Appendix 4A
Legal Opinions Considered by the Committee
Legal Opinion of Mr Gary Corr (Continued)
11. Section 99 of the Constitution
Section 99 of the Constitution provides:
The Commonwealth shall not, by any law or regulation of trade, commerce
or revenue, give preference to one State or any part thereof over another
State or any part thereof.
In determining whether this particular provision is applicable I consider that the High Court would
scrutinise both the direct legal effect and the practical effect of the law (or regulation). The operation of
this in relation to restrictions on power can be seen in cases related to sections 90 and 92 such as North
Eastern Dairy Co Ltd v Dairy Authority of New South Wales (1975) 134 CLR 559, Hematite
Petroleum v Victoria (1983) 151 CLR 599 and Cole v Whitfield (1988) 165 CLR 360. It is also
important to note that the High Court has frequently determined that "what cannot be done directly,
cannot be done indirectly" Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55, Bank of New
South Wales v The Commonwealth (1948) 76 CLR 1. The method of scrutinising legislation as per Cole
v Whitfield is of course subsequent to the relevant decisions on section 99. It is necessary, therefore, to
examine the tests as have previously applied and determine whether the RFAs would be valid if those
tests were applied.
In this legislation, the EC Act and its regulations, there is no express intention to discriminate between the
States. Is it nonetheless discriminatory between the states because under the Export Wood Chips
(Regional Forest Agreements) Regulations 1977 the only RFAs in existence are in Tasmania and part of
Victoria. It could be argued that a person who is an exporter of wood chips from Tasmania is
advantaged purely because they are operating from Tasmania as opposed to another part of the
Commonwealth. This would appear to be in accordance with the decisions of the High Court in James v
The Commonwealth (1928) 41 CLR 442 and Elliott v The Commonwealth (1936) 54 CLR 657. The
preference has to be definite and tangible Elliott at 669-71 per Latham CJ, 679-80 per Starke J and 683
per Dixon J. The difference between those persons operating in Tasmania and in another State where a
RFA is not in existence is that the person in Tasmania does not have to comply with any restrictions on
the export of woodchips whereas the person in another State has to comply with the requirements of the
Export Wood Chips (Hardwood Woodchips) Regulations and may.not in fact be able to export
woodchips. This is in distinction from the situations in Elliott and Crowe where although there was
differentiation between the States it did not amount to discrimination for the purposes of section 99.
There is the alternate view that the Court would look at the literal equality under the law rather than its
application to chance sets of circumstances as applicable in different parts of the Commonwealth. This
would appear to have been the case in Richardson v Forestry Commission (Tas) (1988) 164 CLR 261
where the subject matter of the law, namely the Lemonthyme and Southern Forests (Commission of
Inquiry) Ac 1987 could only exist in one State, to wit Tasmania. This decision was based on the fact that
the law had a general subject matter which was world heritage protection which was applicable in a
particular area. Although this was not a section 99 case the same argument could be raised in this case.
There was a similar situation in the Native Title case Western Australia v The Commonwealth (1995)
183 CLR 373 where the combination of the law, the Native Title Act 1993 and the histodcal
circumstances which, it was argued, imposed a greater burden on Western Australia did not result in an
unconstitutional discrimination. Similarly it was held in Re Australian Education Union: Ex Parte Victofla
(State Public Servants) (1995) 184 CLR 188 that a law which only applied in Victoria was not invalid as
it could apply anywhere in Australia as it was "framed in general terms and is capable of applying to any
State" at 239-40. Again these were not section 99 cases.
While these cases, and particularly the State Public Servants case, would tend to indicate that there has
not been a "discrimination", there is a significant difference between that case and the facts in the present
case. The Export Control (Hardwood Woodchip) (1996) Regulations and the Export Control (Regional
forest Agreements) (1997) Regulations are stated to operate as the result of an agreement between the
Commonwealth and a State - Regulation 3 Export Control (Hardwood Woodchip) (1996) Regulations.
Thus the discriminatory operation must be based on the areas being "localities considered as parts of
States, and not as mere Australian localities, or parts of the Commonwealth considered as a single
country" as per Isaacs J in R v Barge (1908) 6 CLR 41 at 107, Elliott v The Commonwealth (1936) 54
CLR 657 and W. R. Moran Pty Ltd v WCT(NSW) (1940) 63 CLR 338.
