 231 CLR 651; [2007] HCA 34 and Health Insurance Commission v Peverill (1994) 179 CLR 226 (Peverill); and

    the WCBS is rather subject to an entirely different system of regulation and its operation is underpinned by government funding.

45    According to the ACT:

[t]he fundamental difficulty that confronts Aerial’s argument is that, as in Telstra Corporation v The Commonwealth [(2008) 234 CLR 210; [2008] HCA 7 (Telstra) at [52]], it proceeds from an unstated premise: being that Aerial has larger and more ample rights in respect of its booking service than in fact it has. As in Telstra, that argument is one that is aptly described as “synthetic” and “unreal”.

46    The ACT identified a further reason for concluding against Aerial’s claims based on the approach in Nintendo in which it was “held that a law that is not directed to the acquisition of property as such but is concerned with the adjustment or regulation of the competing rights, claims or obligations of persons in a particular relationship or area of activity, is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property within the meaning of s 51(xxxi)”. As the ACT put it, while this principle does not enable a “bright line” to be drawn (Airservices at [500]), the principle is:

well established [Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 510; Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 (Mutual Pools) at 171-172, 177-178, 189-190; Peverill (at 236-238; Georgiadis at 305-308; Airservices at 298-300 and 304; Wurridjal v The Commonwealth (2009) 237 CLR 309; [2009] HCA 2; at [363]-[365] (Wurridjal) at [91]. and is readily applied where, as here, the areas of activity “need to be regulated in the common interest” [Mutual Pools 190, Airservices at [497]] or where the public interest is otherwise served [Peverill at 236 and Airservices at [501]].

47    Further, it would be incongruous to require just terms (as in Theophanous at [60] and [63] and Airservices at [494]) “to treat the protection of any property associated with the accreditation as requiring protection of the commercial and economic position of network providers, when the “price” of the statutory immunity conferred by the Transport Act always included compliance with the regulatory scheme as it existed from time to time, which, in turn, served the object identified in s 2(c)”.

48    The ACT also contended that, in any event, “just terms” requires only “fair dealing between the community and Aerial” (Wurridjal at [190], citing with apparent approval Kitto J’s reasons in Nelungaloo Pty Limited v Commonwealth (1952) 85 CLR 545, and Kirby J at [305]-[307]). Aerial continues to be a taxi network operator and to provide a booking service. The regulation of its operations in these circumstances means that to the extent that there has been any acquisition of Aerial’s property it was on terms that are sufficient to constitute “fair dealing” between Aerial and the broader community.

49    Finally, the ACT submitted that given the only issue is whether the Amendment Regulation is within the power of the regulation making powers in ss 35 and 196 of the Transport Act and the equivalent power in s 233(1) of the Road Transport (General) Act, s 43 of the Legislation Act applies and requires the Amendment Regulation to be read down unless there is a manifest contrary intention (ss 43(5), 5(2) and 6(2)). No such manifest contrary intention can be discerned. The Amendment Regulation, s 74(2), can be read down in accordance with conventional principles. Aerial’s relief should be confined accordingly.

4.    DISCUSSION

50    Other than in respect of what might constitute just terms if there had been an acquisition of property, I accept the submissions for the ACT. I also accept as appropriate the reluctance of the ACT to divorce the question of what constitutes property from the composite phrase in which it appears in s 23(1)(a) of the Self-Government Act. Considering in isolation whether Aerial’s accreditation is property runs the risk of diverting attention from the fact that what s 23(1)(a) requires before it is engaged is an acquisition of property (see WMC at [45] and the Plain Packaging case at [169]-[170]).

51    If Aerial’s accreditation is a species of property, recognising the liberality with which that concept is approached (for example, the Plain Packaging case at [169] and [263]), I do not consider it to be capable of acquisition. As the ACT submitted, the accreditation confers nothing more than an exemption from a prohibition. The fact that, pursuant to the exemption, Aerial has created for itself a valuable commercial enterprise does not transform the accreditation, a mere exemption from what would otherwise be prohibited, into a proprietary right capable of acquisition. The exemption, moreover, never enabled Aerial to operate its taxi network and booking service as Aerial saw fit. It enabled Aerial to do so in accordance with the requirements for such operation as in force from time to time. Although the words “from time to time” are not express in the regulation making power in s 126 of the Transport Act, those powers are exercisable from time to time (s 42(3) of the Legislation Act). Accordingly, the nature and scope of Aerial’s exemption were always liable to modification.

