The Final Verdict 2012

the final verdict

THE FINAL VERDICT

2012 NOTRE DAME SYDNEY LAW SOCIETY

the notre dame sydney law society

Disclaimer This is a publication of the Notre Dame Sydney Law Society, a student organised body. Any statements of fact or opinion within this publication are only those held to be correct by an article’s respective author and are not necessarily reflective of those held by: (a) The University of Notre Dame Australia or its employees or affiliates; or (b) The Notre Dame Sydney Law Society or its; governance, members, or sponsors.

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the final verdict

Contents

Intellectual property: You’re living in it

Katie Kavanaugh

4

The role a general anti avoidance rule plays

Alex Stankovic

17

Regulatory schemes for coal seam gas

Kate Angus

24

A case study of Australian tribunals

Michelle Burge

32

in a taxation regime

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Intellectual Property: You’re living in it

Katie Kavanaugh As a law student who is, to a degree, scarily obsessed with intellectual property, it would not be surprising if, when someone asked me what I thought the most interesting cases were this year, I responded, iiNet1, the ‘Apple and Samsung’2 or the ‘Tobacco Plain Packaging’3 litigation. However, from overhearing chat around Benitos (the school café), checking up on the NDSLS facebook page, and just general conversation with some of my fellow class-mates, it would seem that this may be the general consensus. Sure, they might just think it’s cool that iiNet didn’t get the blame for their customers engaging in internet piracy, they might like to download the latest legal podcasts on their iPhones, or maybe they just hate the Marlboro man, but that’s beside the point. It’s clear that in 2012, intellectual property law is becoming more and more popular, so law students should be aware of the broader intellectual property picture; this is not the first time IP has infiltrated the ‘legal landscape’.

Things you may have never considered interesting or unique, like a set of silverware, a coke bottle, your living room carpet, or your Administrative Law text-book, are wrapped up in all sorts of IP protection. Most interestingly, however, is the protection in what puts a roof over your head at night.

Whether it’s a house, an apartment, a castle or a condo, it’s protected by some kind of intellectual property and while you’re living in it, you probably don’t own the copyright.

1. Copyright in Architectural Plans and Buildings For the purposes of the Copyright Act 1968 (Cth) (the Act), architectural plans, being ‘drawings’, are artistic works, as are buildings.4 For copyright to exist in an artistic work, the subject matter must satisfy the low threshold test of originality.5 There is no need for ‘novelty’ or ‘inventiveness’, yet a ‘more than negligible’ amount of labour, judgment or skill must have been used in the ‘making’ of

1

Roadshow Films Pty Ltd & Ors v iiNet Ltd [2012] HCA 16 Apple Inc. v Samsung Electronics Co Limited [2011] FCA 1164; Samsung Electronics Co. Limited v Apple Inc. [2011] FCAFC 156 3 JT International SA v Commonwealth of Australia; British American Tobacco Australasia Limited & Ors v Commonwealth of Australia [2012] HCA 30 4 s10(1) of the Copyright Act 1968 (Cth) defines an ‘artistic work’ as: (a) a painting, sculpture, drawing, engraving or photograph, whether the work is of artistic quality or not; (b) a building or a model of a building, whether the building or model is of artistic quality or not; or (c) a work of artistic craftsmanship whether or not mentioned in paragraph (a) or (b); but does not include a circuit layout within the meaning of the Circuit Layouts Act 1989 .; Further, A building is defined in s10 of the Copyright Act 1968 (Cth) as ‘a structure of any kind’.

5 Desktop Market Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 49 2

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the work;6 clearly copyright does not subsist in slavish copies7 or trivial variations of another’s work.8 Originality thus carries with it the concept of ‘authorship’ and the ‘author’, who, as a general rule, is the owner of the copyright in the work, must express the subject matter in some ‘tangible embodiment’ or ‘material form’, connected in some way either to Australia or to a country whose copyright laws Australia is obliged to recognize.9 Copyright is concerned with the originality in the expression of thought and not the originality of ideas, protecting only the form in which ideas are expressed and not the ideas themselves.10 An author draws on his skill, his knowledge of the subject, the results of his own researches, his own imagination in forming his idea of how he will express the basic concept...When these ideas…are reduced to concrete form, the forms they take are where the copyright resides.11 In Hollinrake v Trusell ,12 the plaintiff argued that protection given by the Copyright Act 1842 (UK) was, ‘…not limited to works possessing literary merit, but extended to any product of brain work or mental effort because “a picture is entitled to the protection of the Act just as much as a sheet or card of letterpress.” In justifying denial of protection, the court evoked the idea/expression dichotomy,13 which provides that ‘ideas are free for all to use, and only the expression (fixed in some material form) is capable of receiving protection.’14 It follows that if an idea can only be expressed in one particular way, that expression will not be protected by copyright, as doing so would effectively ‘grant a monopoly in the idea.’ 15 In Donaghue v Allied Newspapers16, Farwell J explained that: Á person may have a brilliant idea for a story, or for a picture, or for a play, and one which appears to him to be original; but if he communicates that idea to an author or an artist or a playwright, the production which is the result of the communication of the idea … is the copyright of the person who has clothed the idea in form, whether by

6

University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608-609; Desktop Market Systems Pty Ltd v Telstra Corporation (2002) 119 FCR 49; Ice TV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14 7 Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 at 276; Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 379 8 University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608-9 9 Copyright Act 1968 (Cth) s184 10 Autodesk Inc v Dyason (No 1) (1992) 173 CLR 130 11 Plix Products Ltd v Frank M Winstone (Merchants) Ltd (1984) 3 IPR 390 12 (1894) Ch 420 13 K Bowrey, M Handler, D Nicole, Australian Intellectual Property: Commentary, Law and Practice, (1st ed, 2010) p35 14 Ibid 15 Kenrick and Co v Lawrence and Co (1890) 25 QB 99 16 [1938] Ch 106 at 109 5

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means of a picture, a play, or a book, and the owner of the idea has no rights in that product…

It should be noted that in cases where a work is derived from another, there may be separate copyright in each work. The derived work will be assessed as being a separate copyright work, although to a considerable extent taken from an earlier work, if in producing the derived work the author expended [a sufficient amount of] skill and labour17.

In Tamawood

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Lindgren J recognized that, ‘the application of the law of copyright to project home

plans gives rise to special difficulty. All modern homes have certain features in common…there are pressures towards sameness…’. Nonetheless, copyright ‘does not prevent the development and expansion of ideas or the furtherance of architectural concepts.’19 When parts of a plan are considered in isolation they may merely express a common idea, but if when looked at in its entirety the combination and arrangement of the plan originated with the author, copyright protection will be available.20 Accordingly: [T]wo plans may manifest the ‘idea’ of having two rooms separated by a kitchen with waist-high benches which allow a person standing in the kitchen to see into the other two rooms. But this idea can be given form in more than one way… sufficiently different shapes, dimensions and orientations…will signify that only the idea, not the form, has been taken.21 Therefore, ‘while there may be some limit to the scope for originality, originality can nonetheless be present…’.22 However, the fact that an architect may give ideas relayed onto him by another material form by incorporating them into a home or design plan is not conclusive. Where a person is considered to be a ‘mere amanuensis’ they are not the author23; some degree of originality is required.

Regardless, it has been established that the test for originality is one of a low threshold and it has been recognised that in some cases, constraints such as set costs and state planning legislation may make the task of designing a project home, ‘extremely difficult because the very fact that the designer has to 17

See L B (Plastics) Ltd v Swish Products Ltd [1979] RPC 551 at 569 per Whitford J whose decision was affirmed by the House of Lords. See also Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 379 18 Tamawood Ltd and Others v Henley Arch Pty Ltd and Another [2004] FCA 78 at [38] 19 Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd [1999] FCA 1371 at [16] 20 Tamawood Ltd and Others v Henley Arch Pty Ltd and Another [2004] FCA 78 at [41] 21 Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 at 95 22 Ibid at 80 23 Donaghue v Allied Newspapers (1938) Ch 106 at 109 6

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work within the constraints ... means that a degree of skill and professional expertise must be brought to the task... involv[ing] a great deal of work.’ 24 In Eagle 25, Lindgren J accepted that these ‘tight parameters…within which the designer of a project homes works…calls for a considerable degree of skill and experience as well as time and labour...’.

Therefore, an architect working around a client’s impractical or impossible suggestions to fit within such ‘tight parameters’ will easily be considered more than a ‘mere amanuensis’ and will likely satisfy the degree of originality required to be the ‘author’ of the architectural or design plans. While in such a case the client may have contributed their own ideas and wish to claim authorship, they will find no solace in copyright protection as their failure to express their ideas in the required ‘tangible embodiment’ or ‘material form’ precludes such a possibility.

However, it should be noted that in such a situation, despite falling short of establishing authorship, …when the owner of a building plot employs an architect to prepare plans for a house on that site, the architect impliedly promises that, in return for his fee, he will give a license to the owner to use the plans for the building on that site. The copyright remains in the architect, so that he can stop anyone else copying his plans, or making a house from them; but he cannot stop the owner who employed him, from doing work on that very site in accordance with the plans. If the owner employs a builder or another architect, the implied license extends so as to enable them to make copies of the plans and to use them for that very building on that site: but for no other purpose…26 Accordingly, where this implied license applies, no colorable conduct would likely be found in the construction of a home which was based on plans a client employed an architect to make, regardless of whether or not the architect was the author of the plans.

2. Ownership (a) Joint Ownership When determining ownership of copyright, it is necessary to examine the efforts and contributions of the parties involved. While some efforts may be noted as significant, they may not be ‘the right kind of contribution’ to amount to copyright ownership.27 Accordingly, in order for there to be a joint owner of copyright in architectural or design plans, unless stipulated by contract, in most situations, there must be a joint author.

24

LED Builders Pty Ltd v Masterton Homes (NSW) Pty Ltd (1994) 30 IPR 447 at 454 Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 at [81] 26 Held by the court in Blair v Osborn [1971] 1 QB 78, approving Beck v Montana Constructions Pty Ltd [19645] NSWR 229 27 Bowrey, Handler, Nicole, above n 13 p.171 25

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In Cala Homes (South) Ltd v Alfred McAlpine Homes East Ltd28 Laddie J stated that: What is protected by copyright in a drawing or a literary work is more than just the skill of making marks on paper …. It is both the words or lines and the skill and effort involved in creating, selecting or gathering together the detailed concepts, data or emotions which those words or lines have fixed in some tangible form which is protected.…where two or more people collaborate in the creation of a work and each contributes a significant part of the skill and labour protected by the copyright [and the contribution of each author is not separate from the other], then they are joint authors.

