AUSTRALIAN COMPETITION TRIBUNAL
Freight Victoria Limited [2002] ACompT 1
PRACTICE AND PROCEDURE – trade practices – access to services – application for stay of proceeding until determination of application for certification of access regime – where proceeding relates to review of decision of Minister not to declare as a service rail line services provided by facilities leased to applicant – where access regime found not an effective access regime – Tribunal should determine matter on basis of law at time of determination – consideration of prejudice to parties if application for stay granted or refused.
Trade Practices Act 1974 (Cth): ss 44G, 44H, 44K, 44M, 44N
Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346 considered
Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 considered
Ramsey v Aberfoyle Manufacturing Company (Australia) Pty Ltd (1935) 54 CLR 230 applied
R v Whiteway; Ex parte Stephenson [1961] VR 198 applied
Matter No 1 of 2002
IN THE MATTER OF FREIGHT VICTORIA LIMITED (ACN 075 295 644)
(TRADING AS FREIGHT AUSTRALIA)
GOLDBERG J (Deputy President), MISS M M STARRS & DR J E WALKER
27 MARCH 2002
MELBOURNE
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IN THE AUSTRALIAN COMPETITION TRIBUNAL |
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No 1 of 2002 |
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IN THE MATTER OF:
FREIGHT VICTORIA LIMITED (ACN 075 295 644)
(trading as FREIGHT AUSTRALIA)
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THE TRIBUNAL: |
GOLDBERG J (Deputy President), MISS M M STARRS & DR J E WALKER |
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DATE OF ORDER: |
27 MARCH 2002 |
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WHERE MADE: |
MELBOURNE |
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THE TRIBUNAL ORDERS THAT:
1. ATN Access Pty Ltd be given leave to intervene.
2. The application by the State of Victoria for a stay of the proceeding, alternatively a postponement of the final hearing of the proceeding, be dismissed.
3. Each intervening party file and serve a statement of the facts and contentions upon which it relies giving particular attention to the matters set out in s 44H(4) of the Trade Practices Act 1974 (Cth) by 4.00pm on 10 May 2002.
4. The applicant and intervening parties (other than the National Competition Council) file and serve a list of documents they consider to be relevant to the application for review before the Tribunal in addition to those on the list provided by the National Competition Council by 4.00pm on 10 May 2002.
5. All parties (other than the National Competition Council) file and serve statements of all non‑expert witnesses proposed to be called to give evidence together with copies of all documents proposed to be tendered or otherwise relied on at the hearing by 4.00pm on 7 June 2002.
6. The National Competition Council file and serve statements of all non‑expert witnesses proposed to be called to give evidence together with copies of all documents proposed to be tendered or otherwise relied on at the hearing by 4.00pm on 21 June 2002.
7. All parties (other than the National Competition Council) file and serve statements of any expert witnesses proposed to be called to give evidence by 4.00pm on 19 July 2002.
8. The National Competition Council file and serve statements of any expert witnesses proposed to be called to give evidence by 4.00pm on 2 August 2002.
9. All parties file and serve any amendments and additions to their statement of facts and contentions by 4.00pm on 9 August 2002.
10. Adjourn the directions hearing to a date to be fixed.
11. The hearing be tentatively listed to commence on 11 September 2002.
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IN THE AUSTRALIAN COMPETITION TRIBUNAL |
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IN THE MATTER OF:
FREIGHT VICTORIA LIMITED (ACN 075 295 644)
(trading as FREIGHT AUSTRALIA)
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THE TRIBUNAL: |
GOLDBERG J (Deputy President), MISS M M STARRS & DR J E WALKER |
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DATE: |
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PLACE: |
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REASONS FOR DECISION
1 On 22 February 2002, Freight Victoria Limited (trading as Freight Australia) (“Freight Australia”) filed an application pursuant to s 44K(2) of the Trade Practices Act 1974 (Cth) (“the Act”) for a review of the decision by the designated Minister under s 44H(1) of the Act not to declare as a service the point to point rail line services provided by the use of certain facilities leased to Freight Australia (“the service”).
