Commonwealth regulatory legislation that restricts proprietary rights may be characterized as regulatory/penal rather than acquisitive, even where it has the practical effect of compelling the transfer of proprietary interests.
Later decisions that cite Trade Practices Commission v Tooth & Co Ltd
Decisions cited by Trade Practices Commission v Tooth & Co Ltd
TRADE PRACTICES COMMISSION v. TOOTH & CO. LTD. [1979] HCA 47; (1979) 142 CLR 397
Constitutional Law (Cth)
High Court of Australia
Barwick C.J.(1), Gibbs(2), Stephen(3), Mason(4), Murphy(5) and Aickin(6) JJ.
CATCHWORDS
Constitutional Law (Cth) - Powers of the Commonwealth Parliament - Acquisition of property - Trade practices legislation - Exclusive dealing - Foreign corporations and trading or financial corporations formed within the Commonwealth - Prohibition of a corporation's refusing to renew a lease or licence for reasons related to exclusive dealing - Renewal - Whether law with respect to acquisition of property - The Constitution (62 & 63 Vict. c. 12), s. 51 (xxxi.) - Trade Practices Act 1974-1978 (Cth), ss. 47 (1), (9) (a), 76 (1), 80.
HEARING
Sydney, 1979, April 9; September 28. 28:9:1979DECISION
Sept. 282. The question for decision in this appeal is therefore whether s. 47 (9) (a) of the Trade Practices Act, 1974 (Cth), as amended ("the Act"), is a law with respect to the acquisition of property within the meaning of s. 51 (xxxi.) of the Australian Constitution in so far as s. 47 (9) (a) proscribes the refusal by the owner of property to renew a lease because the other party to the lease has taken a specified attitude with respect to the selection of goods for sale or disposal by that party. It is conceded that if the section in this respect is such a law, it does not provide just terms and, consequently, is invalid. (at p401)
3. For the sake of completeness, I reproduce the relevant terms of s. 47 (9)
(a):
"47 (9) A corporation also engages in the practice of exclusive dealing
if the corporation refuses to grant or renew, or exercises
a power or right to
terminate, a lease of, or a licence in respect of, land or a building or part
of a building for the reason that
another party to the lease or licence or, if
that other party is a body corporate, a body corporate related to that body
corporate
-
(a) has acquired, or has not agreed not to acquire, goods or services, or
goods or services of a particular kind or description,
directly or indirectly
from a competitor of the corporation or from a competitor of a body corporate
related to the corporation."
(at p401)
4. Much argument in the appeal centred around the construction of the section
in so far as it included the words "or renew". I doubt
myself whether it is
necessary in the circumstances of the case to determine the precise denotation
of these words but, assuming
it to be necessary (and I will act on that
assumption), I am of the opinion that, in the context of the section, bearing
in mind
the reference to the other party to the lease, the section confines
the use of the words "or renew" to an occasion when an owner
who has been a
lessor refuses for a specified reason or for reasons which include that reason
to grant to the existing lessee a lease
in the precise terms of an existing
lease. I am further of opinion that the use of these words is confined to a
case in which the
lessee under the existing lease has no contractual right to
such a regrant, that is to say, that it does not refer to a case where
there
is an option to renew or some contractual promise to renew. I have had the
advantage of reading the reasons for judgment prepared
by my brother Aickin in
this appeal and agree with what he says as to the construction of the words
"or renew" as they are found
in the section. (at p402)
5. My doubt as to whether it is necessary in the circumstances of the case to work out the precise denotation of the challenged words is that, in my opinion, the grant of a lease, whether or not by way of renewal of an existing lease, is, or at lowest involves, the grant of an interest in the land to the lessee or tenant. There can be no doubt that an interest created by a lease or tenancy, however brief and tenuous it may be, is property. Nor, in my opinion, can it be doubted that a lessee or a tenant to whom a term or tenancy is granted thereby acquires property. A law which provides a means whereby a person may obtain a term or tenancy in land, in my opinion, is undoubtedly a law with respect to the acquisition of property. To be such a law it is not necessary that the acquisition must necessarily take place. It is enough, in my opinion, that the law provides the means whereby in some, though not in all, circumstances, the acquisition may take place. It is enough in relation to s. 47 (9) (a) that if the lessor's reason for refusal to grant or renew fell within the proscription the section, if valid, would provide a means whereby the lessor could be overborne and the lessee obtain an interest in the land. Thus, the section would none the less be a law with respect to the acquisition of property if, because of reasons for refusing to grant or renew a lease not infringing the proscription of the section, the intending lessee could not enforce a grant or renewal. To so conclude does not involve, in my opinion, any liberality of construction of the relevant provisions of the Constitution. It is no more than a use of the language of the Constitution in its ordinary and well understood sense. Of course, if there were a question of ambiguity or doubt in construction, it would be my opinion that s. 51 (xxxi.) should receive a liberal and wide construction; indeed, it has received such a construction in decisions of this Court which have heretofore been given: e.g. Minister of State for the Army v. Dalziel (1944) [1944] HCA 4; 68 CLR 261 . The particular question in this appeal is therefore whether s. 47 (9) (a) does provide a means whereby a person may obtain a lease or tenancy in the land of another. (at p402)
6. Before examining the section from that point of view, I should deal with an argument of the appellant much pressed on the Court. (at p402)
7. It was argued that, because the section is found in the Trade Practices Act, the section is really a law with respect to trade practices and nothing else. I find this argument unacceptable. In the first place, trade practice is not a head of constitutional power. The relevant head of power in relation to this section is s. 51 (xx.), the corporations power. That the Act is an Act with respect to corporations within the meaning of the Constitution cannot now be doubted. But to say that therefore it cannot in any of its provisions be also a law with respect to the acquisition of property is to run counter not only to the settled doctrine of the Court, but to the very purpose of the inclusion of s. 51 (xxxi.) in the Constitution itself. (at p403)
8. It has been decided, and in my respectful opinion quite correctly, that the presence of s. 51 (xxxi.) in the Constitution means that no other head of power, including the incidental power, would support a law for the acquisition of property. And the reason is plain. The constitutional purpose is to ensure that in no circumstances will a law of the Commonwealth provide for the acquisition of property except upon just terms. Section 51 (xxxi.) is a very great constitutional safeguard, not confined to the protection of the citizen from confiscation of his property by the State. It ensures that no one may, by virtue of a Commonwealth statutory provision, acquire his property except upon just terms. This, of course, leaves out of all account for this purpose contractual arrangements made by the owner himself or on his behalf. It would indeed be a strange inversion of constitutional purpose to conclude that one might make a law with respect, e.g., to banking which provided for the acquisition of property on unjust terms simply because it was a law which predominantly in its provisions related to banking. (at p403)
9. But, further, the very terms of s. 51 (xxxi.) contemplate that a law with respect to acquisition of property will involve a purpose relevant to some other head of power. In many instances, the provisions of the Act which relate to another head of power and are justified by that head of power afford reason to say that in that respect the Act is a law upon that other subject matter. But, in so far as the law is with respect to the acquisition of property, it can only be justified under s. 51 (xxxi.). In my opinion, it is plainly fallacious to suggest that s. 47 (9) (a) cannot be a law with respect to the acquisition of property because found in a statute which predominantly has to be supported on some other head of power than s. 51 (xxxi.). (at p403)
10. I should also at this point refer to another argument of the appellant. The undesirability of the practice of exclusive dealing is emphasized and it is said that without the challenged provision the sanction of the proscription of exclusive dealing would be substantially weakened. (at p404)
11. The question whether or not it is desirable to prevent what is called exclusive dealing is not, of course, in question in this case. On that matter the Court can have no views. That it may be desirable to suppress such a practice is quite irrelevant to the question whether there is power to provide for the acquisition of property on other than just terms. Equally it is, in my opinion, an irrelevant consideration that the effectiveness of the law against exclusive dealing would be weakened if the section were declared invalid. If it is invalid it is so because the Parliament lacks the power to make the particular law however desirable or necessary some might think its terms to be. (at p404)
12. I turn then to consider the nature of the challenged section. The operation of the section is, in my opinion, that if a tenant asks for a grant of a further lease on the same terms as that on which he has already held the land he must be given that lease. The section can only operate upon a request by the lessee or tenant. It proscribes a refusal which, in my opinion, connotes a request express or implied. It seems to me an unsubstantial distinction to say that all the section does is to deny the landlord the capacity to refuse to renew the lease. If a landlord for the stated reason, or for reasons which included the stated reason, were to refuse to accede to the tenant's request for a further lease, he would commit an offence and as well may be enjoined from continuing to refuse to renew. That means, in my opinion, that the law has imposed upon him as a matter of its practical operation a necessity, indeed in substance an obligation, to renew the lease at the request of the lessee or tenant. The section, therefore, aided by other sections of the Act, provides a means whereby the lessee may obtain a further lease, i.e. may acquire an interest in the land. (at p404)
13. In my opinion, the section does not merely impose a restraint upon the exercise by the owner of his proprietary rights: on the contrary, as I have said, it provides a means whereby the lessee or tenant may acquire an interest in the land by requesting a renewal of the existing lease, a request the owner may not lawfully refuse. (at p404)
14. The question in this case is not whether property is acquired by the law itself. Doubtless such a law is a law with respect to the acquisition of property. Whether a law, which imposes such restraints upon the exercise of proprietary rights as to warrant the conclusion that it is confiscatory in nature, is for that reason alone a law with respect to the acquisition of property need not presently be decided. But a law with respect to the acquisition of property need not be confiscatory in its terms in the sense that, by its operation, property is divested from an owner. It is enough that it provides a means whereby property may be acquired. (at p405)
15. The question therefore whether a law is a law with respect to the acquisition of property must be sharply distinguished from the question whether a law is confiscatory in its nature. (at p405)
16. Thus, cases such as Belfast Corporation v. O. D. Cars Ltd. (1960) AC 490 and Pennsylvania Coal Co. v. Mahon [1922] USSC 193; (1922) 260 US 393 (67 Law Ed 322) concerned with the question whether restraints imposed upon the exercise of proprietary rights are, because of the extent of the restraint, confiscatory in nature, are, in my opinion, in an entirely different universe of discourse. They are concerned solely with the question whether the law "takes" property. The question whether a law itself effects a taking or is confiscatory or, on the other hand, is merely regulating in an acceptable way the exercise by the proprietor of his rights as owner, is, in my opinion, a different question. To conclude that a given law does not take or confiscate property does not really bear on the radically different question whether the law is a law with respect to the acquisition of property. The distinction between the two questions is, I think, plain upon the face of the reasoning in the House of Lords and of the American case. In those cases, it is the extent of the restraint upon the exercise of proprietary rights which is the subject of examination. Neither the House of Lords nor the American court were concerned with the concept of a law with respect to the acquisition of property. The contrast is between confiscation and mere limitation upon the exercise of proprietary rights. Because of this radical distinction, I do not find the reasoning in the Belfast Corporation or Pennsylvania Coal Co. cases of assistance in determining the relevant nature of the section in question here. (at p405)
17. The section here provides for the acquisition by a tenant of a new term in the land of the owner. Of course, the section imposes a restriction upon the exercise of proprietary rights: it could not be said to be a law which confiscated the land of the proprietor or took it in the sense of the provision discussed in the House of Lords. But the section could not be said, in my opinion, to be a law which merely imposed restraints on the exercise of proprietary rights. (at p405)
18. In the case of the present section, the extraordinary result produced is that the owner of land is denied the capacity to use his own land to sell his own goods if he has theretofore leased the land to another. The selling by a man of his own goods on his own land might well be thought to have nothing to do with exclusive dealing. But, of course, if the section is not a law with respect to the acquisition of property, it will not be invalid because of the result it thus produces. (at p406)
19. For the reasons I have expressed, I think the majority of the Full Court of the Federal Court were correct in the answer which they gave. Accordingly, I would dismiss the appeal. (at p406)
GIBBS J. The facts of this case and the provisions of the legislation in question are set out in the judgment of my brother Aickin. (at p406)
2. The words of s. 47 (9) of the Trade Practices Act 1974 (Cth), as amended ("the Act"), which must be read in the light of s. 4 (2) (c) (i) and s. 4F (b), are unfortunately not altogether precise. In particular the reference to "another party to the lease" creates a difficulty, since the sub-section is dealing with the refusal to "grant or renew" a lease, and in strictness there is of course no party to a lease that has not come into being. The distinction drawn between the grant and the renewal of a lease suggests that "grant" is intended to refer to a case in which no lease is in existence and "renew" to the case in which there is an existing lease which the lessee seeks to have extended for a further period. Technically, the word "grant" would have covered both cases, since a renewal will involve a new grant. The provisions of s. 47 (9) are analogous to those of s. 47 (8). Section 47 (8) deals, inter alia, with the grant or renewal of leases on certain conditions, whereas s. 47 (9) deals with the refusal to grant or renew leases for reasons that correspond to those conditions. In s. 47 (8), the words "another party to the lease" clearly refer to a party to the lease actually granted or renewed, and in s. 47 (9) in my opinion those words similarly refer to a party to the lease which the corporation has refused to grant or renew. Although, as I have indicated, if there has been a refusal to grant a lease, there is in truth no party to the lease, what in my opinion is meant is a person who would have been a party to the lease had it been granted. But even if this construction were wrong, I could not accept the view that the expression "grant or renew" was intended to distinguish between the re-grant of an existing lease on new terms and the re-grant of an existing lease on the same terms as before. (at p406)
3. The word "renew" can of course signify the grant of a new lease for the same period and on the same terms as those of the old lease. However, that is not its invariable, or even its natural meaning; a lease can be renewed, in the ordinary sense of the word, for a different period, and at a different rent, from those provided in the original lease. At the time when the provisions of the Act came into force it had long since become commonplace to include in convenants for renewal provisions for the escalation of the rent. The context provided by s. 47(8) and (9) indicates clearly enough that those sub-sections have no concern with the rent payable, or the duration of the term, under a lease which is granted or renewed or the grant or renewal of which is refused. They are concerned to prevent the owner of property from using his power to impose conditions on the grant or renewal of a lease, or to refuse to grant or renew a lease, for the purpose of substantially lessening competition. Obviously s. 47 (8) refers only to a renewal on the terms which were in fact agreed to by the parties, and to construe s. 47(9) as requiring a renewal on the terms of the former lease, including a term as to the payment of a rental which may have been rendered quite inadequate as a result of inflation, would give the sub-section an oppressive operation, which is quite unrelated to its object, and which there is no reason to believe could have been intended. The sub-section does not, in my opinion, require the owner of property to grant or renew a lease at less than its full rental value. If s. 47 (9) is a law with respect to the acquisition of property within s. 51(xxxi) of the Constitution, it is not, in my opinion, a law with respect to the acquisition of property on other than just terms. (at p407)
