High Court of Australia Judgment Summary Notes

BHP Billiton Iron Ore Pty Ltd v National Competition Council; BHP Billiton Iron Ore Pty Ltd v National Competition Council [2008] HCA 45 (24 September 2008)

The use by Fortescue of a railway line that was integral to BHP Billiton Iron Ore’s (BHPBIO) productionprocess would not amount to the use by Fortescue of that production process, the High Court of Australia has held.

Fortescue Metals Group applied to the National Competition Council (NCC) in 2004 for access to parts of the Mt Newman and Goldsworthy railway lines in north-western Western Australia by having them declared a service under Part IIIA of the Trade Practices Act (TPA). Declaration of a service meant that a party seeking access was given a right to negotiate access to the service. Fortescue sought access to the Mt Newman railway line from Mindy Mindy in the Pilbara region to Port Hedland, 295km away, and access to 17km of the Goldsworthy railway line from where it crossed the Mt Newman line to Port Hedland. Fortescue planned to build a 17km siding linking Mindy Mindy to the Mt Newman line. BHPBIO was the manager of joint mining ventures in four areas in the Pilbara and it operated the railway lines on behalf of each group of owners. Each line was a single-gauge heavy haulage railway line constructed upon WA Crown land leased at a peppercorn rental. Fortescue was a publicly listed company and a party to an agreement with the State relating to the development of multi-user railway and port facilities. It did not seek access to BHPBIO’s locomotives and rolling stock as it would use its own.

The NCC invited submissions about whether the facilities were a service as defined by section 44B of the TPA. BHPBIO submitted that the railway lines were integral to its iron ore production process. In November 2004, the NCC determined that it had jurisdiction over the application as it pertained to the Mt Newman railway line but not with respect to the Goldsworthy line and that the application should be treated as two separate applications, which led to two appeals coming before the High Court. Section 44B provided that “service” did not include “the use of a production process”. The NCC concluded that the relevant part of the Mt Newman line was a service to which Part IIIA applied, but that the Goldsworthy line was subject to the production process exception. On 24 December 2004, BHPBIO applied to the Federal Court seeking declarations that the Mt Newman railway line was not a service within the meaning of section 44B and that the NCC did not have jurisdiction to recommend that the railway line be declared. On 22 February 2005, Fortescue applied to the Federal Court seeking declarations that the Goldsworthy line is a service under section 44B and that the NCC had jurisdiction with respect to it. Justice John Middleton heard the two cases together and in December 2006 dismissed BHPBIO’s application and made the declarations that Fortescue sought in respect of the Goldsworthy line. The Full Court of the Federal Court dismissed appeals by BHPBIO on 5 October 2007. BHPBIO appealed to the High Court.

The High Court unanimously dismissed the appeals. It held that the subject of Fortescue’s application answered the description of a service provided by the use of an infrastructure facility such as a railway line, in accordance with section 44B of the TPA. BHPBIO submitted that the access sought would be to a production process. The Court held that “a production process” meant the creation or manufacture by a series of operations of some marketable commodity. Although BHPBIO used the track and associated infrastructure as part of its production process, it did not follow that use by Fortescue of that track and infrastructure would be excluded from the definition of “service” as being “the use of a production process”. Fortescue’s proposed use of the railway lines did not constitute use of BHPBIO’s production process.

Asciano Services Pty Ltd v Chief Commissioner of State Revenue [2008] HCA 46 (25 September 2008)

A rail freight operator was liable to pay duty on the lease of rail lines in New South Wales as the lease gave it the right to use the land occupied by railways, the High Court of Australia has held.

On 1 July 1996, a rail access agreement was entered into between National Rail Corporation Limited and Rail Access Corporation (RAC). National Rail was later called Pacific National (ACT) Limited. It began legal proceedings under that name but before the High Court heard its appeal its name changed to Asciano Services. The Court continued to refer to it as Pacific National. The agreement granted to Pacific National access rights to railway lines and associated infrastructure which formed part of the NSW rail network and which were owned by RAC. Land on which the lines and infrastructure stood was owned by the State Rail Authority (SRA). The RAC’s powers were contained in Schedule 6A of the NSW Transport Administration Act (TAA). Clause 5(1) of the Schedule provided that a party to an access agreement was authorised to have access to the relevant rail infrastructure facilities and the land on or in which they were situated. Under section 164A(b) of the NSW Duties Act, a lease attracting duty included an agreement by which a right to use land was conferred on or acquired by the lessee. The Chief Commissioner of State Revenue assessed Pacific National as liable for duty of $567,283.85 plus interest, based on $162 million it paid under the lease between 1 July 2000 and 31 December 2003.