(b) s35(6) Further, s 35(6) of the Act establishes that there is more to the issue of ‘ownership’ than mere ‘authorship’ and provides that when the work is produced under a contract of employment or service, the copyright is owned by the employer. This means that if an architect is an independent contractor, they will retain ownership of the copyright in the architectural or design plans. However, if they are an ‘in-house architect’ and their work is an ‘essential part’ of the business or architectural firm, not just ‘an accessory’ to it

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the business or architectural firm is likely to be the owner of copyright in

the plans. (c) License or Assignment Section 196(1) of the Act provides that copyright is personal property and is transmissible by assignment, by will and by devolution by operation of law. If an assignment or exclusive license of copyright has been made the assignor can exercise and enforce all economic rights of the copyright owner.30 Therefore, in the event that the owner of the copyright in design or architectural plans assigns or gives an exclusive license over the plans to another party, even the owner would need permission to use the plans.

Whether there has been an assignment or license is a question ‘of construction of the particular instrument in the light of the particular circumstances…’. Formal language, the use of the word ‘assign’ or reference to the word ‘copyright’ will not be required. 31 Ultimately,

28

[1995] FSR 818 at 835-6 Beloff v Pressdram Ltd [1973] 1 ALL ER 241 at 250 30 See ss117-125 of the Copyright Act 1968 (Cth) for exclusive licensee rights.

31 Messager v British Broadcasting Co [1927] 2 KB 543; Wilson v Weiss Art Pty Ltd (1995) 31 IPR 423 at 433; s196 of the Copyright Act 1968 (Cth).

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…the question…will depend upon whether the … terms of the agreement reached reflects … an intention on the part of the assignor to effect an assignment of… copyright. In reaching a conclusion upon intention the commercial significance of the transaction to the parties will…form part of the surrounding circumstances to be considered.32

3. When is the copyright in an architectural work infringed?

For the purposes of the Act, unless the contrary intention appears, copyright, in relation to an artistic work, is the exclusive right to reproduce the work in a material form. 33 The rights of reproduction include 2D to 3D reproductions as well as 3D to 2D reproductions, meaning it is within a copyright owner’s rights to produce a building from its plans and produce building plans from its building.34 In Meikle v Maufe35, Uthwatt J opined that: An architectural plan finds its meaning and purpose in the use to which it is put... To deny originality to the artistic design embodied in a building by attributing originality only to the plans which led to the building would be to give reality to the shadow and refuse its substance.

Accordingly, copyright exists not only in the plans of a building, but separately and independently in the building itself.36Therefore, a home that is constructed from a set of architectural or design plans is a new ‘artistic work’ in which copyright subsists.

Copyright in an artistic work will be infringed if a substantial part, or entirety of that work is reproduced in another work.

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If infringement of an architectural work, being the building design,

plans, or building itself, is established, in some cases there is a consequential question as to whether the architect involved is personally liable as having authorized the infringement in the event they sanctioned, approved or countenanced the infringing conduct in a manner that thereby authorized it.38

32

Messager v British Broadcasting Co [1927] 2 KB 543; Wilson v Weiss Art Pty Ltd (1995) 31 IPR 423 at 433; s196 of the Copyright Act 1968 (Cth).

33 see ss31(1)(b)(i) and 73(2) of the Copyright Act 1968 (Cth) 34 see ss21(3)(a) and s21(3)(b) of the Copyright Act 1968 (Cth) 35 Meikle v Maufe [1941] 3 All ER 144 at 147 36 Darwin Fibreglass Pty Ltd v Kruhse Enterprises Pty Ltd (1998) 41 IPR 649; Meikle v Maufe [1941] 3 All ER 144 37 Copyright in an artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner, does in Australia, or authorises the doing in Australia, of any act comprised in the copyright: s 36(1). A reference in the Act to an act comprised in the copyright in a work, is to be read as a reference to any act that, under the Act, the owner of the copyright has the exclusive right to do: s 13(1) 38 Adelaide City Corp v Australasian Performing Right Association Ltd (1928) 40 CLR 481; University of New South Wales v Moorhouse (1975) 133 CLR 1; 6 ALR 193; Australasian Performing Right Association Ltd v Jain (1990) 26 FCR 53 9

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In Barrett v Metricon, 39 the court held that copying: …is a question of fact. Generally, access to the copyright works combined with the sufficient objective similarities between the copyright works and the alleged infringing works are relevant. It enables the court to conclude that independent creation is unlikely and that actual copying has occurred.

Therefore, in order to establish infringement: (i):‘a sufficient degree of objective similarity between the two works’;

and

(ii) ‘some causal connection between the plaintiffs and the defendants

work’

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is

needed.

In Eagle41, Lindgren J stated that while these matters are distinct: …there may be overlap between them. For example, if proof of copying cannot be established directly … it will be necessary to prove it by inference…usually...by showing that the defendant had access to the protected material and…the similarities between the protected material and the allegedly infringing material are so persuasive that …[they] justify an inference of subjective copying and…establish sufficient objective similarity. (i) Sufficient Degree of Objective Similarity In Hanfstaengl v Baines & Co42, Lord Shan opined that: …the issue of sufficient objective similarity simply poses in the case of project homes, as in other cases, the usual question whether the copyright drawing can still be seen embedded in the allegedly infringing drawing, that is, whether the allegedly infringing drawing has adopted the “essential features and substance” of the copyright work.

(a) Substantial Similarity Whether a substantial part of the applicant’s work has been taken is always a question of degree and it is necessary to focus on quality of the part taken rather than on the quantity.43 Mason CJ44 understood

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Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509 at 91 Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 at [101] 41 Ibid 42 [1895] AC 20 at 31; adopted in Eagle at [91] 40

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that in order to be substantial, the part must be ‘original’ and that it is important to ask whether the part taken is an ‘essential or material’ part of the work.45 A project home is: [m]ore of a “functional work” than a novel, film or drama, which necessarily attracts copyright protection. In determining whether the quality of what is taken from a plan for a project home in which copyright subsists makes it a “substantial part” of the copyright work it is important to consider the originality of the part allegedly taken.46 In Barrett v Metricon47 Gilmour J held that in order to determine whether a substantial part of a work has been taken: First, the court must identify the part of the applicant’s works which is alleged to be reproduced and then decide whether it constitutes a substantial part of the applicant’s works as a whole; Second, the court is required to compare the substantial part of the applicants’ work with the respondent’s works and assess whether there is a sufficient objective similarity between the works, having regard to:48 (a) the similarities and differences in the comparison:49 (b) the essential material and non-functional parts — being the most important and significant parts of the works:50 (c) commonplace features that preceded the design of the copyright works51; and Third, the court must determine whether the substantial part of the applicant’s works identified has been used to derive the respondent’s works.

(b) Striking Similarity

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Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964[ 1 WLR 273; S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 44 Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 per Mason CJ dissenting at 389 45 Tamawood Ltd and Others v Henley Arch Pty Ltd and Another [2004] FCAFC 78 at [305] 46 Barrett Property Group Pty Ltd and Another v Dennis Family Homes Pty Ltd [2011] FCA 246 at [128] 47 Ibid 48 Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309 at 42 49 Tamawood Ltd and Others v Henley Arch Pty Ltd and Another [2004] FCAFC 78 at [28] and [86]–[89] 50 Ibid 51 Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309 at 42 11

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In Eagle, 52 Lindgren J held that in the case of project homes, where ‘the copyright drawing can…be seen embedded in the allegedly infringing drawing,’ there will be sufficient objective similarity. His Honour went on to observe that the overall similarity of the project homes in that case appeared to be, ‘striking….[W]hile the comparable rooms on the two plans [were] of slightly different dimensions,’ those minor differences did not prevent ‘seeing the Kookaburra drawing embedded in the Patterson.’

Sufficient similarity was found in terms of, ‘length and breadth, room sizes, shapes, locations and interrelationships and its traffic flow.’53 His Honour concluded that these elements ‘permeate the whole of a project home,’ and thus ‘constitute a ‘substantial part’.54 It is unnecessary that a ‘perfect reproduction’ of a work be made55 as copying in relation to project homes can be established even where there are significant differences between the finished products.56 In LED57 there were differences in room sizes, window placings, wall alignments, and cupboards between the works of the applicant and respondent. Nonetheless, these differences were minor and there was found to be reproduction of a substantial part of the applicant’s works.

Adopting the words of Gilmour J, not all cases are: …a Kenrick-like case, where there was only one means of expressing the idea of a hand ticking a box. Instead, it conforms with what Wilcox and Lindgren JJ stated in Tamawood, that “broad functional requirements can be satisfied in more ways that one”…there are a number of ways of incorporating …the combination of a kitchen, living, dining and rumpus. …For example, there is no necessity for the shapes to be rectangular…Longer rectangular features, squares and other shapes…are possible options.”58

(c) Common Place Ideas It must be remembered that copyright protection is found not in the individual elements of works seen in isolation, but the works when seen in their entirety, as sufficient objective similarity will not be established when the similarities between two homes consist only of common-place ideas. In Tamawood, the court held that ‘three bedrooms in alignment…[cannot] be a substantial part of the 52

Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 at 91 per Lindgren J; note he referred to Hanfstaengl v Baines & Co [1895] AC 20 at 31 (Lord Shand) and exclude the ‘exact replication of a discrete unoriginal part of the copyright work’ discussed earlier in the judgment.

53 Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 at 105-107 54 Ibid at 74: 55 British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57 56 Inform Design and Construction Pty Ltd v Boutique Homes Melbourne Pty Ltd [2008] FCA 912 at 64 57 LED Builders Pty Ltd v Eagle Homes Pty Ltd (1996) 35 IPR 215 58 Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509 (citations omitted).