4. In any case, the law is not, in my opinion, one with respect to the acquisition of property within s. 51 (xxxi). I fully accept that the powers given by the other paragraphs of s. 51 do not authorize legislation for the acquisition of property (W. H. Blakeley & Co. Pty. Ltd. v. The Commonwealth [1953] HCA 12; (1953) 87 CLR 501, at p 521 ; Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361, at p 371 and cases there cited) and that the Court will not permit the adoption of "a circuitous device to acquire indirectly the substance of a proprietary interest without at once providing the just terms guaranteed by s. 51 (xxxi.) of the Constitution when that is done" (Bank of New South Wales v. The Commonwealth [1948] HCA 7; (1948) 76 CLR 1, at p 349 ; and see Minister of State for the Army v. Dalziel [1944] HCA 4; (1944) 68 CLR 261 . Further, s. 51 (xxxi.) is not limited to acquisitions by the Commonwealth (McClintock v. The Commonwealth [1947] HCA 39; (1947) 75 CLR 1, at pp 23-24,36 ; Bank of New South Wales v. The Commonwealth (1948) 76 CLR, at p 250 ; P.J. Magennis Pty. Ltd. v. The Commonwealth [1949] HCA 66; (1949) 80 CLR 382, at pp 401-402, 423, 429-430 A law of the Commonwealth requiring one person to grant a lease to another on other than just terms would, generally speaking, be invalid. However, not every compulsory divesting of property is an acquisition within s. 51 (xxxi.) Thus it has been held that laws providing for the forfeiture of prohibited imports (Burton v. Honan [1952] HCA 30; (1952) 86 CLR 169, at pp 180-181 the compulsory payment of provisional tax (Federal Commissioner of Taxation v. Clyne [1958] HCA 10; (1958) 100 CLR 246, at pp 263, 270 and the application of the property of former enemy subjects reparations (Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 are not within s. 51 (xxxi.). Other laws to which s. 51 (xxxi.) obviously does not apply are those for the imposition of tax, the sequestration of the property of a bankrupt or the condemnation of prize (Attorney-General (Cth) v. Schmidt (1961) 105 CLR, at pp 372-373 . I am not sure that a completely satisfactory explanation has yet been given of the principles by which it is to be determined which laws do, and which laws do not, fall within s. 51 (xxxi.). With great respect I doubt whether the suggestion of Dixon C.J. in Attorney-General (Cth) v. Schmidt - that the section does not affect "anything which lies outside the very general conception expressed by the phrase 'use and service of the Crown'" - fully expresses the ground of distinction. It appears to me that there are cases in which s. 51 authorizes the compulsorily divesting of property in circumstances in which no question of just terms could sensibly arise - for example, it would be absurd to say that the legislature could make provision for the exaction of a fine, or for the imposition of a forfeiture of property used in the commission of a crime, only on just terms. Whatever explanation may be accepted, the provisions of s. 47 (9), which prohibit a corporation from refusing to grant or renew a lease for the reasons stated, seem to me to be of the same nature as provisions for penalty or forfeiture. As at present advised I doubt whether the Federal Court would have power to grant an injunction, which would be mandatory in effect if not in form, to compel the grant or renewal of a lease, but the heavy penalties provided for the contravention of the sub-section may be regarded as practically compelling a corporation to grant or renew a lease if a substantial reason for not doing so would be one of the reasons mentioned in s. 47 (9). If s. 47 (9) is regarded as having the effect that in certain circumstances a corporation is obliged against its will to grant or renew a lease, it only has that effect where the corporation is engaging in the practice of exclusive dealing forbidden by the sub-section, in circumstances in which its conduct has the purpose, and has, or is likely to have, the effect of substantially lessening competition. The sub-section is not merely a device to compel a corporation to divest itself of a proprietary interest and its effect is to deter or punish forbidden conduct. It does not provide for the acquisition of property within s. 51 (xxxi.). In any case, as I have said, the section does not oblige the corporation to grant or renew a lease on other than fair commercial terms. (at p409)
5. Once it is held that s. 47(9) does not fall within s. 51 (xxxi.), there can be no doubt that its provisions are validly enacted under the corporations power (s. 51 (xx.)). (at p409)
6. I would allow the appeal and would answer the question in the affirmative. (at p409)
STEPHEN J. The question raised by this appeal is whether s. 47 of the Trade Practices Act, as amended, offends against s. 51(xxxi.) of the Constitution by legislating for the acquisition of property otherwise than on just terms. (at p409)
2. How s. 47 comes to be challenged as involving the acquisition of property calls for some description first of its provisions and then of their application to the circumstances of this appeal. (at p409)
3. Sub-section (1) of s. 47 forbids corporations from engaging in the practice of exclusive dealing. The section then goes on to describe in subsequent sub-sections kinds of conduct which it declares to be engagement in that practice. Sub-sections (8) and (9) are both concerned with conduct related to leases or licences of land or buildings. By sub-s. (8) the grant, renewal or non-termination of a lease or licence, if made on any one of a number of specified conditions, will constitute exclusive dealing; by sub-s. (9) the refusal to grant or renew, or the termination of, a lease or licence, if effected for any one of a number of specified reasons, will constitute such conduct. (at p409)
4. Allowing for differences inherent in the contrasting structure of the two sub-sections, the conditions in sub-s. (8) find their reflection in the reasons in sub-s.(9). It is the existence of these conditions or of these reasons which converts unexceptionable conduct on the part of a landlord or licensor into instances of the forbidden practice of exclusive dealing. (at p409)
5. The statutory description of these conditions and reasons, replete with double negatives and proliferating alternatives, defies accurate synopsis. However, broadly speaking, the reasons consist of dealings by the tenant or licensee in goods or services either with a competitor of the landlord or with particular persons or in particular places or his failure to have dealings with third parties, whereas the conditions are their mirror images, not to deal with a competitor or with particular persons or in particular places or to have dealings with third parties. (at p410)
6. The traditional brewers' system of "tied houses" is prone to give rise to just such practices as these two sub-sections describe. It was in the course of proceedings involving two New South Wales brewers, that, on a case stated to the Full Court of the Federal Court of Australia, an answer was sought to the question whether sub-s.(9) of s. 47 of the Trade Practices Act was ultra vires the legislative power of the Commonwealth. The full circumstances surrounding the stating of this case need not now be recounted, they appear in the report of the judgment of the members of the Full Court of the Federal Court in Re Tooth & Co. Ltd. [1978] FCA 9; (1978) 31 FLR 314; 19 ALR 191 . In a second and subsequent judgment of the Full Court in associated proceedings between the same parties the majority, Bowen C.J. and Franki J., in answer to this particular question, held that the sub-section was "invalid in so far as it uses the words'or renew'", while Brennan J. held it to be valid [1978] FCA 36; (1978) 34 FLR 112 . It is from that judgment that this appeal is now brought to this Court. (at p410)
7. Although sub-s. (8) is intimately associated with sub-s. (9), it will be
enough, for the purposes of this appeal, if I set out
the terms of the
latter:
"A corporation also engages in the practice of exclusive dealing if the
corporation refuses to grant or renew, or exercises
a power or right to
terminate, a lease of, or a licence in respect of, land or a building or part
of a building for the reason that
another party to the lease or licence or, if
that other party is a body corporate, a body corporate related to that body
corporate
-
(a) has acquired, or has not agreed not to acquire, goods or services, or
goods or services of a particular kind or description,
directly or indirectly
from a competitor of the corporation or from a competitor of a body corporate
related to the corporation;
(b) has re-supplied, or has not agreed not to re-supply, goods, or goods
of a particular kind or description, acquired directly
or indirectly from a
competitor of the corporation or from a competitor of a body corporate related
to the corporation;
(c) has supplied goods or services, or goods or services of a particular
kind or description -
(i) to particular persons or classes of persons or to persons other than
particular persons or classes of persons; or
(ii) in particular places or classes of places or in places other than
particular places or classes of places; or
(d) has not acquired, or has not agreed to acquire, goods or services of a
particular kind or description directly or indirectly
from another person not
being a body corporate related to the corporation." (at p411)
8. The present respondents' successful attack upon the validity of this
sub-section was confined to its reference to a corporation's
refusal to renew
a lease. Section 51 (xxxi.) of the Constitution, upon which that attack was
based, confers legislative power with respect to: "The acquisition of property
on just terms from any
State or person for any purpose in respect of which the
Parliament has power to make laws". The majority in the Federal Court
concluded
that to make it unlawful for a landlord in certain circumstances to
refuse to renew a tenancy was to legislate for the acquisition
of property by
the tenant from the landlord. They regarded it as requiring the landlord in
specified circumstances to re-grant proprietary
rights in respect of land
against his will. That the re-grant was not in favour of the Commonwealth was
immaterial, s. 51 (xxxi.) extended to laws for the acquisition of property by
persons other than the Commonwealth. Since "renew" in sub-s. (9) bore
its
ordinary meaning of renewal upon the same terms, including rental, as in the
old lease, there was an absence of just terms because
no account was taken of
any increase in value of the leasehold interest which the landlord was thus
compelled to re-grant. The sub-section
was accordingly invalid in so far as it
used the words "or renew". (at p411)
9. The dissenting judgment of Brennan J. founded upon the view that sub-s. (9) imposed no obligation to renew a lease but only a duty not to refuse renewal for a specified reason: what the tenant acquired was not any proprietary right but only protection against refusal of renewal of his lease because he declined to engage in the practice of exclusive dealing. In any event, if any acquisition of property by the tenant was involved, it was not an acquisition for "any purpose in respect of which the Parliament has power to make laws" but wholly for the tenant's own private purposes (1978) 34 FLR, at p 145 . Hence the acquisition did not attract the operation of s. 51 (xxxi.) and was unaffected by its reference to just terms. The inclusion of the words "or renew" in sub-s. (9) accordingly worked no invalidity. (at p411)
10. This appeal raises for consideration aspects of s. 51 (xxxi.) which have not previously been the subject of express decision. Whereas previous cases in this Court in which Commonwealth legislation has fallen foul of pl. (xxxi.) have been concerned with measures directed to the acquisition of real or personal property, that acquisition being their explicit purpose, the present measure, if it does effect any acquisition, does so only as an incidental means of better attaining a quite different goal, namely the suppression of the undesirable trade practice of exclusive dealing. Because ownership of commercial premises carries with it an ability to control the particular use made of them by tenants who are let into possession, that ownership is a circumstance readily capable of being exploited by those who seek to impose the practice of exclusive dealing upon others. It is to prevent such exploitation that the legislature has, in sub-ss. (8) and (9) of s. 47, legislated in respect of the leasing of land by making it unlawful for landlords to refuse to grant or renew or to terminate leases if the refusal or termination is linked in one way or another with this particular practice. (at p412)
11. As I have said, it is in its operation in relation to the renewal of leases that sub-s. (9) has been held to involve the acquisition of property otherwise than on just terms. Its operation in relation to the grant and to the termination of leases was not in issue before the Full Court and their Honours were careful to confine themselves to the renewal of leases. Since, in the view which I take of the words "renew" and "renews", sub-ss. (8) and (9) have no different operation in the case of renewals than they do in the case of grants or terminations, neither they nor any other provision of s. 47 involving the acquisition of property within s. 51 (xxxi.), I propose first to state my view of the section generally. Having done so I shall then state why it is that I see no reason to distinguish the case of the renewal of leases. (at p412)
12. There is, of course, no doubt but that each of the first nine sub-sections of s. 47 imposes a restriction upon the conduct of corporations. Essentially it is by sub-s. (1) that this is imposed. It forbids the practice of exclusive dealing but does so without supplying any description of that forbidden practice. It is left to sub-ss. (2) to (9) to furnish that description; those sub-sections are no more than definitive of the conduct which sub-s. (1) forbids. Sub-sections (2) to (7) are concerned with conduct associated with contracts for the supply of goods or services or with the refusal to enter into such contracts, sub-ss. (8) and (9) with conduct associated with leases and licences or with the refusal to grant, renew or keep in force such leases or licences. (at p412)
13. What the legislature has done in s. 47 is to proscribe in very broad terms a particular practice in trade. In doing so it has deprived all those to whom it is directed, whether they be landlords or one of the many other classes of persons capable of imposing the practice of exclusive dealing upon others, of the freedom to impose that practice. The oil company which wishes to supply its products only to so-called "solo" outlets, the financier who wishes to finance motor vehicle purchases only if the vehicles are insured with a particular insurer, the large retailer who seeks to insist that his supplier supplies him alone, the manufacturer who wishes to confine the retailers of his goods to particular areas, so that they may be his exclusive retailers for those areas; these are only some of the many instances of persons other than landlords affected by s. 47. Many, if not all, of these instances involve restraints upon the free exercise of proprietary rights. Are, then, all these to be regarded as acquisitions subject to s. 51 (xxxi.) and hence requiring for their validity the provision of just terms? If not, is there some special feature of sub-ss. (8) and (9) or of such of their provisions as relate to the renewal of leases which so requires? (at p413)
14. I would answer "No" to each of the questions posed above. One may, I
think, approach the first question by two rather different
routes, each of
which has led me to the same conclusion. The first is a route not dissimilar
from that followed by their Lordships
in Belfast Corporation v. O. D. Cars
Ltd. (1960) AC 490 . Their Lordships were there concerned with the town
planning legislation
of Northern Ireland and with types of restrictions which
have of recent years become familiar in legislation of that character. The
impairment of the rights of owners to develop and use their land which such
legislation effected was not regarded by their Lordships
as a "taking" falling
within s. 5 (1) of the Government of Ireland Act, 1920, which forbade the
local legislature from enacting any
law so as to "take any property without
compensation". Viscount Simonds (1960) AC, at p 517 did not regard such
restrictions upon
the use of property in a particular way either as a "taking"
of "property", as those words were commonly understood, or as within
the
phrase "take property without compensation" in s. 5 (1). Having referred to
the fact that from earliest times restraints had
been imposed upon the use of
property and that in modern times the very many instances of the necessary
subordination of individual
rights to the public interest did not encourage
the giving of any enlarged meaning to that phrase, his Lordship went on to
refer
to American authority. He described as a clear guide in distinguishing
between mere regulation of property rights and the "taking"
of property the
dissenting judgment of Brandeis J. in Pennsylvania Coal Co. v. Mahon [1922] USSC 193; (1922)
260 US 393 (67 Law Ed 322) . His Honour
had there said (1922) 260 US, at p 417
(67 Law Ed, at pp 326-327) :
"Every restriction upon the use of property . . . deprives the owner of
some right thertofore enjoyed, and is, in that sense,
an abridgment by the
State of rights in property without making compensation. But restriction
imposed to protect the public health,
safety or morals from dangers threatened
is not a taking. The restriction here in question is merely the prohibition of
a noxious
use." (at p414)
15. Viscount Simonds also cited from the judgment of Holmes J., who had said
(1922) 260 US, at p 415 (67 Law Ed, at p 326) "The
general rule at least is,
that, while property may be regulated to a certain extent, if regulation goes
too far it will be recognised
as a taking". His Lordship recognized that the
distinction between regulation and confiscation might be one of degree but was
in
no doubt but that the instant case was of the former kind. Lord Radcliffe
(1960) AC, at p 523 said that "taking" in its context did
not include the
restrictions here in question. Throughout the history of the regulation of
urban life in the interests of public
health and amenity the resultant
restrictions had not been regarded as takings which entailed compensation for
any compulsory acquisition
of the title to property or of the enjoyment of its
possession. With the introduction of town planning legislation in this century
it too was viewed in the same light and such compensation as it did provide
was for injurious affection, not for "taking". The legislation
in question
should not, his Lordship thought, be regarded as involving any taking,
although restrictions upon the user of land might
be of so extreme a nature as
to amount to a taking. (at p414)
16. In the United States this distinction between the regulation of
proprietary rights and the taking of property has been much
debated and the
law has been highly developed - see generally 29A Corpus Juris Secundum
"Eminent Domain", par.6; 26 Am. Jur. 2d.
"Eminent Domain", par. 157. The
constitutional setting is very different from our own, as Dixon J. made clear
in Grace Bros. Pty.
Ltd. v. The Commonwealth [1946] HCA 11; (1946) 72 CLR 269, at pp 289-290
. However, the following passage from Corpus Juris (supra)
may be of some
guidance in the Australian
context:
"There is no set formula to determine where regulation ends and taking
begins; so the question depends on the particular facts
and the necessities of
each case and the Court must consider the extent of the public interest to be
protected and the extent of
regulation essential to protect that interest."
On the one hand, many measures which in one way or another impair an owner's
exercise of his proprietary rights will involve no "acquisition"
such as pl.
