News that South Australian Premier Mike Rann is contemplating a High Court challenge to the federal Murray-Darling water deal is good news for constitutional lawyers, because it would result in the resolution of a question raised before Federation but never litigated. Such a case might even be in the long-term best interests of the river systems, although in the immediate term South Australian success would certainly require the whole deal to be renegotiated. It seems fairly unlikely that the current scheme can ever function effectively without reasonably free trade in water licences to create a price mechanism where river waters are used efficiently for the most valuable purposes.
I gather South Australia will argue that the Commonwealth and State legislation implementing the Murray-Darling water agreement is in breach of Constitution section 92 and thus invalid. Section 92 requires that interstate trade be “absolutely free”, and the High Court has ruled (in Cole v Whitfield and other cases) that this means free from protectionist burdens of any kind that advantage the traders of one state over those from others.
In the case of water, I assume the argument is along the lines that the cap on trading in water licences, which Victorian Premier John Brumby insisted on as the price of his State’s participation in the deal, represents a protectionist measure that favours Victorian and NSW farmers who are upstream from South Australia and therefore get the opportunity to extract too much water, with the cap then preventing free interstate trade in water extracted by Victorian and NSW farmers (or rather the licences that allow them to do so).
Like ANU constitutional lawyer George Williams, I think it’s a respectable argument that might well succeed. In fact concerns about water and the Murray-Darling were very much front and centre in the years leading up to Federation. It’s strange that the question hasn’t got to the High Court long before this.
One problem Rann might have, however, is his own big mouth. Judicial review remedies, both equitable and prerogative, are discretionary. Litigants can be denied relief if, despite establishing good grounds for review, they have been guilty of excessive delay or come before the court with “unclean hands”:
The State Opposition and some commentators believe the Rann Government should have taken Victoria to the High Court two years ago.
But Mr Rann says that would have been foolhardy.
“That would have been the dumbest thing for SA to do,” he said.
“If we’d mounted the court case two years ago we wouldn’t have got the $13 billion, we wouldn’t have got the independent commission and Victoria wouldn’t have handed over its powers.”
Isn’t an impending High Court challenge always ” good news for constitutional lawyers” – at least the ones representing the two sides in the High Court?
Yes, I’m sure it’s true that any constitutional case is good news for the lawyers for both sets of litigants, but a case which will explore hitherto unexplored aspects of constitutional law is likely to engage the attention of public lawyers much more broadly. There are lots of cases that raise constitutional issues that are largely traversing well-ploughed ground, albeit presumably with some original element or the High Court would not grant special leave to argue them.
However, this case would raise an issue mused about since Federation but not until now litigated i.e. whether and to what extent access to Murray-Darling waters is subject to section 92 freedom of interstate trade.
It’s even more interesting on the facts here, because the legislation under challenge results from a political deal/compromise between the Commonwealth and several States including the plaintiff State South Australia. It’s well recognised that freedom of interstate trade, like other constitutionally protected freedoms, is not absolute. It can be incidentally infringed (even in a manner having a protectionist effect) as long as the law in question is directed at an objective otherwise within legislative power, and is “appropriate and adapted” to that objective. An example of a law that was held (in the Castlemaine-Tooheys case) to infringe that principle (thus being invalid) was the South Australian law implementing mandatory refundable deposits on drink bottles. Encouraging recycling and reduction of litter is clearly an object with state legislative power, but the means selected by the SA government was held not to be “appropriate and adapted” to that objective. SA had elected to impose a much higher deposit on non-refillable beer bottles (as opposed to refillable ones). By coincidence or otherwise, all the national brewers used non-refillable bottles; only local SA brewer Coopers used refillable ones. The evidence was that a much lower deposit on non-refillable bottles would have been equally effective in achieving the desired behavioural change by consumers. Thus the legislation was not “appropriate and adapted”: there was a distinct suspicion that the real objective (or at least one of them) had been protectionism rather than recycling or litter reduction.
In the case of Murray-Darling water, it would be difficult to argue convincingly that Brumby’s motives were other than protectionist; however the Commonwealth’s motives and those of other states were simply to achieve a workable compromise agreement. That was (and remains) a crucial policy objective for Australia, and achieving agreement by necessity requires compromise/give and take, in that neither the Commonwealth nor any state acting alone has the power to implement an effective scheme. It was the best/only deal that could be achieved in the circumstances. Could such a scheme be seen as “appropriate and adapted” notwithstanding the protectionist motives of one of the parties to it, especially when the plaintiff acceded to the agreement initially but now seeks to renege? To what extent does section 92 accommodate collective action between Commonwealth and States, given that any such action unavoidably involves wheeling and dealing and political trade-offs? The High Court’s adoption of an overly purist approach would torpedo co-operative federalism, but taking an excessively lax approach to the “appropriate and adapted” test could open the floodgates to thinly disguised protectionist deals which radically weaken the effectiveness of section 92.
Legalities aside, I just can’t understand why Victorian farmers wouldn’t want the opportunity to get rich (and hence enrich the surrounding towns) by on-selling the property – water rights – they’ve been gifted.
Call me a city-slicker, but it sounds a lot less work than farming.
Yes I thought that too. I don’t understand it. Obviously Brumby thought/thinks there’s a big constituency that wants him to keep water rights in Victoria. Maybe another commenter can explain it to us. It could be as simple as the fact that it gives Brumby the opportunity to expropriate some of the water from Eildon Weir etc and pipe it to Melbourne, so that the “keep the water for Victoria and screw the South Australians” beneficiaries are actually the city slickers in Melbourne rather than the Victorian farmers, although it’s unlikely many of them actually know it. But it means Brumby can avoid building a big new dam and upsetting the greenies, who are much more sanguine about screwing the farmers of northern Victoria. However I don’t actually know much about this at all, so I could be wildly off-beam.