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labor, skill and judgment that produced…the home,’ 59 and that, ‘it is a common feature of a dwelling house to have a kitchen, dining room and meals area in a reasonably close proximity to one another, and a study next to the entry.’60 Decisive features that led the court to conclude there was no infringement of the Baltimore in Tamawood61 include: -The

Bern’s

double

garage

‘protrude[d]

well

in

front

of

the

porch’;62

-The laundry rooms were on opposite sides of each house and, ‘as a result, the family room of the Bern [was] larger and more open than that of The Baltimore whereas the kitchen/dining room side of the Bern [was] more compact and cluttered than the same side of the Baltimore’;63 -The configuration of the ensuite in bedroom 1 was very different;64 -In the Bern there was no access to the corridor or toilet from the rumpus room and there was the Baltimore;65 and -Open entry to the dining/living area in the Baltimore was much wider than that of the Bern.66 While additions alone do not preclude the finding of substantial similarity,67 as the court accepted in Tamawood, both works were ‘examples of a well-known style of house and configuration of rooms in Australian project homes,’ and there was ‘nothing in them that…is not Australian or not seen regularly.’ 68 (ii) Casual Connection While in Tamawood69 it was held that ‘striking similarity, without more, does not necessarily mean that there has been a reproduction of the whole or a substantial part of the plan of a project home,’ certain similarities are indicative of copying. In particular, where there are marked similarities in the

59

Tamawood Ltd and Others v Henley Arch Pty Ltd and Another [2004] FCAFC 78 at 113 Ibid at 116 61 Ibid at 112-115 62 Ibid at 114 63 Ibid 64 Ibid at 112 65 Ibid 66 Ibid at 114 67 Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 at 105 68 Tamawood Ltd and Others v Henley Arch Pty Ltd and Another [2004] FCAFC 78 at 108 69 Ibid at 111 60

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‘location and relationship of rooms…and room dimensions….’70 Of substantial assistance are the observations of Graham J in Antocks Lairn Ltd v I Bloohn Ltd71 where he stated that copying: …may be proved directly, but normally can only be deduced by inference from all the surrounding circumstances. It is not, however, enough for a plaintiff to show that the defendant has made something which looks like the subject of the plaintiffs’ copyright, since the defendant may properly have arrived at the alleged infringement quite independently.

After adopting his Honour’s statement in Barett Property Group v Dennis Family Homes72, the court went on to find that: It is not necessary to establish that the defendant had direct access to or viewed the copyright work itself. The necessary casual link may be satisfied indirectly, where for example the defendant gained access to an infringing work or intermediate version of the copyright work, such as a three-dimensional item reproducing a sketch, a brochure or newspaper advertisement reproducing a house plan, or sufficiently precise written or oral instructions.

It is important to emphasize, as Wilmer LJ observed in Francis Day & Hunter Ltd v Bron, that: … subconscious copying is a possibility which…may amount to an infringement of copyright. But…it must be shown that the composer of the offending work was…familiar with the work alleged to have been copied…The fact that the defendant denies that he consciously copied affords some evidence…but is in no way conclusive.73 In Ancher74, Street J instructed that: An architect may legitimately inspect an original plan or house and then, having absorbed the architectural concept and style … apply that concept and style to an original plan prepared by him…. There is a dividing line separating such a legitimate process from an inspection followed by a later copying of a substantial part…[E]ven though the copying be from memory; the latter exercise does infringe…

In Inform75, the infringed plans were widely publicized and the infringer was ‘highly competitive’ and ‘stay[ed] abreast of what…competitors were doing’. Weinberg J held that the similarities between the 70

Inform Design and Construction Pty Ltd v Boutique Homes Melbourne Pty Ltd [2008] FCA 912 at 229 [1972] RPC 219 at 222 72 Barrett Property Group Pty Ltd and Another v Dennis Family Homes Pty Ltd [2011] FCA 246 at [295] 73 Francis Day & Hunter Ltd v Bron [1963] Ch 587 at 612-614 per Willmer LJ 74 Ancher Mortlock, Murray & Woolley Pty Ltd v Hooker Homes Pty Ltd [1971] 2 NSWLR 278 at 286 75 Inform Design and Construction Pty Ltd v Boutique Homes Melbourne Pty Ltd [2008] FCA 912 71

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works were, ‘too striking…to be the product of a good memory’76 and that it was ‘simply inconceivable that two such similar designs…could have been independently arrived at.’77 Similarly, in Barrett Property Group v Dennis Family Homes78, the court took into account that the respondent had monitored her competitor’s products79 and was satisfied that: [A]lthough it was not possible to identify the precise means, W had access to and awareness of the Barrett works…whether by her own visual inspection…brochures, advertisements, plans or photographs, or more indirectly, through instructions or descriptions conveyed to her by others who had access to the works….80

Therefore, it is clearly established that in the absence of any direct evidence of copying, or access to the applicant’s work, ‘the casual link can be inferred.

The greater the degree of objective similarity, the more likely it will be that that inference will be drawn.’81 4. Defences to infringement? (a) Copyright in Australia?

As globalization becomes increasingly prevalent, a defence to infringement that may be beneficial to raise is whether the allegedly infringed work is protected within Australian borders. To receive copyright protection, there must be a factor connecting the work with Australia. In the absence of such a factor, any protection will depend upon the satisfaction of international copyright recognition provisions.82 Where the work concerned is a building, the building must be situated in Australia.83 However, as copyright is separate in a building and building plans,84 for copyright to subsist in the plans as original

76

Ibid at 206 Ibid at 123 78 Barrett Property Group Pty Ltd and Another v Dennis Family Homes Pty Ltd [2011] FCA 246 79 Ibid at 554 80 Ibid at 569 81 Inform Design v Boutique Homes Melbourne [2008] FCA 912 at 69; SW Hart & Co v Edwards Hot Water Systems (1985) 159 CLR 466 at 472; Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309; Barrett Property Group Pty Ltd v Carlisle Homes Pty ltd [2008] FCA 375.

82 See generally s32 of the Copyright Act 1968 (Cth) 83 s32(3) of the Copyright Act 1968 (Cth) 84 Meikle v Maufe [1941] 3 All ER 144 77

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published works, their first publication must have taken place in Australia85 or the ‘author’ of the work must be a ‘qualified person’86 at the time when the work was first published.

Publication occurs when and where reproductions are ‘supplied or offered to the public, whether or not a sale or receipt results’.

87

However, ‘the construction of a building or of a model of a

building…or the supplying…to the public of photographs of a building, [or]…of a model of a building…does not constitute publication….’.88 Therefore, it is unlikely that materials commonly associated with ‘cookie cutter’ project homes such as promotional brochures or show homes would constitute a ‘publication’. (b) Is the Work Original?

In any event, the most commonsense defence to copyright infringement is to show that copyright does not subsist in a work because it is not original. This is a valid defence to infringement as there is nothing to infringe.89 However, to attract copyright protection it is not necessary to establish that the work in question is novel or unique. Therefore, the fact that a home does not contain any unique or revolutionary concepts in modern house design is not conclusive. All that must be shown is that ‘the product originat[ed] from the author in the sense that it is the result of “more than negligible” skill.’90

85

s32(2) of the Copyright Act 1968 (Cth) ‘qualified person’ is defined in s32(4) of the Copyright Act 1968 (Cth) as Australian citizen or a person resident in Australia.

87 s29(1)(a) of the Copyright Act 1968 (Cth) 88 s29(3) of the Copyright Act 1968 (Cth) 89 Note: this was the case with the television programme schedules in IceTV Ltd v Nine Network Australia Pty Ltd [2009] HCA 14 90 University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608-9.

86

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The Role a General Anti Avoidance Scheme Plays in a Taxation Regime

Alex Stankovic Editor’s note: This article was written before the introduction into Parliament of the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 which amends Part IVA. The policy issues discussed remain relevant to policy debate underlying the proposed Part IVA amendments.

Object of the Taxing Statutes Taxation is the means through which the Government raises revenue to fund the countless number of public ventures supporting our society. The majority of this revenue raising is done through income tax, accounting for approximately 50% of Commonwealth income in the 2010 financial year.91 Income tax is assessed by the Taxing Statutes which together reflect a multitude of taxation policies with a plethora of rules determining tax liability. The tax system we currently operate within is exceptionally complex, the ramification being that there are opportunities for exploitation by taxpayers wishing to structure their affairs in a tax effective manner. The issue which this creates is that there are opportunities for taxpayers, for those who are so willing, to engage in transactions in a manner which illegitimately minimises their tax liability, avoiding the overall purpose of Parliament in the Taxing Statutes. This type of exploitation is sought to be prevented by Part IVA 92, the General anti avoidance rule (GAAR) used in Australia.

Part IVA is a provision of last resort, operating after the application of the substantive taxing provisions and any relevant Specific anti avoidance rules (SAAP’s) which target specific types of transactions. It is therefore meant to be a provision directed entirely towards transactions which, though legal in their form, are contrary to the purpose of the Taxing Statutes.

Australia’s legal system is underpinned by the rule of law, and one may say this is particularly so in the case of the Taxing Statutes, as they impact on all individuals and companies who live and operate in Australia. In evaluating the efficacy of the Taxing Statutes93 there are some fundamental standards which must be met. The first, and most important of these, is that there must be certainty as to the 91

Commonwealth of Australia, ‘Australia’s future tax system’ (Report to the Treasurer, December 2009) 12.

92 Income Tax Assessment Act 1936 (Cth).

93 In which Part IVA is contained.

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extent of liability to taxation.94 The Taxing Statutes adversely affect the rights of citizens and often determine the commercial viability of transactions,95 and in the interests of upholding the most basic principles of equity, the incidence of tax must be easily ascertainable96 and consistent in its application.97 The second is the right of taxpayers to plan their taxation and financial affairs within the law.98 Taxing Statutes impose liability to pay taxation to the State. Outside of the circumstances so prescribed, persons are free to conduct their affairs without tax consequences. In the absence of a positive obligation to conduct affairs in such a way so as to maximise tax liability for a particular commercial objective, taxpayers should be free to conduct their affairs in a way to minimise tax, so long as the Taxing Statutes are complied with.99 Taxation is a business expense like any other, and company Directors are obliged to conduct the affairs of the company in the best interests of the shareholders,100 including legally minimising expenses.

