fsx CATCHWORDS ADMINISTRATIVE LAW - Airlines Equipment Act 1958 - decisions of the Minister of State for Aviation regarding traffic estimates and capacity determinations thereunder - whether decisions vitiated on grounds under the Administrative Decisions (Judicial Review) Act 1977 - whether the decisions were an improper exercise of power - applicability and scope of rules of natural justice. Administrative Decisions (Judicial Review) Act 1977 Airlines Agreement Act 1981: Schedule Airlines Equipment Act 1958: ss. 11, 12, 13, 14, 18, 19 and 20. ANSETT TRANSPORT INDUSTRIES LIMITED v. PETER FREDERICK MORRIS, EAST-WEST AIRLINES (OPERATIONS) LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION 6584/1986 ANSETT TRANSPORT INDUSTRIES LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION v. PETER _ FREDERICK MORRIS and EAST-WEST _ AIRLINES (OPERATIONS) LIMITED G585/19 86 AUSTRALIAN NATIONAL AIRLINES COMMISSION v. PETER FREDERICK MORRIS and EAST-WEST AIRLINES (OPERATIONS) LIMITED VG429 71986 LOCKHART J. 20 MAY 1987 SYDNEY wok fan ieee an ame been ROCEVED 25 MAY 1987 FEDERAL COURT OE AUSTRALIA PRINCIPAL REGISTRY Pes . a" ~ IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G 584 of 1986 ) GENERAL DIVISION ) ANSETT TRANSPORT. INDUSTRIES LIMITED Applicant PETER FREDERICK MORRIS EAST-WEST AIRLINES (OPERATIONS) LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION Respondents IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G585 of 1986 ) GENERAL DIVISION ) ANSETT TRANSPORT INDUSTRIES LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION Applicants PETER FREDERICK MORRIS and EAST-WEST AIRLINES (OPERATIONS) LIMITED Respondents IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G 584 of 1986 ) GENERAL DIVISION ) ANSETT TRANSPORT INDUSTRIES LIMITED — Applicant PETER FREDERICK MORRIS EAST-WEST AIRLINES (OPERATIONS) LIMITED and — AUSTRALIAN NATIONAL AIRLINES COMMISSION Respondents IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G585 of 1986 ) GENERAL DIVISION ) ANSETT TRANSPORT INDUSTRIES LIMITED and — AUSTRALIAN NATIONAL AIRLINES COMMISSION. = s—~C~S~S Applicants PETER FREDERICK MORRIS) and EAST-WEST AIRLINES (OPERATIONS) LIMITED Respondents IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION No. VG 429 of 1986 wee ww AUSTRALIAN NATIONAL AIRLINES COMMISSION Applicant PETER FREDERICK MORRIS and EAST-WEST AIRLINES (OPERATIONS) LIMITED Respondents MINUTE OF ORDER THE COURT ORDERS THAT: NOTE: Applications No. G584/1986, G585/1986 and VG429/1986 be dismissed. In application G584/1986 Ansett Transport Industries Limited pay the costs of the Minister, Peter Frederick Morris, and of East-West Airlines (Operations) Limited. Otherwise no order as to costs. In application G585/1986 Ansett Transport Industries Limited and Australian National Airlines Commission pay the costs of the Minister, Peter Frederick Morris, and of East-West Airlines (Operations) Limited. In application VG429/1986 Australian National Airlines Commission pay the costs of the Minister, Peter Frederick Morris, and of East-West Airlines (Operations) Limited. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) ) IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) ) No. G 584 of 1986 ANSETT TRANSPORT INDUSTRIES LIMITED Applicant PETER FREDERICK MORRIS EAST-WEST AIRLINES (OPERATIONS) LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION Respondents No. G585 of 1986 ANSETT TRANSPORT INDUSTRIES LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION Applicants PETER FREDERICK MORRIS and EAST-WEST AIRLINES (OPERATIONS) LIMITED Respondents IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION wee weve wv ) ) ) ) ) No. G 584 of 1986 ANSETT TRANSPORT INDUSTRIES Applicant PETER FREDERICK MORRIS EAST-WEST AIRLINES (OPERATIONS) LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION Respondents No. G585 of 1986 ANSETT TRANSPORT INDUSTRIES LIMITED and AUSTRALIAN NATIONAL AIRLINES COMMISSION Applicants PETER FREDERICK MORRIS and EAST-WEST AIRLINES (OPERATIONS) LIMITED Respondents 3. . . regional operator deploys more aircraft capacity than has been' determined for it; and by giving effect to the provisions of the agreement authorised by The Airlines Agreement Act 1980 which is generally known as the Two Airlines Agreement. Last year the battle revolved round what were then prospective decisions of the Minister or the Secretary of the Department of Aviation relating. to estimates of traffic, capacity determinations and the grant of acquisition certificates with respect to the two major airlines and East-West. The battleground has now moved to two capacity determinations made on 3 November 1986. On that day the Minister determined, pursuant to s. 12 of the Airlines Equipment Act 1958 ("the Equipment Act"), his estimate of the total passenger traffic that would be carried by Ansett and Australian Airlines, excluding that which would in his opinion be carried by regional or commuter operators, between 1 February 1987 and 30 June 1987. On the same day the Minister also determined the maximum aircraft capacity of the aircraft required by Ansett and Australian Airlines for the purpose of carrying one-half each of the total estimated passenger traffic in respect of competitive routes as would not, in the Minister's opinion, be carried by regional operators or commuter operators. The estimate and capacity determination made with respect to Ansett and Australian Airlines is capacity determination No. 54. Also on 3 November 1986 the Minister estimated the total traffic that would be carried by East-West between 1 February 1987 and 30 June 1987 on ali prescribed routes and determined the maximum aircraft capacity of the aircraft required by East-West for the 3. . ' e regional operator deploys more aircraft capacity than has been determined for it; and by giving effect to the provisions of the agreement authorised by The Airlines Agreement Act 1980 which is generally known as the Two Airlines Agreement. Last year the battle revolved round what were then prospective decisions of the Minister or the Secretary of the Department of Aviation relating to estimates of traffic, capacity determinations and the grant of acquisition certificates with respect to the two major airlines and East-West. The battleground has now moved to two capacity determinations made on 3 November 1986. On that day the Minister determined, pursuant to s. 12 of the Airlines Equipment Act 1958 ("the Equipment Act"), his estimate of the total passenger traffic that would be carried by Ansett and Australian Airlines, excluding that which would in his opinion be carried by regional or commuter operators, between 1 February 1987 and 30 June 1987. On the same day the Minister also determined the maximum aircraft capacity of the aircraft required by Ansett and Australian Airlines for the purpose of carrying one-half each of the total estimated passenger traffic in respect of competitive routes as would not, in the Minister's opinion, be carried by regional operators or commuter operators. The estimate and capacity determination made with respect to Ansett and Australian Airlines is capacity determination No. 54. Also on 3 November 1986 the Minister estimated the total traffic that would be carried by East-West between 1 February 1987 and 30 June 1987 on all prescribed routes and determined the maximum aircraft capacity of the aircraft required by East-West for the \ ; 4. purpose of operating passenger air services on prescribed routes during the same _ period. The traffic estimate and capacity determination with respect to East-West made on 3 November 1986 is capacity determination No. 6. On 1 December 1986 the Minister decided, pursuant to s. 19 of the Equipment Act, to certify that in his opinion the obtaining of one Boeing 737-200 aircraft to be introduced during March 1987 for use by East-West over prescribed routes would not result in East-West having excess aircraft capacity and would not be detrimental to the domestic air transport industry. Ansett commenced proceeding G 584/1986 in this Court under the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act") for review of the decisions of the Minister made on 3 November 1986 under sub-s. 12(1) of the Equipment Act with respect to the estimate of traffic and capacity determination No. 54; the respondents to that proceeding initially being the Minister and East-West. Later, Australian Airlines was added as a respondent at the request of the Minister and by consent for the purpose of ensuring that it was bound by this Court's judgment. Ansett and Australian Airlines commenced proceeding G585/1986 in this Court under the Judicial Review Act to review the decisions of the Minister made on 3 November 1986 under sub-s. 18(2) of the Equipment Act with respect to the estimate of traffic and capacity determination No. 6; the respondents to that proceeding also being the Minister and East-West. Application G585/1986 also seeks to review certain conduct said to have been engaged in by the Minister for the purposes of making the estimate and capacity determination No. 6. VG 429/1986 is also an application under the Judicial Review Act by Australian Airlines to review the Minister's decision of 3 November 1986 relating to capacity determination No. 54. The respondents to that proceeding are the Minister and East-West. All three proceedings were heard together by consent. 2. HISTORY AND STATUTORY PROVISIONS So that the issues may be understood it is necessary to say something about the legislative framework in which estimates of traffic and capacity determinations are made by the Minister and the place which those processes have in the Commonwealth scheme for the regulation of the air transport industry. [I dealt with this fully in reasons for judgment given by me on 15 September 1986 in earlier litigation between the parties (proceedings VG 61, VG65, VG94, VG101, VG195 and VG 204, all of 1986). I need not refer to those matters to the same extent as I then did; but I shall state briefly the more important points which are relevant for present purposes. The two airlines policy has existed for more than forty years in this country and is the name given to the arrangements by which the Federal Government regulates the Australian domestic air transport industry. It is embodied in various Acts of the Federal Parliament and agreements ratified by it including the Two Airlines Agreement itself. VG 429/1986 is also an application under the Judicial Review Act by Australian Airlines to review the Minister's decision of 3 November 1986 relating to capacity determination No. 54. The respondents to that proceeding are the Minister and East-West. All three proceedings were heard together by consent. 