An objection to the assessment was disallowed and Pacific National sought a review in the NSW Supreme Court. Pacific National argued that no right to use land was granted by RAC through the access agreement and that the right was derived from the TAA. It submitted that all the RAC did under the agreement was to confer the right to use the physical items that comprise the NSW rail network, not the land itself. The Chief Commissioner argued that the rail track, cuttings, drainage works, earthworks, tunnels, bridges, track crossings, service roads and buildings were all land. Justice Ian Gzell revoked the assessment. He held that the rights in utilities affixed to or embedded in soil did not comprise land or amount to interest in land. Justice Gzell held that the vesting of the facilities in the RAC carried no interest in land and it therefore had no legal right to grant a right to use land. The Court of Appeal allowed an appeal. It held that the access agreement was one by which a right to use land was conferred or acquired so the duty was levied lawfully. Pacific National appealed to the High Court.

The High Court unanimously dismissed the appeal and held that the agreement was subject to duty. The TAA provided for access to and consequential use of land by others, including the RAC for purposes connected with the rail infrastructure facilities. Pacific National argued that the legal source of the right to use land, in association with the rail lines and infrastructure facilities, was Schedule 6A, clause 5(1) of the TAA. The Court held that Pacific National acquired a right to use the SRA’s land because it was a party to an access agreement. The Court said that it was not correct to describe clause 5(1) of the TAA as the legal source of the right to use the land and diverted attention from the question which arose under section 164A(b) of the Duties Act, namely whether the agreement was one by which the right was acquired. The Court held the lease was such an agreement. Pacific National had no such right prior to its entry into the agreement. It was the making of the agreement and the grant of permission under it by which Pacific National acquired the right provided in clause 5(1).

Imbree v McNeilly [No 2]; McNeilly v Imbree [No 2] [2008] HCA 47 (26 September 2008)

The High Court of Australia has increased the damages awarded to a passenger left a tetraplegic in an accident when a 16-year-old learner driver was driving.

Mr Imbree’s four-wheel-drive crashed while his son’s friend, 16-year-old Jesse McNeilly (spelled “Jessie” in the title of the appeal), was driving on a gravel road in the Northern Territory in April 2002. Both boys were sometimes allowed to drive on the trip from New South Wales to the NT.

Mr Imbree, a Qantas employee, brought proceedings in the NSW Supreme Court against Mr McNeilly as driver and Qantas as owner of the vehicle. Justice Timothy Studdert gave judgment for Mr Imbree. He found Mr McNeilly had been careless, but that Mr Imbree had been contributorily negligent. His damages, assessed at more than $9.5 million, were therefore reduced by 30 per cent. Mr McNeilly and Qantas appealed to the Court of Appeal, which held that the damages should be reduced by two-thirds for contributory negligence. Mr Imbree appealed to the High Court, which on 28 August 2008 allowed the appeal and restored the 30 per cent reduction to the damages award. The Court overturned its 1986 decision in Cook v Cook, in which it held that the standard of care owed was what was reasonably expected of an unqualified and inexperienced driver. Instead, the Court held that a learner driver was subject to the same objective standard of care as any other driver rather than to a lesser standard based on experience.

Mr Imbree made three offers of compromise ahead of the trial, the appeal to the Court of Appeal and the appeal to the High Court. All were refused. The first offer to settle was for $7.1 million plus costs, the second $7.55 million plus costs, and the third was to settle for a little less than $7.225 million. The third offer was based on damages of $11,115,290, reduced by 35 per cent for contributory negligence, together with interest and the costs of the trial and High Court proceedings, with each party bearing its own costs in the Court of Appeal. The parties have since agreed on the quantum of damages, the amount of interest, the amount for which Mr McNeilly and Qantas should have credit for the amount already paid to Mr Imbree, and that Mr Imbree should have his costs in the Supreme Court on an ordinary basis up to 22 March 2006 and then on an indemnity basis. Mr McNeilly and Qantas accepted that Mr Imbree should have his costs of the Court of Appeal and High Court proceedings but that they should be on an ordinary basis and not on an indemnity basis.