The third is that the Taxing Statute should be efficient and tax neutral.101 The Taxing Statute should promote, or at the very least not prohibit, economically beneficial commercial activity and innovative transactions. This should be done by allowing taxpayers to determine their liability easily to avoid disputes with the Commissioner, an economically redundant process. The Taxing Statutes should provide for tax neutrality where different forms of a transaction, which in substance result in the same economic outcome, should be taxed similarly irrespective of their legal form. 102 If this balance is not struck economic inefficiency is created.103 It is apparent that both the second and third of these standards is intimately tied to certainty as to tax liability. Certainty is the overarching object of an equitable taxation regime, one which is at odds with the present operation of Part IVA.

94

N Orow, ‘Part IVA: Seriously Flawed in Principle’ (1998) Journal of Australian Taxation 57, 58.

Ibid 66.

96 The incidence of tax must be easily ascertainable in the sense that compliance and administration costs should be minimised as far as possible as they are dead weight losses in the economy. An overly complex and/or uncertain Taxing Statute will necessarily lead to greater than optimal professional fees being paid to lawyers and accountants as a safeguard.

97 In fact, taxpayers have a right to a high degree of certainty as to the tax consequences of their actions; OECD Committee on Fiscal Affairs, ‘Taxpayers’ Rights and Obligations: A Survey of the Legal Situation in the OECD Countries’ (1990) 12.

98 Orow, above n 94, 66.

99 Ibid 73.

100 Corporations Act 2001 (Cth) ss 181-182.

101 Orow, above n 94, 66.

102 Commonwealth of Australia, ‘Review of Business Taxation’ (Ralph Report: A Tax System Redesigned, July 1999) 113.

103 Orow, above n 94, 76.

95

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Purpose of Part IVA Part IVA was introduced in 1981104 to provide “an effective general measure against those tax avoidance arrangements that – inexact though the words may be in legal terms – are blatant, artificial or contrived.”105 The meaning of ‘tax avoidance’ was reflected on in the Review of Business Taxation where it was characterised as; a misuse or abuse of the law rather than a disregard for it. It is often driven by the exploitation of structural loopholes in the law to achieve tax outcomes that were not intended by the Parliament but also includes manipulation of the law and a focus on form and legal effect rather than substance.106 Part IVA was introduced in the context of the previous GAAR, s 260,107 which applied to all transactions up to 27 May 1981, being rendered ineffective as it was severely read down as a response to its terms having a “wide ambit”.108 Section 260 provided that: Every contract, agreement, or arrangement made or entered into, orally or in writing, whether before or after the commencement of this Act, shall so far as it has or purports to have the purpose or effect of in any way, directly or indirectly: (a) Altering the incidence of any income tax; (b) Relieving any person from liability to pay any income tax or make any return; (c) Defeating, evading, or avoiding any duty or liability imposed on any person by this Act; or (d) Preventing the operation of this Act in any respect; be absolutely void, as against the Commissioner, or in regard to any proceeding under this Act, but without prejudice to such validity as it may have in any other respect or for any other purpose.109 The section “if construed literally, would extend to every transaction…”110 and would have applied to a wide range of situations which the Legislature could not have intended.111 Section 260 was therefore read down by the High Court, particularly during Barwick CJ’s tenure on the Bench. This reading

104

Income Tax Laws Amendment Act (No. 2) 1981 (Cth).

Explanatory Memorandum, Income Tax Laws Amendment Bill (No. 2) 1981 (Cth) 9552.

106 Commonwealth of Australia, above n 13, 243.

107 ITAA 1936, above n 3.

108 Explanatory Memorandum, above n 105, 9551.

109 ITAA 1936, above n 3, s 260(1).

110 Explanatory Memorandum, above n 105, 9551; Deputy Commissioner of Taxation v Purcell (1921) 29 CLR 464, 466.

111 Orow, above n 94, 68 105

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down was done as part of discharging the onus placed on judges to define the requirements of a rule and the parameters in which it will operate so as to develop a rule to be applied with certainty in future decisions.112 In introducing Part IVA the then Treasurer identified four problems created by the High Court in reading down s 260:113 (1) The ‘choice principle’ was not precluded, under which taxpayers were able to choose the form of transaction if the Act laid open that form of transaction. This extended to implied choices in the Taxing Statutes; (2) The purposes or motives of the taxpayer were not to be inquired into. The purpose of the arrangement was to be determined entirely objectively; (3) it was unclear whether an arrangement to which s 260 applied was to be treated as wholly void or whether it may be treated as only partly void; and (4) There was no power provided for to reconstruct what was done so as to arrive at a taxable situation.

The choice principle was flawed because the choices provided for in the Taxing Statutes, even express choices, are not intended to be taken advantage of purely for an alteration of tax incidence. The incentives offered are designed to create favourable economic circumstances, and so Parliament expects “something of substance to result of its incentive.”114 It follows then that not every scheme which exploits an incentive is permissible tax planning.115 Similarly, there is a significant difference in the substance of a transaction which takes up an incentive offered by Parliament, and one which creates a set of circumstances purely to take up such an incentive.116 Having said this, Part IVA was not designed to prevent every sort of tax benefit to a taxpayer. In the explanatory memorandum, transactions “of a normal business or family kind, including those of a tax planning nature”,117 were stated as specific exclusions from the operation of Part IVA. This exclusion marked a return to the early position to s 260,118 enunciated in Newton v FCT119 where Lord Denning stated that in order to bring a transaction within the scope of s 260:

112

Ibid 67.

Explanatory Memorandum, above n 105, 9552.

114 P Walmsley, ‘Tax avoidance and succession planning: Pt IVA and ordinary family dealings’ (2010) 14 The Tax Specialist 71, 73.

115 Ibid.

116 Ibid.

117 Explanatory Memorandum, above n 105, 9553.

118 Ibid 119 (1958) 98 CLR 1.

113

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You must be able to predicate…that it was implemented in that particular way so as to avoid tax. If you cannot so predicate, but have to acknowledge that the transactions are capable of explanation by reference to ordinary business or family dealing, without necessarily being labelled as a means to avoid tax, then the arrangement does not come within the section.120 Lord Denning is clearly indicating here that a transaction with a legitimate commercial benefit as well as an attached tax benefit will not fall within the ambit of the GAAR, where the former objective is the primary purpose of the scheme. This balance between commercial and tax objectives is delicate, and whether or not it has been maintained is subject to some debate.

It was clear from the outset that the stated intention made apparent in both the explanatory memorandum and second reading speech is not consistent with the actual terms of Part IVA itself.

This was indicated in Case W58 where Hartigan J stated that “the words of the Statute are plain. I cannot use the Minister’s words to displace the plain language of Parliament.”121122 On the express terms of Part IVA, there is no exclusion for ordinary business or family dealings, and as a result, the scope of transactions to which Part IVA is intended to apply is difficult to determine.

One of the key difficulties in drafting a GAAR is that defining the term ‘avoidance’ is challenging.

Tax evasion is, on one extreme, lying about ones’ income. Tax mitigation, on the other hand, means reducing one’s tax liability in a way which the law encourages, such as claiming a deduction for charitable donations. Tax avoidance lies somewhere in the middle. It may be taken to approximately mean “contriving artificial transactions to reduce the tax payable than is otherwise payable”.123 The present issue is that Part IVA is in danger of encroaching on that area of tax mitigation, or what the High Court and many commentators have identified as legitimate tax planning.

Methods of Interpretation Ordinary principles of statutory interpretation require the use of a purposive approach in reading legislation. This involves affording a provision a meaning which furthers the purpose of the legislature. In relation to tax laws particularly, the traditional approach is to construe provisions

120

Ibid, 8-9.

89 ATC 524, 533-534.

122 Pursuant to s 15AB of the Acts Interpretation Act 1901 (Cth), extrinsic materials can only be used in the interpretation of a Statute where, inter alia, the meaning of the provision is ambiguous or obscure.

123 Z Prebble and J Prebble, ‘Comparing the General Anti-Avoidance Rule of Income Tax Law with the Civil Law Doctrine of Abuse of Law’ (2008) Bulletin for International Taxation 151, 151.

121

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strictly on the meaning plainly shown in the text.124 This is the result of such a wide number of policy objectives being targeted in the Taxing Statutes. The rationale for this approach is the protection of taxpayers who may be subject to penalties and interest should they incorrectly interpret these laws.

The third approach stems from the “Duke of Westminster Principle”125 which mandates that taxpayers are free to arrange their affairs to minimise taxation. This principle is directly counteracted by Part IVA however.

As an exercise of statutory interpretation, determining whether Part IVA applies to a particular transaction should, one would think, be determinable by reference to ordinary rules of statutory interpretation. Section 15AA of the Acts Interpretation Act provides for a purposive approach to statutory interpretation. Where a provision is ambiguous, the “interpretation that would best achieve the purpose or object of the Act is to be preferred to each other interpretation.”126 Importantly this applies to an express or implied purpose of the Act.127 This exercise is, in reference to Part IVA, extremely challenging if not impossible.128 The Taxing Statutes, as stated previously, represent a number of policy objectives by Parliament, not all of which are easily determined. The matter is further complicated by the nature of Part IVA. It is a provision directed towards transactions which have already satisfied the ‘letter of the law’ in regards to the relevant substantive provisions, as it is a provision of last resort. In reaching this determination, the purposive rule provided in s 15AA will already have been applied and therefore it will only ever apply where the transaction is deemed to have complied with the purpose or object of the Act. Accordingly, seeking to apply a purposive approach to Part IVA to identify illegitimate tax avoidance schemes will not be effective.

Part IVA was introduced to target only transactions which are illegitimate tax avoidance schemes.

These are transactions which primarily seek to reduce tax liability, as opposed to being aimed at some productive commercial end. This is an inference which can, and must, be drawn from the stated intention of the Part in the explanatory memorandum to the Act introducing Part IVA. There are therefore two different types of transaction which are in question here. The first, to which Part IVA should properly apply, is a transaction with some commercial objective, but is ultimately tax driven. On the other hand there is the transaction to which Part IVA should not apply – a transaction 124

Ibid, 152.

IRC v Duke of Westminster (1935) All ER Rep 259.

126 Acts Interpretation Act 1901 (Cth) s 15AA. 127 Ibid.

128 C Rider, ‘The operation of Part IVA on genuine commercial transactions with tax-effective structures’ (2003) 38 Taxation in Australia 264, 264.