2. HISTORY AND STATUTORY PROVISIONS So that the issues may be understood it is necessary to say something about the legislative framework in which estimates of traffic and capacity determinations are made by the Minister and the place which those processes have in the Commonwealth scheme for the regulation of the air transport industry. I dealt with this fully in reasons for judgment given by me on 15 September 1986 in earlier "litigation between the parties (proceedings VG 61, VG65, VG94, VG101, VG195 and VG 204, all of 1986). I need not refer to those matters to the same extent as I then did; but I shall state briefly the more important points which are relevant for present purposes. The two airlines policy has existed for more than forty years in this country and is the name given to the arrangements by which the Federal Government regulates the Australian domestic air transport industry. It is embodied in various Acts of the Federal Parliament and agreements ratified by it including the Two Airlines Agreement itself. 6. Following a review in 1977 of Australia's domestic air transport policy an agreement was negotiated which was executed on 28 May 1981 and approved by the Airlines Agreement Act 1981. This contains the current Two Airlines Agreement. It was preceded by agreements made in 1952, 1957, 1961, 1972 and 1973. Most of the provisions of the 1981 agreement came into force on 26 January 1982 and are to remain in force for not less than eight years. The agreement may be terminated at any time after five years, but three years notice of termination must be given by the Commonwealth pursuant to clause 22 of the agreement. The Two Airlines Agreement relates to air passenger services. Freight which had been included in prior agreements was removed in 1981 from the ambit of the Two Airlines Agreement. The current arrangements by which the Federal Government regulates domestic airlines are constituted by the Airlines Agreement Act 1981, the Independent Airfares Committee Act 1981, the Equipment Act, the Customs (Prohibited Imports) Regulations and the Two Airlines Agreement itself. To these must be added, in a more general sense, the Air Navigation Act 1920 and the Air Navigation Regulations. The Equipment Act 1s an important statute for present purposes. It provides for the exclusion of air cargo from the capacity determination process following the removal of air cargo from the ambit of the Two Airlines Agreement. Operators, other than Australian Airlines, Ansett and Qantas, may acquire jet aircraft subject to the operators undertaking to comply with the obligations set out in the Equipment Act. The obligations of regional operators include obligations not to provide aircraft capacity in excess of that 7. determined under the Equipment Act by the Minister and to provide passenger air services capable of performing the determined capacity. If a regional operator is deemed to have excess capacity it is under an obligation to dispose of sufficient capacity so as to comply with the Minister's determination. The expression "aircraft capacity" is defined by sub-s. 11(1) in relation to an aircraft in respect of a period as meaning the number of revenue passenger kilometres capable of being performed by the aircraft in the period. "Competitive route" is defined as meaning a route over which passenger air services are operated both by Australian Airlines and Ansett. "Prescribed route" is defined by sub-s. 11(1) as: "(a) a route —- (i) between a place in a State and another place in that State; (ii) between a place in a Territory and another place in that Territory; (iii) between a regional centre and another place in Australia; or (iv) over which the Minister has requested the Commission and the Company to provide a passenger air service and over which neither the Commission nor the Company has, within a reasonable time after the making of that request, provided a service that, in the opinion of the Minister, is satisfactory; and (b) a route, other than a route referred to in paragraph (a), over which a person, other than the Commission or the Company, operated a scheduled passenger air service on 1 July 1980 (whether or not any other person operated such a service over that route on that date);" The expression "regional centre" is defined as meaning a city or town in Australia other than Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Coolangatta, Darwin, Gove, Hobart, Launceston, 7. « . determined under the Equipment Act by the Minister and to provide passenger air services capable of performing the determined capacity. If a regional operator is deemed to have excess capacity it is under an obligation to dispose of sufficient capacity so as to comply with the Minister's determination. The expression "aircraft capacity" is defined by sub-s. 11(1) in relation to an aircraft in respect of a period as meaning the number of revenue passenger kilometres capable of being performed by the aircraft in the period. "Competitive route" is defined as meaning a route over which passenger air services are operated both by Australian Airlines and Ansett. "Prescribed route" is defined by sub-s. 11(1) as: "(a) a route - (i) between a place in a State and another place in that State; (ii) between a place in a Territory and - another place in that Territory; (ili) between a regional centre and another place in Australia; or (iv) over which the Minister has requested the Commission and the Company to provide a passenger air service and over which neither the Commission nor the Company has, within a reasonable time after the making of that request, provided a service that, in the opinion of the Minister, is satisfactory; and (b) a route, other than a route referred to in Paragraph (a), over which a person, other than the Commission or the Company, operated a scheduled passenger air service on 1 July 1980 (whether or not any other person operated such a service over that route on that date);" The expression "regional centre" is defined as meaning a city or town in Australia other than Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Coolangatta, Darwin, Gove, Hobart, Launceston, 8. Mackay, Melbourne, Mount Isa, Perth, Proserpine, Rockhampton, Sydney, Townsville or any other city or town in Australia that is for the purposes of para. 6(1)(e) of the Two Airlines Agreement agreed by the parties to that agreement to be a trunk route centre for the purposes of the agreement. Sections 12, 13, 18 and 19 are important sections for present purposes. They provide as follows:~ "12.(1) The Minister shall, from time to time, in relation to a specified future period - (a) estimate the total traffic on ~ (i) each of the competitive routes; (ii) the non-competitive routes of the Commission; and (iii)the non-competitive routes of the Company; and (bp) determine the maximum aircraft capacity of the aircraft required by the Commission and the Company, respectively, for the purposes of - (i) carrying one half of so much of the total traffic estimated by the Minister in respect of the competitive routes as will not, in the opinion of the Minister, be carried by regional operators or commuter operators; and (ili) operating its servies on non-competitive routes. (2) For the purposes of this section, the Minister shall have regard to - (a) rates of traffic increase; (b) the types, speeds and reasonable extent of utilization of the aircraft proposed to be used; (c) the passenger revenue load factor that would be the optimum passenger revenue load factor for the operation of aircraft on each route during the period concerned, due consideration being given to the interests of the public and the maintenance of a proper relation between revenue and costs; (d) the necessity for the overhaul and maintenance of aircraft; (e) the necessity for having aircraft available to meet emergency situations; 9. (£) aircrew training requirements; (g) any services operated otherwise than by the Commission or the Company; and (h) any other factors affecting the stability of the domestic air transport industry. (3) Where the Minister makes an estimate and a determination under sub-section (1) of this section, he shall, not less than 90 days before the commencement of the relevant period, give notice of the terms of the estimate and of the determination to the Commission and to Ansett Transport Industries Limited and shall, in the notice, specify the portion of the determined aircraft capacity that is related to traffic on _ the competitive routes." "13. The obligations to which the Commission and the Company are, in accordance with the agreement referred to in section 5 of the Airlines Agreement Act 1981 or, if that agreement does not have force and effect, the agreements referred to in section 3 of the Airlines Agreements Act 1952, to be subject are the following:~ (a) where the Minister has made a determination under the last preceding section in relation to a period - an obligation not to provide, on competitive routes, during that period, air services capable of performing a number of revenue passenger kilometres in excess of the aircraft capacity specified in respect of the competitive routes in the notice under sub-section (3) of the last preceding section; (b) where, at any time during a period in relation to which the Minister has made a determination under the last preceding section, the Minister (i) notifies the Commission or Ansett Transport Industries Limited that he is satisfied that the aircraft owned, operated, or otherwise available for use, by the Commission or the Company, as the case may require, exceed the aircraft required to provide, in that period, the aircraft capacity determined in relation to the Commission or the Company, as the case may be; (ii) directs the disposal of aircraft to a specified extent (being the extent which the Minister considers necessary to eliminate the excess), 9. (£) aircrew training requirements; (g) any services operated otherwise than by the Commission or the Company; and (h) any other factors affecting the stability of the domestic air transport industry. (3) Where the Minister makes an estimate and a determination under sub-section (1) of this section, he shall, not less than 90 days before the commencement of the relevant period, give notice of the terms of the estimate and of the determination to the Commission and to Ansett Transport Industries Limited and shall, in the notice, specify the portion of the determined aircraft capacity that is related to traffic on the competitive routes." "13. The obligations to which the Commission and the Company are, in accordance with the agreement referred to in section 5 of the Airlines Agreement Act 1981 or, if that agreement does not have force and effect, the agreements referred to in section 3 of the Airlines Agreements Act 1952, to be subject are the following:- (a) where the Minister has made a determination under the last preceding section in relation to a period - an obligation not to provide, on competitive routes, during that period, air services capable of performing a number of revenue passenger kilometres in excess of the aircraft capacity specified in respect of the competitive routes in the notice under sub-section (3) of the last preceding section; (b) where, at any time during a period in relation to which the Minister has made a determination under the last preceding section, the Minister (i) notifies the Commission or Ansett Transport Industries Limited that he is satisfied that the aircraft owned, operated, or otherwise available for use, by the Commission or the Company, as the case may require, exceed the aircraft required to provide, in that period, the aircraft capacity determined in relation to the Commission or the Company, as the case may be; (ii) directs the disposal of aircraft to a specified extent (being the extent which the Minister considers necessary to eliminate the excess), 10. an obligation to comply with the direction within the time specified by the Minister; (c) an obligation not to purchase, lease or otherwise obtain the use of any aircraft unless the Minister has certified in writing that, in his opinion, the obtaining of the aircraft will not result in the Commission or the Company, as the case may be, having the use of any aircraft in excess of the aircraft required to provide the aircraft capacity determined from time to time under the last preceding section, and that, in his opinion, the obtaining of an aircraft of the type proposed to be obtained will not, having regard to the types of aircraft operated by the Commission and the Company or in respect of which any other certificate under this paragraph has been or is proposed to be issued, be detrimental to the stability of the domestic air transport industry; and (d) an obligation to furnish to the Minister, within such times as the Minister specifies, such information in respect of traffic as the Minister requires." "18.