JT International SA v Commonwealth of Australia [2012] HCA 43 (5 October 2012)

Last Updated: 9 October 2012

HIGH COURT OF AUSTRALIA

FRENCH CJ,



GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ

Matter No S409/2011

JT INTERNATIONAL SA PLAINTIFF

AND

COMMONWEALTH OF AUSTRALIA DEFENDANT

Matter No S389/2011

BRITISH AMERICAN TOBACCO AUSTRALASIA LIMITED & ORS PLAINTIFFS

AND

THE COMMONWEALTH OF AUSTRALIA DEFENDANT

JT International SA v Commonwealth of Australia



British American Tobacco Australasia Limited v The Commonwealth



[2012] HCA 43



Date of Order: 15 August 2012



Date of Publication of Reasons: 5 October 2012



S409/2011 & S389/2011

ORDER

Matter No S409/2011

The demurrer by the plaintiff to the defence of the defendant be overruled.



Judgment be entered in the action for the defendant.



The plaintiff pay the defendant's costs in this action, including the demurrer.





Matter No S389/2011

The questions reserved on 28 February 2012 for determination by the Full Court under s 18 of the Judiciary Act 1903 (Cth) be answered as follows:

Question 1

Apart from s 15 of the Tobacco Plain Packaging Act 2011 (Cth), would all or some of the provisions of the Tobacco Plain Packaging Act 2011 (Cth) result in an acquisition of any, and if so what, property of the plaintiffs or any of them otherwise than on just terms, of a kind to which s 51(xxxi) of the Constitution applies?

Answer

No.

Question 2

Does the resolution of Question 1 require the judicial determination of any and if so what disputed facts following a trial?

Answer

No.

Question 3

If the answer to Question 1 is "yes" are all or some, and if so which, provisions of the Tobacco Plain Packaging Act 2011 (Cth) in whole or in part beyond the legislative competence of the Parliament by reason of s 51(xxxi) of the Constitution?

Answer

Does not arise.

Question 4

Are all or some, and if so which, provisions of the Tobacco Plain Packaging Act 2011 (Cth) in whole or in part beyond the legislative competence of the Parliament by reason of the matters raised in pars 10-12 of the statement of claim?

Answer

No.

Question 5

What order should be made in relation to costs of the questions reserved?

Answer

The plaintiffs pay the defendant's costs.

Representation

G Griffith QC with G A Hill and C O H Parkinson for the plaintiff in S409/2011 (instructed by Johnson Winter & Slattery)

A J Myers QC with M F Wheelahan SC, N J Owens and M J O'Meara for the plaintiffs in S389/2011 (instructed by Corrs Chambers Westgarth Lawyers)

S J Gageler SC, Solicitor-General of the Commonwealth with R Merkel QC, S B Lloyd SC, J K Kirk SC, A M Mitchelmore and J S Cooke for the defendant in both matters (instructed by Australian Government Solicitor)

Interveners

W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland in both matters (instructed by Crown Law (Qld))

M P Grant QC, Solicitor-General for the Northern Territory with R H Bruxner intervening on behalf of the Attorney-General for the Northern Territory in both matters (instructed by Solicitor-General for the Northern Territory)

P J F Garrisson, Solicitor-General for the Australian Capital Territory with M A Perry QC intervening on behalf of the Attorney-General for the Australian Capital Territory in both matters (instructed by ACT Government Solicitor)

A C Archibald QC with C P Young intervening on behalf of Philip Morris Limited in S389/2011 (instructed by Allens Arthur Robinson)

B W Walker SC with C L Lenehan intervening on behalf of Van Nelle Tabak Nederland BV and Imperial Tobacco Australia Limited in S389/2011 (instructed by King & Wood Mallesons)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

JT International SA v Commonwealth of Australia



British American Tobacco Australasia Limited v The Commonwealth

Constitutional law (Cth) – Legislative power – Section 51(xxxi) – Acquisition of property on just terms – Plaintiffs hold registered and unregistered trade marks and other intellectual property rights in relation to tobacco product packaging – Tobacco Plain Packaging Act 2011 (Cth) regulates appearance of tobacco product packaging and use of trade marks on such packaging – Whether plaintiffs' intellectual property rights, goodwill and rights to determine appearance of tobacco products constitute "property" for purposes of s 51(xxxi) – Whether Act effects an acquisition of plaintiffs' property otherwise than on just terms.

Words and phrases – "acquisition of property", "intellectual property", "just terms", "trade marks".

Constitution, s 51(xxxi).



Tobacco Plain Packaging Act 2011 (Cth), ss 15, 18-27, 30-48.



Competition and Consumer (Tobacco) Information Standard 2011 (Cth), ss 1.5, 3.1, 4.1, 9.13, 9.19-19.20.



Tobacco Plain Packaging Regulations 2011 (Cth), Divs 2.1-2.4, 3.1.

FRENCH CJ.

Introduction

The Tobacco Plain Packaging Act 2011 (Cth) ("the TPP Act") imposes significant restrictions upon the colour, shape and finish of retail packaging for tobacco products. It prohibits the use of trade marks on such packaging, other than as permitted by the TPP Act, which allows the use of a brand, business or company name for the relevant tobacco product. Pre-existing regulatory requirements for health messages and graphic warnings remain in place and include, under a recent Information Standard, a requirement for the inclusion of the Quitline logo of the Victorian Anti-Cancer Council and a telephone number for the Quitline service. In two proceedings which were heard by this Court in April this year, the plaintiffs, tobacco companies JT International SA ("JTI") and members of the British America Tobacco Group ("BAT") [1] TPP Act effected an acquisition of their intellectual property rights and goodwill on other than just terms, contrary to s 51(xxxi) of the Constitution. On 15 August 2012 the Court made orders reflecting the rejection of the plaintiffs' contentions, by majority, on the basis that there had been no acquisition of the plaintiffs' property within the meaning of s 51(xxxi) of the Constitution. I publish my reasons for joining in those orders.

The TPP Act

The TPP Act regulates the retail packaging and appearance of tobacco products [2] [3] Substantive requirements for the physical features, colours and finish of retail packaging are imposed by ss 18 and 19 of the TPP Act and by the Tobacco Plain Packaging Regulations 2011 (Cth) ("the TPP Regulations") made under that Act. Embellishments on cigarette packs and cartons are proscribed [4] [5] [6] [7] [8]

"The following may appear on the retail packaging of tobacco products:

(a) the brand, business or company name for the tobacco products, and any variant name for the tobacco products;

(b) the relevant legislative requirements;

(c) any other trade mark or mark permitted by the regulations."

Section 26 imposes a similar conditional prohibition on the use of trade marks on tobacco products. The term "relevant legislative requirement" in s 20(3)(b) includes a health warning required by the Trade Practices (Consumer Product Information Standards) (Tobacco) Regulations 2004 (Cth) ("the TPCPI Regulations")[9] or a safety or information standard made or declared under the Competition and Consumer Act 2010 (Cth) ("the CCA").

The TPP Regulations

The TPP Regulations specify physical features of retail packaging of tobacco products [21] [22] [23] [24] [25] The Tobacco Plain Packaging Amendment Regulation 2012 (No 1) (Cth) ("Amendment Regulations") provides that retail packaging of tobacco products may include an adhesive label bearing a health warning that complies with either the TPCPI Regulations or the Competition and Consumer (Tobacco) Information Standard 2011 ("the Tobacco Information Standard") [26]

The Tobacco Information Standard

The Tobacco Information Standard was made pursuant to the CCA [27] [28] [29]

Pre-existing health warnings

The JTI proceedings

By a writ of summons and statement of claim filed in this Court on 15 December 2011 naming the Commonwealth of Australia as defendant, JTI sought a declaration, relying upon s 15 of the TPP Act, that the TPP Act does not apply and has no operation in its application to trade marks and get-up used on tobacco products sold by JTI. In the alternative, JTI sought a declaration that the TPP Act is invalid in its application to the trade marks and the get-up. It was not in dispute that JTI is the registered owner or exclusive licensee of registered trade marks which it is entitled to use in the retail packaging and appearance of the Camel brand of cigarettes and the Old Holborn brand of handrolling tobacco ("the tobacco products") currently sold in Australia. JTI said that, until the commencement of ss 17-27A and ss 30-48 of the TPP Act, it would have the right to determine the appearance of these tobacco products and the form and appearance of at least 70 per cent of the front and at least 10 per cent of the back of the packaging of the tobacco products. JTI alleged that its tobacco products used distinctive trade dress and get-up, including arrangements of words, colours, designs, logos, lettering and markings which distinguish them from other tobacco products. It claimed to have rights of use of this "Get-up" capable of being enforced by an action for passing off or for misleading or deceptive conduct. JTI asserted that its rights in the trade marks and their get-up are "property" for the purposes of s 51(xxxi) of the Constitution. It claimed that the provisions of the TPP Act constituted an acquisition of its property otherwise than on just terms and, but for s 15, would be wholly invalid and of no effect. The Commonwealth admitted that the trade mark was property but denied that characterisation with respect to the get-up and rights said to be associated with it. It pleaded that both the trade mark rights and the get-up rights were, in any event, susceptible to regulation including, in particular, under Commonwealth laws of the kind in the TPP Act. The Commonwealth denied that any of the matters alleged in JTI's statement of claim established that the TPP Act effected or would effect an acquisition of property otherwise than on just terms to which s 51(xxxi) applied. The Commonwealth pleaded that the consumption of JTI's tobacco products and the tobacco products of other manufacturers, importers and distributers is harmful to the public and to the public interest [38] [39]

The JTI demurrer

In its reply to the defence, JTI demurred on the following grounds: Its trade marks and the get-up constitute "property" within s 51(xxxi) of the Constitution. The TPP Act would, apart from s 15, result in an acquisition of that property within s 51(xxxi) of the Constitution. That acquisition would be otherwise than on just terms. Factual matters alleged in various parts of the defence were irrelevant to the constitutional validity of the TPP Act.

