AUSTRALIAN COMPETITION TRIBUNAL
Duke Eastern Gas Pipeline Pty Ltd [2001] ACompT 3
Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 referred to
Oshlack v Richmond River Council (1998) 193 CLR 72 referred to
R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 referred to
MGV Pty Ltd v Phonographic Performance Co of Australia Ltd [2000] ACopyT 8 referred to
Damon v Commissioner of Land Tax (Vic) (1985) 1 VAR 130 referred to
Re Mafodda and Estate Agents Registration Board (1986) 1 VAR 311 referred to
Re Queensland Co-Operative Milling Association (1976) 25 FLR 169 referred to
R v Australian Broadcasting Tribunal; ex parte 2HD (1980) 144 CLR 45 referred to
Trade Practices Act 1974 (Cth)
National Third Party Access Code for Natural Gas Pipeline Systems Cl 1.3, 1.4, 1.5, 1.6, 1.13, 1.14, 1.19
Gas Pipelines Access Law s38(10)
MATTER NO 3 OF 2000
RE: APPLICATION UNDER SECTION 38(1) OF THE GAS PIPELINES ACCESS LAW FOR REVIEW OF THE DECISION BY THE MINISTER FOR INDUSTRY, SCIENCE AND RESOURCES PUBLISHED ON 16 OCTOBER 2000 TO COVER THE EASTERN GAS PIPELINE PURSUANT TO THE PROVISIONS OF THE NATIONAL THIRD PARTY ACCESS CODE FOR NATURAL GAS PIPELINE SYSTEMS AND THE GAS PIPELINES ACCESS LAW
JUSTICE HELY, DR M J MESSENGER & MISS M M STARRS
4 JULY 2001
SYDNEY
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IN THE AUSTRALIAN COMPETITION TRIBUNAL |
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RE: |
APPLICATION UNDER SECTION 38(1) OF THE GAS PIPELINES ACCESS LAW FOR REVIEW OF THE DECISION BY THE MINISTER FOR INDUSTRY, SCIENCE AND RESOURCES PUBLISHED ON 16 OCTOBER 2000 TO COVER THE EASTERN GAS PIPELINE PURSUANT TO THE PROVISIONS OF THE NATIONAL THIRD PARTY ACCESS CODE FOR NATURAL GAS PIPELINE SYSTEMS AND THE GAS PIPELINES ACCESS LAW
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BY: |
DUKE EASTERN GAS PIPELINE PTY LTD DEI EASTERN GAS PIPELINE PTY LTD DUKE AUSTRALIA OPERATIONS PTY LTD
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DATE OF DETERMINATION:
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4 JULY 2001 |
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WHERE MADE: |
THE TRIBUNAL ORDERS THAT:
1. There be no order as to the costs of the proceedings.
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IN THE AUSTRALIAN COMPETITION TRIBUNAL |
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MEMBERS: |
JUSTICE HELY, DR M J MESSENGER & MISS M M STARRS
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DATE: |
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PLACE: |
REASONS FOR DECISION
THE TRIBUNAL:
1 Duke’s application to the Tribunal for review of the Minister’s decision did not seek an order for costs. Nor did Duke put any submissions on the question of costs at the hearing. AGL raised the costs question at the hearing inasmuch as it submitted there should be no order as to costs. In its reasons for decision published on 4 May 2001 the Tribunal indicated a tentative view that there should be no order as to the costs of the proceedings, but it reserved liberty to any party to apply for an order as to costs “in case the failure to put any submission on the question of costs was due to inadvertence”.
2 Duke has applied by motion for an order that the respondents pay its cost of and incidental to the Application for Review of the Minister’s coverage decision. An order for costs is sought against AGL subject to such order being reduced to the extent of any order made against NCC or the Minister. Duke does not contend that its omission to seek an order for costs at the hearing was inadvertent, but it contends that its failure to seek an order for costs at an earlier point in time is explicable and excusable. No one has contended that Duke’s application should be summarily dismissed on the basis that it is outside the liberty to apply which the Tribunal reserved, hence we will deal with the motion on its merits.