(1) Subject to sub-section (7), this section applies to a regional operator - (a) who has given an undertaking in accordance with sub-section 16(1); or (b) who has given an undertaking, in connection with the acquisition of an aircraft, to comply with the obligations applicable in relation to a regional operator to which this section applies. (2) The Minister shall, in accordance with sub-sections (4) and (5), in relation to a specified future period in relation to each regional operator to which this section applies - (a) estimate the total traffic that will be carried by that regional operator in operating passenger air services on prescribed routes; and (b) determine the maximum aircraft capacity of the aircraft required by that regional operator for the purposes of operating passenger air services on prescribed routes. (3) A reference in sub-section (2) to prescribed routes, in relation to a regional operator to which this section applies, shall be read as including a reference to any trunk routes over which that 11. regional operator is permitted to operate scheduled passenger services in accordance with paragraph 6(1)(d) of the agreement referred to in section 5 of the Airlines Agreement Act 1981. (4) In making an estimate and a determination under sub-section (2) in relation to a regional operator, the Minister shall have regard to - (a) the functions of regional operators; (b) the traffic carried by the regional operator before the making of the estimate and determination; (c) the rates of traffic increase in the regional operator's services; (d) the types, speeds and reasonable extent of utilization of the aircraft proposed to be used by the regional operator; (e) the passenger revenue load factor that would be the optimum passenger revenue load factor for the operation of aircraft on each prescribed route on which the- regional operator will carry traffic during the period concerned, due consideration being given to the interests of the public and the Maintenance of a proper relation between revenue and costs; (£) the necessity for the overhaul and maintenance of aircraft; (g) the necessity for having aircraft available to meet emergency situations; (h) the operation of paragraph 6(1)(c) of the agreement referred to in section 5 of the Airlines Agreement Act 1981; (3) aircrew training requirements; and (k) any other factors affecting the stability of the domestic air transport industry. (5) The Minister may make an estimate and determination under sub-section (2) in relation to a regional operator to which this section applies at any time, but shall make such an estimate and determination in relation to a regional operator to which this section applies before the expiration of 60 days after - (a) the importation by or on behalf of that regional operator of any aircraft, airframes or engines in relation to the importation of which an undertaking has been given by that regional operator under sub-section 16(1); or (b) the acquisition by that regional operator of an aircraft in connection with the acquisition of which an undertaking has been given by that regional operator to comply with the obligations applicable in relation to a regional operator to which this section applies. ll. regional operator is permitted to operate scheduled passenger services in accordance with paragraph 6(1)(d) of the agreement referred to in section 5 of the Airlines Agreement Act 1981. (4) In making an estimate and a determination under sub-section (2) in relation to a regional operator, the Minister shall have regard to - (a) the functions of regional operators; (b) the traffic carried by the regional operator before the making of the estimate and determination; (c) the rates of traffic increase in the regional operator's services; (d) the types, speeds and reasonable extent of utilization of the aircraft proposed to be used by the regional operator; (e) the passenger revenue load factor that would be the optimum passenger revenue load factor for the operation of aircraft on each prescribed route on which the regional operator will carry traffic during the period concerned, due consideration being given to the interests of the public and the maintenance of a proper relation between revenue and costs; (£) the necessity for the overhaul and maintenance of aircraft; (g) the necessity for having aircraft available to meet emergency situations; (h) the operation of paragraph 6(1)(c) of the agreement referred to in section 5 of the Airlines Agreement Act 1981; (j) aircrew training requirements; and (k) any other factors affecting the stability of the domestic air transport industry. (5) The Minister may make an estimate and determination under sub-section (2) in relation to a regional operator to which this section applies at any time, but shall make such an estimate and determination in relation to a regional operator to which this section applies before the expiration of 60 days after - (a) the importation by or on behalf of that regional operator of any aircraft, airframes or engines in relation to the importation of which an undertaking has been given by that regional operator under sub-section 16(1); or (b) the acquisition by that regional operator of an aircraft in connection with the acquisition of which an undertaking has been given by that regional operator to comply with the obligations applicable in relation to a regional operator to which this section applies. ~ 12. (6) Where the Minister makes an estimate and determination under sub-section (2) in relation to a regional operator to which this section applies, the Minister shall make another estimate and determination under that sub-section in relation to that regional operator within each succeeding period of 12 months after the making of that first-mentioned estimate and determination. (7) Where the Minister makes an estimate and a determination under sub-section (2) in relation to a regional operator, the Minister shall, not less than 90 days before the commencement of the period in relation to which that estimate and determination were made, give notice of the terms of the estimate and determination to the regional operator. (8) This section does not apply to a regional operator during any period during which neither that regional operator nor any body (whether corporate or unincorporate) in which that regional operator has a controlling interest owns, leases or has the use of turbo jet aircraft having a capacity exceeding 30 passengers or a maximum payload exceeding 3,500 kilograms." "19.(1) The obligations that are, from time to time, applicable in relation to each regional operator to which section 18 applies are the following: (a) where the Minister has, under sub-section 18(7), given notice to that regional operator of the terms of an estimate and determination in relation to a period - (i) an obligation not to provide, during that period, passenger air services capable of performing a number of revenue passenger kilometres in excess of the aircraft capacity specified in that determination; and (ii) an obligation to provide, during that period, passenger air services on prescribed routes capable of performing a number of revenue passenger kilometres that is as near as is practicable to the aircraft capacity specified in that determination; (b) where, at any time during a period in relation to which the Minister has made a determination under sub-section 18(2) in relation to that regional operator, the Minister - (c) (d) 13. (i) notifies the regional operator that he is satisfied that the aircraft owned, operated, or otherwise available for use, by the regional operator exceed the aircraft required to provide, in that period, the aircraft capacity determined in relation to the regional operator; and (ii) directs the regional operator to dispose, within the time specified by the Minister, of aircraft to the extent that the Minister considers necessary to eliminate the excess, an obligation to comply with the direction within the time specified by the Minister in a manner that does not involve a contravention by that regional operator of the obligation set out in paragraph (d); an obligation not to purchase, lease or otherwise obtain the use of any aircraft unless the Minister has certified in writing that, in his opinion, the obtaining of the aircraft will not result in the regional cperator having the use of any aircraft in excess of the aircraft required to provide the aircraft capacity determined from time to time under sub-section 18(2) in relation to that regional operator, and that, in his opinion, the obtaining of an aircraft of the type proposed to be obtained will not, having regard to the types of aircraft operated by the regional operator or in respect of which a certificate under this paragraph has been or is proposed to be issued, be detrimental to the stability of the domestic air transport industry; an obligation not to dispose of an imported aircraft to a person other than - (i) the Commission, the Company or Qantas Alrways Limited; (ii) a person who gives to the Minister, before the acquisition of the aircraft by that person, an undertaking in the form approved by the Minister not to use the aircraft in Australia; (iii) a regional operator who gives to the Minister, before the acquisition of the aircraft by that regional operator, an undertaking in the form (c) (d) 13. (i) notifies the regional operator that he is satisfied that the aircraft owned, operated, or otherwise available for use, by the regional operator exceed the aircraft required to provide, in that period, the aircraft capacity determined in relation to the regional operator; and (ii) directs the regional operator to dispose, within the time specified by the Minister, of aircraft to the extent that the Minister