(xxxi.) speaks of. On the other hand, far reaching restrictions upon the use
of property may in appropriate circumstances
be seen to involve such an
acquisition. That the American experience should provide guidance in this area
is testimony to the universality
of the problem sooner or later encountered
wherever constitutional regulation of compulsory acquisition is sought to be
applied to
restraints, short of actual acquisition, imposed upon the free
enjoyment of proprietary rights. In each case the particular circumstances
must be ascertained and weighed and, as in all questions of degree, it will be
idle to seek to draw precise lines in advance. With
this in mind I turn to a
statement of why it is that I do not regard the general effect of sub-ss. (1)
to (9) of s. 47 as involving
any acquisition of property. (at p415)
17. An important consideration is that these sub-sections are clearly directed only to the prevention of a noxious use of proprietary rights. It is only to the extent that, in the exercise of those rights, the prohibited goal of exclusive dealing is sought to be attained that any restraint is imposed. So long as the supply of goods or services or the exercise of those powers which a lessor or potential lessor possesses is not made the occasion for the imposition of exclusive dealing no question of restraint occurs. In this sense the restraints imposed by s. 47 are less sweeping in their impact upon proprietary rights than are those customarily imposed in, say, town planning legislation. In the latter it is common absolutely to prohibit certain uses of land, albeit in the public interest. The prohibitions contained in s. 47 are never absolute but depend for their effect upon the mode of exercise: it is only when a particular mode of exercise of proprietary rights is in question, one that the legislation identifies as tending to promote exclusive dealing, that the prohibition takes effect. (at p415)
18. A feature of s. 47 (omitting for the moment any consideration of the renewal provisions of sub-ss. (8) and (9) is that it is wholly unconcerned with the price at which goods or services, the supply of which it compels, are in fact supplied or procured; likewise, in the case of leases and licences, there is no restraint imposed upon the level of rent which a prospective lessor may demand. It would be a curious concept of "acquisition" which, while compelling the supply or acquisition of goods or the leasing of premises, nevertheless leaves the supplier or lessor free to nominate his price or rental. Of course if, for the purposes of s. 47, a particular price or rental can be seen to be discriminatory in the sense of being itself fixed at a particular level so as to attain the prohibited objective of exclusive dealing, it will be struck at none the less. But this does not deny the significance of the fact that a general freedom to nominate one's own price prevails. (at p416)
19. The loss of freedom of action in relation to proprietary rights which s. 47 involves is narrowly confined to the suppression of what the legislature has judged to be the noxious practice of exclusive dealing. Not only is there no question of the acquisition of property for its own sake; whatever restraints the section does impose upon the free exercise of proprietary rights apply only where, and to the extent to which, but for their existence, the aim of the legislature would be defeated. (at p416)
20. These considerations serve to confirm the initial impression gained from a reading of the section and an understanding of its operation: that s. 47 effects no acquisition of property within pl. (xxxi.); as their Lordships put it in the Belfast Corporation Case (1960) AC 490 , what the section brings about is not to be understood as any taking of property. In this respect the section is no more an acquisition of property within pl. (xxxi.) than would be a law against racial discrimination which, in its application, might operate so as to prevent a trader or lessor from refusing to sell goods to, or lease premises to, persons upon the ground of their particular race, colour or creed. (at p416)
21. The second route which may be pursued, and which has led me to the same conclusion, employs concepts some of which differ little from those already considered. It is founded upon an analysis of the phrase "acquisition on just terms", which is central to pl. (xxxi.). The reference to "just terms" throws light upon the particular meaning of "acquisition" in the placitum. Despite early dicta to the contrary it is now well established that pl. (xxxi.) contemplates acquisition by "the method of requisition", not by "the method of agreement" (John Cooke & Co. Pty. Ltd. v. The Commonwealth [1924] UKPCHCA 2; (1924) 34 CLR 269, at p 282 and see Poulton v. The Commonwealth (1953) 89 CLR 540, at p 573 , per Fullagar J.). Thus in British Medical Association v. The Commonwealth [1949] HCA 44; (1949) 79 CLR 201, at p 271 Dixon J. contrasted acquisition under pl. (xxxi.) with the case of a voluntary sale, speaking of the former as involving the taking of property from him "against his will without just compensation". (at p417)
22. Section 51 (xxxi.) involves "a compound conception, namely 'acquisition-on-just-terms'" (Grace Bros. Pty. Ltd. v. The Commonwealth (1946) 72 CLR, at p 290 , per Dixon J.). An integral part of that conception is the need for just terms. The existence of that need presupposes an inability on the part of the owner of the property to insist upon payment of whatever amount he may nominate as the price of the thing acquired. The possession by an owner of an ability to so insist goes further than to deny the need for just terms, which he will then be a in a position to secure for himself. It effectively denies recourse by the would-be taker to "the method of requisition" since the owner can, by advancing his price, deter the taker at least to the point at which the obtaining of the price becomes more attractive than retention of the property. At that point requisition necessarily ceases to have meaning and becomes, of its own accord, agreement. (at p417)
23. Bearing in mind this feature of pl. (xxxi.), s. 47 (references in sub-ss. (8) and (9) to renewal of leases aside) can be seen nowhere to deprive the owner of property of insisting upon his own price for any property rights which he is otherwise obliged to part with. The only exception to that proposition is the case of a differential price demanded by an owner of property as a means of compelling acceptance by the buyer of some exclusive dealing arrangement. (at p417)
24. Sub-section (3) provides an instance of the rule and of its exception. Under that sub-section a corporation retains its full ability to refuse to supply goods or services otherwise than at the price it chooses to ask for them, but stipulation of some exceptional and discriminatory price would no doubt, if combined with other appropriate circumstances, provide evidence that in fact the corporation was refusing to supply for one of the specified reasons and was therefore engaging in the practice of exclusive dealing. The same may be said of sub-ss. (5) and (7), the two other sub-sections which are concerned with refusals to supply for specified reasons. (at p417)
25. So, too, in the case of sub-s. (9), which does nothing to prevent an owner of premises from demanding whatever rental, with or without premium, he may care to nominate on the grant of a lease. Only if he refuses to grant a lease and the reason for refusal is one of those specified will the sub-section apply. No doubt the demanding of a high rent might in some circumstances be some evidence of conduct tantamount to a refusal, but neither this consideration nor the terms of s. 4 (2) (c), which extend the meaning of refusing to do an act to include the "refraining (otherwise than inadvertently) from doing that act" contraverts the significance of the general freedom of the prospective lessor to demand whatever rent he chooses. Yet the reference in pl. (xxxi.) to "just terms" as part of the composite concept which it embodies emphasizes the absence of opportunity for the dispossessed party to name his own price and insist upon its payment as a condition precedent to his parting with his property. Possession of that right, there being no taking unless his price is paid, I regard as irreconcilable with the acquisition of which pl. (xxxi.) speaks. (at p418)
26. A feature of the operation of sub-ss. (8) and (9), flowing from the fact that they are entirely dependent for their incidence upon the landlord's state of mind in refusing to grant or renew a lease of the premises in question or upon his imposition of particular conditions, is that their operation is unrelated either to the acquiring party's need for the premises or to any characteristic of those premises themselves. With neither factor do the sub-sections concern themselves. Their effect is, therefore, remote indeed from the concept "that private property shall not be taken for public use without just compensation", to which concept, in Australian Apple and Pear Marketing Board v. Tonking [1942] HCA 37; (1942) 66 CLR 77, at p 82 , Williams J. attributed the genesis of s. 51 (xxxi.), finding its source in the Fifth Amendment of the United States Constitution, as did Rich J. (1942) 66 CLR, at p 106 . So too did Dixon J. in Andrews v. Howell [1941] HCA 20; (1941) 65 CLR 255, at p 282 . The very real distinctions between pl. (xxxi.) and the Fifth Amendment, of which Dixon J. spoke in the passage in Grace Bros. Pty. Ltd. v. The Commonwealth [1946] HCA 11; (1946) 72 CLR 269 to which I have already referred, do not, of course, in any way deny to the Fifth Amendment its role as the source of pl. (xxxi.). (at p418)
27. Whichever of these two routes is followed, my conclusion is the same: s. 47 involves no such acquisition as pl. (xxxi.) contemplates. To the extent that a supplier of goods or services or the owner of premises refuses to supply or to grant a lease but is subsequently compelled to do so by the compulsive provisions of the Act, or for fear lest he breach the Act, there will have been no acquisition within pl. (xxxi.). (at p418)
28. So far I have dealt with s. 47 otherwise than as it concerns, in sub-ss. (8) and (9), the renewal of leases. It is said that at least in this case there occurs an acquisition of property within pl. (xxxi.) and one that may not be on just terms. The absence of just terms arises, so it is said, because "renew" in these sub-sections means to grant a fresh tenancy upon the same terms, including rental, as applied under the old tenancy. The enforced granting of a new tenancy at the old rental, lessors being deprived of the ability to demand such rentals as they see fit, while at the same time being compelled to grant, or not to refuse, a new tenancy, is what is relied upon as involving compulsory acquisition in contravention of pl. (xxxi.). (at p419)
29. To so regard the reference to renewal in these sub-sections accords to them a markedly different operation from that of the provisions relating to the grant of leases, in respect of which the sub-sections exhibit no general concern with the level of rent demanded. To my mind the sub-sections in fact draw no such distinctions. It is only by attributing to the word "renew" a meaning which appears to me to be quite inappropriate in the present statutory context that any such distinction arises. If "renew" be given what I regard as its appropriate meaning, carrying with it no particular reference to rental or other terms, the suggested distinction vanishes and such of these provisions as deal with renewal lose what the respondents would otherwise contend to be their unique quality of involving compulsory acquisition otherwise than on just terms. (at p419)
30. It is said that "renew" means "to renew upon the same terms, other than the covenant for renewal" and respectable authority in the field of landlord and tenant is relied upon for that proposition. It is not my purpose to question that authority but rather to deny its application to "renew" when it appears in sub-ss. (8) and (9). (at p419)
31. It is upon Lewis v. Stephenson (1898) 67 LJQB 296 that reliance is placed
for the particular meaning of "renew" contended for
by the respondents. In
that case the lease contained the words "with the option of renewal". In order
to give those words any operative
effect it was necessary, as Bruce J. said,
to understand them as requiring a renewal "for the same period and on the same
terms".
His Lordship went on to say (1898) 67 LJQB, at p 300 :
"Unless such a meaning is given to the word 'renewal', the words in the
present agreement are deprived of all legal significance,
and I am reluctant
to come to the conclusion that the words inserted in a legal document ought to
be taken as having no effect."
This decision, by concluding that "renewal" without more was not bad for
uncertainty, avoided setting at nought the obvious intention
of the parties
while at the same time giving to "renewal" a meaning not inconsistent with its
ordinary meaning. It is an instance
of what Lord Denning spoke of in Greater
London Council v. Connolly (1970) 2 QB 100, at p 108 when he said, "The Courts
are always
loath to hold a condition bad for uncertainty. They will give it a
reasonable interpretation whenever possible". Lord Pearson spoke
to the like
effect (1970) 2 QB, at p 110 . (at p420)
32. However it is one thing to interpret a consensual document so as to avoid the frustration of the parties' intention, for that purpose clothing the word "renew" in meaning sufficient to sustain specific enforcement by the court. It may be a very different thing to apply that same meaning to that word when it occurs in its statutory setting in s. 47. To do so produces a number of consequences which suggest that the intent of the legislature is not thereby being given effect. It very substantially limits the reach of sub-ss. (8) and (9) and also introduces into those parts of the sub-section which are concerned with the renewal of leases, and into them alone, a concept alien to those other parts which are concerned with the grant or the termination of leases. Further, it gives rise to difficulties when the sub-sections are sought to be applied to all those cases in which the lease which is to be renewed, entered into before the present legislation was enacted, contained covenants by the lessee which themselves impose restraints upon the lessee's trade. Finally, it attributes to these provisions the character of a law concerned with compulsory acquisition, a character present nowhere else in the sub-sections and which, for want of just terms, carries with it constitutional invalidity. (at p420)
33. Of these four consequences the first, that of restricting severely the operation of the sub-sections, appears readily enough. If "renew" is to be confined to the case of a new lease containing precisely the same terms (other, perhaps, than the option of renewal itself) as those in the old lease, it will not apply whenever an option or covenant for renewal in the original lease provides, for example, for some alteration in, or review of, the rental for the renewed term, or for a duration of the renewed term different from that of the original lease. Indeed any difference whatever in any term or covenant of the renewed lease will apparently be sufficient to take it out of the operation of the sub-sections. Nor can, I think, this result be overcome by regarding the provisions as to grants of leases as wide enough to cover renewals whenever the terms are different in any respect from those in the original lease. In these sub-sections "grant" is contrasted with "renew" and it is not, I think, permissible in their interpretation to exclude from the latter, and catch up in the former, all these cases, common in periods of inflation, of options to renew at increased rentals, or at rentals subject to review, whether by arbitration or otherwise. All these must, I think, be treated as renewals. It is unnecessary to determine whether every case of a new term immediately following upon an expired term held by the same lessee involves a renewal for the purposes of sub-ss. (8) and (9): or whether, on the contrary, identicality of lessee is not enough, the new term, to be a renewal, having to arise from the exercise of some option or from some covenant in the old lease. So long as renewals are not treated as necessarily involving the same rental as was payable under the original lease there will be no occasion to distinguish between grants and renewals since neither will involve relevantly different consequences. Instead they may be regarded, as I believe they should be, as together designed to cover the whole field of the creation of leasehold terms, renewals being specifically mentioned so to ensure that no cases will exist to which "grant" might be thought inapplicable. (at p421)
34. The alien concept which the other suggested meaning of "renew" introduces is concern with the quantum of rent. In the case of grants neither sub-section is, in general, at all concerned with the amount of rent which may be demanded by the lessor or offered by the lessee. This is precisely what might be anticipated of legislation concerned not with the regulation of the relationship of landlord and tenant but with the quite distinct subject-matter of restrictive trade practices, and which adverts to the relationship of landlord and tenant only to the extent to which that relationship may become the occasion for the imposition of restraints upon a person's trade. To import into "renew" the concept of a particular pre-existing level of rent is to introduce a matter both irrelevant to what can otherwise be seen to be the concern of the legislation and novel so far as the remainder of s. 47 is concerned. (at p421)
35. That "renew", if it bears the meaning for which the respondents contend, gives rise to difficulty in the case of leases containing covenants themselves offensive to s. 47 is apparent. If a lease contains a "tie clause" together with an option to renew, a renewal will, on the respondent's view, only occur if that tie clause is repeated in the renewed lease. Yet the very inclusion of that tie clause would itself seem to involve breach of sub-s. (8). If, in obedience to the sub-section, it is omitted there will, on that view, be no renewal and, unless the case can in some way be embraced by the term "grant", neither sub-s. (8) nor sub-s. (9) will apply. (at p421)
36. For all these reasons I am unable to read "renews" and "renew" where they occur in these sub-sections as necessarily involving the concept that the rental fixed in the original lease shall apply to the renewed term. (at p422)
37. So to conclude is to remove from these two sub-sections that element which the majority in the Federal Court found to be productive of a want of just terms. It also allows the provisions as to renewal to be seen as no different from all the other provisions of s. 47: none of them involves either such an acquisition as pl. (xxxi.) speaks of or anything which might be seen as involving a denial of just terms. That placitum is neither the source of legislative power for any part of s. 47 nor, if it were, would its requirement of just terms be infringed. (at p422)
38. I have said that this appeal presents problems in the understanding of s.
51 (xxxi.) not previously the subject of authority.