The High Court held that the consequential orders upon which the parties were now agreed meant that Mr Imbree would have judgment of $7,926,535.72, which was more than his three offers. It held that in these circumstances he should have his costs of the trial after the first offer of compromise and the appeals to the Court of Appeal and the High Court on an indemnity basis. The Court set aside Justice Studdert’s judgment and ordered that Mr Imbree’s damages be assessed at $11,323,622.46, reduced by 30 per cent for contributory negligence to $7,926,535.72, plus interest calculated up to 12 September 2008 of $875,000 and then $1,100 a day until payment, and that Mr McNeilly and Qantas have credit of $3,744,060.84 for amounts already paid.

Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48 (2 October 2008)

Steps taken to sell off an old motor vehicle registry in Wagga Wagga did not amount to use of the land, so the site was open to claim by the Aboriginal Land Council, the High Court of Australia has held.

On 23 May 2005, the Land Council, on behalf of the Wagga Wagga Local Aboriginal Land Council made a claim under the NSW Aboriginal Land Rights Act to the 815 square metre allotment in the Wagga business district. A derelict two-storey brick building stood on the site. It was used as a motor registry from 1958 to 1985 and afterwards has been used to store old office furniture. After a plan to turn the building into a laboratory was abandoned in 2004, the State government decided to sell the site. Before the land claim was made, a real estate agent was appointed, an identification survey of the land was made, the Register-General issued a certificate of title, reservation of the land for a “government supply department office and workshop” was revoked, and an auction date of 8 July 2005 was fixed. The Minister for Lands refused the claim, concluding that the land was not claimable Crown land because it was lawfully used and occupied by the Department of Lands in preparing it for sale. The Land Rights Act’s definition of “claimable Crown lands” was limited to lands that were “not lawfully used or occupied”.   The Land Council appealed to the NSW Land and Environment Court against the refusal of the claim. Justice Peter Biscoe dismissed the appeal and held that the decision to sell the land and the steps taken to do so were an actual use of the land. The Land Council appealed to the Court of Appeal which allowed the appeal, held that the land was not being used when the claim was made, declared that the land was claimable Crown land, and ordered the Minister to transfer the land to the Wagga Land Council. The Minister appealed to the High Court.   The Court unanimously dismissed the appeal. It held that sale of the land would amount to exploitation of the land as an asset but it did not follow that exploitation by sale amounted to use of the land. The steps taken to bring about the sale did not amount to lawful use. Nothing was being done on the land when the claim was made and nothing had been done for a considerable time before then. Visits by surveyors and the real estate agent did not amount to a use of the land for the purposes of the Land Rights Act and everything else that was being done towards selling the land occurred elsewhere.

Northern Territory v Collins [2008] HCA 49 (16 October 2008)

The grant of licenses by the Northern Territory to harvest cypress pine timber did not amount to contributory infringement of a patent for methods to produce blue cypress oil because the timber was a staple commercial product, the High Court of Australia has held.   Vincent and Maryann Collins have since 1999 owned a patent for methods of producing essential oils from cypress pine. The oil is used in aromatherapy and in cosmetics and body care products, and it may possess anti-bacterial properties and act as a preservative in the treatment of wood. During the 1960s, the NT government planted cypress pine at various sites to try to produce a commercial crop of timber. Results were disappointing and by 1995 the timber was no longer considered to be of suitable commercial quality. However several commercial uses remained for timber harvested from the Howard Springs Plantation outside Darwin, including milling for poles, fencing, flooring and light construction; woodchip mulch; potting mix and firewood. The NT granted four licenses to the Australian Cypress Oil Company (ACOC) from 1998 to 2001 to enter the plantation and take cypress pine timber.