considers necessary to eliminate the excess, an obligation to comply with the direction within the time specified by the Minister in a manner that does not involve a contravention by that regional operator of the obligation set out in paragraph (d); an obligation not to purchase, lease or otherwise obtain the use of any aircraft unless the Minister has certified in writing that, in his opinion, the obtaining of the aircraft will not result in the regional operator having the use of any aircraft in excess of the aircraft required to provide the aircraft capacity determined from time to time under sub-section 18(2) in relation to that regional operator, and that, in his opinion, the obtaining of an aircraft of the type proposed to be obtained will not, having regard to the types of aircraft operated by the regional operator or in respect of which a certificate under this paragraph has been or is proposed to be issued, be detrimental to the stability of the domestic air transport industry; an obligation not to dispose of an imported aircraft to a person other than - (i) the Commission, the Company or Qantas Airways Limited; (ii) a person who gives to the Minister, before the acquisition of the aircraft by that person, an undertaking in the form approved by the Minister not to use the aircraft in Australia; (iii) a regional operator who gives to the Minister, before the acquisition of the aircraft by that regional Operator, an undertaking in the form 14. approved by the Minister to comply with the obligations applicable in relation to a regional operator to which section 18 applies; or (iv) a cargo operator who gives to the Minister, before the acquisition of the aircraft by that cargo operator, an undertaking in the form approved by the Minister to comply with the obligations applicable in relation to a cargo operator to which section 21 applies; and (e) an obligation to furnish to the Minister, within such times as the Minister specifies, such information in respect of traffic as the Minister requires. (2) In this section, 'imported aircraft' means an aircraft in relation to the importation of which a person has given an undertaking in accordance with section 16 and 17. (3) A reference in sub-section (1) to prescribed routes, in relation to a regional operator, shall be read as including a reference to any trunk routes over which that regional operator is permitted to operate scheduled passenger services in accordance with paragraph 6(1)(d) of the agreement referred to in section 5 of the Airlines Agreement Act 1981." The Two Airlines Agreement of 1981 contains clause 6 which is material for present purposes. [It provides as follows: 6.(1)(a) The parties shall take all reasonable action within their powers to ensure that the Commission and the Company are the only two operators which provide scheduled domestic passenger air services over trunk routes within Australia. (b) Subject to paragraph (c) of this sub-clause nothing in sub-clause (1)(a) shall prevent other operators from providing scheduled passenger air services over a prescribed route or successive prescribed routes. (c) Where any successive prescribed routes have the effect of linking two trunk route centres that are for the time being trunk route centres for the purposes of sub-clause (d) 15. (1)(e), sub-clause (1)(b) applies unless the Secretary is satisfied that such scheduled passenger air services are not predominantly for use for the purpose of the carriage of passengers over separate prescribed routes and are to a significant extent used or to be used for the purpose of carriage of passengers between two centres that are for the time being trunk route centres for the purposes of sub-clause (1)(e). Without derogating from the objectives of sub-clause (1)(a), the parties acknowledge that nothing in this agreement shall preclude the Commonwealth, the Minister or the Secretary from permitting a passenger operator to develop specialised scheduled passenger air services over trunk routes of a nature which in the opinion of the Minister are not adequately provided for either by the Commission or the Company and for which after receiving a request in writing from the Minister neither the Commission nor the Company has, within a reasonable time, provided a service to the satisfaction of the Minister. For the purposes of this agreement a trunk route is a route linking any two trunk route centres. A trunk route centre shall be any one of the _ following: Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Coolangatta, Darwin, Gove, Hobart, Launceston, Mackay, Melbourne, Mount Isa, Perth, Proserpine, Rockhampton, Sydney, Townsville and such other centres as the parties hereto shall agree from time to time. (2)(a) For the purposes of this agreement a prescribed route is - (i) a route: (a) between a place in a State and another place in that State; (b) between a place in a Territory and another place in that Territory; (c) between a regional centre and another place in Australia; or (d) over which the Minister has requested in writing the Commission and the Company to provide a passenger air service and neither the Commission nor the Company has within a reasonable time after the making of that request provided that service to the satisfaction of the Minister; or 15. (1)(e), sub-clause (1)(b) applies unless the Secretary is satisfied that such scheduled passenger air services are not predominantly for use for the purpose of the carriage of passengers over separate prescribed routes and are to a significant extent used or to be used for the purpose of carriage of passengers between two centres that are for the time being trunk route centres for the purposes of sub-clause (1)(e). (d) Without derogating from the objectives of (e) sub-clause (1)(a), the parties acknowledge that nothing in this agreement shall preclude the Commonwealth, the Minister or the Secretary from permitting a passenger operator to develop specialised scheduled passenger air services over trunk routes of a nature which in the opinion of the Minister are not adequately provided for either by the Commission or the Company and for which after receiving a reguest in writing from the Minister neither the Commission nor the Company has, within a reasonable time, provided a service to the satisfaction of the Minister. For the purposes of this agreement a trunk route is a route linking any two trunk route centres. A trunk route centre shall be any one of the following: Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Coolangatta, Darwin, Gove, Hobart, Launceston, Mackay, Melbourne, Mount Isa, Perth, Proserpine, Rockhampton, Sydney, Townsville and such other centres as the parties hereto shall agree from time to time. (2)(a) For the purposes of this agreement a prescribed route is - (i) a route: (a) between a place in a State and another place in that State; (b) between a place in a Territory and another place in that Territory; (c) between a regional centre and another place in Australia; or (d) over which the Minister has requested in writing the Commission and the Company to provide a passenger air service and neither the Commission nor the Company has within a reasonable time after the making of that request provided that service to the satisfaction of the Minister; or 16. (ii) a route, other than a route referred to in sub-clause (2)(a)(i) over which an operator, other than the Commission or the Company, operated a scheduled passenger air service on 1 July 1980, regardless of whether it was the sole operator of scheduled air passenger services over that route. (b) For the purpose of this agreement a regional centre is a place within Australia which is not for the time being a trunk route centre for the purposes of sub-clause (1)(e)." Before turning to the issues in the present case I sound a cautionary note. The decisions of the Minister are challenged by Ansett and Australian Airlines under the Judicial Review Act. This is a vehicle which Parliament has provided for litigants to challenge decisions of an administrative character made under Commonwealth enactments. It is important that this Court, when determining cases of this kind, namely, administrative decisions that are susceptible to review by error of law or any other defect under the Judicial Review Act, does not enter the field of administrative decision-making to the point where it reviews the exercise of discretions by administrators, and does not yield to the temptation, not infrequently offered by parties, of substituting its discretions for those of the decision-makers. What is essentially an administrative process entrusted by Parliament to Ministers, Secretaries and officers of Departments of State must not be rendered nugatory or unduly impeded or stultified by the very number and frequency of applications to this Court so that Ministers, Heads of Departments and other administrators do not know which way to turn for fear of curial challenge. 17. On the one hand there cannot be unfettered bureaucratic control of important decisions which vitally affect the rights of citizens which in this case are the rights of airline operators and the travelling public. On the other hand, the administrative process must not become a quagmire of judicial intervention. The oft repeated injunction that courts must not usurp the Executive's function of decision-making should be kept steadfastly in mind. This Court's task is to examine decisions of an administrative character and determine if they have been made according to law or are in contravention of the principles of natural justice; but not to enquire if some other decision is preferable on the merits. 3. THE PROCEEDINGS I turn now to the three matters before the Court. Applications G584/1986 and G585/1986 are lengthy documents and set out in considerable detail the grounds of challenge to the decisions of the Minister with respect to capacity determinations No. 54 (G584/1986) and No. 6 (G585/1986). It is convenient to defer mentioning the specific grounds of challenge to the Minister's decisions until I come to them later when considering the submissions of counsel. Ansett and Australian Airlines seek orders quashing the decisions of the Minister to make the traffic estimate and capacity determination No. 54; quashing the decision of the Minister to make the traffic estimate and capacity determination No. 6; quashing the decision of the Minister to make what is described in application G585/1986 as the "certificate decision"; and an order directing 17. On the one hand there cannot be unfettered bureaucratic control of important decisions which vitally affect the rights of citizens which in this case are the rights of airline operators and the travelling public. On the other hand, the administrative process must not become a quagmire of judicial intervention. The oft repeated injunction that courts must not usurp the Executive's function of decision-making should be kept steadfastly in mind. This Court's task is to examine decisions of an administrative character and determine if they have been made according to law or are in contravention of the principles of natural justice; but not to enquire if some other decision is preferable on the merits. 