There appear to be two views as to the operation of this section, even given the operation of the test
proposed by Isaacs; J in Barge . The difference between the two views can be shown in the case of
Conroy v Carter (1968) 118 CLR 90. Menzies J, who was part of the statutory majority, held at 103:
section 6(1)(b) does, however, expose a person liable to pay an amount of levy in
respect of hens kept in a State with which the Commonwealth has made an arrangement
pursuant to s.5 of the Act, to a particular disadvantage at law to which a person in
respect of hens kept in a State which has made no arrangement with the Commonwealth
under s.5 is not exposed, namely the retention of the levy out of moneys owing by a State
Egg Board to the taxpayer. I am disposed to think that this differentiation amounts to an
unlawful discrimination.
Taylor J for the minority considered at 10 1 that:
neither of the sub-sections of s.6 can be said to discriminate between States: they merely
provide for the manner in which a liability for the levy may be discharged. And if, by
reason of the fact that in one or more States there is not in existence an arrangement of
the character referred to in s.6, they are incapable of application in those States. But this
does not mean that there is any discrimination in the constitutional sense.
However, regardless of which view is taken it can be considered that the Regulations providing for the
RFAs and the consequent removal of the requirement for a licence is contrary to section 99.
The Tasmanian and Gippsland RFAs are the only RFAs in existence. The woodchip producers in those
areas are operating under a benefit since they do not have to apply for a licence to export woodchips.
Alternatively, the woodchip producers in other States are at a disadvantage. The discrimination arises
from the agreements between the respective State governments and the Commonwealth. The
discrimination arises from the person who is the object of discrimination being within one State as
opposed to another and on the basis of the State as a political entity and not as a mere locality.
Consideration must also be given to the provisions of section 2 of the Export Control (Hardwood
Woodchips) (1996) Regulations. This Regulation contemplates that from 1 January 2000 no woodchips
will be able to be exported from an area which does not have a RFA in existence. This is reinforced by
the following Regulations:
11(2) which provides that transitional licences cannot have effect after 31 December 1999; and
19(1) which provides that degraded forest licences cannot have effect after 31 December 1999.
If as will be the case no licences to export woodchips will be available, other than under the Export
Control (Hardwood Woodchips) (1996) Regulations, then as of 1 January 2000 the only areas in
Australia from which woodchips will be able to be exported will be those areas where a RFA is in force.
Even before then there is a restriction on the ability to export woodchips. Section 11 of the Export
Control (Hardwood Woodchips) Regulations restricts the amount of woodchips which can be exported
dependant on the amount exported in the previous year from an area over which an RFA prevails. The
amount available can be nil - subregulation 11(3).
The result of these provisions is that the ability for a woodchip exporter to export is dependant upon
whether there has been a political agreement between the Commonwealth and the government of the
State from which the producer intends to export. The criterion of operation of the discrimination is the
State from which the export is to take place. This is clearly contrary to the text and the context of section
99 of the Constitution.
Consequently, the Export Control (Regional Forest Agreements) (1997) Regulations are invalid and such
parts of the.Export Control (Hardwood Woodchips) (1996) Regulations and Export Control
(Hardwood Woodchips) Regulations as are dependant on the scheme of operation of RFAs are also
invalid.
Conclusions
1. The Agreement is a statement of intent only and has no legal effect.
2. The Agreement cannot bind Parliament or fetter the exercise of executive power.
3. The Agreement cannot override any statutory obligations contained in legislation.
4. In particular, the Australian Heritage Commission is still obliged to carry out its statutory functions
regardless of any statements or implications contained in the Agreement.
5. The declarations in the Agreement that the obligations of the Commonwealth under the Australian
Heritage Commission Act 1975, the Environment Protection (impact of Proposals) Act 1974 and the
Endangered Species Protection Act 1992 have been met are of no legal effect.
6. The Export Control (Hardwood Wood Chips) (1996) Regulations and the Export Control (Regional
forest Agreements) (1997) Regulations are invalid to the extent that they attempt to incorporate material
contrary to the provisions of section 49A of the Acts Interpretation Act 1901.
7. Any scheme of arrangement, either under primary legislation or regulation, which provides for a
discriminatory regime between one State and another is inconsistent with section 99 of the Constitution
and, therefore, invalid to the extent that they do so.
8. The Export Control (Hardwood Wood Chips) (1996) Regulations and the Expo Control (Regional
Forest Agreements) (1997) Regulations and the Tasmanian RFA are such an agreement and are
consequently invalid.