JTI sought judgment by way of declaration if the demurrer were upheld. In the event that the demurrer were overruled, it sought to have the matter remitted for trial and further orders.

The BAT proceedings

BAT commenced proceedings against the Commonwealth by a writ of summons issued out of this Court on 1 December 2011. They claimed a declaration that the TPP Act would not apply to their tobacco products and packaging and, alternatively, a declaration that the TPP Act is invalid. In its statement of claim, BAT identified a number of categories of property rights which may be paraphrased as follows:

(a) Registered and unregistered trade marks which it is entitled to use for tobacco products and the packaging of tobacco products in Australia and to authorise others to carry out such acts.

(b) Copyright in artistic and literary works which it is entitled to reproduce for tobacco products and the packaging of tobacco products.

(c) Distinctive trade dress and get-up for tobacco products which use the trade marks and/or reproduce the copyright works.

(d) Substantial reputation and goodwill arising from the use in Australia by British American Tobacco Australia Ltd of the trade marks, the copyright works and/or the get-up in conjunction with tobacco products and the packaging of tobacco products.

(e) A design registered under the Designs Act 2003 (Cth).

(f) Two patents registered pursuant to the Patents Act 1990 (Cth).[40]

(g) Packaging rights:

(i) to manufacture, import, sell and use tobacco products and packaging of tobacco products in such shape or design as BAT may choose; and

(ii) to print or to use on the tobacco products and packaging of tobacco products such trade marks or copyright works or designs or patents or messaging as BAT might choose.

(h) Goodwill attaching to the exploitation in Australia of the packaging rights.

(i) Intellectual property licence rights held by British American Tobacco Australia Ltd in relation to the use of the trade marks in Australia, reproduction and publication of the copyright works, use of the get-up, and to manufacture and sell packaging embodying the design and/or exploiting one of the patents.

The registered trade marks took the form of words, package get-up and colour used in relation to the Winfield brand of cigarettes. The unregistered marks were of the same kind. The literary and artistic works were embodied in the text and colour of Winfield cigarette packs. The registered design related to the features of shape and configuration of a ribbed pack for cigarettes. The patents related to inventions claimed for the way in which cigarettes are sealed within a pack and the provision of increased internal surface area which could be utilised for printing information or graphics.

BAT alleged that the provisions of the TPP Act would, but for the operation of s 15 of that Act result in an acquisition of BAT's property comprising the trade marks, the copyright works, the get-up, the licensing goodwill, the design, the patents, the packaging rights, the packaging goodwill and the intellectual property licence rights otherwise than on just terms. It thereby alleged that, by reason of s 15, the provisions of the TPP Act do not apply to and have no operation with respect to BAT's tobacco products and packaging of tobacco products. In the alternative, BAT asserted that the TPP Act is invalid as conferring legislative power on the judicial branch of government by reason of the fact that the extent to which conduct is rendered criminal by the TPP Act is determined by the extent to which s 51(xxxi) of the Constitution would, but for s 15 of the TPP Act, be engaged. It further alleged that the TPP Act is invalid because it does not provide for a rule of conduct or a declaration as to power, right or duty and also because its purported enactment thereby did not involve an exercise of the power to make "laws" conferred by the Constitution upon the Commonwealth Parliament.

The reserved questions

On 27 February 2012, Gummow J reserved questions in the BAT proceedings under s 18 of the Judiciary Act 1903 (Cth) for consideration by the Full Court. The questions were:

"(1) Apart from s 15 of the TPP Act, would all or some of the provisions of the TPP Act result in an acquisition of any, and if so what, property of the plaintiffs or any of them otherwise than on just terms, of a kind to which s 51(xxxi) of the Constitution applies?

(2) Does the resolution of question (1) require the judicial determination of any and if so what disputed facts following a trial?

(3) If the answer to question (1) is "yes" are all or some, and if so which, provisions of the TPP Act in whole or in part beyond the legislative competence of the Parliament by reason of s 51(xxxi) of the Constitution?

(4) Are all or some, and if so which, provisions of the TPP Act in whole or in part beyond the legislative competence of the Parliament by reason of the matters raised in paragraphs 10-12 of the statement of claim?

(5) What order should be made in relation to costs of the Questions Reserved?"

The affected rights

JTI and BAT contended that the TPP Act would effect an acquisition of their property on other than just terms contrary to the guarantee provided by s 51(xxxi) of the Constitution. The categories of property rights said to be affected appear from the pleadings. In the case of JTI, they are its registered trade marks and get-up. In the case of BAT, they are its registered and unregistered trade marks, copyright, get-up, licensing goodwill, design, patents, packaging rights, packaging goodwill and intellectual property licensing rights. Section 51(xxxi) confers upon the Commonwealth Parliament the power to make laws with respect to:

"[t]he acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws".

It uses the term "property" which appears in a number of places in the Constitution[41]. As used in s 51(xxxi) it has long been construed broadly by this Court[42]. It extends to property rights created by statute although the terms of such statutes and the nature of the property rights which they create require examination to determine whether and to what extent that property attracts the protection of s 51(xxxi). As the plurality cautioned in Attorney-General (NT) v Chaffey[43], further analysis is imperative where the asserted "property" has no existence apart from statute[44].

There are and always have been purposive elements reflecting public policy considerations which inform the statutory creation of intellectual property rights. The public policy dimensions of trade mark legislation and the contending interests which such dimensions accommodate were referred to in Campomar Sociedad, Limitada v Nike International Ltd [45] [46] [47] conditions informing their creation, may be relevant to the question whether and in what circumstances restriction or regulation of their enjoyment by a law of the Commonwealth amounts to acquisition of property for the purposes of s 51(xxxi) of the Constitution. That is not to say that such rights are, on account of their instrumental character, inherently susceptible to variation and, on that account, not within the protection of s 51(xxxi) [48] Chaffey the plurality said [49]

"a law reducing the content of subsisting statutory exclusive rights, such as those of copyright and patent owners, would attract the operation of s 51(xxxi)." (footnote omitted)

On the other hand, that statement is not to be taken as support for the proposition that the extinguishment or restriction of a statutory exclusive right, without more, would constitute an acquisition for the purpose of s 51(xxxi). That statement was made in a context of a rejection of the broad proposition that the statutory extinguishment of statutory rights is excluded from the scope of s 51(xxxi)[50]. The question whether there has been an acquisition of all or any of the plaintiffs' asserted property rights directs attention to their source and nature and the consequences of the restrictions imposed by the TPP Act upon their use or enjoyment. The property said to have been the subject of acquisition under the TPP Act comprises a mixture of statutory and associated or derivative non-statutory rights. It is useful to make brief generic reference to them.

At common law, the property interest associated with a trade mark was derived from the goodwill of the business which used it [51] Commonwealth statutes on the holders of registered trade marks have always been "a species of property of the person whom the statute describes as its registered proprietor" [52] [53] [54] [55] Shanahan's Australian Law of Trade Marks and Passing Off [56]

"the property in a statutory trade mark is not permanent."

Registered designs are a species of personal property, capable of assignment and transmission by operation of law [57] [58] [59]

"The principal object of the registered designs system is to give protection, through the grant of a monopoly right, to the visual form of articles which are commercially mass-produced. Concern with questions of design and appearances has had a long history, as it has been seen for many hundreds of years that good design is an integral part of the manufacture and marketing of all kinds of useful articles."

The Patents Act 1990 (Cth) provides that a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention [60] [61] [62] s 6 of that Statute that:

"any letters patents and grants of privilege for the ... making of any manner of new manufactures within this realm, to the true and first inventor and inventors of such manufactures, which others at the time of making such letters patents and grants shall not use".

That provision still forms part of the definition of "patentable invention" in the Patents Act 1990 (Cth)[63]. Its purpose was succinctly stated by Cornish, Llewellyn and Aplin[64]:

"the terms of the section make it plain that an act of economic policy was intended: the objectives were the encouragement of industry, employment and growth, rather than justice to the 'inventor' for his intellectual percipience."

Copyright is defined by reference to exclusive rights of, inter alia, reproduction and publication of works and subject matter other than works. It is classified in the Copyright Act as "personal property" which is transmissible by "assignment, by will and by devolution by operation of law." [65] Registered trade marks, designs, patents and copyright in works and other subject matter give rise to, or constitute, exclusive rights which are property to which s 51(xxxi) of the Constitution can apply. They are all rights which are created by statute in order to serve public purposes. They differ in their histories, their character and the statutory schemes which make provision for them. It is important in that context to bear in mind the adoption by this Court in Campomar [66] of the statement by Dixon J in Victoria Park Racing and Recreation Grounds Co Ltd v Taylor [67]

"the exclusive right to invention, trade marks, designs, trade name and reputation are dealt with in English law as special heads of protected interests and not under a wide generalisation."

It is a common feature of the statutory rights asserted in these proceedings that they are negative in character. As Laddie, Prescott and Vitoria observed [68]

"Intellectual property is ... a purely negative right, and this concept is very important. Thus, if someone owns the copyright in a film he can stop others from showing it in public but it does not in the least follow that he has the positive right to show it himself."

In Pacific Film Laboratories Pty Ltd v Federal Commissioner of Taxation[69], Windeyer J spoke of the essential nature of a copyright:

"It is not a right in an existing physical thing. It is a negative right, as it has been called, a power to prevent the making of a physical thing by copying."