3. THE PROCEEDINGS I turn now to the three matters before the Court. Applications G584/1986 and G585/1986 are lengthy documents and set out in considerable detail the grounds of challenge to the decisions of the Minister with respect to capacity determinations No. 54 (G584/1986) and No. 6 (G585/1986). It is convenient to defer mentioning the specific grounds of challenge to the Minister's decisions until I come to them later when considering the submissions of counsel. Ansett and Australian Airlines seek orders quashing the decisions of the Minister to make the traffic estimate and capacity determination No. 54; quashing the decision of the Minister to make the traffic estimate and capacity determination No. 6; quashing the decision of the Minister to make what is described in application G585/1986 as the "certificate decision"; and an order directing 18. East-West to refrain from obtaining or importing into Australia any Boeing 737-200 aircraft in reliance upon or pursuant to the "certificate decision". 4. FACTS The evidence in these matters was primarily documentary; but it also included evidence of witnesses by affidavit and oral evidence. There is some conflict of evidence, but most of the significant matters were not seriously in dispute. Much of the evidence is protected from public disclosure by confidentiality orders which I made during the course of the hearing. On 3 November 1986 the Minister, pursuant to s. 12 of the Equipment Act, made and gave notice of an estimate of traffic and determination of capacity for the period from 1 February 1987 to 30 June 1987 in relation to Ansett, being capacity determination No. 54. In that capacity determination the Minister estimated the total passenger traffic (excluding that which would, in his opinion, be carried by regional or commuter operators) on: (i) all competitive routes to be 4,036.917 million passenger kilometres; (ii) the non-competitive routes of Australian Airlines to be 51.522 million passenger kilometres; and (iii) the non-competitive routes of Ansett to be 330.974 million passenger kilometres. 19. The Minister determined that the maximum aircraft capacity of the aircraft (i) (ii) aircraft (i) (ii) required by Australian Airlines: for the purpose of carrying one-half of the total estimated passenger traffic in respect of competitive routes as would not in his opinion be carried by regional operators or commuter operators to be 2,703.767 million available seat kilometres of aircraft capacity provided by passenger service aircraft; and for the purpose of operating its services on non-competitive routes to be 92.046 million available passenger kilometres. The Minister determined that the maximum capacity of the required by Ansett: for the purpose of carrying one-half of the total estimated passenger traffic in respect of competitive routes as would not in his opinion be carried by regional operators or commuter operators to be 2,703.767 million of available seat kilometres of aircraft capacity provided by passenger service aircraft; and for the purpose of operating its services over non-competitive routes to be 542.786 million available passenger seat kilometres. 19. The Minister determined that the maximum aircraft capacity of the aircraft (i) (ii) aircraft "(4i) (id) required by Australian Airlines: for the purpose of carrying one-half of the total estimated passenger traffic in respect of competitive routes as would not in his opinion be carried by regional operators or commuter operators to be 2,703.767 million available seat kilometres of aircraft capacity provided by passenger service aircraft; and for the purpose of operating its services on non-competitive routes to be 92.046 million available passenger kilometres. The Minister determined that the maximum capacity of the required by Ansett: for the purpose of carrying one-half of the total estimated passenger traffic in respect of competitive routes as would not in his opinion be carried by regional operators or commuter operators to be 2,703.767 million of available seat kilometres of aircraft capacity provided by passenger service aircraft; and for the purpose of operating its services over non-competitive routes to be 542.786 million available passenger seat kilometres. 20. On 1 December 1986 the Minister, pursuant to s. 13 of the Judicial Review Act, provided to Ansett a statement of his reasons for decision with respect to capacity determination No. 54. The section 13 statement states that the evidence and other material on which the Minister's findings were based involved certain findings of fact which were in turn based on a submission titled "COMMERCIAL-IN-CONFIDENCE" prepared within the Department of Aviation for the Minister's consideration and signed by the First Assistant Secretary, Domestic Policy Division. The submission itself consisted of a minute dated 31 October 1986 and a series of attachments labelled A to M. Those attachments include departmental minutes - some titled "LEGAL-IN-CONFIDENCE" - from the Secretary to the Minister concerning aspects of the capacity determination process; correspondence between the Department and the three airlines; documents described as "revised information requirements" from the airlines; extracts from papers prepared within the Domestic Policy Division of the Department; decisions of Arbitrators in earlier matters; papers prepared within the Domestic Policy Division of the Department; file notes and other documents. The material used in the preparation of the submission of 31 October 1986 included submissions prepared by Australian Airlines and by Ansett for the capacity determination; airline timetables; a submission for capacity determination No. 6 provided by East-West; affidavits filed in proceedings in this Court in other matters; reports from State Departments of Tourism; Department of Aviation weekly management reports; various statistics; departmental analyses; and historical data. 2l. Capacity determination No. 6 was made by the Minister on 3 November 1986 for the period 1 February to 30 June 1987 in which he gave notice estimating the total traffic on all prescribed routes to be 290.679 million passenger kilometres and determining that the maximum aircraft capacity of the aircraft required by East-West for the purpose of operating passenger air services on prescribed routes to be 424.349 million passenger kilometres. The section 13 statement with respect to capacity determination No. 6 shows that the Minister based his findings upon various departmental submissions and refers to similar material to that to which I referred earlier in relation to capacity determination No. 54. 5. SUBMISSIONS AND FINDINGS In the light of the statutory background and the facts, I turn now to the submissions of the parties. It is convenient to deal with them under the particular headings which counsel themselves adopted. I shall turn first to the submissions challenging the decisions of the Minister based on grounds other than denial of natural justice and then to the submissions asserting denial of natural justice. Most of the submissions on behalf of the applicants were made by counsel for Ansett. Counsel for Australian Airlines, whilst addressing separately where the interests of the two major airlines did not coincide, adopted the submissions of counsel for Ansett and supplemented them where necessary. The interests of Ansett and Australian Airlines in these proceedings are largely identical. 21. Capacity determination No. 6 was made by the Minister on 3 November 1986 for the period 1 February to 30 June 1987 in which he gave notice estimating the total traffic on all prescribed routes to be 290.679 million passenger kilometres and determining that the maximum aircraft capacity of the aircraft required by East-West for the purpose of operating passenger air services on prescribed routes to be 424.349 million passenger kilometres. The section 13 statement with respect to capacity determination No. 6 shows that the Minister based his findings upon various departmental submissions and refers to similar material to that to which I referred earlier in relation to capacity determination No. 54. 5. SUBMISSIONS AND FINDINGS In the light of the statutory background and the facts, I turn now to the submissions of the parties. It is convenient to deal with them under the particular headings which counsel themselves adopted. I shall turn first to the submissions challenging the decisions of the Minister based on grounds other than denial of natural justice and then to the submissions asserting denial of Natural justice. Most of the submissions on behalf of the applicants were made by counsel for Ansett. Counsel for Australian Airlines, whilst addressing separately where the interests of the two major airlines did not coincide, adopted the submissions of counsel for Ansett and supplemented them where necessary. The interests of Ansett and Australian Airlines in these proceedings are largely identical. 22. 5.1 SUBMISSIONS ON GROUNDS OTHER THAN DENIAL OF NATURAL JUSTICE 5.1.1 Failure to Estimate Total Traffic on Competitive Routes Sub-paragraph 12(1)(a)(i) requires the Minister, from time to time, in relation to a specified future period, to estimate the total traffic on each of the competitive routes. Sub-paragraph 12(1)(b)(i) requires the Minister to determine the maximum aircraft capacity of the aircraft required by the Australian Airlines and Ansett respectively for the purposes of carrying one-half of so much of the total traffic estimated by the Minister in respect of the competitive routes as will not in his opinion be carried by regional operators or commuter operators. It was submitted by counsel for Ansett that the Minister failed to carry out the task required of him by sub-para. 12(1)(a)(i) and sub-para. 12(1)(b)(i) of the Equipment Act. The argument depends on the correct application of those two sub-paragraphs and para. 12(2)(a) of the Equipment Act. Paragraph 12(2)(a) provides that for the purposes of s. 12 the Minister shall have regard to rates of traffic increase. It was submitted that, in making capacity determination No. 54, the Minister failed to estimate the total traffic on each competitive route and estimated only the total traffic that would be carried on all competitive routes by Ansett and Australian Airlines. Having failed to make an estimate of total traffic on each of the competitive routes, he did not form an opinion, for the purposes of para. 12(1)(b), of the portion of the total estimated traffic that > ' 23. would be carried by East-West as a regional operator. Hence, the determination wrongly represented that the Minister formed the opinion required by sub-para. 12(1)(b)(i). A related submission was that, after estimating the total traffic on the competitive routes Sydney/Coolangatta and Brisbane/Cairns the Minister used that estimate to adjust the separate estimates for Ansett and Australian Airlines on these two routes; but did not, even for these routes, estimate the total market and deduct an estimate for East~West's