125

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which is driven by a commercial objective, but does have an associated tax benefit, as a result of structuring the transaction in a manner to minimize tax. In considering the object of a good tax system, this latter type of transaction should, from a policy point of view, be promoted as it is economically efficient. However it is in danger of being targeted by Part IVA based on the development of case law interpreting the provisions.129 If this eventuates, these commercially driven transactions will have to be conducted in a way so as to maximize the tax liability, ceteris paribus.

129

Ibid.

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A critical assessment of the current, and any proposed, regulatory scheme for the exploration and extraction of CSG in NSW

Kate Angus I.

Introduction

Coal seam gas (“CSG”) is a naturally occurring resource recently recognised as a valuable alternative energy form. In response to increased interest in CSG by mining enterprises, the NSW State Government has been required to bolster the current legislative framework of mining activities to ensure that both the exploration and extraction of CSG is adequately regulated. However the rapid growth of the industry and relative uncertainty into the short and long term impacts of exploration and extraction has led to scepticism as to the framework’s suitability. This essay will seek to identify the key issues pertinent to CSG activities, discuss the deficiencies of the current regulatory framework in light of these concerns, and assess whether proposed reforms address such issues.

II.

What is Coal Seam Gas?

CSG refers to the mixture of gaseous hydrocarbons found within coal seams.130 Traditionally regarded as a major hazard with the pottential to cause disastrous explosions in underground coal mines,131 CSG is now recognised as a valuable, alternative energy resource. CSG is created during the process of coal formation, becoming trapped in the fractures of coal deposits, known as coal “seams” or “cleats”.132 Held in place by water pressure, CSG is mainly extracted through processes whereby the water pressure of the coal seam is decreased, with the gas eventually being extracted by treatment of the water removed from the coal deposits.133 CSG extraction methods may be assisted by hydraulic or chemical processes134 known as “fraccing.”

130

Ken MacDonald and Ben Zillmann, ‘Minerals and Energy’ in The Honourable Justice Margaret Beazely AO (ed) Australian Encyclopaedia of Forms and Precedents (Butterworths LexisNexis, 2012) 195.

131 C M Atkinson, Environmental Hazards of Oil and Gas Exploration (27 August 2002) LockTheGate.org <http://lockthegate.org.au/documents/doc-283-evironmental-hazards-of-oil-and-gas-exploration.pdf>.

132 Samantha Hepburn, The Coal Seam Gas Industry in Australia (8 May 2012) Deakin University Research <http://deakin.edu.au/research/stories/2012/05/08/the-coal-seam-gas-industry-in-australia>.

133 CSIRO, What is coal seam gas? (18 May 2012) CSIRO <www.csiro.au/news/coal-seam-gas>'; Australian Petroleum Production and Exploration Association (APPEA) An Introduction to the Coal Seam Gas Industry (1 March 2012) Australian Petroleum Production and Exploration Association (APPEA) <www.appea.com.au/csg/industry-facts/fact-sheels/969-csgindustry.html>.

134 ABC Rural, About Coal Seam Gas, (Date unknown) ABC Rural – The Coal Seam Gas Debate <http://www.abc.net.au/rural/coalseamgas/?section=about>.

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As noted above, CSG has become increasingly recognised as a valuable resource. Within the mineral and resources industry, CSG has significant economic potential as a source of low cost fuel, with lower greenhouse gas emissions. With the development of efficient extraction technology, the commercial utility of CSG has rapidly increased,135 and should the CSG industry develop further, it is foreseeable that the industry will provide exports, state revenue and create a number of domestic jobs.136 However, several concerns arise from the exploration and extraction of CSG. CSG processes have the ability to impact upon both surface and sub-surface environments. This may be through the physical process of drilling wells, by virtue of the chemical products used during extraction, or by the waste products produced. 137 Further concerns rest upon the rights of landowners upon whose land CSG activity is purported to take place, and the actual economic viability of CSG projects.

III.

The Regulatory Framework

A. The Current Framework Pursuant to the Petroleum (Onshore) Act 1991 (NSW), CSG is classified as a “petroleum” and thus is regulated in the same manner as onshore petroleum activities. The current framework rests upon a number of pieces of legislation, which in summation provide for the strongest regulation of CSG exploration and extraction in Australia.138 State governments are primarily responsible for the regulation of CSG activity, with the Commonwealth and Local governments playing little to no role.

The Petroleum (Onshore) Act 1991 (NSW) provides the legislative mechanisms pursuant to which exploration139 and production140 of CSG may take place, and development approval and environmental assessment of CSG activities are specified in the Environmental Planning and Assessment Act 1979 (NSW). Ultimately, the legislation provides the manner in which explorers may obtain exploration licences and petroleum titles, such as assessment leases, production leases and prospecting authorities.

135

Samantha Hepburn, above n 132.

Nicola Swayne, ‘Regulating coal seam gas in Queensland: lessons in an adaptive environmental management approach?’ (2012) 29 Environmental and Planning Law Journal 163, 164.

137 Briny “production water,” salts, and remnant chemicals of fraccing processes.

138 Andrew Stoner MP and Brad Hazzard MP, ‘Government Unveils New Protections for Agricultural Land’ (Media Release, 11 September 2012).

139 Petroleum (Onshore) Act 1991 (NSW) s 29.

140 Ibid s 41.

136

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In addition to these two key legislative instruments, CSG activities may also need to comply with additional legislative provisions, for example those of the Environment Protection and Biodiversity Conservation Act 1999 (Cth), the Protection of the Environment Operations Act 1997 (NSW), the Water Management Act 2000 (NSW), the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) or the Native Title Act 1993 (Cth).

B. The Proposed Framework In September 2012, the NSW State Government released its final version of the Strategic Land Use Policy (“The Policy”), which established a number of recommendations targeted at striking the “right balance between Australia’s agricultural, mining and energy sectors whilst ensuring the protection of high value conservation lands.”141 The recommendations cover a number of areas, such as: -

Increasing scientific knowledge pertinent to CSG, it’s value and impact

-

Amending existing codes of practice to better address the exploration and extraction process, environmental impacts and land acquisition concerns

-

Developing effective communication channels with key stakeholders

-

Strengthening the rights of landowners

In addition to the Policy, the NSW Government has also released a Draft Code of Practice for CSG Exploration (“The Code”). The Code is aimed as establishing a best practice framework, balancing the rights and concerns of private landowners with an access regime for explorers.142 In this sense, the Code of Practice rests heavily upon obtaining proper consent from landowners and government agencies, as well as placing emphasis on ensuring that CSG exploration projects are environmentally sound.

A number of other guidelines and publications have been released by the NSW Government under the umbrella of strategic land use policy, all aimed toward strengthening the regulation of the CSG industry.143 The proposed framework may thus be viewed as continuing the comprehensive approach taken by the existing framework, ensuring that CSG exploration and extraction methods remain strongly regulated.

IV.

Evaluation

To best assess the proposed framework, a comparative analysis of the existing and proposed regulatory frameworks will be conducted, assessing how the proposals address identified issues and concerns.

141

Brad Hazzard, ‘NSW Government adopts rigorous strategic approach to regional land use planning’, (Media Release, 21 May 2011).

142 NSW Government, Draft Code of Practice for Coal Seam Gas Exploration (at March 2012).

143 Chris Hartcher, ‘Tougher controls on CSG’, (Media Release, 6 March 2012).

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A. Environmental Concerns 1. Chemical Concerns The process of extracting CSG may sometimes rest upon the use of a chemical fraccing process.

Whilst the NSW Government has placed a moratorium144 on the use of BTEX145 chemicals, community groups remain concerned about the effect non-BTEX chemicals used during CSG activity may have on surrounding surface and sub-surface systems.

To this end, the Policy is directed towards maintaining the ban on chemically-assisted fraccing until such a time as when the National Industrial Chemicals Notification and Assessment Scheme has completed its assessment on the use and toxicity of fraccing chemicals.146 The Policy is also directed at increasing community knowledge as to the chemicals used in CSG activities, by having mining enterprises make available online lists of the chemicals used in CSG activities.147 In a manner that may be considered forward thinking, the Code provides that the onus is upon explorers to protect the environment from risks posed by fraccing, should the ban be lifted.148 Such measures are viewed to be the primary way in which community concerns as to chemical contamination of prime surface agricultural land and sub-surface water systems is to be alleviated.

2. Water Concerns Environmental concerns also rest upon the potential impact CSG activity may have upon NSW’s water resources. Community groups are concerned about “produced water” as a by-product of the CSG extraction process, as well as the impact upon groundwater resources in terms of depletion and contamination.

“Produced water” is a remnant product of the CSG extraction process. Large volumes of this poor quality water are produced, often containing high levels of sodium, chlorine and other impurities,149 rendering the water unable to be conventionally disposed of. As inappropriate management of produced water can create irreversible damage to soil, vegetation and hydro-ecosystems,150 the current

144

Chris Hartcher , ‘NSW Government Extends Fraccing Moratorium’, (Media Release, 2 December 2011); Chris Hartcher, ‘NSW Government has listened and acted: Tough new conditions for coal and coal seam gas’, (Media Release, 21 July 2011).

145 Benzene, Toluene, Ethylbenzene and Xylenes 146 General Purpose Standing Committee No 5, Parliament of New South Wales, Inquiry into Coal Seam Gas (2012) 5.58-5.59.

147 Ibid 148 NSW Government, above n 142, 15.

149 National Water Commission, Australian Government, Onshore Co-produced Water: Extent and Management (at September 2011).

150 National Water Commission, above n 20, 1; M Taulis, ‘Australia and New Zealand CBNG development and environmental implications in KJ Reddy (ed), Coalbed Natural Gas: Energy and Environment (Nova Science Publishers, 2010) 421.