Accordingly the decided
cases throw little light upon the issues here in question. Placitum (xxxi.),
when it speaks of acquisition
"for any purpose in respect of which the
Parliament has power to make laws", is said to contemplate the taking of
property for the
purpose of putting it to a particular use. As seven members
of this Court said in W. H. Blakeley & Co. Pty. Ltd. v. The Commonwealth
[1953] HCA 12; (1953) 87 CLR 501, at pp 518-519 :
"It seems to be plain enough that the Constitution, in using the word
'purpose', is speaking of the object for which the land is needed. The word
itself does not refer to any power
or powers defined in the various paragraphs
of ss. 51 or 52 of the Constitution or elsewhere conferred; it is referring to
the object for which the land is acquired. That object, however, must be one
falling within
the Commonwealth's power to make laws. It does not matter,
however, from which of the paragraphs the power to make a law covering
that
object is derived. No doubt for practical purposes the word 'use' would have
the same meaning as the word 'purpose' in par.
(xxxi.) of s. 51, but of course
'use' must be given a very wide meaning."
Again in Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361, at pp 372-373
Dixon C.J., with whose judgment the
four other members
of the Court expressed
agreement, said
of the words "for any purpose" in pl. (xxxi.):
"The expression 'for any purpose' is doubtless indefinite. But it refers
to the use or application of the property in or towards
carrying out or
furthering a purpose comprised in some other legislative power. It covers laws
with respect to the acquisition of
real or personal property for the intended
use of any department or officer of the Executive Government of the
Commonwealth in the
course of administering laws made by the Parliament in the
exercise of its legislative power.
How much further it goes may not perhaps be settled but it does not
affect acquisition by way of forfeiture or penalty or for
the purpose of
provisional tax (Commissioner of Taxation v. Clyne [1958] HCA 10; (1958) 100 CLR 246 ), by
the condemnation of prize
or indeed anything
which lies outside the very
general conception expressed by
the phrase 'use and service of the Crown'."
(at p423)
39. The cases in which these passages occur concern the validity of
legislation the declared purpose of which was to pass property
from one person
to another. The judgment must, no doubt, be understood in that context. If,
indeed, pl. (xxxi.) necessarily involves
the concept of a particular "object
for which land is needed", acquisition being for the "use and service of the
Crown", it is difficult
to see how it can have anything to do with the present
case. For here the legislative concern is not with the diverting of land to
any particular use, let alone any use in which the Crown is at all concerned.
Instead, the operation of s. 47 upon land or other property is merely
incidental to the prohibition of a trade practice. (at p423)
40. To restrict the operation of the placitum in the way in which these cited passages suggest would, no doubt, provide a short answer to the present appeal: there would then be no question of pl. (xxxi.) as a source of power for s. 47 and no question of invalidity would arise. To contend to the contrary, understanding the "object" of the acquisition to be to ensure that the property in question came to the hands of those who might be expected to receive it had its original owner no sought to impose a restrictive practice, that being an object in which the Crown had a direct interest, would seem to require an undue expansion of the notion of "purpose" or "use" to which these judgments refer. (at p423)
41. However such a restricted operation of pl. (xxxi.) comes perilously close to depriving it of all application in those cases in which regulatory laws operate so harshly that an owner's enjoyment of his property is virtually set at nought. I think that the preferable view is to regard what was said in these cases as necessarily restricted to the particular factual setting with which the Court was there confronted. So understood they neither provide any answer to the present appeal nor should they be understood as giving to pl. (xxxi.) the very restricted operation to which I have referred. (at p423)
42. It is no part of my task in deciding this appeal to enter upon the debate as to how far the legislative power conferred by s. 51 (xxxi.) extends beyond the acquisition of property by the Commonwealth for use by it. That it extends some distance beyond seems clear and in McClintock v. The Commonwealth [1947] HCA 39; (1947) 75 CLR 1 ; Jenkins v. The Commonwealth [1947] HCA 41; (1947) 74 CLR 400 ; Bank of New South Wales v. The Commonwealth [1948] HCA 7; (1948) 76 CLR 1 and P.J. Magennis Pty. Ltd. v. The Commonwealth [1949] HCA 66; (1949) 80 CLR 382 are passages supporting the view that s. 51 (xxxi.) applies to acquisitions of property whether by the Commonwealth, by a State or by any other person. In Jenkins' Case Williams J. so held, as had Starke and Williams JJ. in McClintock's Case, Rich J. there agreeing with Williams J. However only Starke J. appears to have held that the pineapples in question in McClintock's Case were not acquired by an agent of the Commonwealth. Williams J. (1947) 75 CLR, at p 37 , expressly found them to have been acquired "on behalf of the Commonwealth" so that they became its property and his observations as to the wide scope of pl. (xxxi.) were thus obiter. In Magennis' Case both Latham C.J. (1949) 80 CLR, at pp 401-402 and Williams J., again gave a wide operation to pl. (xxxi.), the former citing the joint judgment of Rich and Williams JJ. in the Banking Case (1948) 76 CLR, at p 250 , which in turn referred back to Jenkins' Case and to McClintock's Case. It is notable that in Magennis' Case (1949) 80 CLR, at p 423 , Williams J., a consistent supporter of this view, added to it the qualification that to be legislation within pl. (xxxi.) "the Commonwealth or some body authorized by the Commonwealth must no doubt have an interest in the acquisition of the property" although this need not be a proprietary interest so long as it was a legal interest. This passage calls to mind the passage already quoted from Blakeley's Case [1953] HCA 12; (1953) 87 CLR 501 , to which Williams J. was a party. (at p424)
43. Sir Owen Dixon always inclined to a contrary view, nor was he alone in doing so. I mention some only of the references which appear in the cases. In Andrews v. Howell (1941) 65 CLR, at p 281 , he treated pl. (xxxi.) as contemplating the acquisition of property "which the Commonwealth proposed to use for purposes of the Executive Government" and doubted whether it applied at all where that Executive had no interest in the property or in its future use. In the Banking Case (1948) 76 CLR, at p 349 , he described pl. (xxxi.) as serving the double purpose of giving the Commonwealth Parliament "a legislative power of acquiring property" while providing protection "against governmental interferences" with proprietary rights without just recompense. In Blakeley's Case the joint judgment of the seven members of the Court over which he then presided observed (1953) 87 CLR, at p 521 , that "acquisition by the Commonwealth itself is at the centre of the legislative power" while recognizing that it also extended to acquisition by "subordinate Federal bodies". Finally, in Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 , Dixon C.J., with whom all other members of the Court expressed their agreement, spoke of the scope of pl. (xxxi.) as limited: prima facie it was "pointed at the acquisition of property by the Commonwealth" and it did not affect "anything which lies outside the very general conception expressed by the phrase 'use and service of the Crown'" (1961) 105 CLR, at p 373 . This is a phrase which his Honour had earlier used in the Banking Case (1948) 76 CLR, at p 358 to signify occupation, if not by the Crown itself, at least, "for the behoof of the Crown"; it has been much used in that sense in that line of cases of which Coomber v. Justices of Berks, (1883) 9 App Cas 61 is an early example. Having said so much his Honour went on, however, to make it clear that the instant case was not itself concerned with the question whether pl. (xxxi.) applied to legislation for the transfer of property by A to B or was confined to the acquisition of property by the Commonwealth or its agencies. (at p425)
44. As I say, in this appeal I need do no more than note the varying views which have been expressed and recall that on the one hand no precedent authority requires the extension of pl. (xxxi.) to the present case while, on the other, such an extension, involving as it would the view that the placitum applies to laws for the acquisition of property by third parties, in the acquisition of which the Commonwealth has not the remotest interest, will ill-accord with at least some of the views which have been expressed concerning the scope of the placitum. (at p425)
45. A consequence of the conclusion to which I have come is, of course, that a corporation may find itself obliged, by the operation of sub-ss. (8) or (9) of s. 47, to grant or renew a lease against its will without expectation of compensation. However this will only occur when, were it not obliged to do so, it would be employing as a weapon its power to refuse to grant or renew a lease, using it as a sanction which it could impose in giving effect to a policy of exclusive dealing. Exclusive dealing having been declared by Parliament to be a noxious practice, injurious to the public interest, it can scarcely be a matter for concern that those who would use such a power in furtherance of such a practice are found not to be entitled to compensation when prevented from doing so. (at p426)
46. I would allow this appeal and would answer as follows the only question in the case stated to the Full Court of the Federal Court of Australia which is now before this Court on appeal: Question (d). Whether s. 47 (9) (a) of the said Act or any part thereof is a valid exercise of the legislative power of the Commonwealth? Answer. Yes. (at p426)
MASON J. I have had the advantage of reading the reasons for judgment prepared by Aickin J. I agree with his Honour's observations as to the construction and effect of s. 51 (xxxi.) of the Constitution. To these observations I add the following comments. (at p426)
2. To the extent to which the remarks of Dixon C.J. in Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361, at pp 372-373 and his Honour's earlier remarks in such cases as Andrews v. Howell [1941] HCA 20; (1941) 65 CLR 255, at pp 281-282 may be thought to throw doubt on the proposition that s. 51 (xxxi.) extends to laws for the acquisition of property by persons other than the Commonwealth and agencies of the Commonwealth, they should not be accepted. There is nothing in the wide and general language of s. 51 (xxxi.) which gives support to the view that the "acquisition of property" to which it refers is limited to acquisition for the "use and service of the Crown", a conception which is in itself by no means precise and certain in scope. (at p426)
3. The interpretation thereby suggested is at variance with the policy which underlies par. (xxxi.) and the protection which it gives to the citizen against compulsory acquisition of his property otherwise than on just terms. As a matter of policy and protection it makes very little sense to say that the Commonwealth cannot pass laws for its acquisition of the citizen's property without giving just terms but it can pass laws for the acquisition of the citizen's property by others without giving any compensation at all. (at p426)
4. Moreover, the gloss which it is suggested should be placed upon par. (xxxi.) is one which fundamentally disturbs the established relationship between that paragraph and the other heads of power in s. 51. It is very difficult to resist the conclusion that, apart from s. 122, and subject to a qualification to be mentioned later, s. 51 (xxxi.) is the sole source of the Parliament's power to make laws for the compulsory acquisition of property. After all, the power is made subject to the requirement of just terms, a requirement not elsewhere mentioned in the Constitution. And the very presence of the paragraph in the comprehensive terms in which it is expressed belies the notion that every other head of power carries with it a relevant power of acquisition. True it is that a law made with respect to the acquisition of property on just terms is also a law made with respect to some other head or heads of power, but this is a consequence which flows from the way in which s. 51 (xxxi.) is expressed, for the acquisition is required to be "for any purpose in respect of which the Parliament has power to make laws". As I have said, subject to s. 122 and to this qualification, par. (xxxi.) is the sole source of the Parliament's power to make laws with respect to the compulsory acquisition of property, and so it always has been held-see, e.g., Johnston, Fear & Kingham and Offset Printing Co. Pty. Ltd. v. The Commonwealth [1943] HCA 18; (1943) 67 CLR 314, at pp 317-319, 325, 331 . (at p427)
5. Accordingly, I agree that s. 51 (xxxi.) extends to laws for the acquisition of property by persons other than the Commonwealth or an agency of the Commonwealth, as was decided in Jenkins v. The Commonwealth [1947] HCA 41; (1947) 74 CLR 400 ; McClintock v. The Commonwealth [1947] HCA 39; (1947) 75 CLR 1 and P.J. Magennis Pty. Ltd. v. The Commonwealth [1949] HCA 66; (1949) 80 CLR 382 ; see also Real Estate Institute of New South Wales v. Blair [1946] HCA 43; (1946) 73 CLR 213, at p 236 . (at p427)
6. We were invited by the Solicitor-General to hold that a law whose effect is to provide for the acquisition of property is not a law with respect to the acquisition of property when it also happens to be a regulatory law which prohibits and penalizes obnoxious or undesirable trade practices by corporations. The argument accompanying this invitation was rather elusive. It derives no support from the speech of Viscount Simonds in Belfast Corporation v. O.D. Cars Ltd. (1960) AC, at pp 518-520 , where his Lordships cited the observations of Holmes J. and Brandeis J. in Pennsylvania Coal Co. v. Mahon (1922) 260 US, at pp 415, 417(67 Law Ed, at pp 326, 327) and went on to draw attention to the distinction between "regulating" and "taking" and between "regulatory" and "confiscatory". (at p427)
7. In the Belfast Corporation Case (1960) AC 490 it was argued that town planning legislation so severely restricted the development and user of property that it constituted an authorization to "take any property without compensation" in contravention of s. 5(1) of the Government of Ireland Act, 1920. It was to this argument that Viscount Simonds and Lord Radcliffe addressed their remarks for it was accepted that the legislation did not provide for an acquisition of title to property. The argument was rejected on the ground that the legislation, though interfering with the owner's rights of development and user, did not amount to a "taking" of property, though Viscount Simonds and Lord Radcliffe acknowledged the possibility that a restriction of user could be "so extreme that in substance, though not in form, it amounted to a 'taking' of the land affected for the benefit of the public" (1960) AC, at p 525 . (at p428)
8. It is not possible to apply the remarks made in that case to legislation which does provide for the acquisition of an estate or interest in land, with a view to denying that legislation the character of a law with respect to the acquisition of property. It is one thing to say that a law which is merely regulatory and does not provide for the acquisition of title to property is not a law with respect to acquisition of property. It is quite another thing to say that a law which does provide for the compulsory acquisition of title to property and which also happens to be regulatory is not a law with respect to the acquisition of property. (at p428)
9. Section 47 (1) of the Trade Practices Act 1974 ("the Act") prohibits a
corporation in trade or commerce from engaging in the
practice of exclusive
dealing, subject to the other provisions
contained in the section. Each of the
eight following sub-sections
contains examples of what constitutes exclusive
dealing on the
part of a corporation. So far as it is relevant to the
circumstances
of the parties before the Court, sub-s. (9) provides:
"A corporation also engages in the practice of exclusive dealing if the
corporation refuses to grant or renew ... a lease of
... land or a building
... for the reason that another party to the lease ...
(a) has acquired, or has not agreed not to acquire, goods ... or goods ...
of a particular kind or description, directly or indirectly
from a competitor
of the corporation ..." (at p428)
10. A contravention of s. 47(1), read with s. 47 (9) (a), exposes a wrongdoer
to a pecuniary penalty under s. 76 and to a civil
action for damages under s.