traffic. It was also submitted that the Minister did not apply a uniform growth rate for the total market on each or all of the competitive routes. For example, in the case of the route Sydney/Coolangatta he applied a market growth rate of 5.915% in estimating Ansett's and Australian Airlines' traffic, whereas in capacity determination No. 6 he applied a growth rate of 12.2% for the same route in estimating East-West's traffic. It was submitted that the Minister should have estimated a rate of growth for the total traffic on that route as it was a competitive route and should have done likewise for all competitive routes. A consequence of the Minister's approach was said to be that he underestimated Ansett's and Australian Airlines' traffic on the Sydney/Coolangatta and other competitive routes (e.g. Brisbane/Cairns and Sydney/Canberra). It was said that one cannot be satisfied that the Minister's failure to do the task set for him by sub-para. 12(1)(a)(i) of the Equipment Act made no material difference to the result which he achieved. It was submitted that, if the Minister erroneously under-estimated Ansett's and Australian Airlines' traffic or over-estimated Fast-West's traffic on the competitive routes, this 23. . fd would be carried by East-West as a regional operator. Hence, the determination wrongly represented that the Minister formed the opinion required by sub-para. 12(1)(b)(i). A related submission was that, after estimating the total traffic on the competitive routes Sydney/Coolangatta and Brisbane/Cairns the Minister used that estimate to adjust the separate estimates for Ansett and Australian Airlines on these two routes; but did not, even for these routes, estimate the total market and deduct an estimate for East-West's traffic. It was also submitted that the Minister did not apply a uniform growth rate for the total market on each or all of the competitive routes. For example, in the case of the route Sydney/Coolangatta he applied a market growth rate of 5.915% in estimating Ansett's and Australian Airlines' traffic, whereas in capacity determination No. 6 he applied a growth rate of 12.2% for the same route in estimating East-West's traffic. It was submitted that 'the Minister should have estimated a rate of growth for the total traffic on that route as it was a competitive route and should have done likewise for all competitive routes. A consequence of the Minister's approach was said to be that he underestimated Ansett's and Australian Airlines' traffic on the Sydney/Coolangatta and other competitive routes (e.g. Brisbane/Cairns and Sydney/Canberra). It was said that one cannot be satisfied that the Minister's failure to do the task set for him by sub-para. 12(1)(a)(i) of the Equipment Act made no material difference to the result which he achieved. It was submitted that, if the Minister erroneously under-estimated Ansett's and Australian Airlines' traffic or over-estimated East-West's traffic on the competitive routes, this ; 24. error would carry through to the capacity determination and hence set a limit on the traffic achievable during the determination period. The next determination may take as its base the traffic, so limited, achieved during the determination period and the initial error will be compounded. Although it was conceded that the Minister may have taken a practical approach in acting as he did, it was submitted that it was not in accordance with law and should lead to the quashing of capacity determination No. 54. This attack is confined to the validity of capacity determination No. 54. It was not submitted that capacity determination No. 6 was similarly vitiated. Neither Ansett nor Australian Airlines provided the Minister with its estimate of total traffic on each competitive route. They supplied the information to him on different bases. He did have before him, however, estimates of through traffic for Ansett and Australian Airlines. At the time of making capacity determination No. 54 the Minister had before him East-West's estimate of the through traffic it would be carrying on competitive routes and those estimates excluded sector traffic. The Minister also had before him East-West's combined through and sector traffic. East-West is the only regional operator independent of the two major airlines. It was not suggested that the Minister had before him any details of commuter traffic, but it was common ground that any such traffic would be de minimis. 25. The evidence establishes to my satisfaction that the Minister took account of Ansett''s and Australian Airlines' traffic on competitive routes for all practical purposes contemporaneously with his consideration of traffic estimates for East~West. It is important to note what the Minister had before him when making capacity determination No. 54 and it will be remembered that he made that determination on the same day as he made capacity determination No. 6 (3 November 1986), the former pursuant to s. 12 and the latter pursuant to s. 18 of the Equipment Act. Much of the material before the Minister on or about 3 November was common to each determination. He had, for example, East-West''s own traffic estimates as well as the traffic estimates of the two major airlines. Although the making of each traffic estimate and capacity determination was technically an independent exercise, it would be unreal to say that the Minister did not have before him all relevant material. I am satisfied that the Minister carried out the task required by sub-para. 12(1)(a)(i). I make this finding on the basis, which was common ground, that the terms of that sub-paragraph require the Minister to estimate total traffic on each of the competitive routes and not on the competitive routes treated globally. The Minister is undertaking what 1s essentially a practical exercise when making estimates of traffic and capacity determinations under s. 12 and s. 18. One must apply a sensible and balanced analysis of the evidence in concluding whether the Minister has complied with the duties imposed upon him by s. 12. Although there is some support on the face of capacity determination No. 54 itself for the conclusion that the Minister did not estimate the total traffic on each competitive route but only the traffic that would be carried on all 25. The evidence establishes to my satisfaction that the Minister took account of Ansett's and Australian Airlines' traffic on competitive routes for all practical purposes contemporaneously with his consideration of traffic estimates for East-West. It is important to note what the Minister had before him when making capacity determination No. 54 and it will be remembered that he made that determination on the same day as he made capacity determination No. 6 (3 November 1986), the former pursuant to s. 12 and the latter pursuant to s. 18 of the Equipment Act. Much of the material before the Minister on or about 3 November was common to each determination. He had, for example, East-West's own traffic estimates as well as the traffic estimates of the two major airlines. Although the making of each traffic estimate and capacity determination was technically an independent exercise, it would be unreal to say that the Minister did not have before him all relevant material. I am satisfied that the Minister carried out the task required by sub-para. 12(1)(a)(i). I make this finding on the basis, which was common ground, that the terms of that sub-paragraph require the Minister to estimate total traffic on each of the competitive routes and not on the competitive routes treated globally. The Minister 1s undertaking what 1s essentially a practical exercise when making estimates of traffic and capacity determinations under s. 12 and s. 18. One must apply a sensible and balanced analysis of the evidence in concluding whether the Minister has complied with the duties imposed upon him by s. 12. Although there is some support on the face of capacity determination No. 54 itself for the conclusion that the Minister did not estimate the total traffic on each competitive route but only the traffic that would be carried on all : 26. competitive routes by Ansett and Australian Airlines, having in mind the matters to which I have referred, I think the sensible and practical construction of the events revealed by the evidence is that he did comply with the task required by para. 12(1)(a). If I had not reached this conclusion, in my opinion, any failure by the Minister strictly to observe the requirements of sub-paras. 12(1)(a)(i) and 12(1)(b)(i) was a technical error of no practical significance. I assume for this purpose that the Minister did not estimate the total traffic on each of the competitive routes and did not take into account an estimate of East-West traffic on competitive routes as the sub-paragraphs require. However, the failure to take these steps would result in a self cancelling exercise. The function of s. 12 1s to control the total capacity of the two major airlines, whether deployed on competitive routes or non-competitive routes, and to ensure that neither of them has available for deployment on competitive routes more aircraft capacity than the other. The object of the section is to determine the capacity required by both Ansett and Australian Airlines to carry their respective shares of the total traffic on competitive and non-competitive routes. Ultimately, the estimate of East-West's traffic on competitive routes can have no effect on the capacity determination made under para. 12(1)(b). Although the traffic estimate for East-West on competitive routes should technically be taken into account at the beginning of the exercise, it is taken out again by sub-para. 12(1)(b)(i), leaving the relevant total traffic estimate as being that of the two major airlines. 