2 A directions hearing was held on 12 March 2002 at which the Tribunal granted leave to the National Competition Council, the State of Victoria and AWB Limited to intervene in the proceeding. At the directions hearing, the State of Victoria indicated that it wished to have the proceeding stayed until the determination of an application by the State of Victoria pursuant to s 44M of the Act for certification of an access regime by the Commonwealth Minister. The application for the stay was set down for hearing on 27 March 2002.
3 Freight Australia is the lessee of the Victorian Railway Intra‑State Rail Network and associated infrastructure in the following circumstances. Victorian Rail Track (“VicTrack”), a statutory corporation established under s 8 of the Rail Corporations Act 1996 (Vic) owns the Victorian Railway Intra‑State Rail Network and associated infrastructure. On or about 30 April 1999 VicTrack leased the rail network to the Director of Public Transport on behalf of the Crown in right of the State of Victoria. On 30 April 1999, the Director subleased the freight network to Freight Australia for a term of fifteen years with two further options of fifteen years. On 30 April 1999, Freight Australia purchased the rail freight business conducted by V/Line Freight Corporation which it currently operates on the rail network. Freight Australia also provides access to the freight network to other rail operators.
4 On 1 May 2001, Freight Australia lodged an application with the National Competition Council (“NCC”) asking the NCC to recommend pursuant to s 44G of the Act that the service be declared. The State of Victoria lodged submissions with the NCC opposing that application for declaration.
5 On 7 December 2001, the NCC recommended that the Minister not declare the service. The NCC was not satisfied of the matter set out in s 44G(2)(a) of the Act in respect of the application.
6 On 1 February 2002, the designated Minister decided to accept the NCC’s recommendation not to declare the service. The Minister was not satisfied that access to the service pursuant to a declaration would promote competition in at least one market, other than the market for the service: s 44H(4)(a) of the Act.
7 In May 1998, the Parliament of Victoria had passed the Rail Corporations (Amendment) Act 1998 which inserted Pt 2A into the Rail Corporations Act and established an access regime which had the potential to apply to services comprising access to or use of the rail network owned by VicTrack.
8 On 15 May 2001, an Order-in-Council was made under s 38C(1) of the Rail Corporations Act declaring “any service comprising access to, or use, of the Freight Network or any part of it for the purpose of providing transport services other than passenger services should be a ‘declared rail transport service’ with effect from 1 July 2001. The Order was expressed to expire on the fifth anniversary of its commencement. The freight network referred to in the Order comprised all the rail infrastructure owned by VicTrack (with certain exceptions) that is leased from time to time by Freight Australia.
9 In July 2001, the State of Victoria, through the responsible Minister, the Honourable Stephen Bracks, the Premier of Victoria, made application to the NCC pursuant to s 44M of the Act asking it to recommend to the Commonwealth Minister that the Victorian rail access regime found in Pt 2A of the Rail Corporations Act is an effective access regime in relation to the service of providing railway infrastructure facilities necessary for the operation and use of a railway by a person for the purpose of providing a service of carrying freight.
10 The NCC has published a position paper in relation to the application by the State of Victoria and has sought and received submissions in relation to it. The NCC has not yet made a decision whether to recommend to the Minister (pursuant to s 44M(3) of the Act) that the access regime is or is not an effective access regime for the service. Once the Commonwealth Minister receives the recommendation of the NCC, the Minister must decide that the access regime either is or is not an effective access regime for the service in accordance with s 44N of the Act. If the Commonwealth Minister’s decision is adverse to the State of Victoria, it may apply to the Tribunal for a review of the decision pursuant to s 44O of the Act.
11 In the course of reaching its recommendation that the Minister not declare the service, the subject of Freight Australia’s application, the NCC considered whether it was satisfied of the matters set out in s 44G(2) of the Act. In particular, the NCC considered that the current Victorian access regime failed to satisfy all the relevant criteria in cls 6(2) to (4) of the Competition Principles Agreement and was therefore not an “effective access regime” for the purposes of par (e) of s 44G(2) of the Act. It followed that the NCC concluded that access to the service, the subject of the application, was not “the subject of an effective access regime”. In its recommendation, the NCC said:
“The Council considers that the Victorian regime fails to satisfy all the relevant criteria in clauses 6(2)‑(4) of the CPA and is therefore not an ‘effective’ regime for the purposes of Part IIIA of the TPA. Given that this means there is no effective regime covering the services under application, the Council concludes that criterion 44G(e) is satisfied.