9. Part 4 of the Export Control (Hardwood Wood Chips) (1996) Regulations is invalid.
10. The Export Control (Regional Forest Agreements) (1997) Regulations are invalid.
In Chambers
GARY CORR
Cases Cited
A v Hayden (1984) 156 CLR 532
Aboriginal Legal Service v Minister for Aboriginal and Torres Strait Wander Affairs
(1996) 139 ALR 577
ACF v Minister for Resources (1989) 76 LGRA 200
Ansett Transport Industries (Operations) Pty Ltd v Commonwealth
(1977) 139 CLR 54
Arnold v Hunt (1943) 67 CLR 429
Arthur Yates & Co Ply Ltd v Vegetable Seeds Committee 1945) 72 CLR
Attorney-General for the Commonwealth v R (1957) 95 CLR 52
Attorney-General (NSW) v Homebush Flour Mills Ltd 1937) 56 CLR 390
Australian National University v Lewins-unrep. Full Federal Court 18 July 1996
Bank of New South Wales v The Commonwealth (1948) 76 CLR 1.
Bread Manufacturers of NSW v Evans (1981) 180 CLR 404
Capital Duplicators v ACT (1992) 177 CLR 248
Chittick v Ackland (1984) 1 FCR 254; 53 ALR 513
Chumbairux v Minister for Immigration and Ethnic Affairs.(1 986) 74 ALR 480
Church of Christ (Non-Denominational) Incorporated-v Minister for Territories and
Local Government (1985) 10 FCR 152
Clayton v Heffron (1960) 105 CLR 214
Cole v Whitfield (1988) 165 CLR 360
Commonwealth v Evans Deakin Industries Pty Ltd- 1986) 161 CLR 254
Conroy v Carter (1968) 118 CLR 90
Crowe v The Commonwealth (1935) 54 CLR 69
De L v Director-General NSW Department of Community Services
(1997) 71 AUR 588
Elliott v The Commonwealth (1936) 54 CLR 657
Evans v Donaldson 1909) 9 CLIR 140
Friends of Hinchinbrook Society Inc v Minister for Environment (1997) 69 FCR 28
Friends of Hinchinbrook Society Int. v Minister for Environment
(unrep. Full Fed. Ct. 6, August 1997),
Giris Pty Ltd v Commissioner of Taxation (1969) 119 CLR 365
Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55
Green v Daniels (1977)
Hematite Petroleum v Victoria (1983) 151 CLR 599
Holland v Halpin [1939] VI-R 253
James v The Commonwealth (1928) 41 CLR 442
McIver v Alien (1943) 43 SR(NSW) 266
Melbourne Corporation v The Commonwealth (1947) 74 CLR 31
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259
Minister for Primary Industry and Energy v Davey 1993) 47 FCR 151
North Eastern Dairy Co Ltd v Dairy Authority of New South Wales
(1975) 134 CLR 559 1
O'Sullivan v- Noarlunga Meats Ltd (1954) 92 CLR 565
R v Anderson; Ex parte 1 Ipec-Air Pty Ltd (1965) 113 CLR 177
R v Barger (1908) 6 CLR 41
R v Humby; ex parte Rooney (1973) 129 CLR 231
R v Lampe: Ex parte Maddalozzo (1963) 5 FLR 160
R v Mahony; Ex parte Johnson (1931) 46 CLR 131
R v Toohey: ex parte Northern Land Council (1981) 151 CLR 170
Re Australian Education Union: Ex parte Victoria (State Public Servants)
(1995) 184 CLR 188
Richardson -v Forestry Commission (Tas) (1988) 164 CLR 261
Roche v Kronheimer (1921) 29 CLR 329
Scurr v Brisbane City Council (1973) 133 CLR 242
South Australia v The Commonwealth 1962) 108 CLR 130
Tasmanian Wilderness Society v Fraser (1982) 153 CLR 270
Thomson v Council of the Municipality of Randwick (1950) 81 CLR 87
Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan
(1931) 46 CLR 73
Watson v Lee (1979) 144 CLR 374
Western Australia v The Commonwealth (1995) 183 CLR 373
William Cory & Son Pty Ltd v London Corporation [195112 KB 476
Wright v TIL Services Pty Ltd (1956) 56 SR (NSW) 413
W. R. Moran Pty Ltd v DFCT(NSW) (1940) 63 CLR 338