To similar effect, in relation to patents, was the observation of Lord Herschell LC in Steers v Rogers[70], quoted with approval by the plurality in The Grain Pool of Western Australia v The Commonwealth[71]:

"The truth is that letters patent do not give the patentee any right to use the invention — they do not confer upon him a right to manufacture according to his invention. That is a right which he would have equally effectually if there were no letters patent at all; only in that case all the world would equally have the right. What the letters patent confer is the right to exclude others from manufacturing in a particular way, and using a particular invention."

The Commonwealth submitted that the property rights associated with the registered trade marks, design, patents and copyright asserted by JTI and BAT involve "a statutory assurance of exclusive use, not a positive right or authority to use." On that basis the imposition of restrictions on their use would take nothing away from the rights granted. Therefore, it was submitted, no property had been taken by the TPP Act. BAT stigmatised that argument as formalistic, observing that rights of exclusion are of the essence of all proprietary rights [72] [73] [74] The Commonwealth's submission points to a characteristic of the plaintiffs' asserted rights which may be relevant in determining, inter alia, whether or not they can be said to have been the subject of acquisition in terms of any benefit that could be said to have accrued to the Commonwealth. That consideration does not involve an acceptance of the proposition that rights were not taken in the sense that JTI and BAT were deprived of their ability to enjoy the fruits of their statutory monopolies. BAT complained of acquisition of its goodwill. The concept of goodwill as property, and its characterisation as property or a proprietary right, arise in different contexts, discussed at length in the joint judgment in Federal Commissioner of Taxation v Murry [75] [76]

"Goodwill is correctly identified as property, therefore, because it is the legal right or privilege to conduct a business in substantially the same manner and by substantially the same means that have attracted custom to it." (footnote omitted)

Goodwill is derived from the use of the assets and other elements or attributes of a business. It may have different aspects or components corresponding to its sources. Goodwill derived from the use of a trade mark, registered or unregistered, or from a particular get-up, may be protected by an action for passing off. Lockhart J observed in Conagra Inc v McCain Foods (Aust) Pty Ltd[77]:

"It is now beyond argument that the plaintiff's right which the law of passing off protects is a proprietary right in the goodwill or reputation of his business likely to be injured by the defendant's conduct."

That cause of action serves the purpose, which is its "underlying rationale", of preventing commercial dishonesty[78].

It has rightly been said that "[t]here is no 'property' in the accepted sense of the word in a get-up" [79]

Whether there is an acquisition of property

Section 51(xxxi) embodies a constitutional guarantee of just terms "and is to be given the liberal construction appropriate to such a constitutional provision." [80] Bank Nationalisation case [81] Section 51(xxxi) was said to extend to "innominate and anomalous interests" and to include "the assumption and indefinite continuance of exclusive possession and control for the purpose of the Commonwealth of any subject of property." [82] Taking involves deprivation of property seen from the perspective of its owner. Acquisition involves receipt of something seen from the perspective of the acquirer [83] Australian Tape Manufacturers Association Ltd v The Commonwealth [84] , Mason J said in the Tasmanian Dam case [85]

"To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be."

Importantly, the interest or benefit accruing to the Commonwealth or another person must be proprietary in character. On no view can it be said that the Commonwealth as a polity or by any authority or instrumentality, has acquired any benefit of a proprietary character by reason of the operation of the TPP Act on the plaintiffs' property rights. In this respect I agree with the reasons of Gummow J[86] and the reasons of Hayne and Bell JJ[87].

It may also be observed that the negative character of the plaintiffs' property rights leaves something of a logical gap between the restrictions on their enjoyment and the accrual of any benefit to the Commonwealth or any other person. Unlike the Newcrest case [88] TPP Act create the "space" for the application of Commonwealth regulatory requirements as to the textual and graphical content of tobacco product packages does not constitute such an accrual. Rather, it reflects a serious judgment that the public purposes to be advanced and the public benefits to be derived from the regulatory scheme outweigh those public purposes and public benefits which underpin the statutory intellectual property rights and the common law rights enjoyed by the plaintiffs. The scheme does that without effecting an acquisition. In summary, the TPP Act is part of a legislative scheme which places controls on the way in which tobacco products can be marketed. While the imposition of those controls may be said to constitute a taking in the sense that the plaintiffs' enjoyment of their intellectual property rights and related rights is restricted, the corresponding imposition of controls on the packaging and presentation of tobacco products does not involve the accrual of a benefit of a proprietary character to the Commonwealth which would constitute an acquisition. That conclusion is fatal to the case of both JTI and BAT.

Conclusion

For these reasons, I joined in the orders made by the Court on 15 August 2012.

GUMMOW J. These cases in the original jurisdiction of the Court present challenges by the plaintiffs to the validity of the Tobacco Plain Packaging Act 2011 (Cth) ("the Packaging Act"). The plaintiffs invoke the restraint upon legislative power found in s 51(xxxi) of the Constitution. For the reasons which follow the challenges should fail and I joined in the orders pronounced on 15 August 2012. That failure illustrates the propositions that s 51(xxxi) gives protection against acquisition of property without just terms but "not to the general commercial and economic position occupied by traders" [89] Truax v Corrigan [90]

"Delusive exactness is a source of fallacy throughout the law. By calling a business 'property' you make it seem like land, and lead up to the conclusion that a statute cannot substantially cut down the advantages of ownership existing before the statute was passed. An established business no doubt may have pecuniary value and commonly is protected by law against various unjustified injuries. But you cannot give it definiteness of contour by calling it a thing."

Previous federal legislation

The parties

In matter No S409 of 2011 ("the JTI Matter") the plaintiff, JT International SA ("JTI"), is incorporated in Switzerland. JTI is the registered owner of one trade mark and exclusive licensee of four trade marks, all registered under the Trade Marks Act 1995 (Cth) ("the TMA"). The registrations are in respect of tobacco products falling within class 34 of the international trade mark classification [96] Registered trade marks numbers 339477 and 348139 have respective priority dates in 1979 and in 1980 [97] JTI is exclusive licensee of these four trade marks. JTI is registered owner of the remaining registration, number 1007693, which has a priority date in 2004, and comprises the words "Old Holborn" displayed upon what appears to be fancy packaging in the shape of a tobacco pouch. Tobacco products are distributed and sold in Australia in packaging featuring the registered trade marks and the brand names "Camel" and "Old Holborn". In the second matter, No S389 of 2011 ("the BAT Matter"), the first plaintiff, British American Tobacco Australasia Limited ("BAT Australasia"), is a trading corporation, incorporated under the Corporations Act 2001 (Cth) ("the Corporations Act"); the second plaintiff, British American Tobacco (Investments) Limited ("BAT Investments"), is incorporated under the laws of England and Wales; the third plaintiff, British American Tobacco Australia Limited ("BATA"), is a wholly owned subsidiary of BAT Australasia and is a trading corporation, incorporated under the Corporations Act. BATA carries on the business of manufacturing or importing and of marketing, selling, distributing and displaying packets of cigarettes under the "Winfield" brand and the "Dunhill" brand. Since July 2010 BATA has sold in Australia hundreds of millions of packets of Winfield cigarettes and tens of millions of packets of Dunhill cigarettes. BAT Australasia is the registered owner under the TMA of trade marks numbers 270845, 752287, 917043 and 1326870 ("the BAT Trade Marks"). All feature the brand name "Winfield" with additional material and are registered in class 34. The registration of the second and third of these trade marks bears endorsements as to colour. The trade marks were first registered respectively in 1973, 1998, 2002 and 2009. The BAT Matter also involves other species of intellectual property. It is accepted by the Commonwealth that BAT Australasia is the owner of original artistic works pursuant to the Copyright Act 1968 (Cth) ("the Copyright Act") comprising the material (excluding health warnings) on the packaging for the products marketed as "Winfield Optimum Night", "Winfield Blue", "Winfield Red", "Winfield Silver" and "Winfield Gold" ("the BAT Copyrights"). BAT Investments is the owner of registered design number 323481 under the provisions of the Designs Act 2003 (Cth) ("the Designs Act"). The design ("the BAT Design") is registered with lodgment date of 31 October 2008, in respect of a "ribbed pack". The newness and distinctiveness of the design is said to reside in the features of shape and configuration of a ribbed pack illustrated in the representations accompanying the registration. BAT Investments also is grantee of Patent No 2001258572 under the Patents Act 1990 (Cth) ("the Patents Act") for an invention titled "Smoking article packaging" ("the BAT Patent") which claims a method of re-sealing the contents in that packaging. The Dunhill branded cigarettes referred to above were sold in packaging which utilised the BAT Patent and applied the BAT Design. The plaintiffs in both the JTI Matter and the BAT Matter assert common law rights of goodwill in the get-up of their products in addition to their statutory rights.

The JTI Matter

JTI complains of the effect upon these trade mark registrations of the Packaging Act and of the Tobacco Plain Packaging Regulations 2011 ("the Packaging Regulations") made under the Packaging Act. JTI contends that the effect is, under pain of offence and civil penalty provisions contained in the Packaging Act, to require the elimination of all distinguishing features of its tobacco packaging and to permit, on the area of packaging remaining after the health warnings, the use only of the brand or business name or variant name (eg "Camel") in small plain font [98] [99] JTI seeks declaratory relief that in its application to the JTI registered trade marks the Packaging Act (and thus the Packaging Regulations made thereunder [100] Packaging Act upon what it claims are its common law rights in the get-up of its products. To the defence, in which the Commonwealth pleads that s 51(xxxi) is not engaged with respect to the Packaging Act, JTI pleads and demurs [101] On the hearing of the demurrer there were interventions by Queensland, the Northern Territory and the Australian Capital Territory. Each intervener supported the submissions by the Commonwealth as to the absence of any "acquisition" as required by s 51(xxxi).