82. Moreover, under s. 80 the Court may grant an injunction restraining a
person from engaging in conduct
that constitutes, or would constitute, a
contravention
of the two provisions. (at p428)
11. Aickin J. has referred to the difficulties which surround the use of the expression "grant or renew" and "another party to the lease". As a matter of ordinary English a lessee is "another party to the lease", but an intending lessee is not. The problem arises because the sub-section deals with the termination of a lease as well as with a refusal to grant or renew a lease. The draftsman has chosen a form of words peculiarly appropriate to the former case. The nature and purpose of s. 47 is such that it was likely that the draftsman had in mind some such person as an intending lessee or a person who had requested a lease as well as an existing lessee, for there is no obvious policy reason for restricting the prohibition to renewals of leases, thereby leaving a corporation at liberty to refuse to grant an initial lease for the proscribed reason. However, as the words in their ordinary meaning have a sensible, though restricted, application, I do not consider that they should be given the extended meaning, "intending lessee", suggested by the Solicitor-General. (at p429)
12. For my part, I doubt whether the addition of the word "renew" adds anything to the scope of the word "grant", since the renewal of a lease, even one which arises from the exercise of an option to renew, operates by way of a fresh grant or re-grant. However, it is my view that "renew" is not confined to the grant of a lease on the same terms and conditions as those contained in the lease which preceded it. A new lease which provides for a higher rental or for a different term is now commonly described as a renewal of the lease which preceded it, no doubt because the new lease involves a renewal of the relationship of landlord and tenant. Perhaps, at an earlier time, "renew" and "renewal" according to their legal meaning in the context of landlord and tenant signified primarily the grant of a new lease on the old terms and conditions. But this is certainly not so today when continuing inflation generally results in an increase in the rent reserved in the new lease. (at p429)
13. It is conceivable that the word "renew" was intended to signify the grant of a new lease in circumstances where the old lease gave the lessee an option to renew, despite the fact that there are difficulties in applying the statutory provisions to such an option. There may have ben doubts as to the enforceability of the option to renew when the lessee had breached an exclusive dealing covenant, the option being conditioned on the performance of all the covenants in the old lease. Be that as it may, it is my opinion that the words "grant or renew" should be construed as a composite expression which was intended to comprehend situations in which a corporation refuses to grant to the existing lessee a new or extended lease of the premises. However, as will appear later, I do not think that the section should be understood as requiring a lessor to grant or renew a lease on the same terms and conditions as those applying to a former lease. To read the section as importing such a requirement would give it an operation in relation to renewals that is far more stringent than its operation in relation to grants. (at p430)
14. Accordingly, I am unable to agree with the members of the Federal Court who thought that "renew" in its application to a lease means a renewal on the same terms and conditions as those contained in the antecedent lease. This conclusion has important consequences. The foundation of the majority opinion in the Federal Court in favour of invalidity was that the statutory provisions compelled the corporation to renew a lease on the old terms and conditions, including the rent payable under the old lease. This, it was assumed, would or might be substantially less than a fair or just rent. (at p430)
15. In terms s. 47 (9) (a), taken in conjunction with s. 47 (1), prohibits a corporation from refusing to grant or renew a lease for the proscribed reason. They leave a corporation at liberty to refuse to grant or renew a lease for any other reason. So long as the reason mentioned in s. 47 (9) (a) is not substantial reason for the refusal there is no contravention (see s. 4F (b)). (at p430)
16. The operation of the two provisions is such as to leave the corporation free to decide what it will do with the premises, subject only to the prohibition. The corporation may, for example, refuse to grant a lease because the rent proposed is too low or because the term suggested is too long; it may decide to go into possession of the premises itself; it may elect to keep the premises vacant and sell them to the best advantage; or it may prefer to lease them to a person other than the intending lessee on terms that do not include an exclusive dealing convenant. In all these situations, and no doubt in others as well, the action of the corporation would be untouched by s. 47. (at p430)
17. The fact, if it be a fact, that the corporation would have preferred to have leased the premises to the lessee on terms that included an exclusive dealing arrangement, had it been lawful for the corporation to do so, is no obstacle to this conclusion. The corporation's refusal to grant a lease for the reason that the grant of a lease on such terms is made unlawful by the statute is very different from saying that the reason for its refusal was the reason expressed in s. 47(9) (a), i.e. that the intending lessee has acquired, or has not agreed not to acquire, goods from a competitor. (at p430)
18. The Court will be astute to see that the statutory prohibition is not evaded by the mere assertion by a corporation of a pretended reason for a refusal. The Court will closely examine the circumstances once it emerges that a corporation has refused to grant a lease to a lessee who has acquired, or has not agreed not to acquire, goods from a competitor, more particularly when the corporation proposes to grant a lease of the premises to another lessee. But this only means that it is the function of the Court to ascertain whether the forbidden reason is a substantial reason for the refusal and that some circumstances will invite closer scrutiny than others. (at p431)
19. In conformity with what I have already said as to the effect of s. 47 (1) and (9) (a), they do not explicitly impose on a corporation a positive obligation to grant or renew a lease. They make no reference to the term, the rental and the other conditions of the lease which is the subject of the refusal. Nor do they contain any provision for fixing and determining these matters the existence of which is essential to a valid lease. I do not detect in the provisions any indication of an intention or purpose of compelling a corporation to grant or renew a lease on the same terms and conditions as those contained in the old lease. As I read the section, the terms and conditions of a lease are left to be agreed upon by the parties, subject only to the statutory prohibition. (at p431)
20. The interpretation which I have given to s. 47 (9) (a) is an answer to the case for invalidity which was presented in argument. That case depended for its success on acceptance of the view that "renew" signifies a renewal on the same terms and conditions as those contained in the old lease and that s. 47 (1) compels a corporation which is a lessor to renew a lease on those terms and conditions, the assumption being that the continued reservation of the old rent would result in unjust terms. On my interpretation of s. 47 (9) (a), the statute does not have this result. (at p431)
21. However, I should not wish it to be thought that I am saying that in no circumstances do the statutory provisions compel the grant of a lease. In general, the legal effect of a statute which makes unlawful a refusal to do an act and subjects that refusal to a penalty and a remedy by way of injunction is to impose an obligation to perform that act, so far at least as its performance lies within the capability of the actor. When, however, a statute prohibits a refusal to grant or renew a lease for a particular reason the problem is more complex. This is not simply because the statute leaves the actor with a larger area of choice but because the bringing into existence of the lease calls for a consensus between lessor and lessee on the terms and conditions of the lease to be granted. (at p431)
22. A corporation which refuses to grant a new lease for the reason set out in s. 47 (9) (a) before agreement is reached with the lessee as to the terms and conditions of the new lease is not placed under any obligation to grant a lease. Such an obligation can only arise if and when the corporation's reason for refusing stands within s. 47 (9) (a) and s. 4F (b) and, apart from the issue of exclusive dealing, the corporation has agreed to the terms and conditions of the proposed new lease. (at p432)
23. The legal effect of the statute in this situation is that it leaves the corporation with no legal alternative but to grant the lease. Although the grant of the lease in these circumstances is consensual in that there is agreement between the corporation and the tenant as to the terms and conditions of the lease, it is not easy to resist the conclusion that the grant is made under compulsion of law because a refusal to make it is an offence which is subject to penalty and relief by way of injunction. It is a misnomer to speak of the grant of a lease in these circumstances as voluntary for the simple reason that the grant is not made willingly; it is made because it is unlawful not to make the grant, and a refusal to make the grant will attract a penalty and relief by way of injunction. (at p432)
24. Section 80 (1) confers power on the Court to "grant an injunction restraining a person from engaging in conduct that constitutes or would constitute - (d) a contravention of a provision of Part IV . . .". The language is more appropriate to the grant of a negative injunction than to the grant of a mandatory injunction. This impression is reinforced by the language of s. 80 (4) and (5). Both sub-sections are directed to the case of an application for the grant of an injunction restraining a person from engaging in conduct of a particular kind, being conduct referred to in sub-s. (1). Each sub-section provides that in the circumstances with which it deals the Court may "grant an injunction under sub-section (1) restraining the person from engaging in conduct of that kind". (at p432)
25. It has been suggested that s. 4 (2) (c), which provides that "a reference to refusing to do an act includes a reference to - (i) refraining (otherwise than inadvertently) from doing that act", furnishes a basis for the grant of a mandatory injunction in lieu of an injunction which is negative in form, though mandatory in substance. But this provision can have no application to the present case because s. 47 (9) (a) deals with refusal to do an act for the nominated reason only. (at p432)
26. None the less the grant of an injunction in negative form restraining a corporation from refusing to grant or renew a lease for the proscribed reason will, in a case where the terms and conditions of the lease are otherwise agreed, have the effect of compelling the corporation to grant the lease, though it has no wish to do so. (at p433)
27. In deciding whether an enactment is a law with respect to the acquisition of property one must look to its direct legal operation and effect. This is the accepted criterion for the purposes of characterization. As the legal operation and effect of s. 47 (1) and s. 47 (9) (a) is in some circumstances to require a corporation which is an owner of land to create an estate or interest in that land in favour of another person, it may well be that the statutory provisions should be classified as a law with respect to the acquisition of property. (at p433)
28. In the end, it is my opinion that the case for the respondents fails because they cannot sustain the interpretation of the statutory provisions on which the case for invalidity depends for its success. Although s. 47 (1) and (9) (a) may result in a compulsory acquisition of property in circumstances not specifically dealt with in argument, no argument was advanced to sustain the conclusion that in these circumstances the acquisition would be otherwise than on just terms. (at p433)
29. In conclusion I should say that I do not accept the respondents' submission that s. 47 (9) (a) is in any event not a law with respect to corporations within the meaning of s. 51 (xx.). It is a law which regulates the trading activities of a corporation. As such it deals with "the very heart of the purpose for which the corporation was formed" (Strickland v. Rocla Concrete Pipes Ltd. (1971) 124 CLR 468, at p 489 ). (at p433)
30. In the result I would allow the appeal. (at p433)
MURPHY J. The Federal Court of Australia by majority (Bowen C.J. and Franki J., Brennan J. dissenting) held that s. 47 (9) of the Trade Practices Act 1974 (Cth) (inserted by No. 81 of 1977) was invalid in so far as it uses the words, "or renew" [1978] FCA 36; (1978) 34 FLR 112 . The section penalizes the refusal by an owner to grant or renew a lease because the other party has not engaged in exclusive dealing. (at p433)
2. The respondent contended to the Federal Court and also in this Court that the section is not a law with respect to trading corporations within s. 51 (xx.) of the Constitution. This contention was correctly rejected by the Federal Court. The section is concerned with the conduct of trading corporations (see Strickland v. Rocla Concrete Pipes Ltd. (1971) 124 CLR 468 ). (at p433)
3. The foundation for the Federal Court's holding of invalidity is that "renew" means renew on the same terms and conditions. On that foundation, the majority held that the section so construed provides for acquisition of property other than on just terms contrary to s. 51 (xxxi.) of the Constitution. However, renewal is not restricted to a fresh grant on the same terms and conditions as the previous lease. (at p434)
4. In Sharp v. Wakefield (1891) AC 173, at p 183 , Lord Bramwell said:
"The license is a renewal. That word has been criticized. It may be
misleading, but is, I think, correct. It is a 'renewal'
- i.e., a new license,
as we talk of a new lease being a renewal, though parties and terms may be
wholly different." (at p434)
5. I agree with what Gibbs J. says on this aspect of the case. The foundation
collapses. Even if s. 47 (9) were a law with respect to the acquisition of
property within s. 51 (xxxi.) of the Constitution, once the construction of
"renew" accepted by the Full Court is rejected, it does not appear that any
"acquisition" would not be
on just terms. It is not necessary to deal with the
exact scope and application of s. 51 (xxxi.). There is much force in the view
expressed by Dixon C.J. that s. 51 (xxxi.) is concerned with acquisition of
property for use or application by the Executive Government (see
Attorney-General (Cth)
v. Schmidt [1961] HCA 21; (1961) 105 CLR 361, at pp 372-373 and
Andrews v. Howell [1941] HCA 20; (1941) 65 CLR 255 ). If s. 51 (xxxi.) is a far reaching
restriction of the legislative power as contended by the respondents (and held
by the majority in the Federal
Court) then this would put into question many
laws of the Parliament which have not so far been questioned. Generally,
"property"
is not confined to real estate or goods; the word embraces a
multitude of legal conceptions - intellectual property, the right to
vote (see
Amalgamated Society of Engineers v. Smith [1913] HCA 44; (1913) 16 CLR 537, at p 553 ) and so
on. Many federal laws provide
for alteration
of property rights and
obligations between citizens
without any intended use of the property by the
executive government
or its agents.
If such alterations were to be regarded as
acquisitions
of property within s. 51 (xxxi.) there would be some remarkable
results; for example, the validity of many long-standing sections of Acts such
as the Conciliation
and Arbitration Act 1904 (Cth), as amended, would be put
in doubt (see also Brennan J.'s dissent in the Federal Court). (at p434)
6. The challenged part of s. 47 (9) of the Trade Practices Act is valid. The appeal should be allowed. (at p434)
AICKIN J. This is an appeal by the Trade Practices Commission and the
Attorney-General for the Commonwealth of Australia against
a decision of the
Full Court of the Federal Court of Australia in a matter arising under the
Trade Practices Act 1974, as amended
by the Trade Practices Act 1977, which
came into force on 1st July 1977 ("the Act"). The proceedings commenced on
24th
October 1977
by an application made by the respondent Tooth & Co. Ltd. to
the Federal Court seeking certain declarations. On
24th November
1977
the
Chief Judge of the Federal Court stated a special case asking four questions
of the Full Court of the Federal
Court pursuant
to s. 25 (6) of the Federal
Court of Australia Act 1976. The facts so stated were said to have been agreed
between the parties and
it is convenient to set them out in full; they are as
follows:
"2. The applicant (Tooth & Co. Ltd.) is a trading corporation within the
meaning of the Trade Practices Act and s. 51 (xx.) of the Constitution. The
applicant carries on business as a brewer and in the course thereof
manufactures and sells, inter alia, bulk beer.
3. The applicant is the owner of numerous licensed hotels in New South
Wales. The said hotels are currently the subject of
leases to various tenants
who pursuant to the terms of the lease conduct upon the premises the business
of an hotel. The said leases
are for various terms from 1 week to 156 weeks
and on an average several leases expire in every week.
4. Each of the said leases currently in force contains a covenant by the
lessee in the case of leases entered into before 12th
August 1977 in the terms
set out in the annexure marked 'B.1' hereto; in the case of leases entered
into after 12th August 1977 in
the terms set out in the annexure marked
'B.2'.
5. On or about 12th August 1977 the applicant sent to each of its said
lessees a letter, a copy of the material terms of which
is annexed hereto and
marked 'C'.
6. No such lessee currently sells bulk beer other than that manufactured
and supplied by the applicant.
7. On or about 10th January 1975 the applicant made an application for
authorisation under s. 88 (6) of the Trade Practices
Act 1974 which was
numbered A.3321, and a copy of which is annexed hereto and marked 'D'. The
said application was dismissed by a
determination
of the Trade Practices
Commission on 23rd December 1976. Thereafter the applicant made an application
to the Trade
Practices Tribunal
under s. 101 of the Trade Practices Act 1974
(as then amended) for a review of the said determination. The said
review is
presently proceeding. In the meantime, interim authorisations
have from time
to time been made in respect of the said application
for authorisation, the
last of which was made by the Trade Practices
Tribunal on 10th June 1977 until
the hearing and determination
of the said application for review or until
further order.
8. It is the intention of the applicant that in the event that the Trade
Practices Tribunal determines not to grant the said
application for
authorisation, it will go into possession of as many of the hotels leased as
aforesaid upon the expiry of the respective
leases thereof as is economically
and commercially practicable, and manage the same itself rather than lease
them, in order to ensure
that bulk beer manufactured by the applicant and no
other will be sold at such hotels, and without seeking from any such lessee
any
agreement, arrangement or undertaking that such lessee will not acquire
any goods or services from a competitor of the applicant."
B1during the continuance of the term hereby granted and during such further time as he shall hold a Publican's License for the said premises deal wholly and solely with the Lessor for all spirits wines beers ales and porters and other liquers cordials minerals and aerated waters sold used or consumed in or about or upon the said premises or by virtue of the License held in connection therewith and with no other person or persons brewer or brewers firm or firms and a breach of this covenant shall entitle the Lessor to re-enter upon the said premises PROVIDED that no beer except that brewed by the said Lessor shall be sold or consumed upon the said premises and that the Lessor shall not be bound to supply any articles other than what are manufactured brewed supplied or imported by it or of which it has the agency in the said State of New South Wales."