3 “Any person” may make an application to NCC requesting that a Pipeline be covered (National Third Party Access Code for Natural Gas Pipeline Systems (“Code”): Cl 1.3)). Unless the application is dismissed as trivial or vexatious, NCC must inform persons whom it believes have a sufficient interest in the matter that the application has been received. NCC must also publish a notice in a national daily newspaper requesting submissions in relation to the application (Code: Cl 1.4). Thereafter NCC must consider the submissions received and submit a recommendation to the Relevant Minister as to whether or not the Pipeline should be covered (Code: Cl 1.6 and 1.7). The Relevant Minister then decides whether or not the Pipeline is covered (Code: Cl 1.13). The Relevant Minister may require NCC to provide such information, reports and other assistance as the Relevant Minister considers appropriate for the purpose of considering the application (Code: Cl 1.14). The NCC’s recommendation, and the Relevant Minister’s decision depend upon whether the matters referred to in Cl 1.9(a)-(d) are satisfied. The decision on coverage is subject to review by the Tribunal as the relevant appeals body under the Gas Pipelines Access Law (“the Law”) (Code: Cl 1.19).
4 Section 38(10) of the Law provides:
“The relevant appeals body may make such orders (if any) as to costs in respect of a proceeding as it thinks fit.”
Duke contends that this is a broad discretionary power which should be exercised in accordance with principles established in relation to inter partes litigation. The general principle applicable in the case of inter partes litigation is said to be that, absent special circumstances, and subject to the exercise of the Tribunal’s discretion, costs ordinarily follow the event: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748, although the formulation of any general principle has to take account of the decision of the High Court in Oshlack v Richmond River Council (1998) 193 CLR 72, 88.
5 The Tribunal is not empowered to make costs orders in proceedings under Parts IIIA, IX or XIC of the Trade Practices Act 1974 (Cth) . The power under s 38(10) of the Law is unique so far as the Tribunal is concerned. The Tribunal’s decision is administrative in character. It does not resolve any legal rights of, or controversy between, AGL and Duke. Nor is the focus of the Tribunal’s enquiry upon the narrow commercial interests of particular persons. The decision is concerned with the wider question of whether the coverage criteria are met, so as to justify regulation of the Pipeline in aid of the promotion of competition in relevant markets. “Any person” may initiate the administrative process which culminates in the Tribunal’s decision. As the proceedings before the Tribunal are not, either in substance or in form, inter partes litigation, there is no particular reason for applying principles developed in connection with such litigation to proceedings before the Tribunal.
6 Further, the words if any in s 38(10) make it plain that in proceedings before the Tribunal, there is no presumption that orders as to costs will be made at all. Whether the Tribunal makes any, and if so, what, order as to costs is entirely within the discretion of the Tribunal. The costs discretion should be exercised having regard to the subject matter, scope and purpose of the statute: R v Australian Broadcasting Tribunal; ex parte 2HD (1980) 144 CLR 45 at 49; Oshlack (supra) at p 81.
7 Whether the statutory criteria for coverage of a pipeline are met will often be, as the present case illustrates, a matter on which there can be different points of view and legitimate differences of opinion. It is important that the Tribunal be acquainted with all factors which are potentially relevant to its determination. Responsible intervention by interested parties who have a worthwhile contribution to make ought not to be discouraged by fear of adverse costs orders. The review process benefits from such participation. Nor should a pipeline operator be discouraged from exercising its statutory right of review by fear that costs orders may be made against it if unsuccessful, potentially in favour of multiple parties. For these reasons, the adoption of a general rule applicable in the case of inter partes litigation to the proceedings before the Tribunal would not be conducive to the effective discharge by the Tribunal of its statutory functions.
8 Costs orders should only be made in proceedings before the Tribunal where there are circumstances which justify the making of an order. The fact that a particular outcome of proceedings before the Tribunal may be seen as conducive (or not conducive) to the commercial interests of a party, would not ordinarily provide, of itself, a sufficient reason for making a costs order for (or against) that party. In principle, the power to order costs should be exercised sparingly, and not so as to discourage participation in the review process. Generally the power to award costs should be reserved for cases where a party’s participation in the proceedings before the Tribunal materially and unnecessarily increases what would otherwise have been the costs of those proceedings.