The BAT Matter

By order of a Justice of this Court made on 28 February 2012 questions have been reserved for determination by the Full Court in the BAT Matter pursuant to s 18 of the Judiciary Act 1903 (Cth). The effect of Qu (1) is to ask whether all or some of the provisions of the Packaging Act result in an acquisition otherwise than on just terms of the BAT trade marks and the BAT Copyrights, the BAT Design and the BAT Patent, and the common law rights of BAT Australasia and of BATA. Question (2) asks whether the resolution of Qu (1) requires the determination at trial of any disputed facts. Question (3) assumes an affirmative answer to Qu (1). Question (4) raises the validity of s 15 of the Packaging Act; the text of s 15 is set out later in these reasons [102] There were interventions in the BAT Matter by Philip Morris Ltd ("Philip Morris") and by Van Nelle Tabak Nederland BV and Imperial Tobacco Australia Ltd (together "Van Nelle") in support of the plaintiffs and interventions in support of the Commonwealth by the Northern Territory and the Australian Capital Territory. The demurrer in the JTI Matter and the questions reserved in the BAT Matter were heard consecutively. It is convenient to begin with some consideration of the relevant intellectual property legislation, beginning with the trade mark legislation.

The TMA

The issues which are presented in these cases respecting the "taking" and "acquisition" of proprietary interests are to be approached with an appreciation that trade mark legislation, in general, does not confer a "statutory monopoly" in any crude sense. Rather, the legislation represents an accommodation between the interests of traders, in the use of trade marks in developing the goodwill of their businesses and turning this to account by licensing arrangements, and the interests of consumers, in recognising trade marks as a badge of origin of goods or services and avoiding deception or confusion as to that origin [103] The term "trade mark" is defined in s 17 of the TMA as a "sign" [104] (s 40). The Registrar is obliged by s 68 to register a trade mark which is accepted for registration and in respect of which there has been no successful opposition. A trade mark may be registered with limitations as to colour, in respect of the whole or part of the trade mark. Examples are the "Winfield" registration numbers 752287 and 917043. To the extent that a trade mark is registered without limitations of the exclusive right of use as to colour, the trade mark is taken to be registered for all colours (s 70). Section 21 states that a registered trade mark "is personal property" and that equities in respect of it "may be enforced in the same way as equities in respect of any other personal property". It is important to note that a registered trade mark may be assigned or transmitted, with or without the associated goodwill and for all or some only of the goods or services for which it is registered (s 106). From the date of registration (s 20(3)), the registered owner is given by s 20(1) "the exclusive rights" (a) to use the trade mark and (b) to authorise others to do so, in relation to the goods or services in respect of which the trade mark is registered (emphasis added). Use by an authorised user is taken for the purposes of the Act to be a use by the owner (s 7(3)). The exclusive right of use in respect of the goods or services for which there is a registration is given effect and extended by the infringement provision in s 120. Under the chapeau "When is a registered trade mark infringed?", s 120 gives three distinct answers. The first appears in sub-s (1), the second in sub-s (2), and the third in sub-ss (3) and (4). Section 120, excluding the appended Notes, reads:

"(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:

(a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or

(b) services that are closely related to registered goods; or

(c) services of the same description as that of services (registered services) in respect of which the trade mark is registered; or

(d) goods that are closely related to registered services.

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

(3) A person infringes a registered trade mark if:

(a) the trade mark is well known in Australia; and

(b) the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:

(i) goods (unrelated goods) that are not of the same description as that of the goods in respect of which the trade mark is registered (registered goods) or are not closely related to services in respect of which the trade mark is registered (registered services); or

(ii) services (unrelated services) that are not of the same description as that of the registered services or are not closely related to registered goods; and

(c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and

(d) for that reason, the interests of the registered owner are likely to be adversely affected.

(4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is well known in Australia, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason." (emphasis in original)

The remedies for infringement include an injunction and damages or an account of profits (s 126). An authorised user who brings an infringement action must join the registered owner as a defendant (s 26(2)). Regulations made under the Act may provide that a specified sign is not to be used as a trade mark or as part of a trade mark; but the regulations may not affect an already registered trade mark (s 18). A trade mark is subject to removal from the Register for non-use, as provided in Pt 9 (ss 92-105). In particular, s 92(4)(b) specifies a non-use period of three years ending one month before the filing of the application for removal. Part 8, Div 2 (ss 85-90) provides for rectification of the Register by curial order if a ground in s 87 or s 88 is made out. These grounds include the loss of distinctiveness after registration whereby the trade mark becomes the "generic" description or name of an article, substance or service (s 87) and the presence of circumstances at the time of the rectification application which made the use of the trade mark likely to deceive or cause confusion (s 88).

Threshold propositions

In oral submissions the Queensland Solicitor-General submitted, essentially with the support of the Commonwealth Solicitor-General, that, (i) absent some prohibitions elsewhere in the common law or in statute, there was at common law a freedom to use any word or device in association with the provision of goods or services, (ii) that common law freedom was not proprietary in nature, (iii) it was this common law freedom of traders, whether the plaintiffs or others, which the Packaging Act restricted, (iv) the "exclusive" rights of a registered owner identified in s 20(1) of the TMA, to use and to authorise use, were directed to the imposition in favour of the registered owner of a duty or obligation upon others, thereby restricting what otherwise was their freedom of use, (v) it was this right to exclude which constituted the personal property in a registered trade mark spoken of in s 21 of the TMA, (vi) the Packaging Act in no way impinged upon the rights of exclusion of others conferred by the TMA upon registered owners. These propositions may be accepted, but, as will appear [105] s 51(xxxi) in the JTI Matter and the BAT Matter. It also is true, as another threshold proposition, that while the TMA facilitates the exploitation of registered trade marks in trade and commerce, trade mark registration systems ordinarily do not confer a liberty to use the trade mark, free from what may be restraints found in other statutes or in the general law. The point was made with respect to the Trade Marks Act 1955 (Cth) by Deane J in New South Wales Dairy Corp v Murray Goulburn Co-op Co Ltd [106]

"the availability of ordinary criminal or civil procedures to prevent dishonesty, fraud and passing-off and by the fact that registration of a trade mark does not ordinarily constitute a licence for what would otherwise be unlawful conduct: see, eg, Lyle and Kinahan Ltd's Application[107]; Van Zeller v Mason, Cattley & Co[108]; and note the narrowness of the trade mark exception in s 51(3)(c) of the Trade Practices Act 1974 (Cth)".

In particular, the TMA does not immunise the use of a registered trade mark from the law of passing-off. Rather, s 230 makes special provision on the subject. The use of a registered trade mark may be enjoined at the suit of a third party who makes out a case of passing-off; however, damages may not be awarded if the defendant was unaware of the plaintiff's common law rights and had no reasonable means of finding this out when the defendant began its activity and this activity ceased immediately upon the defendant becoming so aware. But while all these threshold propositions should be accepted, they do not foreclose submissions that there has been a sufficient degeneration of property rights brought about by the Packaging Act to engage s 51(xxxi). Rather, the threshold propositions do not cover the relevant field of property rights. The rights given to registered trade mark owners to assign their marks with or without goodwill, to license authorised users, and to bring proceedings against other parties for infringement may be of great commercial value. So also the generation of goodwill derived from the distinctiveness of the registered trade mark which flows from its use. It will be necessary shortly to return to these matters [109]

The Copyright Act, the Designs Act and the Patents Act

"exploit, in relation to an invention, includes:

(a) where the invention is a product – make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process – use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use."

Chapter 11, Pt 1 (ss 117-123) makes detailed provisions for infringement. Chapter 12 (ss 133-140) provides for compulsory licences and revocation if the reasonable requirements of the public with respect to the invention are not satisfied.

Conclusions respecting intellectual property legislation

The upshot is that (a) while the Commonwealth and supporting interveners are correct in their submissions that it would be wrong to approach the issues arising under s 51(xxxi) of the Constitution on the footing that registration under the TMA or the Designs Act, a grant under the Patents Act, or the subsistence of copyright, confers some unconstrained right to exploit those items of intellectual property or an immunity from the operation of regulatory laws, (b) that is not sufficient to dispose of the case presented for the application of s 51(xxxi).

The Packaging Act

"if, apart from this section, this Act would result in [an acquisition of property from a person otherwise than on just terms] because it would prevent the use of a trade mark or other sign on or in relation to the retail packaging of tobacco products, or on tobacco products, then despite any other provision of this Act, the trade mark or sign may be used on or in relation to the retail packaging of tobacco products, or on tobacco products, subject to any requirements that may be prescribed in the regulations for the purposes of this subsection."

Section 15(3) confirms the continued operation of any tobacco product requirement that does not result in such an acquisition. The plaintiffs in the BAT Matter challenge the validity of s 15(2). It is undoubtedly accurate to say that the Parliament may not confer upon courts exercising federal jurisdiction a choice as to the content of the law to be applied in adjudicating a "matter", if the result of doing so is that the Parliament has not made a law supported by a head of legislative power [113] s 15A of the Acts Interpretation Act 1901 (Cth) is another member. To apply s 15(2) would not be to "read up" the Packaging Act in the impermissible manner discussed in Pape v Federal Commissioner of Taxation [114]

The issue on the demurrer and the questions reserved

The issue then posed by the demurrer and the leading questions reserved, in effect, is whether the tobacco product requirements of the Packaging Act do not amount to an "acquisition" of the property of the plaintiffs so that s 15(2) is not engaged. This presents two questions. The first is whether there is a "taking" or "deprivation" of the property of the plaintiffs and, if so, the second question is whether the Packaging Act effects an "acquisition" of property otherwise than on just terms as proscribed by s 51(xxxi) of the Constitution. The distinction between the two questions appears from the pithy statement of Gibbs CJ, Wilson, Brennan, Deane and Dawson JJ [115] For the reasons which follow, there is sufficient impairment, at least of the statutory intellectual property of the plaintiffs, to amount to a "taking", but there is no acquisition of any property. The result is the plaintiffs' cases for invalidity fail.