Mr and Mrs Collins commenced proceedings in 2005 in the Federal Court of Australia alleging that the NT was liable under section 117 of the Commonwealth Patents Act for infringement by supplying timber to ACOC. Section 117 dealt with contributory infringement of patents by providing that the supply of a product from one person to another was a patent infringement if use of the product would infringe a patent. However, under section 117(2)(b), supply of a “staple commercial product” was not an infringement. Mr and Mrs Collins alleged that ACOC used the bark and wood of the timber to extract blue cypress oil by steam distillation, one of the methods claimed in the patent. The NT denied the validity of the patent and did not admit that ACOC produced blue cypress oil by a process protected by the patent. It also denied that section 117 was engaged by the grant of the licenses, irrespective of whether the patent was valid or whether ACOC used the timber to produce blue cypress oil by a process which infringed the patent. ACOC was not a party to the proceedings.

Justice John Mansfield assumed, without deciding, that the patent was valid but dismissed the proceedings. He held that there was no “supply” within section 117 as the licences merely permitted ACOC to harvest the trees and the NT had not engaged in a sale or other means of supply. Moreover, even if there were a supply by the NT, he held that it was of a “staple commercial product” and thus not an infringement. The Full Court of the Federal Court, by majority, allowed the appeal by Mr and Mrs Collins. It held that, although the conduct of the NT amounted to supply of the timber, in all the circumstances the timber was not a staple commercial product. The NT appealed to the High Court. It argued that the supply of an input for a patented method or process was incapable of engaging the operation of section 117, that the grant of licences to ACOC did not amount to a “supply” of timber for the purposes of section 117, and that the timber was a “staple commercial product” within the meaning of section 117(2)(b).

The Court unanimously allowed the appeal on the third issue. While the Court considered there had been a “supply” of cypress pine timber by the NT for the purposes of the Patents Act, it held that the timber was a “staple commercial product”, which meant a product supplied commercially for various uses. The cypress pine was supplied to various licensees for a variety of uses and the supply of this staple commercial product by the NT to ACOC could not infringe the patent according to section 117(2)(b). It followed that the order of Justice Mansfield to dismiss the proceeding against the NT was reinstated.

Sok v Minister for Immigration and Citizenship [2008] HCA 50 (16 October 2008)

A claim of domestic violence did not have to be raised during initial consideration of an application for a permanent visa but could be raised when a visa refusal was being reviewed by the Migration Review Tribunal (MRT), the High Court of Australia has held.   In August 2002, Sie Sok, a citizen of Cambodia, married an Australian woman who sponsored his applications for a temporary visa and a permanent visa. The temporary visa was granted and Mr Sok entered Australia in November 2002. Permanent visas are not granted for at least two years. A condition for the grant of the permanent visa was that the applicant be the spouse of the sponsor. This required the Minister to be satisfied that the couple had a mutual commitment to a shared life as husband and wife to the exclusion of all others, that the relationship was genuine and continuing, and that they live together or do not live apart on a permanent basis. If the relationship had ceased, an applicant would remain entitled to a permanent visa if they had suffered domestic violence committed by the sponsoring spouse. In March 2005, following an interview by an immigration official and visits to two addresses where Mr Sok and his wife were apparently living, the visa was refused on the ground that the official was not satisfied that Mr Sok was the spouse of the sponsor.

He applied for a review by the MRT. In February 2006, Mr Sok submitted material to the MRT claiming that he had been the victim of domestic violence. The MRT, without inviting Mr Sok to appear to give evidence or make submissions, recorded a finding that it was not satisfied that he had suffered domestic violence. If the MRT was not satisfied that a claimant had suffered domestic violence it could refer the question to an independent expert. The expert’s opinion was conclusive. In this case, without hearing Mr Sok, the MRT referred the matter to first one independent expert for an opinion, then to a second expert. Both experts concluded that Mr Sok had not suffered domestic violence. A copy of each opinion was sent to Mr Sok. After he received the first opinion he provided further evidence in support of his claim to have suffered domestic violence. In October 2006, the MRT held a hearing at which Mr Sok adduced evidence and presented arguments in support of his claim. The MRT affirmed the official’s decision to refuse him a permanent visa.

Mr Sok applied to the Federal Magistrates Court (FMC) for relief. It declared the MRT’s decision to be unlawful, void and of no force and effect, and made orders quashing the decision, prohibiting the MRT and the Minister from giving effect to the decision, and requiring the MRT to rehear the application for review. It held that the MRT was obliged to invite Mr Sok to a hearing before seeking the opinion of an independent expert. The Minister appealed to the Full Court of the Federal Court of Australia, which allowed the appeal. The Full Court held that Division 1.5 of the Migration Regulations relating to domestic violence applied only to the original decision-maker and not to the MRT. It held that a person had to have raised a domestic violence claim when a visa application was considered by the Minister. Mr Sok appealed to the High Court.