"The Lessee FURTHER COVENANTS with the Lessor that he will at all times
B2during the continuance of the term hereby granted and during such further time as he shall hold a Publican's License for the said premises deal wholly and solely with the Lessor for all bulk beer sold used or consumed in or about or upon the said premises or by virtue of the License held in connection therewith and with no other person or persons brewer or brewers firm or firms corporation or corporations and a breach of this covenant shall entitle the Lessor to re-enter upon the said premises PROVIDED that no bulk beer except that brewed by the said Lessor shall be sold or consumed upon the said premises and that the Lessor shall not be bound to supply any bulk beer other than that brewed by it." (at p436)
"The Lessee FURTHER COVENANTS with the Lessor that he will at all times
2. It is not necessary to set out in full the leases which are annexures to
the special case and it is sufficient to say that the
earlier one contained a
covenant by the lessee to deal solely with the lessor in respect of "all
spirits wines beers ales and waters
and other liquers cordials minerals and
aerated waters", whereas the later covenant applies only to bulk beer sold
used or consumed
on the premises. So far as material it appears that the
leases granted by Tooheys Ltd. contain covenants to the same effect. (at
p437)
3. It appears that the Full Court dealt with the first two of the questions in the case stated in April 1978 or thereabouts and there is no appeal from that decision. The Chief Judge states in his judgment that the circumstances giving rise to the proceedings and the facts raised by the special case are fully described in that judgment and he does not repeat them in his judgment in the present case. That judgment is not contained in the record of proceedings before us but no party has referred us to the earlier judgment or has suggested that the current record of proceedings and the judgments are not sufficient to enable this Court to deal with the present appeal. The only other preliminary matter to which I need to refer is that, at some stage and by some process not revealed by the record of proceedings, the Attorney-General for the Commonwealth of Australia became a party to the proceedings. He was one of the applicants for special leave and is one of the appellants. (at p437)
4. In the Full Court of the Federal Court Bowen C.J. and Franki J. were of the opinion that s. 47 (9) (a) of the Act, which was inserted by the 1977 amendments, was invalid in so far as it included the words "or renew" as not complying with the requirements of s. 51 (xxxi.) of the Constitution, while Brennan J. dissented [1978] FCA 36; (1978) 34 FLR 112 . The question of the jurisdiction of the Federal Court to answer the questions in the special case was dealt with by all members of the Federal Court, who decided that there was jurisdiction. There is no appeal on that aspect of the decision of the Federal Court. (at p437)
5. Of the questions argued in the Full Court of the Federal Court the only one argued before this Court was, so far as material: "(d) . . . whether s. 47 (9) (a) of the said Act or any part thereof is a valid exercise of the legislative power of the Commonwealth." The majority of the Federal Court answered that question by declaring that "Section 47 (9) (a) was invalid in so far as it used the words 'or renew'". (at p437)
6. The relevant provisions of s. 47 as it has stood since 1977 are sub-ss.
(1), (8), (9) and (10) which, so far as material, are
as follows:
"(1) Subject to this section, a corporation shall not, in trade or
commerce, engage in the practice of exclusive dealing.
. . .the corporation grants or renews, or makes it known that it will not exercise a power or right to terminate, a lease of, or a licence in respect of, land or a building or part of a building on the condition that another party to the lease or licence or, if that other party is a body corporate, a body corporate related to that body corporate -
(8) A corporation also engages in the practice of exclusive dealing if
(a) will not, or will not except to a limited extent -or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; or
(i) acquire goods or services, or goods or services of a particular kind
7. It is to be noted that the restriction imposed by sub-s. (10) has no
application to sub-s. (9) (d) which thus applies whether
or not the conduct is
" . . . likely to have the effect, of substantially lessening competition . .
.". It is necessary to refer
also to s. 4F (b) of the Act which is as
follows:
"a person shall be deemed to have engaged or to engage in conduct for a
particular purpose or a particular reason if -
(i) the person engaged or engages in the conduct for purposes that
included or include that purpose or for reasons that included
or include that
reason, as the case may be; and
(ii) that purpose or reason was or is a substantial purpose or reason."
(at p439)
8. It will thus be seen that the practice of "exclusive dealing" by trading
corporations is prohibited by s. 47 which is included
in Pt IV of the Act.
Such conduct must therefore be regarded as illegal, notwithstanding that by s.
78 it is provided that criminal
proceedings do not lie against a person
(including a corporation) by reason only that he has contravened a provision
of Pt IV. Part
VI of the Act provides for "Enforcement and Remedies". Section
76 (1) provides, so far as material, as follows:
"If the Court is satisfied that a person - (a) has contravened a provision
of Part IV;
. . .penalty (not exceeding . . . $250,000 in the case of a body corporate, in respect of each act or omission by the person to which this section applies) as the Court determines to be appropriate . . .". (at p440)
the Court may order the person to pay to the Commonwealth such pecuniary
9. By s. 77 it is provided that the Minister or the Commission may institute
proceedings in the Federal Court for the recovery on
behalf of the
Commonwealth of a pecuniary penalty imposed under s. 76. By s. 80 it is
provided that the Federal Court may on the
application of the Minister, the
Commission and, subject to sub-s. (1A), any other person, grant an injunction
restraining a person
from engaging in conduct that constitutes or would
constitute a contravention of a provision of Pt IV. (at p440)
10. Section 47 (9) involves some problems of construction not directly connected with the constitutional question which is the basis of this appeal, as well as some which are related to that question. Sub-section (9) speaks of a refusal by a corporation "to grant or renew", or the exercise of "a power or right to terminate", a lease of land "for the reason that another party to the lease . . . has acquired or has not agreed not to acquire goods . . . directly or indirectly from a competitor of the corporation . . ." The use of the expression "another party to the lease" presents no difficulty where the prohibited act is the exercise of a power or right to terminate. There is then obviously someone who occupies the position of "another party to the lease" whose conduct may constitute a breach of covenant and thus give rise to the power to terminate and may also provide the reason for the wish to exercise the power to terminate. Where the question is one of a refusal to renew, it is no doubt natural enough to refer to the lessee under an original lease the term of which has not expired as "another party to the lease", though less easy to do so if the former lease has expired. However in the case of a grant of a lease de novo whether or not a person who had prior thereto been the lessee, it is not easy to see what is meant by "another party to the lease". It was suggested by the Solicitor-General that the phrase meant an "intending lessee" but, with respect, that neither clarifies the expression used in the Act nor substitutes a more precise one. For my part I am unable to give any precise meaning to the expression "intending lessee" unless it refers to a party to an agreement for a lease, to whom no grant has yet been made, but that seems unlikely to be what was intended by the draftsman or by the Solicitor-General. Again there seems no basis for regarding a person who has never held a lease from a relevant landlord but hopes to obtain one, or has applied for one, as "another party to the lease" or indeed as an "intending lessee". The Solicitor-General suggested that the section deals only with persons who had previosly been a tenant. There are obvious difficulties in applying the provision to the grant of a lease de novo to a person not then the existing or an overholding tenant. The submission did not expressly confine the provision to such persons as had been tenants at the time of or immediately prior to the relevant prohibited act, but if it were so limited that problem of construction would be solved. On the whole I think that is the proper construction of the provision. (at p441)
11. The use of the two words "grant or renew" causes other difficulties. The
ordinary meaning of the word "renew" in the context
of leases is a further
grant on the same terms save as to commencing date. This is clearly
established in the case of an option to
renew, save that the new lease will
contain no further option; see Lewis v. Stephenson (1898) 67 LJQB 296, at pp
299-300 where Bruce
J. said:
"What does the word 'renewed' signify? According to Dr. Johnson, one
meaning of the word is 'to repeat'; to put again in act'.
In accordance with
this meaning of the word is the dictum of Lord Abinger in Price v. Asheton
(1834) 4 LJ Ex 3, at p 6; 1Y &
C 82,
at p 92 [1834] EngR 1112; (160 ER 34, at p 38) , where that
learned Judge, speaking of a renewed lease, says: "That is a renewal of the
old lease;
and therefore,
in point of duration, coextensive with the former
lease'. And it is to be gathered from the same judgment that the
Chief Baron
considered
that a renewed lease meant not only a lease coinciding with the
former lease in duration, but, further, a
lease containing the same
terms.
This dictum of Lord Abinger that a renewed lease means a lease of the same
duration as the original
lease is cited apparently
with approval in Fry on
Specific Performance, and in other books of authority. But this pronouncement
of
Lord Abinger can, I think,
only be treated as a dictum. . . . Unless such a
meaning is given to the word 'renewal', the words in
the present agreement are
deprived
of all legal significance, and I am reluctant to come to the
conclusion that the words inserted
in a legal document ought to be taken
as
having no effect." (at p441)
12. An option for a new lease on specified different terms would be valid;
such options are sometimes called options to renew but
that usage would not be
accurate. (at p441)
13. However it is clear that a "renewal" pursuant to an option to renew must
take effect by way of re-grant; see the observation
of Isaacs J. in Gerraty v.
McGavin [1914] HCA 23; (1914) 18 CLR 152, at p 163 where he said:
"Now, what is the position of a lease obtained by the exercise of an
option to renew? Clearly it is a new lease, a new demise.
An option given for
valuable consideration is merely an irrevocable offer, but beyond that there
is no contract for a further term,
unless and until the offer is duly
accepted, by exercising the option." (at p442)
14. Where there is no option but the tenant seeks and obtains a new lease for
a further term of the same duration, on the same terms
and to commence on the
expiration of the old, it must be effected by a new grant. In my opinion the
word "renew" is used in that
sense in s. 47 (9). Such a grant may be spoken of
as a "renewal" and it is one of the dictionary meanings of that term. See the
definition
of the verb to "renew" in the Shorter Oxford Dictionary to which we
were referred by the Solicitor-General: "renew (7) To grant anew,
esp. to
grant or give (a lease, bill, etc.) for a fresh period; also to take afresh,
to obtain an extension of . . .". That meaning
indicates that the only change
involved is in the new commencement date. (at p442)
15. The use of the two expressions "grant" and "renew" seems to suggest that the draftsman may have had in mind that a "grant" signified the grant of a new lease on new and different terms, and that a "renewal" signified a grant on the same terms pursuant to some further agreement, notwithstanding the word "grant" would adequately have covered both situations. On this view the sub-section is not concerned with a situation in which a person not already a tenant approaches the owner of the premises and applies for a lease. A refusal of such an application thus stands outside the legislation. (at p442)
16. It seems clear that the provisions can have no operation to the case of an option because no occasion for refusal arises if the option is properly exercisable, and if it is not then there is at the relevant time no option capable of exercise. If the tenant fails to exercise the option, no refusal of a grant or renewal arises. If the lease containing the option had contained a tie clause originally valid, such clause would, by reason of s. 47 (1) and s. 47 (8), be illegal and void, subject to s. 47 (10). If the landlord refused for whatever reason to grant a new lease on the proper exercise of the option, the tenant would, save in exceptional cases, be entitled to a decree of specific performance, and there would be no occasion for reliance on s. 47. (at p442)
17. We are not here concerned with the operation of the provision so far as it concerns the "grant" of a lease on different terms and it is not necessary to consider the difficulties which would be involved in ascertaining the terms of the supposed lease which has been refused. They may await another day. (at p442)
18. It was argued for the appellants that the term "renew" looks to the granting of a fresh lease, not necessarily in the same terms. It was said that the dictionary meaning which I have quoted above supported that view, but, as I have already said, that meaning conveys to me the contrary view. However if that construction were to be adopted the same problem would arise as in the refusal of an initial lease. On such a view how is one to ascertain the nature of the lease which is refused and prohibit by injunction its refusal? It appears to me that it cannot have been intended to mean any terms at all which the tenant under the former lease cares to suggest. Such a provision would involve its own constitutional problems. It appears to me to be unlikely to have been intended to attach the very stringent penalties to such a refusal, whatever may be the reason or one of the reasons, for such refusal. As I cannot accept that construction it is not necessary for me to pursue the additional problems which it would involve. (at p443)
19. The basis for the decision of the Federal Court was that the operation of s. 47 (9), when read with ss. 76, 77 and 80, was to give power to the Commission and others to apply to the Federal Court for an injunction which would operate to compel a landlord to "renew" an old lease at the old rent at a time when the old rent had become inadequate, whether by reason of inflation or otherwise. It was then said that that was to effect an acquistion of the landlord's property, or an interest therein, by the "other party to the lease" otherwise than upon just terms. Whether the possible imposition of a fine of up to $250,000 for refusal to grant a renewal would of itself be a sufficient compulsion need not be considered because an injunction may be sought. The jurisdiction would arise only when it had determined that there had been a refusal for the stated reason or for reasons including the stated reason. It would necessarily be a case where an interlocutory injunction could not be granted, for that would conclude the matter finally, save in the case of a threat to terminate a lease. (at p443)
20. It appears that the Federal Court does not have jurisdiction under s. 80 to grant a mandatory injunction, but an injunction restraining a landlord from refusing to renew a lease would have the same effect, given a finding that the reasons for refusal included the prohibited reason. It is not necessary to consider whether forms of order restraining other conduct of the landlord could be devised so as to achieve the same effect. (at p443)
21. For present purposes it is proper to assume that circumstances could exist in which a compulsory renewal at the old rent would not, at the time of such renewal, be at a rent which would amount to a fair commercial rent appropriate to the terms of the lease and to the premises. I say that it is proper so to assume, not because we can say it as a matter of judicial notice, but because the form of procedure adopted, both initially and in the case stated, produced the result that this vital matter was not expressly dealt with. No doubt the Court may take judicial notice of the fact of inflation but it cannot take judicial notice of its effect on what would be a fair rent in factual circumstances of which it knows nothing. It appears to have been assumed in the Federal Court, and it was assumed by all parties in the argument before this Court, that the compulsory acquisition of a new lease on the old terms would not be on just terms. We are confined to the terms of the case stated, considered by the Full Court, and that document does not advert to this matter at all. It happens that earlier material than the case stated is included in the appeal but it too is silent on this important aspect. It cannot be regarded as satisfactory that a case should be dealt with by the Court adopting an unexpressed assumption common to the parties. The mode of procedure adopted appears unsuitable for raising a constitutional issue, but since it has been fully argued on this assumption it is proper that it should be dealt with in its present form, especially as the Solicitor-General did not argue that the legislation provided just terms. (at p444)
22. The argument before us was concerned with two questions only. First whether the operation of s. 47 (9) (a) of the Act when read with ss. 76, 77 and 80, in relation to the renewal of a lease, comprised the acquisition of property within the meaning of s. 51 (xxxi.). In such a case the lease would be granted, not to the Commonwealth or its agent, but to some other person or corporation. The second point was whether in the circumstances the requirement of just terms was applicable to this Act, but it was not contended for the appellants that if the operation of the Act produced an "acquisition" it was on just terms. (at p444)
23. The cases establish that the concept of property in par. (xxxi.) is a wide one, see Minister of State for the Army v. Dalziel [1944] HCA 4; (1944) 68 CLR 261 and that it includes interests in land which fall far short of full ownership. There can be no doubt that a leasehold interest in land is property, nor that a law requiring that the owner of land grant a lease to the Commonwealth would be an acquisition of property where that interest is by the operation of the legislation carved out of the larger interest of the landowner who holds the fee simple. A leasehold interest may be the subject of compulsory acquisition by the Commonwealth from the lessee provided the relevant law is with respect to an appropriate head of power and provides just terms. (at p444)
24. The meaning and operation of s. 51 (xxxi.) have been the subject of much authority and discussion in this Court. Many of the possible questions which may arise have by now been clearly settled by direct decisions, or by principles clearly established. (at p445)
25. The argument for the appellants was that the purpose of this legislation was to prevent restraints on trade and that the words "to grant or renew" referred to an initial lease in the case of a grant and a fresh lease to a previous tenant, not necessarily on the same terms, in the case of a renewal. The relevant sections therefore were a law with respect to trading corporations in the conduct of their trade by their acquiring covenants in restraint of trade by the use of their property for the granting of leases. It was said that the relevant provisions were therefore not a law with respect to acquisition of property because the landlord retained his property and "the tenant got nothing or might not get anything". (at p445)
26. It was said that the test was, "is this a law with respect to acquisition of property" and if not, then even if the law did compulsorily effect the acquisition of property, it did not fall within the restraint involved in s. 51 (xxxi.). It was said that s. 47 (9) was not a law with respect to the acquisition of property and that all that it did was to remove from permissible considerations open to a landlord on the proposed renewal of leases, the specific reason that there had been prior refusal by the outgoing tenant to enter into a covenant to refrain from dealings, or prior dealings by such tenant with competitors. (at p445)
27. It was conceded that this Court had in earlier decisions dealt with s. 51 (xxxi.) by treating it as abstracting from other heads of power (including the incidental power) all content which would otherwise have enabled the compulsory acquisition of property, and as subjecting the power with respect to the acquisition to an obligation to provide just terms. Thus the paragraph ensured that whenever property was compulsorily acquired pursuant to a law of the Commonwealth just terms must be provided. It was acknowledged that the consequence was that no other head of power included a power to acquire property compulsorily for the purposes of that head of power because the totality of the power of compulsory acquisition was embodied in s. 51 (xxxi.). (at p445)
28. The view so expressed is in my opinion plainly right. It was established
no later than the decision in Johnston, Fear &
Kingham
& Offset Printing Co.