Section 51(xxxi) of the Constitution and statutory entitlements

In Wurridjal v The Commonwealth [116] s 51(xxxi):

"It can be significant that rights which are diminished by subsequent legislation are statutory entitlements. Where a right which has no existence apart from statute is one that, of its nature, is susceptible to modification, legislation which effects a modification of that right is not necessarily legislation with respect to an acquisition of property within the meaning of s 51(xxxi)[117]. It does not follow, however, that all rights which owe their existence to statute are ones which, of their nature, are susceptible to modification[118], as the contingency of subsequent legislative modification or extinguishment does not automatically remove a statutory right from the scope of s 51(xxxi)[119].

Putting to one side statutory rights which replace existing general law rights [120] s 51(xxxi) must depend upon the nature of the right created by statute. It may be evident in the express terms of the statute that the right is subject to subsequent statutory variation [121] [122] [123]

It should be accepted that while the registered trade marks owe their legal character to their registration under the TMA, rather than to the general law, it would be an error to proceed on the footing that because some valuable rights conferred by statute, such as fishing licences [124] [125] Such licences as those just mentioned commonly are granted so as to lift a statutory prohibition imposed upon engagement in the activity in question and the grant is expressly made subject to the terms of the statutory regime as they stand from time to time. That is not the case with the various species of "intellectual property" within the description in s 51(xviii) of the Constitution, namely copyrights, patents of inventions and designs and trade marks. It is true that upon grounds specified in the relevant statutes patents and designs may be revoked and trade mark registrations may be expunged from the register. But even at general law, an estate or interest in land or other property may be defeasible upon the operation of a condition subsequent in the grant, without losing its proprietary nature. In the end, one cannot gainsay two statements by Windeyer J. The first, in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [126] which it permits him to assign" (emphasis added). The second, in Pacific Film Laboratories Pty Ltd v Federal Commissioner of Taxation [127] [128] Australian Tape Manufacturers Association Ltd v The Commonwealth [129] s 51(xxxi)". The same may be said of patents and registered designs. It also should be accepted that at general law the goodwill attached to the business of the plaintiff by reason of the exploitation of trade marks and associated get-up answers the description of property. In Federal Commissioner of Taxation v Murry [130]

"From the viewpoint of the proprietors of a business and subsequent purchasers, goodwill is an asset of the business[131] because it is the valuable right or privilege to use the other assets of the business as a business to produce income. It is the right or privilege to make use of all that constitutes 'the attractive force which brings in custom'[[132]]. Goodwill is correctly identified as property[133], therefore, because it is the legal right or privilege to conduct a business in substantially the same manner and by substantially the same means that have attracted custom to it. It is a right or privilege that is inseparable from the conduct of the business[134]."

And, as Windeyer J emphasised in Colbeam Palmer[135], protection of property is the foundation in equity of the passing-off action. Further, it is well established that such an action may protect the goodwill derived from slogans and visual images which build up an association with the business of the plaintiff[136].

However, it should be borne in mind that all these items of "property" are, as Higgins J put it [137] [138] These considerations direct further attention to the identification of those rights which constitute the property in question in these cases. This is an essential first step in the identification of that of which there has been a deprivation or "taking". It is convenient first to say something respecting the position in the United States.

The Fifth Amendment

Reference was made in the submissions of various parties and interveners to decisions of the United States Supreme Court upon the "taking" clause of the Fifth Amendment. Both in this provision and in s 51(xxxi) the term "property" is used with respect to the group of rights inhering in ownership and, as the Supreme Court put it, not in any "vulgar and untechnical sense" [139] [140] s 51(xxxi). Perhaps it was with this similarity of approach in mind that in 1941 Dixon J said in Andrews v Howell [141]

"The source of s 51(xxxi) is to be found in the fifth amendment of the Constitution of the United States, which qualifies the power of the United States to expropriate property by requiring that it should be done on payment of fair compensation."

However, it has been apparent for some time that with respect to "taking" and "acquisition" some important distinctions are to be observed between the United States and Australian Constitutions. As early as 1944, McTiernan J, after referring to several decisions of the United States Supreme Court, said that the differences between the two constitutional provisions "would suggest a need for caution in the application of the American decisions regarding the power of eminent domain and the safeguards upon its exercise" [142] Smith Kline & French Laboratories (Aust) Ltd v Department of Community Services and Health [143] The Fifth Amendment, which also applies to the States by the medium of the Fourteenth Amendment guarantee against the deprivation of property without due process of law [144] [145] s 51(xxxi) is directed to the Parliament and speaks of "acquisition" for any "purpose" in respect of which there is federal legislative power. "Acquisition" is a term which indicates, as Gibbs J put it in Trade Practices Commission v Tooth & Co Ltd [146] s 51(xxxi)". It should be emphasised that under the Fifth Amendment, even if just compensation be made, the "taking" must be for "public use", that is to say for "the public good, the public necessity or the public utility" [147] Kelo v City of New London [148] The effect of the United States decisions is to accept that the "taking" clause may be engaged without what the decisions in this Court would classify as an "acquisition". However, the greater scope this gives to the Fifth Amendment has been tempered by a doctrine permitting "regulation" which does not amount to a "taking" [149] [150] Reference was made in several submissions to the characterisation of the Packaging Act as a law of "trade regulation" as determinative or at least indicative of the placement of the law outside the application of s 51(xxxi). However, to adopt this course would be to provide a false frame of reference. The caution given by Mason J in Trade Practices Commission v Tooth & Co Ltd [151]

"It is one thing to say that a law which is merely regulatory and does not provide for the acquisition of title to property is not a law with respect to acquisition of property."

Remarks by Brennan J in The Commonwealth v Tasmania (The Tasmanian Dam Case) [152]

"In the United States, where the Fifth Amendment directed that private property should not be 'taken' without just compensation, the Supreme Court construed the provision as one 'designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole': Armstrong v United States[153]. If this Court were to construe s 51(xxxi) so that its limitation applies to laws which regulate or restrict use and enjoyment of proprietary rights but which do not provide for the acquisition of such rights, it would be necessary to identify a touchstone for applying the limitation to some regulatory laws and not to others. The experience of the Supreme Court of the United States was frankly stated in Penn Central Transportation Co v New York City[154]:

'... this Court, quite simply, has been unable to develop any "set formula" for determining when "justice and fairness" require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.'"

Brennan J continued:

"In this Court, the limitation in par (xxxi) has not been thought hitherto to apply to a regulatory law that did not effect an acquisition of property. In Tooth's Case, the distinction between a law that provides for an acquisition of property and a law that does not was clearly drawn."

His Honour then repeated the passage from the reasons of Mason J in Tooth which has been set out above.

Also in the Tasmanian Dam Case [155] [156]

"The emphasis in s 51(xxxi) is not on a 'taking' of private property but on the acquisition of property for purposes of the Commonwealth. To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be." (emphasis in original)

Substance and degree – three leading decisions

Whether the law in question sufficiently impairs the group of rights inhering in the property in question as to amount to an involuntary taking of that property, presents questions of substance and degree, rather than merely of form. That this is so is well settled by authority beginning at least with the reasons of Dixon J in Bank of New South Wales v The Commonwealth ("the Banking Case") [157] In that regard something should be said respecting three cases upon the development of doctrine from which submissions in the present matters sought to draw support. They are Minister of State for the Army v Dalziel [158] Banking Case [159] Tasmanian Dam Case [160] The respondent in Dalziel occupied, as a weekly tenant of Bank of New South Wales, vacant land in the Sydney central business district upon which he conducted a parking station. In pursuance of authority conferred by regulations made under the National Security Act 1939 (Cth) the Minister took possession of that land for defence use purposes as fully "as if" the Minister held an unencumbered fee simple, and for a period not to extend more than six months after war hostilities ceased. The Minister unsuccessfully submitted that Dalziel retained his weekly tenancy and the Bank its fee simple in the land, and that there had been no taking of any recognised estate or interest in the land, and therefore there had been no "acquisition" [161] Latham CJ, although in dissent, did indicate that as applied to land the term "property" in s 51(xxxi) may mean both the physical subject matter in relation to which exist rights of ownership, including a range of uses, and those rights of ownership themselves [162] The present matters before the Court concern intellectual property which has no physical subject matter, unlike a parcel of land or a chattel [163] Packaging Act operates. Like a parcel of land, there might be postulated many uses of that physical subject matter, and thus a range of restraints or "regulation" of that subject matter. However, as counsel for Van Nelle correctly accepted, the only use to be postulated of the packaging was as a cigarette container. To focus upon the cardboard boxes as the subject of the proprietary rights of the plaintiffs would be to present a case both unreal and synthetic [164] In Dalziel, Starke J said that, whilst what was conferred upon the Commonwealth was neither ownership nor any estate in the land, the right of temporary possession was to be classified "under the denomination of jura in re aliena [a right in the thing of another], and so a right of property, the subject of acquisition" [165] [166] [167] It is with an appreciation of the unsuccessful submission put by the Minister in Dalziel and of the somewhat divergent approaches in the reasoning of the Court in that case, that there should be read the synthesis attempted by Dixon J in the Banking Case [168] jura in re aliena. Dixon J said:

"I take [Dalziel] to mean that s 51(xxxi) is not to be confined pedantically to the taking of title by the Commonwealth to some specific estate or interest in land recognized at law or in equity and to some specific form of property in a chattel or chose in action similarly recognized, but that it extends to innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property." (emphasis added)

The provisions of Divs 2 and 3 of Pt IV of the Banking Act 1947 (Cth) were held by Dixon J effectively to deprive the private banks of the substance and reality of proprietorship of their assets and undertaking and the shareholders of the substance and reality of proprietorship of their shares, and to place this beneficial enjoyment and control in the hands of agents of the Commonwealth. What distinguished this conclusion from that in Dalziel was that it was reached not directly as in Dalziel, but indirectly by reference to the circuitous devices constituted by the interconnected plan which his Honour saw laid out in Divs 2 and 3 of Pt IV of the statute. The phrase "possession and control" was used by Dixon J to identify the substance of the property of which the banks and their shareholders had been stripped in favour of the Commonwealth [169] It is, however, apparent that in the Tasmanian Dam Case [170] [171] One ground was that because "property" in s 51(xxxi) includes the "innominate and anomalous interests" to which Dixon J had referred in the Banking Case [172] Dalziel of the submission that what had to be taken was some specific estate or interest in land recognised at law or in equity, and in the Banking Case what had been taken from the banks and the shareholders and placed in the hands of the agents of the Commonwealth was the substance of proprietary interests. The other ground which Deane J advanced in the Tasmanian Dam Case was by way of analogy expressed as follows [173]

"The benefit of a restrictive covenant, which prohibits the doing of certain acts without consent and which ensures that the burdened land remains in a state which the person entitled to enforce the covenant desires to have preserved for purposes of his own, can constitute a valuable asset. It is incorporeal but it is, nonetheless, property."

However, restrictive covenants are not imposed in gross but must "touch and concern", that is to say benefit or enhance the value of, the land of the covenantee[174]. There is a binary relationship between the two parcels of land, one bearing the burden and the other receiving the benefit[175].

The proposition that there need be no corresponding benefit of a proprietary nature which, with some hesitation, Deane J accepted in the Tasmanian Dam Case, was not adopted in that case by any other member of the Court. Other passages in his Honour's reasons [176] [177] Nevertheless, to varying degrees, the plaintiffs in the present cases and supporting interveners sought to rely upon what Deane J had said, at least as a means of supporting the sufficiency of an attenuated connection between the operation of the Packaging Act and the derivation of a benefit to the Commonwealth. But, as indicated above, that reasoning in the Tasmanian Dam Case was not soundly based.

Subsequent decisions

A comparison between several decisions given after the Tasmanian Dam Case was drawn by Gaudron and Gummow JJ in a passage in Smith v ANL Ltd [178]

"The legislation which was invalid in its application to the plaintiff in Georgiadis [v Australian and Overseas Telecommunications Corporation[179]] denied his right to recover damages for non-economic loss and deprived him of his entitlement to full recovery of economic loss[180], [even though it] did not extinguish the whole of the rights comprising his common law cause of action. The law which was successfully challenged in Newcrest Mining (WA) Ltd v The Commonwealth[181] did not in terms extinguish Newcrest's mining tenements and the Kakadu National Park extended only 1,000 m beneath the surface. Nevertheless there was an effective sterilisation of the rights constituting the property in question, the mining tenements. On the surface and to the depth of 1,000 m, s 10(1A) of the National Parks and Wildlife Conservation Amendment Act 1987 (Cth) forbade the carrying out of operations for the recovery of minerals. As a legal and practical matter, the vesting in the Commonwealth of the minerals to that depth and the vesting of the surface and the balance of the relevant segments of the subterranean land in the Director of National Parks and Wildlife denied to Newcrest the exercise of its rights under the mining tenements."

The passage in ANL continued:

"On the other hand, the degree of impairment of the bundle of rights constituting the property in question may be insufficient to attract the operation of s 51(xxxi). For example, the prohibition imposed under the legislation upheld in Waterhouse v Minister for the Arts and Territories[182] upon the export of the applicant's painting left him free to retain, enjoy, display or otherwise make use of the painting. He was free to sell, mortgage or otherwise turn the painting to his advantage, subject to the requirement of an export permit if the owner or any other person desired to take it out of Australia. The legislation considered in British Medical Association v The Commonwealth[183], and held invalid on other grounds, today perhaps would be thought to be nearer the line of invalidity. In British Medical Association, Dixon J was of the opinion that there was no involuntary taking of property from chemists without just compensation. The chemists were legally free to supply pharmaceuticals or not, as they pleased, in a situation where, if a sale were made at other than a price fixed by the Commonwealth, there would be little or no other trade for them in that commodity."

In Australian Tape Manufacturers Association Ltd v The Commonwealth [184] [185] On the other hand, the defendant tortfeasor considered in Georgiadis was, pro tanto, relieved of liability. Further, the sterilisation of the mining tenements in Newcrest augmented the title of the Commonwealth and the Director to the land in question. These two cases illustrate the proposition that the modification or deprivation of the proprietary rights of one party may yield to another party a countervailing benefit or advantage of a proprietary nature.

Conclusions as to "taking"

As noted above, the TMA, like other trade mark legislation, does not confer on registered owners or authorised users a liberty to use registered trade marks free from restraints found in other statutes [186] Patents Act, the Copyright Act and the Designs Act does carry with it the right to relax that exclusivity in favour of licensees and assignees of the intellectual property in question, who on their part undertake obligations to the licensor or assignor. Those rights of the intellectual property owner may properly be regarded as proprietary in nature for the purposes of s 51(xxxi) of the Constitution. The rights mentioned in respect of registered trade marks are in substance, if not in form, denuded of their value and thus of their utility by the imposition of the regime under the Packaging Act. Section 28 of the Packaging Act goes to some lengths to preserve registrations against attack under the TMA by reason of non-use necessitated for compliance with the Packaging Act. Nevertheless, whilst the registration, like the weekly tenancy of Mr Dalziel, may remain, it is impaired in the manner just described. In Mattel Inc v 3894207 Canada Inc [187] Packaging Act is designed to give the opposite effect to trade mark use, namely by encouraging consumers to turn away from tobacco products even if that otherwise is where they would "want to go". This is achieved by the contraction of device trade marks to the bare brand name and the required appearance of brand names, including those separately registered as word marks, in small print against a background of unattractive colour. A licensee or assignee, at peril otherwise of contravening the offence provisions in Ch 3 of the Packaging Act, would be enabled to exercise a licence or enjoy the assignment only in this constrained manner. The result is that while the trade marks remain on the face of the register, their value and utility for assignment and licensing is very substantially impaired. The situation is even more drastic as regards the BAT Copyrights, the BAT Patent and the BAT Design at stake in the BAT Matter. Use of the artistic works on retail packaging of tobacco products is denied by the operation of s 20(3) of the Packaging Act. Use of the BAT Design would conflict with s 18(1) of the Packaging Act and exploitation of the BAT Patent would conflict with reg 2.1.1(2) of the Packaging Regulations. The circumstances just described are sufficient to render the operation of the Packaging Act a "taking" of these items of intellectual property. The situation respecting goodwill associated with the get-up of the packaging of tobacco products requires further consideration. This is because, unlike the statutory species of intellectual property just described, the common law restricts the exploitation of goodwill by its assignment. At common law the goodwill would be assignable only in conjunction with the goodwill of the business in respect of which the get-up was used [188] [189] It is unnecessary to pursue further the question of whether the rights adhering to common law goodwill do not extend to rights of assignment or licensing and thereby deny subject matter for any deprivation by the Packaging Act sufficient to engage s 51(xxxi). This is because, in any event, there has been no acquisition of any interests of a proprietary nature by the Commonwealth or any other party by reason of the regime established by the Packaging Act.

Conclusions as to "acquisition"

In the Tasmanian Dam Case [190]

"In terms of its potential for use, the property is sterilized, in much the same way as a park which is dedicated to public purposes or vested in trustees for public purposes, subject, of course, to such use or development as may attract the consent of the Minister. In this sense, the property is 'dedicated' or devoted to uses, ie, protection and conservation which, by virtue of Australia's adoption of the Convention and the legislation, have become purposes of the Commonwealth. However, what is important in the present context is that neither the Commonwealth nor anyone else acquires by virtue of the legislation a proprietary interest of any kind in the property. The power of the Minister to refuse consent under the section is merely a power of veto. He cannot positively authorize the doing of acts on the property. As the State remains in all respects the owner the consent of the Minister does not overcome or override an absence of consent by the State in its capacity as owner."

Brennan J concluded[191]:

"Unless proprietary rights are acquired, par (xxxi) is immaterial to the validity of the impugned Commonwealth measures. Though the Act conferred a power upon the Minister to consent to the doing of acts which were otherwise prohibited on or in relation to land, that power was not a proprietary right."

These statements exemplify the application of the established doctrine of the Court respecting s 51(xxxi).