The Council is currently considering Victoria’s application to certify the Victorian regime under a separate process. Victoria proposes some changes in response to the Council’s concern and may no doubt consider further changes should issues arise from the public process. However, the Council must make its assessment on the current regime, established under the Rail Corporation Act and gazetted Orders.
Some areas that the Council considers the Victorian regime currently fail to satisfy the clause 6 criteria are outlined below.”
12 The Commonwealth Minister agreed with the NCC’s view that the Victorian access regime was not an effective regime for the purposes of Pt IIIA of the Act.
13 The State of Victoria has responded to the issues raised by the NCC in relation to the current Victorian access regime and indicated that it is prepared to make amendments to the Rail Corporations Act which, if made, will satisfy the NCC’s concerns relating to the effectiveness of the Victorian access regime.
14 In short, the State of Victoria now seeks to have the review by the Tribunal stayed until a decision has been made by the Commonwealth Minister under s 44N of the Act in relation to the application by the State of Victoria. If a decision is made in favour of the State of Victoria that the access regime is an effective access regime for the service, then that decision will effectively pre‑empt the determination by the Tribunal as to whether there is an effective access regime already in existence in relation to the service. By virtue of the provisions of s 44H(6) of the Act, a decision under s 44N of the Act that a regime is an effective access regime must be followed by the designated Minister unless the Minister believes that since the decision under s 44N was published “there have been substantial modifications of the access regime or of the relevant principles set out in the Competition Principles Agreement”: s 44H(6).
15 As the review by the Tribunal is “a reconsideration of the matter”: s 44K(4), the decision by the Minister under s 44N of the Act would effectively pre‑empt the Tribunal considering the matter, subject to the provisions of s 44H(6) of the Act.
16 Thus, the grant of any stay would provide a tactical advantage to the State of Victoria.
17 The Tribunal has a general discretion to control and regulate its own proceedings in accordance with s 103(1) of the Act. Although that section is found in Div 2 of Pt IX of the Act which is headed “Review by Tribunal of determinations of Commission”, the Tribunal is satisfied that the provisions in Div 2 which relate to procedure and evidence apply to all hearings and proceedings of the Tribunal and not only to a review of Australian Competition and Consumer Commission determinations. That discretion enables the Tribunal to determine to allow an adjournment or temporary stay of its proceedings. The discretion is unfettered by any statutory limitation.
18 The State of Victoria submitted that guidance could be obtained as to the manner in which the discretion might be exercised from cases where courts have considered the circumstances in which a stay should be granted, particularly in the context where proceedings were pending in another court: Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346 at 351‑353; Sterling Pharmaceuticals Pty Ltd v Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 at 290‑291. In those cases, the courts took into account a number of factors in determining whether to exercise the discretion to grant or refuse a stay of proceedings. Those matters included weighing the advantage to the plaintiff against the disadvantage to the defendant, the convenience to witnesses, the duplication of work, the undesirability of courts competing to see which court determined common facts first, whether preparatory work and procedural work might be wasted and the prevention of a multiplicity of proceedings.
19 However, those principles do not easily translate into the present context. The situation is not so much one where there are two bodies determining a similar issue or set of circumstances but rather a situation where one party, the State of Victoria, is seeking to alter or procure the alteration of a set of facts or circumstances presently existing. This will involve the necessity for the Parliament of Victoria to pass legislation to implement necessary amendments to the present Victorian access regime.