Pty. Ltd. v. The Commonwealth [1943] HCA 18; (1943) 67 CLR 314 ; see per Latham C.J. (1943)
67
CLR, at pp 317-318 ; per Starke
J. (1943) 67 CLR, at p 325 though he
reserved
the question of actual war operations; and per Williams
J. (1943) 69
CLR, at p 331
. The view expressed by Latham C.J. is necessarily
implicit in
the judgments of Rich J. and Williams J.
Latham C.J. said:
"It was not argued in the present case that the Commonwealth Parliament
has any power to legislate for the acquisition of property
except under s. 51
(xxxi.). Legislation under the provision must, in order to be valid, be
legislation which provides for just terms.
If par. xxxi had not appeared in s.
51, there is little doubt that other paragraphs of s. 51 would have been
interpreted so as to
authorize the Parliament to make laws for the acquisition
of property in relation to the subject matters of those paragraphs. For
example, under the power to legislate with respect to lighthouses and
bankruptcy, there is no doubt that the Parliament would have
been entitled to
legislate for the purpose of acquiring land for the erection of lighthouses
and bankruptcy courts. The paragraphs
of s. 51 should not, in my opinion, in
general be read as limiting each other in any way. But there are special
characteristics of
par. xxxi which raise special questions with respect to the
power to legislate for the acquisition of property. Par. xxxi gives express
power to legislate for the acquisition of property 'for any purpose in respect
of which the Parliament has power to make laws'. This
phrase is used in a
general descriptive sense and, in its setting, may fairly be interpreted as
referring to all other matters with
respect to which the Parliament has power
to make laws and, therefore, as including the thirty-eight subjects referred
to in the
other paragraphs of s. 51, as well as other subjects mentioned in
other sections of the Constitution. Thus the phrase, 'purpose in respect of
which the Parliament has power to make laws', incorporates by reference all
the other subject
matters of the legislative power of the Commonwealth.
(Perhaps the power to make laws for the government of territories
(Constitution,
s. 122) should be excepted from this statement (cf. R. v.
Bernasconi [1915] HCA 13; (1915) 19 CLR 629 ), but it is not now necessary to
express an
opinion
upon that question.) In relation, for example, to defence,
par. xxxi
means that the Parliament may legislate for
the acquisition
of property on
just terms for the purpose of the naval and
military defence of the
Commonwealth and of the several
States and the
control of the forces to
execute and maintain the laws of
the Commonwealth. When par. xxxi is thus
construed in relation
to a particular
purpose it must, I think, be regarded as
limiting
the legislative power with respect to the acquisition of property
for
that purpose.
In other words, the terms of par. xxxi are such
that, for
example, the power to legislate with respect to defence
cannot be interpreted
as including a power to make laws for the
acquisition of property upon any
terms which commend themselves to
Parliament, whether
they are just or not. In
relation to defence,
as in relation to all other legislative purposes, an
express and
specific power to
make laws is given by par. xxxi and that power
is limited by the inclusion of the words 'on just terms'. Accordingly,
I am of
opinion
that the only power of the Commonwealth Parliament
to legislate with
respect to the acquisition of property for defence
purposes
is that conferred
by s. 51 (xxxi.)." (at p447)
29. The decision in P. J. Magennis Pty. Ltd. v. The Commonwealth [1949] HCA 66; (1949) 80
CLR 382 is to the same effect. This view
was summarized
in a joint judgment of
all the members of the Court in W. H. Blakely
& Co. Pty. Ltd. v. The
Commonwealth [1953]
HCA 12; (1953) 87 CLR 501, at pp
520-521 where the Court said:
"The power is a legislative power of a sovereign government and its
purpose is to invest the Parliament with a specific authority
to make laws for
the acquisition of property and to subject the authority to a condition
relating to the justice of the terms provided.
The power to acquire property
compulsorily would probably have been regarded as forming an incident of
almost every other power which
is expressly granted by s. 51 in the absence of
par. (xxxi.), and the grant of a specific power would have been in itself
unnecessary. At all events that is the
view which no doubt would now commend
itself to constitutional lawyers. If it had depended on the incidental powers,
there would
have been no room for the argument under consideration. But the
acquisition of property could not be left to the incidental powers
because it
was desired to limit the power of acquisition by imposing a condition that it
must be exercised upon just terms. This
desire could not be carried into
effect except by expressing a separate positive limitation in the form of a
constitutional check
or bar as is done in the United States Constitution in
the Fifth Amendment, or else by conferring a specific but restricted power.
The latter course was chosen. Naturally the power
of acquisition must be for
objects which fall within the Federal province." (at p447)
30. The general principle was re-stated by Dixon C.J., with whom the other
members of the Court agreed, in Attorney-General (Cth)
v. Schmidt [1961] HCA 21; (1961) 105
CLR 361, at pp 370-373 in a passage too long to quote in full. After referring
to what he had
said in Bank
of New South
Wales v. The Commonwealth [1948] HCA 7; (1948) 76
CLR 1, at pp 349-350 Dixon C.J. stated the central proposition
as follows
(1961)
105 CLR, at p 371 :
"The decisions of this Court show that if par. (xxxi.) had been absent
from the Constitution many of the paragraphs of s. 51, either alone or with
the aid of par. (xxxix.), would have been interpreted as extending to
legislation for the acquisition of land
or other property for use in carrying
out or giving effect to legislation enacted under such powers. The same
decisions, however,
show that in the presence in s. 51 of par. (xxxi.) those
paragraphs should not be so interpreted but should be read as depending for
the acquisition of property for
such a purpose upon the legislative power
conferred by par. (xxxi.) subject, as it is, to the condition that the
acquisition must
be on just terms."
The judgment goes on to consider the limits of the power under par. (xxxi.)
and to discuss what have since been described as "exceptions"
to the
restriction imposed on that power. I shall deal with this aspect of the matter
below but for the moment it is enough to say
that in my opinion that
description is erroneous. (at p448)
31. It was said for the appellants however that the explanation as given in Blakeley's Case [1953] HCA 12; (1953) 87 CLR 501 and Schmidt's Case [1961] HCA 21; (1961) 105 CLR 361 produced the result that the test was to ask whether this was a law with respect to the acquisition of property and, if it was, it did not matter if it was also a law with respect to some other head of legislative power, e.g. trading corporations. The argument was that if it were a law with respect to trading corporations it would not be a law with respect to the acquisition of property, even though it did effect or provide for the compulsory acquisition of property. It was thus said that, since the true character of s. 47 was that of a law with respect to trading corporations, or as it was put "a law with respect to preventing restraint of trade", it was not, and could not be, a law with respect to the acquisition of property and accordingly it was not subject to the restriction contained in s. 51 (xxxi.). (at p448)
32. In my opinion these arguments mistake the nature of the settled doctrine with respect to the relation between s. 51 (xxxi.) and other heads of power as expressed in the passages I have quoted above. That settled view is that, leaving aside s. 122, a power of compulsory acquisition of property cannot be found in any head of power other than s. 51 (xxxi.) and that such a power can be found only in s. 51 (xxxi.) or in that power in combination with other powers. Thus in most cases a law with respect also to some other head of power, and the part of such law which acquires or authorizes the acquisition of property must depend upon par. (xxxi.) in combination with the other relevant head of power as supplying the constitutional power. (at p448)
33. I may add that to describe s. 47 as "a law with respect to preventing restraint of trade" as was done in argument is likely to be more misleading than helpful. There is of course no such head of power and the use of the expression suggests that it is not a law with respect to trading corporations, a point which was however not argued. (at p448)
34. Some reliance was placed on Collins v. Hunter [1949] HCA 16; (1949) 79 CLR 43 , reported
along with R. v. Foster; Ex parte
Rural Bank of New
South Wales and another
case, all of which were
reported together and were concerned with the
"contraction" of
the extent of the
defence power after the cessation of
hostilities.
Collins v. Hunter concerned the National Security (War Service
Moratorium) Regulations,
which had been introduced in 1946, and the
operation
of which had been extended by the Defence (Transitional
Provisions) Acts 1946,
1947 and 1948 to 31st December 1949. Those
regulations in a somewhat earlier
form had been considered in Real
Estate Institute of
N.S.W. v. Blair [1946] HCA 43; (1946) 73
CLR 213 . Some consideration of that case is required before dealing
with
Collins v. Hunter. The regulations
in question
in Blair's Case had been made
after the cessation of hostilities and provided
that a "protected person"
might apply for
a warrant
authorizing the delivery to him of possession of "a
dwelling house which is unoccupied
or about to become unoccupied".
By virtue
of reg. 30 (9) (a) "protected persons" were deemed to be certain members of
the defence
forces and members of the household
to which
they belonged. It was
provided that there should be paid a rent to be determined in
accordance with
the regulations. The
regulations
were attacked as not being authorized by the
defence power and on no other basis.
However, Latham C.J. said (1946) 73
CLR,
at pp
223-224 :
"There is another aspect of these regulations to which, however, no
reference was made in argument. They are provisions under
which successful
applicants become tenants of property, and therefore acquire an interest in
property. Even if it were held that
reg. 30 AD did not result in the creation
of tenancies strictly so called, it could nevertheless be argued that there
would be a
right of exclusive possession in the protected person and therefore
an acquisition of property by him: see Minister of State for
the Army v.
Dalziel [1944] HCA 4; (1944) 68 CLR 261 . Section 51 (xxxi.) of the Constitution provides
that the Commonwealth Parliament may make laws with respect to 'The
acquisition of property on just terms from any State
or person for any purpose
in respect of which the Parliament has power to make laws'. It has been held
that the requirement of just
terms applies to all laws made under any Federal
legislative power for acquisition of property by the Commonwealth (Johnston,
Fear
& Kingham v. The Commonwealth [1943] HCA 18; (1943) 67 CLR 314 ). The Court, however,
has not yet expressly considered whether
or not the same limitation
applies
not only to
Federal laws with respect to the acquisition of property by the
Commonwealth but also
to Federal laws with respect
to the acquisition
of
property by any person. As, however, the question of just terms in relation to
s. 51 (xxxi.) of the Constitution was not raised in argument, I reserve my
opinion upon it." (at p450)
35. Williams J. was the only member of the Court who adverted to the
question. He said (1946) 73 CLR, at p 236 :
"The Constitution, like any other document, must be construed as a whole
and this express power, as the Chief Justice pointed out in Johnston, Fear
&
Kingham v. The Commonwealth, imposes a limitation upon legislation for the
acquisition of property for any purpose including
any
purpose of defence with
respect to which the Parliament has power to make laws. In my opinion, there
is no general authority
under
the Constitution for the Parliament in the
exercise of its legislative powers to interfere with the proprietary rights of
individuals under the laws
of the States and compel one citizen to make his
property available for the benefit of another.
During hostilities legislation under the defence power requiring
householders to billet members of the forces, and probably
also members of
their families, could be valid. And during the period of demobilization
legislation to the same effect might be valid.
By analogy to billeting,
legislation passed in war-time requiring citizens to allow members of the
forces and their families to reside
in unoccupied houses could also be valid.
We are now in a period when the defence power is contracting. In my
opinion the operation of the defence power in peace-time
could not be wide
enough to authorize legislation, otherwise than under s. 51 (xxxi.), to make
dwelling houses owned by individuals available as dwelling houses for
discharged members of the forces. But the
present regulations can, I think, be
justified as an exercise of the defence power during hostilities and the
immediate aftermath.
They are of temporary duration and any statutory rights
they create would not continue after their expiration. In these circumstances
I am not prepared to hold that those regulations which are challenged are at
present beyond the ambit of the defence power." (at
p450)
36. I do not think that Williams J. in that passage can have intended to
depart from what had been decided by the Court in Minister
of State for the
Army v. Dalziel and in Johnston, Fear & Kingham v. The Commonwealth, to the
latter of which he expressly refers
without comment. He was I think referring
to problems which might arise, suggesting only that legislation as envisaged
might be valid
but without indicating any concluded view. (at p450)
37. In Collins v. Hunter [1949] HCA 16; (1949) 79 CLR 43 the Court held that the continuation of the National Security (War Service Moratorium) Regulations years after real demobilization was over could not be considered as incidental to the defence power and that they were no longer in operation. (at p451)
38. The regulations were also attacked as not authorized under s. 51 (xxxi.)
and that point was argued. However the argument was
not dealt with at all in
the joint judgment of the Court, save that the Court said (1949) 79 CLR, at p
97 :
"Regulations 30A to 30AF make a provision of a peculiar and of a drastic
nature. It is a provision which is not based on s. 51 (xxxi.) of the
Constitution and yet it proceeds in invitos against the owners of dwelling
houses and places the protected person in occupation as a so-called
tenant.
Section 51 (xxxi.) confers a power for the acquisition of property for
purposes which, no one doubts, would include the housing of discharged
servicemen."
and no reference was made to the observations of Williams J. in Blair's Case.
(at p451)
39. No doubt it is correct to say that in time of war legislation providing for billeting of troops could, at least in some circumstances, be supported under the defence power. Whether it would constitute an acquisition of property would depend on the nature of the provision but there is no authority which suggests that, if it were by means of acquisition of property, the requirement of just terms would not apply. It is not necessary to consider whether it could be effected by means equivalent to the compulsory provision of services as was held to be the case in Australasian United Steam Navigation Co. Ltd. v. Shipping Control Board [1945] HCA 45; (1945) 71 CLR 508 . (at p451)
40. The question whether par. (xxxi.) applies to legislation which
compulsorily acquires property is that it vests in some person
other than the
Commonwealth or an agency of the Commonwealth must now be regarded as settled.
It was first referred to in Jenkins
v. The Commonwealth [1947] HCA 41; (1947) 74 CLR 400 by
Williams J. sitting in the original jurisdiction. He said (1947) 74 CLR,
at p
406 : "Section 51 (xxxi.) of the Constitution is not limited to acquisitions
by the Commonwealth." The question arose again in McClintock v. The
Commonwealth [1947] HCA 39; (1947)
75 CLR 1 where
Rich J., Starke J. and Williams J. all
expressed the view that s. 51 (xxxi.) was not limited to the acquisition of
property by the Commonwealth itself but extended to the acquisition of
property for
any purpose in respect of which the Commonwealth has power to
make laws. Rich J. agreed with Williams J. Starke J. said (1947) 75
CLR, at p
24 :
"The effect of Order No. 1 and the directions given under it is to
require the grower to pick and deliver his pineapples as
directed and fixes
the price which is to be paid therefor. It certainly regulates the
distribution and sale of the pineapples and
controls the prices at which they
may be sold. In operation it compels a grower to deliver his pineapples to
canners at a fixed price.