The objects of the Packaging Act stated in par (a) of s 3(1) include the improvement in public health by discouraging people from using tobacco products and from relapsing if they have stopped such use, and by reducing exposure to smoke from tobacco products. Parliament desires to contribute to achievement of those objects by regulating the retail packaging and appearance of tobacco products to reduce their appeal to consumers, increasing the effectiveness of health warnings thereon and reducing the ability of retail packaging to mislead consumers about the harmful effects of using tobacco products (s 3(2)). Another object stated in s 3(1) is the giving of effect to certain obligations upon Australia as a party to the WHO Framework Convention on Tobacco Control, done at Geneva on 21 May 2003 [192] JTI submits (i) there can be an "acquisition" within s 51(xxxi) which is not proprietary in nature and (ii) the pursuit of the legislative purposes in s 3 of the Packaging Act confers the requisite advantage upon the Commonwealth to satisfy the requirement of an "acquisition". Proposition (i) should be rejected as inconsistent with the authorities discussed above. As to (ii), pursuit of the legislative objectives stated in s 3 of the Packaging Act does not yield a benefit or advantage to the Commonwealth which is proprietary in nature. No doubt the implementation in municipal law of a treaty obligation of sufficient specificity [193] s 51(xxxi). However, the reasoning and outcome in the Tasmanian Dam Case indicates, as is apparent from the passage in the reasons of Mason J set out above, that the mere discharge by the Commonwealth of a treaty obligation itself is insufficient to provide an "acquisition" by the Commonwealth. JTI also points to the benefit to the Commonwealth in expected reduction in public expenditure on health care. But, as the Northern Territory correctly emphasised in its submissions, the realisation of such an expectation is conjectural. So also is any suggested enhancement of goodwill attached to the Quitline logo already appearing in the health warnings on the packaging of the plaintiffs' products. These outcomes would depend upon a complex interaction of regulatory, social and market forces comparable to that interaction considered and rejected as insufficient in Bienke v Minister for Primary Industries and Energy [194] In its submissions Philip Morris contended that it was sufficient that there has been obtained no more than some identifiable benefit or advantage, which, while not of a proprietary character, is at least a benefit or advantage "relating to the ownership or use of property" (emphasis added). For this proposition Philip Morris relied upon the use of such words by Deane and Gaudron JJ in Mutual Pools & Staff Pty Ltd v The Commonwealth [195] Packaging Act conferred such a benefit on the Commonwealth because the statutory regime "controlled" the exploitation of the trade marks on the packaging even though the Commonwealth itself did not exploit the trade marks; it was sufficient that the control related to the use of the trade marks. Counsel for the plaintiffs in the BAT Matter submitted to similar effect. However, as Hayne and Bell JJ explain in passages in their reasons with which I agree [196] s 51(xxxi) of the Constitution. Compliance with the federal law does not create a relationship between "the Commonwealth" and the packaging which is proprietary in nature. Moreover, the major premise which Philip Morris sought to derive from the passage in the reasons of Deane and Gaudron JJ in Mutual Pools is not soundly based upon it. The passage in their Honours' reasons in Mutual Pools reads [197]

"Nonetheless, the fact remains that s 51(xxxi) is directed to 'acquisition' as distinct from deprivation. The extinguishment, modification or deprivation of rights in relation to property does not of itself constitute an acquisition of property[198]. For there to be an 'acquisition of property', there must be an obtaining of at least some identifiable benefit or advantage relating to the ownership or use of property. On the other hand, it is possible to envisage circumstances in which an extinguishment, modification or deprivation of the proprietary rights of one person would involve an acquisition of property by another by reason of some identifiable and measurable countervailing benefit or advantage accruing to that other person as a result[199]."

Deane and Gaudron JJ were distinguishing two species of benefit, each sufficient for an "acquisition". The first would be exemplified by the acquisition of land by a resuming authority, where what was taken was received by the authority. The second would be exemplified by cases of a countervailing benefit or advantage of a proprietary nature. An example is the benefit or advantage to the obligee of an extinguished or modified chose in action, as in Georgiadis [200] ANL [201] [202] That is the sense in which the passage in the reasons of Deane and Gaudron JJ in Mutual Pools was understood by French CJ, Gummow and Crennan JJ in ICM Agriculture Pty Ltd v The Commonwealth [203]

The outcome

In oral submissions the Commonwealth placed at the forefront of its arguments first that no "property" had been "taken" and, secondly, that in any event there had been no "acquisition" of "property". The upshot is that the Commonwealth should succeed on the second of these grounds. That makes it unnecessary to rule upon two further and related submissions by the Commonwealth. The first is that there is no contextual, structural or historical reason to treat every transfer of property as an acquisition to which s 51(xxxi) applies where the transfer is "incidental to regulation in the public interest". The second proposition is that s 51(xxxi) has no operation where the acquisition of property without compensation "is no more than a necessary consequence or incident of a restriction on a commercial trading activity ... reasonably necessary to prevent or reduce harm caused by that trading activity to members of the public or public health". These submissions bring to mind remarks by Brandeis J in his dissenting reasons in Pennsylvania Coal Company v Mahon [204]

"Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking."

It is sufficient for present purposes to say that propositions of the width of those put by the Commonwealth have not so far been endorsed by decisions of this Court and that whether such propositions should be accepted would require most careful consideration on an appropriate occasion.

Orders

The demurrer by JTI to the defence by the Commonwealth should be overruled. There should be judgment in the action for the Commonwealth. JTI should pay the costs of the Commonwealth of this action, including the demurrer. On the questions reserved in the BAT Matter [205]

HAYNE AND BELL JJ. The facts and circumstances which give rise to these two proceedings and the relevant provisions of the Tobacco Plain Packaging Act 2011 (Cth) ("the TPP Act") are set out in the reasons of other members of the Court and need not be repeated. We agree that orders should be made in these matters in the form proposed by Gummow J. It is as well to identify the central elements of the case advanced by the plaintiffs and other tobacco companies that intervened in the proceedings and the principles that must be applied. When that is done, it is evident that the determinative question is shortly stated and readily answered. The TPP Act seeks to reduce the sales of tobacco products. It prohibits the use of the intellectual property (copyright, designs, patents and trade marks) that the tobacco companies would otherwise use to help sell their products. The tobacco companies say that, if the TPP Act operates according to its terms, it will reduce their sales and that their businesses will therefore be less valuable. They also say that the TPP Act will adversely affect the value of their intellectual property, which could have been turned to account by assignment or licence. Doing so after the TPP Act comes into force will bring, if anything, a very greatly reduced price. The tobacco companies' central complaint in these proceedings is that the TPP Act prohibits them from using their intellectual property in or on their retail packaging in the way in which they have used it, and would wish to continue to use it, to promote the sale of their products. They say that it follows that the TPP Act will take their property. On the face of it, that proposition seems hard to deny, but its accuracy need not be examined. It need not be examined because the relevant constitutional question is whether there has been an acquisition of property, not whether there has been a taking. Even assuming that the TPP Act effects a "taking", these reasons will show that there is no acquisition.

Fundamental principles

As was most recently pointed out in Wurridjal v The Commonwealth [206] s 51(xxxi) [207] s 51(xxxi) give particular effect to wider considerations. Hence, as Dixon CJ said in Attorney-General (Cth) v Schmidt [208]

"The decisions of this Court show that if par (xxxi) had been absent from the Constitution many of the paragraphs of s 51, either alone or with the aid of par (xxxix), would have been interpreted as extending to legislation for the acquisition of land or other property for use in carrying out or giving effect to legislation enacted under such powers. The same decisions, however, show that in the presence in s 51 of par (xxxi) those paragraphs should not be so interpreted but should be read as depending for the acquisition of property for such a purpose upon the legislative power conferred by par (xxxi) subject, as it is, to the condition that the acquisition must be on just terms. ... [W]hen you have, as you do in par (xxxi), an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect, it is in accordance with the soundest principles of interpretation to treat that as inconsistent with any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification." (emphasis added)

Of course, the caveat entered [209] s 51 in a too sweeping and undiscriminating way". But the present cases do not depend upon any refinement to the general proposition that was identified in Schmidt. Rather, they turn upon the observation that the relevant constitutional inquiry is whether the impugned law is a law with respect to the acquisition of property from any person. To adopt the metaphor of abstraction [210] s 51(xxxi), it is a legislative power with respect to the acquisition of property which is abstracted from other heads of legislative power. Section 51(xxxi) does not abstract any more widely or differently expressed power. In particular, to persist with the metaphor, there is no abstraction of legislative power the exercise of which can be said to have some deleterious effect on the worth of a business, or to "take" or "extinguish" the property of some person, unless there is an "acquisition" of property. It is for this reason that it has been said [211] s 51(xxxi) does not give protection to "the general commercial and economic position occupied by traders". Given the centrality of the concept of "acquisition" to the operation of s 51(xxxi) and to the disposition of the present matters, it is useful to repeat some fundamental propositions about this head of power. It is well established that s 51(xxxi) is concerned with matters of substance rather than form and that "acquisition" and "property" are to be construed liberally [212] [213] s 51(xxxi), there remains a bedrock principle. There can be no acquisition of property without "the Commonwealth or another acquir[ing] an interest in property, however slight or insubstantial it may be" [214] s 51(xxxi): there must be an acquisition of property. The arguments advanced by the tobacco companies sought to depart from this bedrock principle and to justify the departure as no more than adherence to "liberal" construction. In particular, they submitted that decisions and statements of this Court had extended or overtaken the principle. They said that there need be no acquisition of "property", or of a benefit or advantage of a proprietary nature, to engage s 51(xxxi). But that submission must run aground on the bedrock that has been identified. A liberal construction of s 51(xxxi) cannot set the provision free from its text or the principle that the text establishes. A liberal construction cannot and does not go as far as the tobacco companies asserted, which would treat any benefit or advantage as a sufficient definition of the constitutional reference to "property". Something more must be said about the decisions to which the tobacco companies referred in support of their arguments. Particular emphasis was given to statements made in The Commonwealth v Tasmania (The Tasmanian Dam Case) [215] Mutual Pools & Staff Pty Ltd v The Commonwealth [216] In The Tasmanian Dam Case Deane J made two statements of present relevance. First, he said [217] s 51(xxxi) is involved". Second, he decided [218] s 51(xxxi), the reference made by Deane J to "an identifiable and measurable advantage" must be understood as an advantage of a proprietary nature. Likewise, the observations made [219] Mutual Pools, that a person must obtain "at least some identifiable benefit or advantage relating to the ownership or use of property" (emphasis added) and that there must be "some identifiable and measurable countervailing benefit or advantage", must be understood in the same way. None of these statements from either case sweeps away the requirement that there be an acquisition of property. Cases like Minister of State for the Army v Dalziel [220] s 51(xxxi) the focus of attention must fall upon identification of a legal interest in, or legal relation with, some subject matter. In Dalziel the impugned provisions gave the Commonwealth possession of land to the exclusion of a weekly tenant. In Bank of NSW v The Commonwealth [221] the impugned provisions gave the Commonwealth control of a banking company to the exclusion of its shareholders by giving the Commonwealth control over the bank's board of directors. In Georgiadis v Australian and Overseas Telecommunications Corporation [222] Newcrest Mining (WA) Ltd v The Commonwealth [223] It may not be possible, and it is certainly not appropriate, to attempt to chart the boundaries of what is meant in s 51(xxxi) by "property". It is important, however, to notice that it has long been recognised [224] TPP Act, acquires any legal interest in or legal relation with the packaging that is an interest or relation the law would label as "property".