20 The Executive Director of the NCC has identified the following steps which must occur before the Victorian rail access regime could be considered an effective regime and could be so recommended by the NCC in accordance with s 44M(3) of the Act:
“(i) the State of Victoria must draft and pass legislation amending the Rail Corporations Act 1996 (Victoria) and associated legislation establishing the Victorian Rail Access Regime;
(ii) the Council must consider the amended regime against the criteria in clause 6 of the Competition Principles Agreement;
(iii) if the Council considers that the amendments to the Victorian Rail Access Regime is an effective regime under section 44M of Part IIIA of the Trade Practices Act, the Council will then recommend to the Minister that the Minister decide that the regime for access to the service is an effective access regime; and
(iv) the Minister will decide under section 44N the Trade Practices Act 1974 (Cth) whether or not the Victorian Rail Access Regime is an effective access regime for the purposes of section 44N of Part IIIA of the Trade Practices Act 1974 (Cth).”
The State of Victoria proposes to have legislation passed by the Parliament to implement the measures needed to satisfy the NCC’s concerns but it does not appear that the legislation will be introduced into Parliament until later in the year.
21 As a matter of general principle, a Court or Tribunal should determine a matter before it on the basis of the law as it exists at the time of its judgment or determination. It is inappropriate to anticipate or speculate as to alterations in the law that may occur in the future. In Ramsey v Aberfoyle Manufacturing Company (Australia) Pty Ltd (1935) 54 CLR 230 Starke J, who dissented, said at 253:
“Courts of law, however, can only act upon the law as it is, and have no right to, and cannot, speculate upon alterations in the law that may be made in the future.”
The majority did not express any disagreement with this proposition. In R v Whiteway; Ex parte Stephenson [1961] VR 168, Deane J quoted this passage and said at 171:
“It would be a cause of injustice if courts could adjourn cases because they had some real or imagined belief that the law might be amended.”
See also Re Minister for Minerals and Energy; Ex parte Wingate Holdings Pty Ltd [1987] WAR 190 at 193, 196.
22 The review by the Tribunal is a reconsideration of the matter which was before the Minister and earlier before the NCC: s 44K(4) of the Act. For the purposes of the review, the Tribunal has the same powers as were available to the Minister: s 44K(5) of the Act. Accordingly, when the matter comes on for hearing the Tribunal will not be able to declare the service, the subject of the application, unless it is satisfied of all the matters set out in s 44H(4) of the Act. It is therefore for the Tribunal to be satisfied at the date of the hearing and the date of its determination of the hearing, in accordance with par (e) of s 44H(4), that “access to the service is not already the subject of an effective access regime”.
23 What the State of Victoria wishes to achieve is to have a successful outcome to its application pursuant to s 44M of the Act and for the Minister to make a similar decision pursuant to s 44N of the Act. However, in order to achieve that outcome there are a number of steps which must be taken to which we have referred. It is not simply a matter of the NCC making the recommendation. The Minister must make a decision on receiving a recommendation from the NCC. As noted earlier, it will also be necessary for the Parliament of Victoria to legislate a number of changes to Pt 2A of the Rail Corporations Act before the NCC and the Minister are in a position to make a recommendation and decision respectively. In short, the State of Victoria is seeking to have the proceeding before the Tribunal stayed until such time as it can arrange for what may be a significant aspect of the matter before the Tribunal to be pre‑empted. That will occur if all the steps required to be taken by the NCC and the Parliament of Victoria and the Minister are taken because, as we have noted earlier, if the Minister makes a decision under s 44N that the State of Victoria’s access regime is an effective regime, that decision must be followed for the purposes of s 44H(4)(e) of the Act, unless the Tribunal believes that since the Minister’s decision was published there have been substantial modifications of the access regime or of the relevant principles set out in the Competition Principles Agreement: s 44H(6).
24 Although there are similar issues involved in both matters, so far as a consideration of s 44H(4) is concerned, the matter is not a matter of concurrent proceedings in relation to concurrent issues; rather it is a matter of one party taking steps to attempt to change the factual basis upon which one of the proceedings is predicated. It is also important to recognise that what may be seen to be two concurrent proceedings are not proceedings involving the same parties. Freight Australia is not a party to the application before the NCC pursuant to s 44M of the Act. If ultimately the Minister does not make a recommendation in accordance with s 44N of the Act, the responsible Minister of the State of Victoria can apply to the Tribunal for review of the Commonwealth Minister’s decision: s 44O. However, if the Commonwealth Minister decides that the State of Victoria’s access regime is an effective access regime for the relevant service, in accordance with s 44N of the Act, Freight Australia has no redress or appeal in respect of that decision. It is a one way appeal process.
