By Dr Michelle Sharpe -
Key decisions
- Hobart International Airport Pty Ltd v Clarence City Council and Australia Pacific Airports (Launceston) Pty Ltd v Northern Midlands Council Pty Ltd [2022] HCA 5
- H Lundbeck A/S & Anor v Sandoz Pty Ltd and CNS Pharma Pty Ltd v Sandoz Pty Ltd [2022] HCA 4
Judicial power of the Commonwealth
In the High Court decision of Hobart International Airport Pty Ltd v Clarence City Council and Australia Pacific Airports (Launceston) Pty Ltd v Northern Midlands Council Pty Ltd [2022] HCA 5(9 March 2022) the High Court was required to determine whether the dispute sought to be agitated by the respondents (‘Councils’) involved a ‘matter’ for the purpose of Chapter III of the Constitution.
The appellants (‘the Lessees’) entered into long-term leases with the Commonwealth (‘Leases’) for the Hobart Airport and the Launceston Airport (‘Airport Sites’). The Airport Sites are both on Commonwealth land and in areas administered by the Councils. The Commonwealth granted the Leases pursuant to s 22 of the Airports (Transitional) Act 1996 (Cth) (‘Transitional Act’). The Leases contain materially similar terms including cl 26 which formed the basis of the dispute between the parties.
The insertion of cl 26 into the Leases is consistent with the principle of ‘competitive neutrality’ embodied in the Competition Principles Agreement between the Commonwealth and the States and Territories. Clause 26 provides that if rates are not payable to the local council, because the Airport Site is on Commonwealth land, then the Lessees must use ‘all reasonable endeavours’ to enter into an agreement with the Council to pay an amount equivalent to the amount which would have been payable as rates on those parts of the Airport Sites which are either sub-leased to tenants or on which ‘trading or financial operations are undertaken’.