52    To the extent that Aerial suggested otherwise, I do not accept that s 35(f) of the Transport Act is confined to modifications of the service standards or does not extend to the removal of a class of customers from the taxi network. Provided the regulation is not capricious or arbitrary (as was the example given by Aerial of it not being permitted to accept bookings from a customer aged over 20), the narrowing of the exemption from the prohibition so that it does not apply to a class of customers from a taxi network is an aspect of the regulation of the operation of a booking service. No suggestion was made, nor could it be, that the creation of a special scheme for wheelchair-dependent people was capricious or arbitrary or other than the ACT Executive responding rationally to the reasonable expectations of people in the ACT. For the same reason Aerial’s submission that the statutory scheme assumes the continued existence of the taxi network’s basic function, being the right to receive and refer bookings, should not be accepted. The submission identifies as a “basic function” a free and full capacity, untrammelled by any constraint, to receive and refer as Aerial sees fit all bookings. The statutory scheme does not assume the existence of a capacity of this kind. The fact that Aerial currently has that capacity is a consequence of the particular accreditation it was issued. However, the accreditation was always able to be confined in nature and scope by the imposition of a condition (s 10(1) of the Transport Regulation) or by amendment of the service standard (ss 12(1)(b) and 13A of the Transport Regulation). It was also always able to be confined in nature and scope by the making of a new regulation relating to the operation of the booking service as provided for in s 35(f) and, in respect of wheelchair-accessible taxis, s 35(j) of the Transport Act. The exemption held by Aerial, accordingly, was inherently susceptible to subsequent modification. That is what occurred by the coming into force of the Transport Regulation.

53    For these reasons I consider the circumstances engage the observations of Crennan J in Wurridjal at [364]:

Putting to one side statutory rights which replace existing general law rights, the extent to which a right created by statute may be modified by subsequent legislation without amounting to an acquisition of property under s 51(xxxi) must depend upon the nature of the right created by statute. It may be evident in the express terms of the statute that the right is subject to subsequent statutory variation. It may be clear from the scope of the rights conferred by the statute that what appears to be a new impingement on the rights was in fact always a limitation inherent in those rights. The statutory right may also be a part of a scheme of statutory entitlements which will inevitably require modification over time.

54    Gummow J, after quoting these observations in the Plain Packaging case at [102], made the point at [103] that “it would be an error to proceed on the footing that because some valuable rights conferred by statute, such as fishing licences [Bienke] and petroleum exploration licences [WMC], have been held to fall outside the constitutional criterion of “property”, no right sourced in federal law may fall within it”. At [104] he explained the difference between those licences conferring valuable rights which, nevertheless are not amenable to s 51(xxxi) acquisition and intellectual property rights which, whilst also creatures of statute, are so amenable. Gummow J said:

Such licences as those just mentioned commonly are granted so as to lift a statutory prohibition imposed upon engagement in the activity in question and the grant is expressly made subject to the terms of the statutory regime as they stand from time to time. That is not the case with the various species of “intellectual property” within the description in s 51(xviii) of the Constitution, namely copyrights, patents of inventions and designs and trade marks.

55    Aerial’s accreditation lifts a statutory prohibition and enables an otherwise prohibited activity to be carried out in accordance with the statutory regime as in force from time to time. The existing regime, for example, includes a capacity for minimum service standards to be approved (s 18B of the Transport Regulation) including about matters such as the operation of taxi booking services operated by or for the taxi network (Sch 1, Pt 1.2 of the Transport Regulation). An accredited taxi network operator must comply with the approved minimum service standards, failing which, disciplinary action may be taken (s 321(1)(b) of the Transport Regulation) and the discretion to refuse accreditation is enlivened (s 9(1)(b) of the Transport Regulation). The minimum service standards to which Aerial’s accreditation is subject include required off-loads to other taxi networks if Aerial’s affiliated taxis have not responded within 5 minutes of the original request for a taxi. In other words, Aerial’s accreditation always involved, as Aerial put it, a “compulsory transfer” of part of its “rights” to others. Ongoing adjustment of the measures needed to ensure continued provision of safe, reliable and efficient taxi services to the public in the ACT is just as much part of the statutory scheme as Aerial’s accreditation.