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framework requires that produced water be disposed of in an approved, specified manner. 151 In this regard, it can be said that current regulation is adequate, with the Code reinforcing those practices to be used with respect to produced water.152 Despite supporters of the CSG industry claiming that water systems are well understood,153 it has been identified that CSG activities have the potential to deplete groundwater supplies, as well as crosscontaminate them. The current framework requires mining enterprises to carry out baseline assessments of sub-surface water sources to determine if CSG activities will impact upon them. 154 Companies are also required to hold Water Access Licences in certain circumstances to ensure the continued and sustainable management of sub-surface water supplies. 155 As Australia’s groundwater and aquifer systems are vast and expansive, the current regulations appear to be appropriate only for those circumstances where a single CSG operation takes place upon an aquifer. However, should the CSG industry develop, it is foreseeable that multiple CSG operations may drill into the one groundwater system, which can lead to significant impacts upon aquifer interaction, vertical recharge, structural integrity and artesian pressure.156 It may thus be said that the cumulative effect of multiple CSG projects in a particular area upon groundwater systems is not well understood.157 Such concerns have been addressed in Queensland through the comprehensive management of groundwater by the Water Act 2000 (Qld), rather than by a cursory division in petroleum legislation.

Queensland regulation of CSG activities and its impact upon groundwater resources also rests upon an “adaptive management framework,”158 whereby continual monitoring, evaluation and reporting obligations are placed upon mining enterprises to ensure that any negative ramifications of CSG activity are immediately addressed.159 It would be appropriate for NSW to take a similar approach, and perhaps aim towards establishing a Commonwealth approach to CSG activities and their impact on water systems, particularly in circumstances where groundwater systems affected exceed the bounds of the State.

151

NSW Government, above n 142, 14.

Ibid.

153 General Purpose Standing Committee No 5, above n 146 3.3.

154 NSW Government, above n 132, 14.

155 Ibid.

156 Geoscience Australia and Habermehl M, ‘Summary of Advice in Relation to the Potential Impacts of Coal Seam Gas Extraction in the Surat and Bowen Basins, Queensland: Phase One Report Summary for the Australian Government Department of Sustainability, Environment, Water, Population and Environment’ (29 September 2010) 1.

157 National Water Commission, ‘Coal Seam Gas and Water’ (Position Statement, December 2010) 1.

158 Geoscience Australia and Habermehl M, above n 156, 7.

159 Swayne above n 136 163-185.

152

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3. Repatriation of Agricultural Land Returning land upon which CSG activities have taken place back to its natural state is an environmental concern shared by a number of stakeholders but predominantly by landowners, agricultural unions and governments.160 Concerns are particularly heightened in circumstances where land affected by CSG activity was previously used for agricultural activity. It should not be the case that Australia’s agricultural industry takes a step back whilst the CSG mining industry is developed.

The current framework provides that mining enterprises are to provide a security deposit for the purposes of covering remediation works or unseen impacts.

161

However whether these are adequate

or held long enough is questionable.162 Further, there are no legislative obligations imposed upon mining enterprises to repatriate land upon which they have conducted CSG activities.163 The Policy provides a number of measures to confront the issue of returning land back or close to its original condition. Suggestions have been made that rather than, or in addition to, the payment of a security bond, mining enterprises be encouraged to take out insurance policies that can be invoked to meet long and short term repatriation costs.164 Further it is suggested that legislative mechanisms be inserted into the Petroleum (Onshore) Act 1992 to mirror those requirements of the Draft Code of Practice165 to impose remediation obligations on mining enterprises.

B. Rights of Private Landowners 1. Access Arrangements Under the existing regime, private landowners have certain rights that may operate as a restriction on mining titles.166 However, landowners and agricultural stakeholders have voiced concerns related to the bullish attitude taken by large mining enterprises in their attempts to gain exploration access to prime agricultural land in NSW upon which CSG activity is purported to take place.167 Such an attitude may prompt landowners to defer to the will of mining enterprises which, in the case of vulnerable and ill-informed landowners, can lead to access on unjust terms.

160

Atkinson, above n 131.

NSW Government, above n 142, 3.

162 General Purpose Standing Committee No 5, above n 146, 6.36; Hon Chris Hartcher MP, ‘Tougher controls on CSG’, (Media Release, 6 March 2012).

163 General Purpose Standing Committee No 5, above n 146, 6.47.

164 Ibid 6.45.

165 Ibi 6.50; NSW Government, above n 142, 3 166 Petroleum (Onshore) Act 1991 (NSW) Parts 4A and 5.

167 Sean Nicholls, ‘Entire state up for grabs in coal seam gas and mining rules,’ The Sydney Morning Herald (online), 12 September 2012, <http://www.smh.com.au/environment/entire-state-up-for-grabs-in-coal-seam-gasand-mining-rules-20120911-25qnj.html>; NSW Government, above n 142, 7.

161

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The proposed framework aims to alleviate such concerns through a number of measures. Harmonising current legislative provisions with those of the Mining Act 1992 (Cth) perhaps provides better protection for landowners of “cultivated land.”168 Further, amendment of the Petroleum (Onshore) Act 1991 (NSW) to specify that access agreements be entered into for both the exploration and extraction stage ensures that landowners are kept well informed of CSG activities taking place upon their land, at all stages of the process.

The proposals appear to bring NSW CSG practices in line with those of Queensland, where access agreements and the recovery of costs associated with legal review of such agreements is a prominent legislative feature.169

2. Co-existence Another concern of landowners, particularly farmers, is the inability for CSG activities to co-exist with agricultural activities. Whilst the current framework provides for the Government’s ability to veto applications where the land involved is prime agricultural land170 the framework does little to recognise how CSG activities may co-exist with agricultural activities.

As touched upon by the discussion with regard to land repatriation, the agricultural industry need not suffer whilst the CSG industry develops. As CSG infrastructure may potentially consume large areas of land in the extraction phase, it is necessary for consideration to be had to the agricultural value of the land and whether allowing CSG activity to take place will detract from this value. The Petroleum (Onshore) Act 1991 has been recognised to have been drafted with conventional mining activities in mind, and as CSG exploration and extraction is not performed in this conventional manner, the legislation is deficient when it comes to regulating the CSG model.171 The proposed framework recommends the requirement of an Agricultural Impact Statement be prepared for all exploration licence applications.172 This should extend to ensuring that assessment of the viability of a CSG project takes into account the comparative value of the land in terms of its use for agricultural activities, and perhaps consider alternative locations in which wells may be drilled for extraction where the effect upon agricultural land is purported to be significant.

168

General Purpose Standing Committee No 5, above n 17, 9.44.

Petroleum and Gas (Exploration and Safety Act 2004 (QLD) s 532(4)(b).

170 Petroleum (Onshore) Act 1991 (NSW) s 71.

171 General Purpose Standing Committee No 5, above n 146, 7.38.

172 Ibid 10.54.

169

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C. Economic Concerns In addition to concerns as to environmental impacts and landowner rights, community groups have expressed concern over the economic viability of CSG. It has been noted that development of the Australian CSG industry has the potential to provide greater exports, state revenue and create jobs.173 It is thus foreseeable that development of the industry will lead to regional development and investment. However these projections remain ambiguous, and must be contrasted with the concerns highlighted above, in addition to concerns raised by special interest groups.174 Current concerns rest upon a number of factors should CSG activity increase, including: -

The ability for current infrastructure to cope with increased demand

-

The impact upon labour supply, as the mining industry may attract workers away from other industries

-

Impacts upon the housing market as mining industry employees compete in the same market as those outside the industry 175

In an attempt to confront these concerns, the Policy is directed toward increasing the transparency surrounding CSG activity. The provision of projections on employment opportunities to be created in regional areas176 may better quell community concerns and enable subsequent assessments to be made as to the wider economic impacts of CSG activity. In this regard, it may be noted that the proposed framework may adequately address economic concerns through the continual provision of information pertinent to the economic consequences of CSG activity.

V.

CONCLUSION

As demonstrated by the preceding discussion, balancing environmental concerns and landowner interests with the purported economic benefits of the CSG industry is a complicated process. Whilst the current regulatory framework has been built upon by proposals of the State Government, it is important to be mindful of the fact that an adaptive approach may not be appropriate where little is known about the true impacts of industry practice. In order to guarantee the viability of CSG

173

Swayne, above n 136, 164.

General Purpose Standing Committee No 5, above n 146, 11.22; Josephine Tovey, â&#x20AC;&#x2DC;Winemaker sees red over coal seam gas mining,â&#x20AC;&#x2122; The Sydney Morning Herald (online), 8 November 2011, <http://www.smh.com.au/environment/winemaker-sees-red-over-coal-seam-gas-mining-201111081n4mh.html>.

175 General Purpose Standing Committee No 5, above n 142, 11.24.

176 Ibid 11.40.

174

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activities, it is paramount that full regulatory controls are imposed upon mining enterprises, with the support of strong and independent research and the initiation of proper stewardship.177

177

Hepburn, above n 132 32

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Tribunals now perform a crucial role in administrative law, but can they hack the pace at which it is growing?

Michelle Burge

1. The Growth of Administrative Tribunals in Australian Law Administrative law encompasses a broad range of initiatives attempting to improve government accountability in the areas of lawfulness, fairness, rationality, impartiality and transparency.178 According to Creyke and McMillan, administrative law aims to ‘safeguard the rights and interests of people and corporations in their dealings with government agencies’179 and does so in three ways. The most relevant to this essay, is the right to have a government decision reviewed, for example, the right to appeal to a tribunal to review the merits or legality of a decision.180 Tribunals vary in nature due to the diversity of needs and interests that must be met. As such, tribunals differ in objectives, processes and remedies. Whilst they cannot be easily defined, they have three things in common: They must operate in a way that is procedurally fair. They must decide the matters they are mandated to determine on the basis of credible evidence and they must operate only within the limits of their various and often very limited areas of jurisdiction.181 It is also recognized that there two main groups operating in Australia: Administrative tribunals that determine disputes between government and private persons or bodies arising under public law… and tribunals that have taken over from the courts the determination of some civil disputes arising under private law.182 In these capacities, tribunals have been able to make policy, monitor compliance with regulatory standards, advise, conduct investigations and handle grievances. These powers, as usually sourced in statute, have enabled various governmental functions to be delegated to tribunals.

178

Robin Creyke and John McMillan, Control of Government Action: Text, Cases and Commentary (LexisNexis Butterworths, 2nd ed, 2009) 8 179 Ibid 14.