9 Section 174 of the Copyright Act confers a discretion on the Copyright Tribunal to make costs orders in relation to proceedings in the Tribunal. In MGV Pty Ltd v Phonographic Performance Co of Australia Ltd [2000] ACopyT 8 Burchett P referred to the ordinary practice of that Tribunal not to make orders for costs. A reason for that practice is that decisions of that Tribunal often affect wider interests than those arising between the immediate parties to the particular proceeding. That is also the case here. In Damon v Commissioner of Land Tax (Vic) (1985) 1 VAR 130, Mr Gibson (Member) declined to apply the “costs follow the event” principle to proceedings in the Administrative Appeals Tribunal, because so to do may well frustrate the objects of the relevant statute. To like effect is the decision of Deputy President Forrest in Re Mafodda and Estate Agents Registration Board (1986) 1 VAR 311.
10 AGL was not given leave to intervene in the proceedings until 15 November 2000. In the Tribunal’s assessment, thereafter AGL played a proper role in the proceedings before the Tribunal, which was consistent with the Tribunal’s expectation when it granted AGL leave to intervene. Given the structure of the industry, and AGL’s position in the industry, the Tribunal needed to understand how AGL saw the issue of coverage, and the factors which, in its assessment, were germane to that question. AGL acted as a contradictor. The Tribunal’s processes benefit from the presence of a contradictor. The Tribunal is not persuaded that cause has been shown for the making of a costs order against AGL. AGL accepted that its involvement did contribute to the length of the proceedings to some extent. Its estimate of about a day is probably close to the mark. But if AGL had not been a party, it would probably have been necessary for someone else, perhaps ACCC, or counsel assisting or the Tribunal itself to have investigated the matters which AGL pursued.
11 NCC has a statutory role to play in relation to coverage questions as outlined above. The Tribunal sought and was given assistance by NCC from time to time. Had NCC not played the role which it did in relation to the proceedings, it may have been necessary for the Tribunal to seek further involvement by ACCC under s 38(8) of the Law. In Duke’s submissions of 6 December 2000 Duke asserted that NCC was the appropriate body to assist the Tribunal in the manner outlined in Re Queensland Co-Operative Milling Association (1976) 25 FLR 169, 173.
12 Again, the Tribunal is of the view that NCC performed the role which the Tribunal expected of it. In no sense did NCC act inappropriately. In particular, it was appropriate for NCC to lead the evidence of Dr Makholm – otherwise the Tribunal would have lacked any test of the evidence of Mr Ergas. The Tribunal is not persuaded that cause has been shown for making a costs order against NCC.
13 Effectively, the Minister submitted to such order as the Tribunal thought fit to make. On the initial return date of the application, the Minister made it plain that he proposed to adopt a submitting role, and no one suggested that this was an inappropriate role for the Minister to adopt.
14 Whether the Minister was bound to adopt that role having regard to the principles established in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35-36 is not without its own complications. Whilst the issue of coverage of EGP would not be remitted to the Minister, it may be that depending on the Tribunal’s decision on coverage of EGP, EAPL might renew its application for termination of coverage of MSP. If that occurred a related matter would come before the Minister.
15 For present purposes, it does not matter whether the Minister was bound to act as he did. He announced his intention to do so at the first available opportunity and did so without equivocation. No one dissented from his announced course. In those circumstances, it is not appropriate for a costs order to be made against the Minister.
16 There will be no order as to the costs of the proceedings.
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I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely, Dr M J Messenger and Miss M M Starrs. |
Associate:
Dated: 4 July 2001
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Counsel for Duke Eastern Gas Pipeline Pty Ltd: |
Mr A I Tonking |
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Solicitor for Duke Eastern Gas Pipeline Pty Ltd: |
Minter Ellison |
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Counsel for NCC: |
Mr S Gageler SC |
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Solicitor for NCC: |
Clayton Utz |
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Counsel for AGL: |
Mr J Gleeson SC |
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Solicitor for AGL: |
Gilbert and Tobin |
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Counsel for the Minister: |
Mr M Bezzi |
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Solicitor for the Minister: |
Australian Government Solicitor |
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Date of Hearing: |
26 June 2001 |
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Date of Judgment: |
4 July 2001 |