56    That the statutory scheme is one which will inevitably require modification over time is apparent from the objects of the Transport Act. The objects in s 2 refer to the aim of encouraging public passenger services that meet the reasonable expectations of the community for safe, reliable and efficient public passenger services. Community expectations evolve over time. Expectations about the capacity of wheelchair-dependent people to access public passenger services, such as taxis, is an obvious example of reasonable expectations evolving over time. What might have been considered reasonable at one time was no longer considered reasonable by 2012, as the regulatory impact statement which preceded the making of the Transport Regulation discloses. At pp 6-12 the statement explains why a centralised booking service for wheelchair-accessible taxis was adopted to meet the concerns of disabled people in the ACT about lack of accessibility created by the existing regime. The relevant point is that, in the context of public transport regulation, the scheme created by the Transport Act and Transport Regulation is one in which flexibility to accommodate changing circumstances and expectations is inherent. And as the ACT submitted:

even if there are limits on the extent to which any “rights” associated with accreditation can be modified; those limits could only be ones of substance and not form. That is, if an amendment of a certain kind could be made within the existing scheme, no objection can be taken that it was made by new regulations rather than by new minimum service standards or by imposing further conditions on the accreditations of taxi network operators under the existing regulations. So long as the new constraints are consistent with the existing objects of the legislation, as they are in the present case (as to which see below), any complaint about the reforms are only complaints as to form and not as to substance.

57    This analysis also explains why what the WCBS operator obtained through the Amendment Regulation cannot be seen as a corresponding right of a proprietary character to that which, on Aerial’s case, was acquired from Aerial. In the context of the statutory scheme, nothing was acquired from Aerial. Aerial’s “entitlement” being, in substance, an immunity from a prohibition, it is apparent that what occurred by the Amendment Regulation was that Aerial’s immunity from the prohibition was reduced in scope. By the Amendment Regulation Aerial’s immunity no longer extended to bookings for wheelchair-dependent people. At the same time Aerial was subjected to a new obligation to refer such a booking to a WCBS. This obligation to refer does not involve the transfer of any right held by Aerial to a WCBS. The WCBS is not a taxi network provider (s 154I(b)). The WCBS is a booking service that only accepts bookings for wheelchair-accessible taxis for wheelchair-dependent people (s 154I(a)(i)). A person may only operate a WCBS if the person holds a service contract for that service with the ACT (s 154L). The entitlement of a person to operate a WCBS, accordingly, is also an immunity from a prohibition. The rights of a WCBS, whatever they are apart from this immunity, are to be found in the service contract. The statutory scheme thus creates something entirely new in which, at least in respect of bookings for wheelchair-accessible taxis for wheelchair-dependent people, there is nothing corresponding to the earlier scheme.

58    Aerial’s analysis, that the Amendment Regulation involved the compulsory transfer of part of Aerial’s statutory rights to Celltrack, does not reflect the substance of what has occurred. First, Aerial has characterised its statutory right as the right to receive and refer to its affiliated taxis bookings for wheelchair-accessible taxis. As discussed, the accreditation gave Aerial an immunity allowing it to do that which would otherwise be prohibited provided that what it did accorded with the statutory regime from time to time. That immunity enabled Aerial to receive and refer to its affiliated taxis bookings for wheelchair-accessible taxis. Second, by amendment to the statutory regime Aerial’s immunity was confined and, as part of its duty as an accredited taxi network provider, Aerial was subjected to an obligation to refer bookings for wheelchair-accessible taxis for wheelchair-dependent people to a WCBS. Third, the ACT entered into a service contract with Celltrack so that Celltrack became a person able to operate a WCBS in the ACT. Celltrack obtained nothing from Aerial. The source of Celltrack’s entitlement is the entry into the service contract. It cannot be said that Celltrack, or the ACT, obtained an interest in property in circumstances where Aerial did not hold property capable of acquisition and Celltrack did not receive property from or in connection with anything Aerial held. Given that the liberal approach to s 51(xxxi) does not affect the “bedrock principle” that there must be an interest in property acquired, however slight or insubstantial that interest (the Plain Packaging case at [169]), s 23(1)(a) of the Self-Governing Act is not engaged.