27. This alternative approach was described in argument by counsel for Ansett as an argument of "substantial equivalence"; and in a sense I suppose it is. But by whatever name the approach is dubbed, in my view, no practical difference is achieved in the end. Regional traffic and commuter traffic, though technically included in the equation by sub-para. 12(1)(a)(i), is then taken out by sub-para. 12(1)(b)(i), without any effect on the result. It must also be borne in mind, as I said earlier, that neither Ansett nor Australian Airlines provided the Minister with estimates of total traffic on each competitive route. In other words, the estimate of total traffic on each competitive route includes the East-West component but, by subtracting the same figure for sub-para. 12(1)(b)(i) purposes, no different result is produced. There is a third possibility. If neither of the two approaches mentioned above is correct, the evidence establishes that the maximum effect of the error of the Minister (an error assumed for present purposes only) would be a difference in traffic estimates of 0.136% of the total traffic forecast in capacity determination No. 54 of 4,418,000 revenue passenger kilometres; a minimal difference. Tf this assumed error had been established then, subject to any other errors in the Minister's traffic estimates or capacity determinations that may be established in these proceedings, in the exercise of the Court's discretion, I would not quash capacity determination No. 54 or otherwise interfere with it. 27. This alternative approach was described in argument by counsel for Ansett as an argument of "substantial equivalence"; and in a sense I suppose it is. But by whatever name the approach is dubbed, in my view, no practical difference is achieved in the end. Regional traffic and commuter traffic, though technically included in the equation by sub-para. 12(1)(a)(i), is then taken out by sub-para. 12(1)(b)(i), without any effect on the result. It must also be borne in mind, as I said earlier, that neither Ansett nor Australian Airlines provided the Minister with estimates of total traffic on each competitive route. In other words, the estimate of total traffic on each competitive route includes the East-West component but, by subtracting the same figure for sub-para. 12(1)(b)(i) purposes, no different result is produced. There is a third possibility. If neither of the two approaches mentioned above is correct, the evidence establishes that the maximum effect of the error of the Minister (an error assumed for present purposes only) would be a difference in traffic estimates of 0.136% of the total traffic forecast in capacity determination No. 54 of 4,418,000 revenue passenger kilometres; a minimal difference. If this assumed error had been established then, subject to any other errors in the Minister's traffic estimates or capacity determinations that may be established in these proceedings, in the exercise of the Court's discretion, I would not quash capacity determination No. 54 or otherwise interfere with it. 28. 5.1.2 Exclusion of January 1987 from the statistics based on the five month period of February to June 1987. The Minister estimated the traffic which would be carried during the five month period of February to June 1987 for the purposes of making capacity determination No. 54. Ansett submitted that the Minister should have included the month of January in the base period. January is a month that carries very heavy traffic due to the Christmas and holiday season. It was submitted that, by not including January, the Minister failed to take into account the requirement of para. 12(2)(h) of the Equipment Act that the Minister shall have regard to "any other factors affecting the stability of the domestic air transport industry". Ansett informed the Minister, in response to his enquiry, that the appropriate adjustment factor to be used in converting base period statistics for Sydney/Coolangatta and Brisbane/Cairns for the capacity determinations should be 150/181. The Minister rejected that adjustment factor, giving as the reason that, because January was a heavy traffic month, a conversion factor of 150/181 would substantially inflate Ansett's and Australian Airlines' traffic by 105.4789 million revenue passenger kilometres; the equivalent of about two F28 aircraft. It was submitted by counsel for Ansett that the purpose of the Equipment Act is to relate aircraft capacity to traffic demand with a view to maintaining a balance between the two and that it was therefore unreasonable to exclude the heavy January traffic from an estimate of maximum aircraft capacity for the immediately ensuing period of five months: February to June. Capacity determination No. 54, with a base period that excluded January, was said to be capable 29. ; of founding a requirement that Ansett dispose of aircraft which it needs in January and might preclude the acquisition of additional aircraft during the determination period. This submission relied on the provisions of para. 13(b) relating to the disposal of aircraft and 13(c) relating to the acquisition of aircraft. It was also submitted that, because the exclusion of January reduces the estimate of Ansett's traffic and hence lowers its determined capacity, the traffic it can lawfully achieve during the period of the determination will be limited. It was said that this effect may be compounded in subsequent determinations because the traffic so limited may be a basic element in subsequent estimates of traffic. The task before the Minister was to estimate the traffic for a particular period, in this case the five month period February to June 1987, and then to determine the maximum aircraft capacity to carry that traffic during that period. It is common ground that January is a month of heavier traffic than average. In my opinion no ground has been established for upsetting the Minister's view that, if he had included January in the base statistics for a future period which excludes that month, then by applying the 150/181 factor it would result in a inflated and false estimate of traffic for the five month period and an excessive aircraft capacity. The Minister was not purporting to determine the capacity which might be required in a higher than average month such as January or December. It was also part of Ansett's criticism that the Minister was inconsistent in his approach to the estimate of traffic and capacity 29. , of founding a requirement that Ansett dispose of aircraft which it needs in January and might preclude the acquisition of additional aircraft during the determination period. This submission relied on the provisions of para. 13(b) relating to the disposal of aircraft and 13(c) relating to the acquisition of aircraft. It was also submitted that, because the exclusion of January reduces the estimate of Ansett's traffic and hence lowers its determined capacity, the traffic it can lawfully achieve during the period of the determination will be limited. It was said that this effect may be compounded in subsequent determinations because the traffic so limited may be a basic element in subsequent estimates of traffic. The task before the Minister was to estimate the traffic for a particular period, in this case the five month period February to June 1987, and then to determine the maximum aircraft capacity to carry that traffic during that period. It is common ground that January is a month of heavier traffic than average. In my opinion no ground has been established for upsetting the Minister's view that, if he had included January in the base statistics for a future period which excludes that month, then by applying the 150/181 factor it would result in a inflated and false estimate of traffic for the five month period and an excessive aircraft capacity. The Minister was not purporting to determine the capacity which might be required in a higher than average month such as January or December. It was also part of Ansett's criticism that the Minister was inconsistent in his approach to the estimate of traffic and capacity 30. determination No. 54 on the one hand and the estimate of traffic and capacity determination No. 6 with respect to East-West on the other hand in that, so it was submitted, the Minister used the conversion factor of 150/181 as a scaling figure for capacity determination No. 6. But this submission fails because the base period figures provided by East-West to the Minister were for the period of five months of February to June only and no scaling was required. No scaling factor was in fact used by the Minister in the requisite estimate of traffic and subsequently the capacity determination for East-West resulting in capacity determination No. 6. This ground of attack has not been established. 5.1.3 Traffic on non-competitive routes Ansett contended that, when estimating total traffic on each of the competitive routes and on the non-competitive routes of Ansett and on the non-competitive routes of Australian Airlines (para. 12(1)(a)), the Minister committed a fundamental error in that he treated certain non-competitive routes as competitive routes. The question concerns the allocation of traffic between the competitive routes (sub-para. 12(1)(a)(i)) and the non-competitive routes of Australian Airlines (sub-para. 12(1)(a)(ii)) and the non-competitive routes of Ansett (sub-para. 12(1)(a)(iii)). It was asserted that the method of allocation adopted by the Minister had the effect of transferring traffic on non-competitive routes, where each of the two major airlines would receive capacity for all of the traffic, to competitive routes where each of them would receive capacity for one-half of what remains of the total after the deduction of regional 31. * and commuter traffic. As Ansett operates on more non-competitive routes than does Australian Airlines the result was said to be that Ansett suffers and Australian Airlines benefits from the Minister's allocation. It was said that the traffic so "transferred" is 82.466 million revenue passenger kilometres in the case of Ansett and 3.3573 million revenue passenger kilometres in the case of Australian Airlines. This issue has no effect on capacity determination No. 6 involving East-West, but is one of the few points of departure in the case between Ansett and Australian Airlines. Ansett submitted that a "route" must be distinguished from the "passenger air services" operated over it for the purposes of s. 12 of the Equipment Act. For example, a passenger service operated between Sydney and Hobart via Devonport might to some extent compete for traffic with a direct passenger service between Sydney and Hobart, but the two services are not operated over the same route, It was said that it is permissible to use the Two Airlines Agreement as a guide to the interpretation of the Equipment Act and that that agreement makes a clear distinction between "services" and "routes" over which services are provided. Clause 6 was cited as an illustration. It was submitted that the Minister confused two distinct concepts, namely, that of a route and that of the traffic carried over it. It was also submitted that the Minister did not consistently adhere to the approach which he adopted in that some routes served by Ansett alone were treated by him as competitive with regard to all traffic and not just end-to-end or through traffic; for example, Melbourne/Mackay, Melbourne/Albury/Sydney. ' ' 31. and commuter traffic. As Ansett operates on more non-competitive routes than does Australian Airlines the result was said to be that Ansett suffers and Australian Airlines benefits from the Minister's allocation. It was said that the traffic so "transferred" is 82.466 million revenue passenger kilometres in the case of Ansett and 3.3573 million revenue passenger kilometres in the case of Australian Airlines. This issue has no effect on capacity determination No. 6 involving East-West, but is one of the few points of departure in the case between Ansett and Australian Airlines. Ansett submitted that a "route" must be distinguished from the "passenger air services" operated over it for the purposes of s. 12 of the Equipment Act. For example, a passenger service operated between Sydney and Hobart via Devonport might to some extent compete for traffic with a direct passenger service between Sydney and Hobart, but the two services are not operated over the same route. It was 'said that it is permissible to use the Two Airlines Agreement as a guide to the interpretation of the Equipment Act and that that agreement makes a clear distinction between "services" and "routes" over which services are provided. Clause 6 was cited as an illustration. It was submitted that the Minister confused two distinct concepts, namely, that of a route and that of the traffic carried over it. It was also submitted that the Minister did not consistently adhere to the approach which he adopted in that some routes served by Ansett alone were treated by him as competitive with regard to all traffic and not just end-to-end or through traffic; for example, Melbourne/Mackay, Melbourne/Albury/Sydney. 