180 Ibid.

181 Nick O’Neill ‘What is COAT (NSW) about and where is it going?’ COAT (NSW) Conference, 28 May 2004.

182 R Creyke and J McMillan, above n 178 154-155.

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This understanding of administrative law is a recent development. General dissatisfaction with the justice system, particularly the courts, in the second half of the 20th Century acted as a catalyst for reform of Australian administrative law.183 The courts were seen as ‘too slow, too expensive, too formal and too complicated’.184 The ad-hoc state of administrative law in the 1960’s is well explained

by Sir Anthony Mason, AC, KBE, QC: There was then no merits review, judicial review was beset with all the technicalities associated with the prerogative writs and there was a myriad of statutory discretions and ill-assorted tribunals over which there hovered a dark cloud in the form of the Boilermakers’ Case.185 The Kerr Committee Report in 1971186 and later, the Bland Committee Report in 1973187 prompted the establishment of a general tribunal to hear appeals on the merits of decisions, now known as the Administrative Appeals Tribunal (AAT). In 1976, the AAT was the first tribunal to be established in Australia. Today it has jurisdiction to review administrative decisions made under more than 400 acts of the Commonwealth Parliament of Australia.188 The influence of the two reports resulted in other major changes to the functions, powers and obligations of the executive branch of government. The office of the Ombudsman 189 to investigate complaints was established, as was a new Federal court to review decisions on the basis of unlawfulness and the Administrative Review Council (ARC) as an overall monitoring body. They were each implemented to ensure that the citizen could challenge government decisions and scrutinise government processes.190 Since 1976, many other tribunals have been established across Australia due to pressure from areas with a high volume of appeals, such as social security and migration.191 At the Federal level, specialist 183

Lane WB and Young S, Administrative Law in Australia (2007) 1.15-1.20.

Kay Ransome, ‘The effectiveness and efficiency of administrative law: the tribunal perspective’ [online] AIAL Forum; (58) September 2008: 68-73.

185 Sir Anthony Mason AC KBE QC, ‘The Kerr Report of 1971: Its Continuing Significance’ (Speech delivered at the Inaugural Whitmore Lecture, Council of Australasian NSW Chapter – Annual General Meeting, 19 September 2007) <http://www.coat.gov.au/docs/NSWChapter/InauguralWhitmoreLecture.pdf>. Also note, in the Boilermakers Case the High Court of Australia held that the judicial power of the Commonwealth could not be vested in a tribunal that also exercised non-judicial functions.

186 Commonwealth, Kerr Committee Report, The Commonwealth Administrative Review Committee Report (chaired by Justice John Kerr), Parl Paper no 144 (1971) 187 Commonwealth, Bland Committee Report, Final Report of the Committee on Administrative Discretions Parl Paper No 316 (1973).

188 Berrigan Doube Lawyers Group, ‘Comparing courts to tribunals’ (1 May 2011) <http://www.bdlg.com.au/images/stories/Litigation__Disputes_Resolution/Comparing_Courts_toTribunals.pdf 189 See Ombudsman Act 1976 (Cth).

190 Francisco Esparraga and Ian Ellis-Jones, Administrative Law Guidebook (Oxford University Press, 2011) 5.

191 See Robin Creyke, ‘Better Decisions’ and federal tribunals in Australia’, Reform, Australian Law Reform Commission (2004) Autumn 84, 10-14. Note, This is despite the recommendations of the Kerr and Bland 184

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tribunals include the Social Security Appeals Tribunal, the Migration Review Tribunal (MRT), the Refugee Review Tribunal (RRT) and the Veterans’ Review Board, amongst others. At a state level, tribunals are diverse and include the Administrative Decisions Tribunal192, the Consumer Trader and Tenancy Tribunal193, the Dust Diseases Tribunal194 and the Mental Health Review Tribunal195 (MHRT), amongst others. There are also ‘domestic’ tribunals that are not courts of law and not established by statute. A common example is a sporting disciplinary body.196 However, as the amount and variance of tribunals grew, their effectiveness and efficiency was questioned and as a result the Administrative Review Council (ARC) was established. The ARC published a final Better Decisions197 report in 1995. Its key recommendation was to amalgamate the specialist tribunals and the AAT into the Administrative Review Tribunal.198 Due to concerns regarding independence of tribunals and an undermining of the merits review process this did not come to fruition but it became apparent that some of the recommendations could be met without legislative change. For example, the MRT and the RRT share premises and resources, such as IT systems, resistors, front counter staff and even members.199 In light of this growth of tribunals and administrative law, another question begs an answer. Why has there been such a growth in government decision-making? Largely, this growth can be attributed to an increase in legislation. In 1901 only 17 acts of the Commonwealth Parliament were passed;

200

contrast this with 150 Acts passed in 2010.201 Not only has there been a growth in legislation passed, but also in the number of pages per act passed, which no doubt increases the complexity of the law.202 This growth in Acts passed and pages per act, is also the case in every state and territory in Australia.203 Thus, while the legislation grows, government decision-making must grow and so too does Australian administrative law. To assess whether tribunals have coped with the growth it may be beneficial to look at the objectives and achievements of particular tribunals.

Reports, which strongly advocated that the number of tribunals operating in the Commonwealth be strictly limited, see example Final Report of the Committee on Administrative Discretions (Bland Committee Report) (1973), recommendations xix-xxi.

192 Established under the Administrative Decisions Tribunal Act 1997.

193 Established under the Consumer, Trader and Tenancy Tribunal Act 2001.

194 Established under the Dust Diseases Tribunal Act 1989.

195 Established under the Mental Health Act 2007.

196 For example, the Disciplinary Committee of the Football Federation of Australia, but these will not be dealt with in the essay as they do not directly or actively aid in government decision-making.

197 Administrative Review Council, Better Decisions: Review of Commonwealth Merits Review Tribunals, Report No 39 (1995), 181.

198 Returning to the Kerr / Bland model, and would have been a major cost-cutting exercise.

199 Changes implemented to improve financial efficacy.

200 See Commonwealth Parliament of Australia, House of Representatives Practice (5th ed, 2005) 794 201 Ibid.

202 Chris Berg, The Growth of Australia’s Regulatory State: Ideology, accountability and the mega-regulators (Institute of Public Affairs, 2008) 11.

203 Ibid, 12-14.

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2

The MRT and The RRT

The MRT and RRT are statutory bodies providing a final, independent merits review of visa and visarelated decisions made by the Minister for Immigration and Citizenship or by delegates of the Minister.204 The tribunals are established under the Migration Act 1958 (Cth) (the Act)

205

and their

powers, procedures and jurisdiction are set out in the Act and the Migration Regulations 1994 (Cth).

The difference between the two is that the RRT reviews decisions regarding protection visas and the MRT reviews decisions regarding all other visas.

Both tribunals have the same statutory objective of ‘…providing a mechanism of review that is fair, just, economical, informal and quick’.206 The difficulty of achieving these objectives simultaneously was illustrated in 1997 in Sun Zhan Qui v Minister for Immigration and Ethnic Affairs. Where in regards to an RRT case, Lindgren J said: I do not think that the legislature intended… to afford a ground of review wherever the [Tribunal] provided a mechanism of review which, in its application to a particular case, was 'economical', 'informal' and 'quick', but which might be considered to be somewhat less than 'fair' and 'just' in some respect.207 However, the practical impossibility of satisfying the five objectives appears to be a contentious issue as other courts have decided the matter differently.208 Perhaps it is now somewhat settled by the findings of the High Court in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs.209 In that case by a 3:2 majority Kirby, McHugh and Hayne JJ, emphasized the need to be ‘fair and just’, while Gleeson CJ and Gummow J applied the ‘economical, informal and quick’ requirements.210 Whilst satisfying these objectives appears to be a recurring issue, information published on the MRT and RRT website evaluates the tribunals’ performance using different measures.211 They are largely 204

The Migration Review Tribunal – An Overview (M8), Australian Government, Migration Review Tribunal, Effective March 2011.

205 Under the Migration Act 1958 the MRT is established under s 349 and the RRT is established under s 415.

206 Migration Act 1958, s 353 (MRT) and s 420 (RRT).

207 Sun Zhan Qui v Minister for Immigration and Ethnic Affairs, unreported, Federal Court of Australia, Lindgren J, 6 May 1997. Note, this case went to appeal. The appeal against the decision of Lindgren J was allowed.

208 See Eshetu v Minister for Immigration and Multicultural Affairs (1997) 71 FCR 300, Perrett v Commissioner for Superannuation (1991) 29 FCR 581 at 592.

209 (2005) 215 ALR 162.

210 See further inquiry in Robin Creyke ‘Inquisitorial practice in Australian tribunals’ Administrative Review 57 (March 2006) 17-32. Also note that through the principle of procedural fairness this case placed a higher burden on the MRT and RRT to provide information in writing to applicants, even where the information had been thoroughly explained orally at a hearing. This prompted the Migration Amendment (Review Provisions) Act 2007, which has attempted to alleviate this burden.

211 See The Tribunals’ Plan 2007 – 2010, Australian Government: Migration Review Tribunal and Refugee Review Tribunal, retrieved at http://www.mrt-rrt.gov.au/About-the-tribunals/default.aspx, MRT-RRT Caseload 36

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assessed on their performances in delivering favourable decisions, deciding cases within specific time frames, dealing with complaints, publishing decisions online and by the number of cases that are appealed to the courts for judicial review.

The Annual Report 2009-2010212 (the Annual Report) for the MRT and RRT reported on various key performance indicators (KPI). Overall, it showed that 70% of cases were decided within time standards. The cases with the lowest rate of timeliness being MRT cases (other than bridging detention cases and visa cancellation cases, ‘MRT cases’) with only 52% decided within the time standard of 350 calendar days.213 However, the MRT and RRT Caseload Report for 2010-2011214 (Caseload Report) shows that MRT and RRT lodgements have increased by 27% and 28% respectively since the same time in the previous year. The Caseload Report also shows dramatic increases of 58% and 33% of cases on hand in the MRT and RRT, respectively.

The fact that MRT cases have such a low percentage of cases decided within the time frame indicates that the MRT may not be ‘coping’ with the growth in lodgements and live cases. This is reinforced by the fact that in 2007-2008 the time standard for MRT cases to be decided within was 250 days, which was increased to 320 days in 2008-2009, and to 350 days in 2009-2010. Each year the time standard has increased but the amount of cases actually being decided within these standards has hardly improved.215 The Annual Report also revealed that 45% of MRT cases delivered a favourable result for the applicant and 40% of RRT cases delivering a favourable result for the applicant. This concern with the ‘favourable’ result is perhaps due to the findings of the Federal Court in 1979 in Drake v Minister for Immigration and Ethnic Affairs216, where it was established that the function of the AAT was to arrive at the "correct or preferable" decision.217 Not only is the outcome of decisions important, but also whether the correct decision has been made.