25 If a stay of the proceeding is granted or a structured timetable ordered postponing the final hearing, Freight Australia will still have full access to the freight network to provide any network it chooses. Further, there are no access seekers relying on a declaration pursuant to the provisions of Pt IIIA of the Act. To that extent, Freight Australia may not suffer any prejudice by a stay or postponement of the final hearing. However, Freight Australia contends that it will suffer prejudice because until its application to the Tribunal is successful, access determinations in respect of the service will be made in accordance with the existing Victorian access regime. There is a dispute between the parties as to the adequacy and appropriateness of certain pricing issues in relation to access which arise under the existing Victorian access regime. For present purposes it is not necessary to investigate that issue, other than to note that it exists. Assuming for present purposes that it does, then it is in the interests of Freight Australia, indeed any potential access seeker to the service, that the issue be resolved as soon as possible so that issues in relation to pricing may be clarified and parties can organise their commercial activities accordingly.
26 If Freight Australia’s application for review of the Minister’s decision proceeds, the State of Victoria will not suffer any significant prejudice. Unlike Freight Australia, which has no avenue of appeal or redress if the Commonwealth Minister decides in accordance with s 44N that the Victorian access regime is an effective access regime for the relevant service, the State of Victoria is not forever shut out from contending that access to the service has become the subject of an effective regime, for the purposes of par (e) of s 44H(4), even if the Tribunal, upon review of the Commonwealth Minister’s decision, declares the service.
27 If the Tribunal does declare the service in accordance with s 44H(4), it must be satisfied that the Victorian access regime is not an effective access regime in accordance with the considerations set out in s 44H(5). If such a decision is made by the Tribunal and the Commonwealth Minister subsequently receives a recommendation from the NCC in accordance with s 44N of the Act that the Victorian regime is an effective access regime, it will be open to the State of Victoria, in accordance with s 44J of the Act, to seek to have the NCC recommend to the Commonwealth Minister that the declaration made by the Tribunal be revoked. If the NCC took the view that it was satisfied at the time it made its recommendation that the Victorian access regime was an effective access regime for the purpose of s 44H(4)(e) then, in accordance with s 44J(2) of the Act, it could make a recommendation to the Commonwealth Minister to revoke the declaration made by the Tribunal. The Minister could then act upon that recommendation.
28 Put shortly, the potential prejudice to Freight Australia if a stay of proceedings is granted or if there is a postponement of the final hearing, is significantly greater than any prejudice to the State of Victoria if the application for the stay of the proceeding or the postponement of the final hearing is not made. Although the parties, and in particular, the State of Victoria, might incur costs and expend time and effort if the application before the Tribunal is not stayed or the final hearing postponed, because of its pursuit of a recommendation from the NCC pursuant to s 44M of the Act and a decision of the Commonwealth Minister pursuant to s 44N of the Act, the Tribunal does not consider that such matters outweigh the considerations to which the Tribunal has referred in favour of rejecting the application for the stay or postponement of the final hearing.
29 The application by the State of Victoria for a stay or postponement of the final hearing will be dismissed.
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I certify that the preceding twenty‑nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Tribunal. |
Associate:
Dated: 4 April 2002
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Counsel for the Applicant: |
W T Houghton QC and C M Caleo |
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Solicitor for the Applicant: |
Deacons |
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Counsel for the State of Victoria: |
G A A Nettle QC and M Sloss |
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Solicitor for the State of Victoria: |
Allens Arthur Robinson |
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Counsel for National Competition Council: |
M R Pearce |
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Solicitor for National Competition Council: |
Gilbert & Tobin |
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Counsel for ATN Access Pty Ltd: |
C Jose |
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Solicitor for ATN Access Pty Ltd: |
Freehills |
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Date of Hearing: |
27 March 2002 |
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Date of Reasons for Decision: |
27 March 2002 |