Such a transaction is a forced sale and results in
the acquisition of property by some canner. And, therefore, the legislation,
regulation
and order must be founded on the constitutional power to make laws
with respect to the acquisition of property (Johnston, Fear &
Kingham and
Offset Printing Co. Pty. Ltd. v. The Commonwealth [1943] HCA 18; (1943) 67 CLR 314, at pp
318, 325 )."
Williams J. said (1947) 75 CLR, at p 36 :
"The canneries had no power to compel the growers to deliver their
pineapples to the canneries. But the Commonwealth Parliament
or its authorized
delegate could legislate to give the canneries compulsory powers to acquire
fruit required to be canned in order
to supply the needs of the armed forces.
This was a purpose (that is of defence) in respect of which the Commonwealth
Parliament
had power to make laws, and it was necessary that the legislation
should provide just terms for th acquisition whether the pineapples
were
compulsorily acquired by the Commonwealth or by the canneries."
Neither Latham C.J. nor McTiernan J. found it necessary to consider the point.
(at p452)
41. With respect this view appears to me to be soundly based. It would be a serious gap in the constitutional safeguard which is the manifest policy of par. (xxxi.) if the Parliament could legislate for compulsory acquisition of property without just terms by statutory bodies which were not the Commonwealth itself or its agents or by persons or bodies having no connexion with the government. Neither the words of s. 51 nor the context require the adoption of so anomalous a view. Accordingly the fact that under s. 47 (9) (a) of the Act the lease compulsorily acquired vests in a private individual or a company provides no reason why just terms need not be provided. (at p452)
42. It was argued in the present case that notwithstanding the decisions
referred to legislation may validly be enacted under heads
of power other than
par. (xxxi.) providing for or authorizing the compulsory acquisition of
property otherwise than on just terms.
This argument sought to draw support
from some of the observations of Dixon C.J. in Attorney-General (Cth) v.
Schmidt where he said
(1961) 105 CLR, at pp 372-373 :
"But two observations must be made . . . a law made in pursuance of s.
51 (xxxi.). The scope of s. 51 (xxxi.) is limited. Prima
facie it is pointed
at the acquisition of property by the Commonwealth for use by it in the
execution of the functions, administrative
and the like, arising under its
laws. It is perhaps not easy to express in a paraphrase the extent of the
operation of s. 51 (xxxi.)
and thus to define its full scope and application
but it is at least clear that before the restriction involved in the words 'on
just terms' applies, there must be a law with respect to the acquisition of
property (of a State or person) for a purpose in respect
of which the
Parliament has power to make laws. The expression 'for any purpose' is
doubtless indefinite. But it refers to the use
or application of the property
in or towards carrying out or furthering a purpose comprised in some other
legislative power. It covers
laws with respect to the acquisition of real or
personal property for the intended use of any department or officer of the
Executive
Government of the Commonwealth in the course of administering laws
made by the Parliament in the exercise of its legislative power.
How much further it goes may not perhaps be settled but it does not
affect acquisition by way of forfeiture or penalty or for
the purpose of
provisional tax (Commissioner of Taxation v. Clyne [1958] HCA 10; (1958) 100 CLR 246 ) by the
condemnation of prize
or indeed anything
which lies outside the very general
conception expressed by
the phrase 'use and service of the Crown'." (at p453)
43. As to the first observation it is enough to refer by way of example to s.
51 (xvi.), "bills of exchange and promissory notes"
as a subject matter with
which par. (xxxi.) "cannot have much to do", and also to pars. (iii.) bounties
and (iv.) borrowing in the
public credit of the Commonwealth. (at p453)
44. The cases dealing with bankruptcy, taxation and penalties require some examination. One general observation may however be made by way of introduction. Such subject matters may properly be said to involve, at least in some instances, the passing of the legal title and in others both the legal and the beneficial title to the Commonwealth, or its officers or to designated persons, but nonetheless the processes involved are not such as would ordinarily in 1900 or today be described as the "acquisition of property" or as falling within its ordinary meaning. (at p453)
45. Taxation involves the compulsory payment of money to the Commonwealth
according to prescribed criteria applicable to persons
who fall within the
specified categories in a manner capable of testing in the courts. Its
imposition creates a debt but does not
compulsorily acquire property. No doubt
when payment is made property in the case or cheque passes to the Commonwealth
but it is
not a process capable of being categorized or described as
"acquisition of property", save in a very unusual sense of that expression.
It
is thus not surprising to find that in Moore v. The Commonwealth [1951] HCA 10; (1951) 82 CLR
547 and Federal Commissioner of
Taxation v. Clyne
the Court held that
legislation classified as laws with respect
to taxation or imposing taxation
were not laws
with respect to the
acquisition of property within the meaning
of s. 51 (xxxi.). In
the latter case Dixon C.J. said (1958) 100 CLR,
at p 263
:
"Little need be said of the argument based upon s. 51(xxxi.) of the
Constitution. The argument is that 'provisional tax' is paid provisionally and
returned without interest in the event of no tax accruing due.
That is said to
be an acquisition of property on terms not just. Once it is held that
provisional tax is authorised by s. 51 (ii.) it seems absurd to say that,
within the meaning of s. 51 (xxxi.), the sums paid or payable as provisional
tax constitute property acquired for a purpose in respect of which Parliament
has
power to make laws. The purpose of the power itself which is conferred by
s. 51 (ii.) is to acquire money for public purposes and that is no less so if
the money is raised provisionally and in advance of the actual
accrual of the
tax as debitum in praesenti solvendum in praesenti." (at p454)
46. In Burton v. Honan [1952] HCA 30; (1952) 86 CLR 169 the Court dealt with forfeiture of
prohibited imports under the Customs
Act. Dixon C.J.
said (1952) 86 CLR, at
pp
180-181 :
"The short answer to this contention is that the whole matter lies
outside the power given by s. 51 (xxxi.). It is not an acquisition
of property
for any purpose in respect of which Parliament has power to make laws. It is
nothing but forfeiture imposed on all persons
in derogation of any rights such
persons might otherwise have in relation to the goods, a forfeiture imposed as
part of the incidental
power for the purpose of vindicating the Customs laws.
It has no more to do with the acquisition of property for a purpose in respect
of which the Parliament has power to make laws within s. 51 (xxxi.) that has
the imposition of taxation itself, or the forfeiture
of goods in the hands of
the actual offender."
The other members of the court agreed with those reasons and did not deliver
separate reasons for judgment. I take Dixon C.J. in
that passage and in
another passage on the same page to use the expression "the acquisition of
property for a purpose in respect
of which the Parliament has power to make
laws within s. 51 (xxxi.)" to indicate that in so far as the application of
the Customs
Act involves the passing of property to the Commonwealth it is not
by "acquisition" within the meaning of that term in s. 51 (xxxi.).
(at p455)
47. The same would be true of fines imposed by the courts for breaches of Acts of the Commonwealth Parliament and of various statutory penalties, including those referred to in s. 76 of the Act. Both forfeiture under customs legislation and the imposition of fines by way of punishment for criminal offences were well known in 1900 and would not then or now ordinarily be described as the "acquisition of property". (at p455)
48. It is necessary to return to the actual decision in Attorney-General
(Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 in
order to relate
it to the general
principles stated in the judgment and in earlier decisions. It dealt with
an
attack upon the validity
of ss. 13C
and 13D of the Trading with the Enemy Act
1939-1952. At the outbreak of war in 1939 a firm
known as Dohnert Muller
Schmidt
& Co.
was carrying on business as wool buyers in Australia and
elsewhere. The proprietors of
the firm were all resident in Germany,
although
one appears to have been resident also in Australia, and they were all of
German
nationality. They were thus enemy aliens.
The Trading
with the Enemy
Act authorized the Minister to apply to the High Court for the
appointment of
a controller of certain
enemy firms
and companies and conferred upon the High
Court power to appoint such a controller
and to confer on him powers including
those of
controlling, conducting or discontinuing businesses owned by enemy
aliens. On 16th
October 1939 Starke J. had made an order
appointing
a
controller of the business of that firm during the then state of war or until
further order. The controller conducted
the business
only for the purpose of
winding it up and realizing its assets, the proceeds
of which in due course
were paid into court.
On 9th
July 1951 the formal state of war with Germany
was terminated but the notification
thereof amongst other things reserved the
right
of the Commonwealth to retain any money or property subject to control
by virtue
of the Trading with the Enemy Act. By a combination
of various
amendments to that Act, it was declared that regulations might be
made to give
effect to Art. 6 of an Agreement on Reparation
from Germany arrived at in
1945. The legislation was such that, if an
order were made under that Act, the
moneys would be applied
as German external assets in accordance with Art. 6 of
the Agreement.
The validity of that provision was attacked on a number of
grounds including reliance upon s. 51 (xxxi.). I have already referred
to the
passage in the judgment of Dixon C.J. in which the
nature of the legislation
is examined, and I add a reference to the judgment
of Taylor J. and quote the
following passage (1961)
105 CLR, at pp 376-377 :
"Since the original seizure in the present case a controller has been
appointed, he has sold the enemy property and paid the
proceeds into Court.
All this has been done under statutory authority and all that ss. 13 C and
13D, standing alone, purport now
to accomplish is a transfer of the proceeds
from the Suitors' Fund to the Enemy Subjects Trust Account. These
considerations, I think,
make it quite impossible to take those provisions in
isolation and then to characterize them as a law with respect to the
acquisition
of property. Having regard to the effect of the original seizure,
that is to say, a seizure by virtue of which the beneficial ownership
of the
original owner was suspended indefinitely and the property, or its proceeds,
were to be held at the disposition of the Commonwealth
at the end of the war,
it might have been thought, consistently with the respondent's argument,
rather more appropriate to attack
the legislation which authorized the seizure
as a law with respect to the acquisition of property. But to hold that it
constituted
a law for which constitutional justification could be found only
in par. (xxxi.) and that enemy property could validly be seized
only under
legislation which provided compensation to the expropriated owners would, in
my opinion, be the height of absurdity. In
my view the true character of ss.
13C and 13D is discoverable only by regarding them as a subsidiary provision
in a general scheme
for the administration and final disposal of enemy
property and, as such, completely outside par. (xxxi.)." (at p456)
49. I do not think that the judgments in that case intended to change, or in
fact have the effect of changing, the law as laid down
in the earlier
decisions to which I have referred. It does not seem to me to involve
construing the defence power as operating free
of the restriction in par.
(xxxi.). It is not to be supposed that the earlier decisions were overruled
sub silentio. The case was
concerned with the characterization of the whole of
the legislative provisions which had affected property originally held by the
enemy nations. The original "taking" did not dispose of the beneficial
ownership but left that for later decision. Moreover the fact
that trading
with the enemy was unlawful both at common law and under the Trading with the
Enemy Act 1939 produced the result that
the business could not have been
carried on in Australia by its owner after the outbreak or war. Some provision
was at least desirable
for the preservation of the property or its equivalent
during the progress of the war, so that it might await both the result of
the
war itself and a determination, by a variety of means including perhaps a
final peace treaty, of the matters to be dealt with
by international
agreements. Beneficial ownership was in effect suspended throughout the period
of the war and then dealt with pursuant
to the international arrangements
referred to in the judgments. (at p457)
50. It appears to me with respect that it would be a misunderstanding of the nature of that legislation and of the background of the common law with respect to trading with the enemy and enemy property generally to regard such legislation as providing for the acquisition of property. No doubt for the time being the enemy nationals lost control of their property though it was not vested beneficially in anyone else. (at p457)
51. At common law the property of enemy aliens had always been subject to seizure and forfeiture by the Crown, although the title of the Crown to property seized was not complete until "an inquisition of office" had been held prior to the conclusion of peace. It was held by the Court of Appeal in In re Ferdinand, Ex-Tsar of Bulgaria (1921) 1 Ch 107 that those rules of the common law, though there was no record of their recent use, remained in existence and intact notwithstanding that they were currently suspended by the existence of the Trading with the Enemy Act 1914-1916 (U.K.). The Court of Appeal held its provisions to be so inconsistent with the common law right of the Crown that it should be treated as temporarily suspended while that legislation remained in force. Accordingly the purported exercise of the common law power by the Crown in relation to property of the ex-Tsar of Bulgaria was held to be ineffective. That right if validly exercised would have resulted in a divesting of the property of the alien enemy, but not by legislation, and, upon inquisition, a vesting in the Crown. However the nature of the common law right was to effect a forfeiture, such as would not ordinarily be described as an acquisition of property. In all the judgments in the Court of Appeal it is spoken of as forfeiture to the Crown and not as acquisition by the Crown. See the discussion in the judgments of Warrington L.J. (1921) 1 Ch, at pp 139-140 and of Younger L.J. (1921) 1 Ch, at p 144 . The proper analogy by which to characterize the legislation discussed in Attorney-General (Cth) v. Schmidt is that of forfeiture and subsequent dealing with the property by executive action (the making of the various international agreements) which was carried into effect by the regulations referred to. (at p457)
52. In the result it seems to me to be clear that the so called exceptions to the general rule as to the operation of s. 51 (xxxi.) are not in truth exceptions at all, and that it leads to misconception and misunderstanding to refer to them as exceptions. (at p458)
53. If the present provisions with respect to the compulsory grant of a lease by a brewery to a tenant by way of renewal of an old lease are to be valid, they must be a law with respect to some head of power and also with respect to the acquisition of property. As a law with respect to the acquisition of property the legislation must provide for just terms, notwithstanding that the "purpose in respect of which the Parliament has power to make laws" relied on its in "trading corporations" under par. (xx.). (at p458)
54. For those reasons I am of the opinion that, subject to what I say below as to s. 122 of the Constitution, the majority of the Full Court of the Federal Court were correct in their decision and I would therefore dismiss the appeal. (at p458)
55. The views which I have set out above concerning the relation between s. 51 (xxxi.) and other Commonwealth legislative powers were expressed to be on the basis of "leaving aside s. 122". It was held by this Court in Teori Tau v. The Commonwealth [1969] HCA 62; (1969) 119 CLR 564 that the legislative power given by s. 122 was free of the limitation expressed in s. 51 (xxxi.) and accordingly that laws for the government of a Territory which dealt with compulsory acquisition of property need not provide just terms. The Act now in question is by s. 6 (2) (a) (iii) expressed to have the effect it would have had if "any references in this Act other than in s. 55 to trade or commerce were, by express provision, confined to trade or commerce - . . . (iii) within a Territory . . ." Accordingly the Act, in so far as it deals with conduct within a Territory operates as if it were a law which derived its force from s. 122. This aspect of the case was not adverted to in the judgments in the Federal Court and we were informed that it was not referred to in the course of argument before that Court. (at p458)
56. It is however clear that the declaration made by the Federal Court as to the extent of the invalidity of s. 47 (9) (a) cannot stand in its present form and must be modified so as to preserve the validity and operation of the relevant words in the Territories. In my opinion the declaration should be to the following effect: "Declare that, save in so far as it applies to acts done within a Territory, s. 47 (9) (a) is invalid in so far as it includes the words 'or renew'". (at p458)
ORDER
Appeal allowed with costs.
Order that the order of the Full Court of the Federal Court of Australia in
so far as it answers (d) of the special case dated
24th November 1977 as
follows:
"(d) Section 47 (9) (a) is invalid in so far as it used the words 'or
renew'" be set aside and in lieu thereof, question (d) be
answered as
follows:
"(d) Yes".