The tobacco companies' arguments

The tobacco companies expressed their arguments in several different ways. The largest submission was that s 51(xxxi) could be, and here was, engaged even though no "property" was acquired. JT International SA expressly adopted this position, submitting that the achievement of any or all of the evident purposes of the TPP Act (reducing expenditure on health care, improving the effectiveness of health warnings, and meeting international obligations) was sufficient to engage s 51(xxxi). The submissions of the other tobacco companies may well be understood as embracing this argument. For the fundamental reasons already given, the argument must be rejected. All the tobacco companies further submitted, however, that the benefit or advantage that the Commonwealth obtains from the tobacco companies' compliance with the TPP Act falls within what this Court's decisions recognise to be "property" for the purposes of s 51(xxxi). All these arguments sought to assert, in one way or another, that the TPP Act takes the tobacco companies' intellectual property and gives the Commonwealth an "identifiable and measurable countervailing benefit or advantage". The "benefit or advantage" was described in various ways: "use" or "control" of the (surface of) tobacco packaging; free advertising space; "control" over what appears on retail packaging and thus "control" over the "exploitation" of that packaging; the removal from packaging of what the Commonwealth wanted removed and its replacement by what the Commonwealth wanted put there. Though variously expressed, the different formulations had common ground. They identified the object in which the Commonwealth was said to have property as the physical packaging in which the tobacco companies sell their products, and each form of the submissions hinged on the notions of "the Commonwealth" obtaining the "use" of, or "control" over, that packaging. These submissions must be considered against the fundamental principles explained earlier. Does the Commonwealth obtain a benefit or advantage that is proprietary in nature?

Does the Commonwealth acquire "property" in the packaging?

The tobacco companies' submissions direct attention to the relationship between the Commonwealth, as the putative acquirer, and the object, in these cases the tangible object, in which it is said that the Commonwealth has obtained a proprietary interest. It is therefore necessary to examine in more detail how it was said that the Commonwealth gained the "use" of, or "control" over, the packaging in which tobacco products are sold. Though variously expressed, the tobacco companies submitted that the TPP Act gives the Commonwealth the use of, or control over, tobacco packaging because the Commonwealth or the TPP Act (the submissions did not clearly identify which) required certain things to be done or not done on the packaging. But the requirements of the TPP Act are no different in kind from any legislation that requires labels that warn against the use or misuse of a product, or tell the reader who to call or what to do if there has been a dangerous use of a product. Legislation that requires warning labels to be placed on products, even warning labels as extensive as those required by the TPP Act, effects no acquisition of property. When the seller or the maker of a product puts a warning on the packaging, the seller or maker cannot "exploit" that part of the packaging by putting something else where the warning appears. And as the tobacco companies pointed out, the TPP Act greatly restricts, even eliminates, their ability to use their packaging as they would wish. In the terms the tobacco companies used, they cannot exploit their packaging. But contrary to the central proposition that underpinned these arguments, no-one other than the tobacco company that is making or selling the product obtains any use of or control over the packaging. The tobacco companies use the packaging to sell the product; they own the packaging; they decide what the packaging will look like. Of course their choice about appearance is determined by the need to obey the law. But no-one other than the tobacco company makes the decision to sell and to sell in accordance with law. By prescribing what can and cannot appear on retail packaging the TPP Act affects that packaging and those who produce and sell the tobacco products. But to characterise this effect as "control" diverts attention from the fundamental question: does the TPP Act give the Commonwealth a legal interest in the packaging or create a legal relation between the Commonwealth and the packaging that the law describes as "property"? Compliance with the TPP Act creates no proprietary interest. The submissions about "use" of, or "control" over, retail packaging to disseminate or promote the Commonwealth's health "message" recognised that what will appear on retail packaging of tobacco products will convey information (a "message") to those who see the packaging. But the submissions then assumed (wrongly) that the author or sponsor of that "message" can be personified as "the Commonwealth". It cannot. Like "the Crown" [225] TPP Act led to any enhancement to the property of the body politic of the kind that occurs, for example, when a right to mine minerals from land vested in the Commonwealth is extinguished [226] In oral argument, the British American Tobacco plaintiffs submitted that it was the Executive Government of the Commonwealth that obtains a benefit or advantage because the TPP Act provides [227] [228] TPP Act confers a benefit or advantage on the Executive Government of the Commonwealth can be accepted. Whatever the sense in which the tobacco companies intended to use the term, "the Commonwealth" has no message which is conveyed by whatever appears on retail packaging that conforms to the requirements of the TPP Act. The packaging takes the form and bears the information required by the TPP Act. It is the legislation which requires that to be so. The TPP Act neither permits nor requires the Commonwealth to use the packaging as advertising space. The Commonwealth makes no public announcement promoting or advertising anything. The packaging will convey messages to those who see it warning against using, or continuing to use, the product contained within the packaging. Statutory requirements for warning labels on goods will presumably always be intended to achieve some benefit: usually the avoidance of or reduction in harm. But the benefit or advantage that results from the tobacco companies complying with the TPP Act is not proprietary. The Commonwealth acquires no property as a result of their compliance with the TPP Act.

Conclusion

The TPP Act is not a law by which the Commonwealth acquires any "interest in property, however slight or insubstantial it may be" [229] TPP Act is not a law with respect to the acquisition of property. It is therefore not necessary to consider the Commonwealth's attempt to articulate a principle which would set legislation effecting an acquisition of property otherwise than on just terms beyond the reach of s 51(xxxi) on the ground that the legislation is a reasonable regulation of some activity for the greater good of society. The arguments advanced by the tobacco companies are answered by the logically anterior conclusion that the TPP Act effects no acquisition of property. One further point should be made. It is unsurprising that much of the argument in the present cases, as in other recent cases about s 51(xxxi), proceeded by taking statements made in earlier decisions and fusing them into a proposition from which it was said to follow that there was or was not an acquisition of property without just terms. It must be emphasised, however, that it would be wrong to take what has been said in earlier decisions, or in these reasons, and divorce the statement from the context in which it appears. Above all, it must be recognised that it is the constitutional text and the cardinal principles that emerge from that text to which attention must always be given. In the present cases, the tobacco companies argued that the Commonwealth acquired the use of, or control over, the retail packaging in which tobacco will be sold to convey health messages. Framing the argument in that way necessarily drew attention to an understanding of property that places in the foreground the identification of the interest in the tangible or intangible object in question and the legal relation which should be described as "property" between that object and the person alleged to have acquired "property". Other cases, perhaps many other cases, may require the same kind of analysis. But there may be cases in which an analysis of that kind will not be helpful. It is the constitutional text and the fundamental principles based on that text which must guide consideration of the issue.

"None of the provisions ... is expressed in direct language as effecting an acquisition of any property. However, the question is whether, even if not formally, the [proprietors] effectively have been deprived of 'the reality of proprietorship' by the indirect acquisition, through the collective operation of the [impugned provisions], of 'the substance of a proprietary interest'."

In view of the enormous amounts of money which would probably be needed to provide just terms, the possibility of evasion in relation to the impugned legislation cannot be ruled out. The structure of that legislation is very strongly motivated by an altruistic desire to improve public health – or rather the health of Australian residents, as distinct from foreigners, for the legislation sees it as satisfactory to let exporters purvey lies and death to them. But improving (local) public health is not the fundamental concern of the impugned legislation. Its fundamental concern is to avoid paying money to those who will be damaged if that desire to improve (local) public health is gratified in the manner which the legislation envisages. Section 15(1) of the TPP Act provides:

"This Act does not apply to the extent (if any) that its operation would result in an acquisition of property from a person otherwise than on just terms."

There is no provision for just terms in the TPP Act. Thus, faced with a choice between protecting local public health at the price of compensating the proprietors and not protecting local public health at all, the legislature chose the latter course.

Acquisition: some authorities

In Smith v ANL Ltd, Callinan J argued, not implausibly, that the distinctions between interfering with rights and acquiring rights, and between taking rights and acquiring rights, were not of significance [236] In the Tasmanian Dam Case, Deane J stated that an acquisition for s 51(xxxi) purposes could arise where the effect of a legislative prohibition or regulation "is to confer upon the Commonwealth or another an identifiable and measurable advantage or is akin to applying the property, either totally or partially, for a purpose of the Commonwealth" [237] [238] Bank of NSW v The Commonwealth that s 51 (xxxi) [239]

"is not to be confined pedantically to the taking o