59    The observation of Hayne and Bell JJ in the Plain Packaging case at [170] is also important. They said that:

A liberal construction of s 51(xxxi) cannot set the provision free from its text or the principle that the text establishes. A liberal construction cannot and does not go as far as the tobacco companies asserted, which would treat any benefit or advantage as a sufficient definition of the constitutional reference to “property”.

60    The benefit or advantage Celltrack acquired derives from the fact of entry into the service contract for which the Amendment Regulation provided. The connection that circumstance has with Aerial’s reduced immunity is that both are part of the changed regulatory landscape in respect of wheelchair-accessible taxis for wheelchair-dependent people created by the Amendment Regulation. But the reduction of immunity and the creation of a new entitlement do not involve any acquisition of property direct or indirect. While it “does not matter that what a property owner has lost does not correspond precisely with what the Commonwealth or another person gains” (the Plain Packaging case at [199]) there still must be an “identifiable benefit or advantage relating to the ownership or use of property” (Plain Packaging case at [200]) which in some way relates to what has been allegedly acquired. That relationship is not apparent in the present case.

61    On this basis I do not consider it necessary to deal with the ACT’s submissions based on incongruity other than to say the principle may not be as expansive as the ACT suggested and the present circumstances are not obviously analogous to the classes of case which engage with the principle – fines, penalties, taxes, forfeitures and the like, where the incongruity results from the fact that providing just terms would be “to annihilate the penalty…and thus to weaken, if not destroy, the normative effect of the prescription of the rule of conduct” (the Plain Packaging case at [233] in which Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 278 is quoted).

62    It is also not necessary to deal with the ACT’s submissions about just terms having been provided. I did not find the ACT’s submissions persuasive in this regard. If the Amendment Regulation acquired property of Aerial then it is difficult to see how that acquisition was on just terms merely because Aerial remains an accredited taxi network operator.

63    While it is unnecessary too to consider the ACT’s argument that the Amendment Regulation, if it effects an acquisition of property other than on just terms, must be read down, this is the effect of the relevant provisions of the Legislation Act. Sections 43(1) and (2) of the Legislation Act provide that:

(1)    A statutory instrument is to be interpreted as operating to the full extent of, but not to exceed, the power given by the Act or statutory instrument under which it is made (the authorising law).

(2)    Without limiting subsection (1), if a provision of a statutory instrument would, apart from this section, be interpreted as exceeding power—

(a)    the provision is valid to the extent to which it does not exceed power; and

(b)    the remainder of the instrument is not affected.

64    Section 43(5) of the Legislation Act states that s 43 is a “determinative provision”.

65    By s 5(2) of the Legislation Act a “determinative provision is a provision of this Act that is declared to be a determinative provision”.

66    By s 6(2) of the Legislation Act:

A determinative provision may be displaced expressly or by a manifest contrary intention.

67    Section 6(4) of the Legislation Act states:

The declaration of a provision as ‘determinative' indicates that it is the intention of the Legislative Assembly that, if the provision is to be displaced at all in a particular case, a more deliberate displacement is required than if the provision were a non-determinative provision.

68    The examples of possibly anomalous operation which Aerial identified in ss 101A, 114 and 154I of the Transport Regulation as amended by the Amendment Regulation do not disclose a manifest contrary intention that the provisions of the Amendment Regulation be valid to the extent they are within power with the remainder of the instrument not being affected.

69    Section 101A can still operate in accordance with its terms. The fact that s 74(2) cannot apply to Aerial for so long as it holds its current accreditation does not affect the obligation in s 101A. Section 114 may create a gap in the scheme in that there is a WCBS operating but a driver affiliated with Aerial may receive a booking from Aerial but not be bound to comply with Aerial’s direction to accept the booking. The gap is temporary and not fatal to the operation of the scheme. Section 154I does define a WCBS as a centralised booking service. But that too does not exhibit a manifest contrary intention to the operation of the scheme insofar as within power.

70    If I had concluded that the Amendment Regulation exceeded the statutory power in the Transport Act because it involved an acquisition other than on just terms, I would not have concluded that there was a manifest contrary intention to s 43(1) and (2) of the Legislation Act. Accordingly, rather than declaring the Amendment Regulation invalid I would have applied these provisions and read down the Amendment Regulation. The relief that Aerial could have obtained would thus have been confined in this way.

71    Given my conclusions above, the application should be dismissed with costs.

Associate:

Dated:    20 December 2013