The Court unanimously allowed the appeal and upheld the FMC’s orders. It held that the MRT must consider a claim of domestic violence made by a visa applicant, even when no such claim was made before the Minister refused to grant the visa. The MRT must invite the applicant for review to appear to give evidence and present arguments before making a decision about whether or not the applicant has suffered domestic violence.

Lujans v Yarrabee Coal Company Pty Ltd [2008] HCA 51 (16 October 2008)

The High Court of Australia has allowed an appeal against a decision of the New South Wales Court of Appeal which had overturned a decision of the NSW Supreme Court awarding damages to the victim of a road accident. The High Court held that the Court of Appeal had not discharged its legal duty on the appeal, which required it to review the evidence before the trial judge.

At 6.20am on Friday 18 September 1998 Matina Lujans, then aged 28, was driving to work at a central Queensland coal mine when she had an accident that left her a quadriplegic. She turned off the Capricorn Highway on to a mining road controlled by Yarrabee Coal. Almost 6km along the road where Ms Lujans was out of sight of two drivers behind her, the left wheels of her Toyota HiLux gradually went on to the shoulder of the road at the start of a sweeping right-hand bend. The vehicle swung sharply right, travelled across the road and rolled over. Ms Lujans said she had slowed from 100km per hour to between 80 and 90km per hour before the accident because for a reason she could not identify she felt unsafe. The edge of the road was a ridge of soil left after grading operations, known as a rill. The 35km clay and gravel road was graded every week to remove a build-up of coal dust from 500 loads carried on large road trains, each hauling 400 tons of coal. The road was graded in 7km sections from Sunday to Thursday nights. The section where Ms Lujans had her accident on a Friday had not been graded since the previous Sunday night. The road was also watered each night to reduce dust and there was evidence that it was still wet or moist at the time of the accident.

Ms Lujans sued Yarrabee Coal and its road maintenance contractor, Jalgrid, in the NSW Supreme Court. Acting Justice Harvey Cooper found that, due to coal and dust being spread over the road from rill to rill, drivers had difficulty distinguishing between the hard roadway surface and the softer shoulder. Ms Lujans was awarded $10,802,980.43 in damages against Yarrabee and Jalgrid, which was reduced by 20 per cent for contributory negligence to $8,759,510.55 by her failure to stay on the hard compacted centre of the road.

The Court of Appeal allowed an appeal by Yarrabee and Jalgrid. It held that the sole cause of the accident was driver error because Ms Lujans had not kept a proper lookout. The Court of Appeal noted that the road’s appearance was not deceptive and the shoulder was not so soft as to contribute to the accident. Ms Lujans sought special leave to appeal to the High Court. She complained that although the appeal rehearing lasted more than two days the Court of Appeal failed to conduct the rehearing required by law as it did not consider a substantial body of evidence, it did not refer to Acting Justice Cooper’s assimilation of that evidence into his judgment, it misunderstood evidence and proceeded on wrong factual bases, and it wrongly relied on its own interpretations of photographs over those of Justice Cooper.

The application for special leave to appeal to the High Court was referred to a five-member Bench and argued as if on an appeal. The Court unanimously granted special leave to appeal, allowed the appeal and remitted the proceedings to the Court of Appeal for rehearing. It held that the Court of Appeal had wrongly relied on copies of photographs in appeal books while the originals — to which the Court of Appeal had access — arguably showed a layer of black coal dust all the way across the road. Acting Justice Cooper and witnesses at the trial had used originals, not copies. The High Court held that the Court of Appeal overlooked the cross-examination of experts about speed and the condition of the road at the time of the accident. It made errors in its analysis of evidence about the vehicle’s speed and did not explain why it had not taken account of evidence about the trajectory of the vehicle and how Ms Lujans lost control of it. The High Court held that the Court of Appeal’s conclusions were not necessarily wrong but that important steps in its reasoning were shown not to be valid, which meant that it had not reheard the matter as it should.