Telstra has a current application against Queensland in the Federal Court to have legislation prescribing rent for Crown leases declared invalid under the Telecommunications Act 1997 (Cth). Under the Telco Act, a carrier is permitted to not comply with any State law that discriminates against it and so Telstra commenced its claim against Queensland arguing that it should only pay as much rent for Crown leases as other commercial interests instead of the otherwise higher rents prescribed for telecommunications leases. The claim involves s 109 of the Constitution which provides that Commonwealth laws prevail over State laws to the extent of any inconsistency.

Recently, Queensland brought an interlocutory application seeking a declaration that its laws were valid until a Court finally determined otherwise. Queensland appeared to be seeking to acquire the approximately $12.5 million in outstanding rent and penalty interest it alleged Telstra owed under the State legislation. Telstra had paid, and continues to pay, rent to Queensland but only at the rate as it existed prior to the introduction of the Land Regulation 2009 (Qld) which is the subject of Telstra’s discrimination claim. 

Queensland argued that there existed a presumption of validity of State legislation which a Court must apply during interlocutory proceedings and that the presumption was irrebuttable. Telstra disputed that the presumption of validity is irrebuttable and succeeded. The Judge, Rangiah J, commented that if the presumption was irrebuttable then no Judge could exercise his or her discretion to grant or not grant an interlocutory injunction. Queensland had not sought an interlocutory injunction (rather it sought a declaration) but the Judge accepted, as argued by Telstra, that Queensland could not properly seek an interlocutory declaration because such declarations do not exist in law. That is, declarations cannot be interlocutory; they must, by their very nature, be final. 

During oral submissions Queensland sought to clarify that its application was actually for final relief and not interlocutory in an apparent response to Telstra’s submissions. However, given Queensland’s application was entitled “Interlocutory Application” and sought “Interlocutory Orders” that were intended to last only “pending determination of [the] proceeding”, even if Queensland was seeking a final declaration, Queensland did not follow the correct Federal Court procedure to obtain a final order and this prejudiced Telstra.

Queensland’s interlocutory application was dismissed. A copy of the judgment is available on the Federal Court website.