This requires a qualitative approach, which is extremely difficult to carry out when there are time and money constraints. Former Chairperson of the New South Wales Consumer, Trader and Tenancy Tribunal, Kay Ransome, questions the methods tribunals use to evaluate their efficiency and

Report: 31 March 2011, Australian Government, Migration Review Tribunal and Commonwealth of Australia, Migration Review Tribunal, Refugee Review Tribunal, Annual Report 2009-2010.

212 Commonwealth of Australia, Migration Review Tribunal, Refugee Review Tribunal, Annual Report 20092010 (2010).

213 Ibid, 32.

214 MRT-RRT Caseload Report: 31 March 2011, Australian Government, Migration Review Tribunal.

215 In 2007-08 only 41% of cases were decided within the standard and in 2008-09 only 50% of cases were decided within the standard and in 2009-2010 only 52% of cases were decided within the standard.

216 (1979) 46 FLR 409 at 589.

217 Whilst this has been established as a function of the AAT, legislation enacting other tribunals largely mirrors that of the Administrative Appeals Tribunal Act 1975 (Cth) and as such, decisions such as these can be influential on the functions of other Commonwealth tribunals.

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effectiveness.218 Ransome advocates for measures to focus on assessment of correct outcomes, fair procedures and accessibility. In order to measure these objectives Ransome explains that a tribunal should be able to report consistency in its decisions because fairness dictates that parties in like situations should receive like results.219 She also asserts that tribunals must produce understandable reasons for decisions.220 Lastly, Ransome advocates for client satisfaction surveys in order for the opinion of the applicant to be heard, as in her opinion they are: …a useful tool for assessing whether the practices and procedures… as well as matters associated with the design of the premises, helpfulness of the informational material etc, are perceived to be fair by the users of the system.

3

The MHRT

It is beneficial to contrast Commonwealth tribunals, such as the MRT and the RRT with a state tribunal, such as the MHRT. The MHRT is a specialist quasi-judicial body constituted under the Mental Health Act 2007 (the Act). It is important to note that state tribunals may carry out judicial functions, whilst Commonwealth tribunals cannot exercise any powers that are judicial in nature. The Australian Constitution incorporates the separation of powers doctrine. Most significantly, the judicial powers of the Commonwealth may only be carried out by the courts specified in s 71 and s 72.221 This separation of judicial power from the other powers has been strictly enforced in cases such as R v Kirby; Ex Parte the Boilermakers’ Society of Australia222 and Brandy v Human Rights and Equal Opportunity Commission.223 This enforcement of the doctrine is the reason why Commonwealth tribunals such as the MRT and RRT exist strictly as merits review bodies. The courts can review an administrative decision to determine if it is lawful, but not an administrative decision on the merits of a decision since this is an administrative function, and so these reviews are delegated to tribunals.

This does not apply to the courts and tribunals of New South Wales, as the state Constitution224 does not strictly enforce a separation of powers and this explains how the MHRT is a ‘quasi-judicial’ body.

The MHRT does not have the same set of objectives as the MRT or RRT. In fact, the words ‘economical’, ‘quick’ or ‘just’ do not even appear in the Act. Instead, their objectives come from the objectives of the Act itself, and the United Nations Principles for the Protection of Persons of Mental

218

See Kay Ransome, ‘The effectiveness and efficiency of administrative law: the tribunal perspective’, AIAL Forum; (58) September 2008: 68-73 <http://search.informit.com.au.ipacez.nd.edu.au/fullText;dn=20091341;res=AGISPT>.

219 Ibid, 4.

220 Ibid.

221 Australian Constitution s 71, 72.

222 (1956) 94 CLR 254.

223 (1995) 183 CLR 245.

224 Constitution Act 1902 (NSW).

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Illness and for the Improvement of Mental Health Care adopted by the General Assembly in 1991.225 The objectives of the MHRT include delivering ‘the best possible kind of care to each patient in the least restrictive environment’ and ‘treatment and care for every patient based on individually prescribed plans, discusses with the patient, reviewed regularly, revised as necessary and provided by qualified professional staff’.226 In assessing how the MHRT satisfies its objectives an examination of its Annual Reports shows that they take on a different format to that of the MRT and RRT. The MHRT President, Forensic Division, Civil Division and the Registrar each write their own sections. These sections comment on legislative changes and how these have affected the tribunal, instead of providing a qualitative approach reporting on the effectiveness of the tribunal. The objectives of the tribunal dictate that a qualitative approach must be used, but this is not translated into the Annual Reports.227 There also appear to be no KPI for the MHRT. There are many graphs and tables in the ‘Statistical Review’228 of the Annual Reports,

229

but these primarily show basic information such as the total

number of hearings, a gender breakdown of those reviewed, the numbers legally represented and review outcomes. Some of the statistics are useful when contrasted to other parts of the report. For instance, the MHRT Annual Report 2009-2010230 shows there was only a 4% increase in the overall caseload, yet the President comments on concern that there is insufficient funding for the tribunal to complete its requirements as set out in the Act and reforms incorporated in the Mental Health (Forensic Provisions) Act 1990 (NSW).

There are no statistics concerning the timeliness of the tribunal’s procedures, how complaints are handled or how many are judicially reviewed. Without information in these areas it is difficult to have an accurate picture of the effectiveness or efficacy of MHRT and as such it is difficult to determine whether the MHRT has been able to cope with the growth of administrative law in its jurisdiction.

4

Improving efficacy of Australian Tribunals

The Council of Australasian Tribunals (COAT) was set up in 2002 as an initiative of the ARC to streamline tribunals’ procedures, to introduce performance standards, minimum skill sets for members and professional development training.231 COAT has published a Practice Manual for Tribunals, 225

of.

232

In particular, see principle 17 which applies to the MHRT, as the MHRT is the ‘Review body’ that it speaks

226

New South Wales Government, Mental Health Review Tribunal Annual Report 2009-2010, (2010).

Ibid. Also see New South Wales Government, Mental Health Review Tribunal Annual Report 2007-2008.

228 Ibid, 21-34.

229 Contrast, New South Wales Government, Mental Health Review Tribunal Annual Report 2007-2008, to New South Wales Government, Mental Health Review Tribunal Annual Report 2009-2010.

230 New South Wales Government, Mental Health Review Tribunal Annual Report 2009-2010, (2010) 1, 15.

231 Creyke, Robin, ‘Better Decisions’ and federal tribunals in Australia’, Reform, Australian Law Reform Commission (2004) Autumn 84, 13.

227

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which provides information on procedural fairness, conducting hearings and making decisions. They also released A Framework for Tribunal Excellence.233 Although COAT has only been in operation for nine years, at this early stage there does not yet appear to be a comprehensive approach made to satisfy its objectives. Perhaps this is due to the publications already produced by the ARC, such as, the Best Practice Guides234 and Guide to Standards of Conduct for Tribunal Members. 235 Whilst these two bodies aim to improve the efficiency of government decision-making, there are still many challenges that face Australian administrative law.

Professor John McMillan AO, outlines the challenges and changes required to guide administrative law into the future. Of main concern to Australian tribunals are poor decision making, technology, and the diversity of the client population.236 To resolve these issues McMillan advocates a highlighting of systemic problems. He proposes that agencies should perform investigations of their own motion to enable an examination of the administrative failures that gave rise to a problem and the reforms needed to avoid it recurring. He acknowledges that new technology can improve speed, accuracy and reliability of decision making’, 237 but that it can also be a risk as confidential information is easily accessible. Thus, McMillan expresses the importance of having efficient information technology systems in place. Lastly, he proposes that more relevant remedies should be available. For example he argues that tribunals should be able to provide better explanations of how complex law or statute requirements apply in a particular case, or even provide an apology if this is what the individual seeks.238 However, the question remains whether tribunals have coped with the exponential growth of government decision-making. Like the work of the tribunals themselves, a qualitative approach to this question is required and it is difficult to give a comprehensive answer. Overall, it appears that tribunals have been able to provide processes that are consistent with values of accountability.

232

Which is available to members of COAT, and only available to non-members for a fee of $50. However, the table of contents of the Manual can be accessed at http://www.coat.gov.au/practicemanual.htm.

233 Framework for Tribunal Excellence, Consultation Draft 2011, Council of Australian Tribunals, <http://www.coat.gov.au/docs/FrameworkTribunalExcellenceDraft.pdf>.

234 See Australian Review Council, Decision Making: Lawfulness: Best Practice Guide 1 (August 2007), Australian Review Council, Decision Making: Natural Justice: Best Practice Guide 2 (August 2007), Australian Review Council, Decision Making: Evidence, Facts and Findings: Best Practice Guide 3 (August 2007), Australian Review Council, Decision Making: Reasons: Best Practice Guide 4 (August 2007), Australian Review Council, Decision Making: Accountability: Best Practice Guide 5 (August 2007), <http://www.ag.gov.au/agd/WWW/archome.nsf/Page/Publications_Reports_Other_Documents>.

235 A guide to Standards of Conduct for Tribunal Members, Administrative Review Council (September 2001, Revised August 2009) <http://www.ag.gov.au/agd/WWW/arcHome.nsf/Page/Publications_Reports_Downloads_A_Guide_to_Standard s_of_Conduct_for_Tribunal_Members_-_Revised_2009>.

236 See John McMillan, ‘Ten Challenges for Administrative Justice’ (Speech delivered at the AIAL Forum 23, 8 August 2008), published in 2010, 61 AIAL Forum 23, 4-5, 8.

237 Ibid, 5.

238 Ibid, 11.

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However, it is clear from the case studies and from the research of McMillan, Ransome and others that if concerns regarding tribunal processes are not addressed now, they may indeed, fail to cope with the growth of government decision-making. Perhaps the objectives were just too demanding. Can we really expect tribunals to provide a mechanism of review that is â&#x20AC;&#x2DC;fair, just, economical, informal and quickâ&#x20AC;&#x2122;? This can really only be described as an almost impossible ideal.

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Enriching the Student Experience