32. The expression "competitive route" is defined by sub-s. 11(1) of the Equipment Act as meaning "a route over which passenger air services are operated both by the Commission and the Company". "Non-competitive route" is also defined by the same section as meaning "a route other than a competitive route". The word "route" is not defined by the Equipment Act. "Traffic" is defined by s. 11 as meaning "traffic in respect of passengers". The Minister adopted as a working definition of the expression "competitive route" the following: "KA city pair between which traffic is carried either directly or indirectly by both Ansett and Australian including their subsidiaries and operating divisions." It is essential to the argument of Ansett that there is a fundamental distinction between the concepts of a route and of the traffic carried over it for the purposes of the Equipment Act. Relevant provisions of the Equipment Act, especially s. 12, are concerned with regulating a market and dividing capacity between the two major airlines to carry passengers between ports. Section 12 is concerned to ensure that each of Ansett and Australian Airlines is able to compete for at least half of the traffic on the competitive routes. The traffic for which they may compete may be carried directly between the particular passenger's port of origin and port of destination or indirectly, that is via intermediate ports. Although the Equipment Act uses the expression "competitive route" it defines it with reference to a route over which passenger air services are operated by both major airlines. Hence, although the expression "route" in its ordinary usage contemplates a certain or particular direction taken in travelling from one place to 33. another or a regular line of travel or passage it is not to be treated separately or distinctly from the passenger air service provided over it. Section 12 is not concerned with routes as such but with the passenger air services which operate on them. For presently relevant purposes an air route exists in my view only in relation to passenger air services that are or may be conducted over it. The Minister's approach was to examine the routes over which passengers who used the passenger air services that operated over the relevant routes had common origins and destinations. In my opinion that was a permissible approach. It has not been established that the Minister fell into error in adopting the course which he did by applying his working definition ("city pairs") to which I referred earlier. Nor am I persuaded that the Minister failed to consistently adhere to the approach which he adopted. Reference was made to the traffic on Melbourne/MacKay and Melbourne/Albury/Sydney routes to support the proposition that some routes served by Ansett alone were treated by the Minister as competitive with regard to all traffic and not just through traffic. I am not convinced that the Minister did err in this respect as alleged by Ansett; nor am I persuaded that if he did so err (assuming it be an error of law such as would attract this Court's jurisdiction under the Judicial Review Act) the Court would, in the exercise of its discretion, interfere with capacity determination No. 54. 33. t another or a regular line of travel or passage it is not to be treated separately or distinctly from the passenger air service provided over it. Section 12 is not concerned with routes as such but with the passenger air services which operate on them. For presently relevant purposes an air route exists in my view only in relation to passenger air services that are or may be conducted over it. The Minister's approach was to examine the routes over which passengers who used the passenger air services that operated over the relevant routes had common origins and destinations. In my opinion that was a permissible approach. It has not been established that the Minister fell into error in adopting the course which he did by applying his working definition ("city pairs") to which I referred earlier. Nor am I persuaded that the Minister failed to consistently adhere to the approach which he adopted. Reference was made to the traffic on Melbourne/MacKay and Melbourne/Albury/Sydney routes to support the proposition that some routes served by Ansett alone were treated by the Minister as competitive with regard to all traffic and not just through traffic. I am not convinced that the Minister did err in this respect as alleged by Ansett; nor am I persuaded that if he did so err (assuming it be an error of law such as would attract this Court's jurisdiction under the Judicial Review Act) the Court would, in the exercise of its discretion, interfere with capacity determination No. 54. 34. . 5.1.4 Network load factors Ansett's submission on network load factors concerns the interpretation and application of para. 12(2)(c) and para. 18(4)(e) of the Equipment Act which require the Minister to have regard to the optimum passenger revenue load factor for the operation of aircraft on each route during the period concerned. It was submitted that, as the Minister calculated what he described as a "weighted average network load factor" which he then applied to the total estimated traffic for Ansett and Australian Airlines on all competitive routes for the purposes of arriving at capacity determination No. 54, he erred in law. With respect to capacity determination No. 6 it was submitted that the Minister did not estimate an optimum passenger revenue load factor for each route and did not use a weighted average load factor for all routes. This omission was said to be an error of law. I turn first to the ground of criticism with respect to capacity determination No. 54. The criticism was pressed at first but was not seriously argued. I have some doubt as to whether the point was abandoned or not by counsel with respect to capacity determination No. 54 so I shall deal with it. It is important to note that route by route load factors could not be assessed by the Minister for Ansett and Australian Airlines because the information which they provided was mainly on a State or Territory basis except for the routes Melbourne/Sydney, Sydney/Brisbane and Melbourne/Brisbane. Yet the Minister is criticised for not having used route by route load factors. Also, both Ansett and Australian Airlines requested that the Minister use a single load factor of 74%. Although para. 12(2)(c) requires the Minister to have regard, for the purposes of s. 12, to 35. optimum route by route load factors this must assume that in a given case, when making a particular estimate of traffic or determination of capacity under s. 12, he has the material before him to do so. Plainly enough he did not have that material on this occasion. He did in fact adopt a weighted average network load factor which he applied to the total estimated traffic for both the major airlines on all competitive routes. When making capacity determination No. 6 the Minister had before him East-West''s estimate of the optimum load factor on each route it proposed to service together with the forecast load factor which East-West believed would be achieved on each route. In its submission to the Minister East-West stated the reasons for the differences between optimum and forecast load factors and this was reflected in the Department's submission to the Minister relating to capacity determination No. 6. Indeed, East-West proposed the adoption of a network load factor of 70% which was not adopted by the Minister and instead separate load factors were adopted. Paragraph 18(4)(e) requires the Minister to have regard to optimum passenger revenue load factors on each prescribed route and there is no evidence that he failed to do so. Indeed, the reasonable inference from the material before me is that he did precisely what he was required to do. He was not required by sub-s. 18(2) to automatically translate his consideration of the route by route load factors for East-West into his capacity determination. He chose to do this on a network basis and in my view was entitled to do so. ' 35. x optimum route by route load factors this must assume that in a given case, when making a particular estimate of traffic or determination of capacity under s. 12, he has the material before him to do so. Plainly enough he did not have that material on this occasion. He did in fact adopt a weighted average network load factor which he applied to the total estimated traffic for both the major airlines on all competitive routes. When making capacity determination No. 6 the Minister had before him East-West''s estimate of the optimum load factor on each route it proposed to service together with the forecast load factor which East-West believed would be achieved on each route. In its submission to the Minister East-West stated the reasons for the differences between optimum and forecast load factors and this was reflected in the Department's submission to the Minister relating to capacity determination No. 6. Indeed, East-West proposed the adoption of a network load factor of 70% which was not adopted by the Minister and instead separate load factors were adopted. Paragraph 18(4)(e) requires the Minister to have regard to optimum passenger revenue load factors on each prescribed route and there is no evidence that he failed to do so. Indeed, the reasonable inference from the material before me is that he did precisely what he was required to do. He was not required by sub-s. 18(2) to automatically translate his consideration of the route by route load factors for East-West into his capacity determination. He chose to do this on a network basis and in my view was entitled to do so. 36. 5.1.5 Growth forecasts Ansett asserts that the Minister used the Bureau of Transport Economics' ("the BTE") growth forecasts and adjusted them upwards to allow for additional growth due to East-West's enlarged operations. It was said that the BTE''s forecasts themselves contained an allowance for at least a portion of that same growth, so the Minister gave in essence a double benefit to East-West. The BTE forecasts traffic for Ansett, Australian Airlines and, where relevant, East-West. It was submitted that the Minister applied those forecasts, with their own inbuilt upwards adjustment for growth, as the basis for calculation and then adjusted them upwards, by taking account of East-West's proposed growth in services on two routes, namely, Sydney/Coolangatta and Brisbane/Cairns, as if the BTE's factor related only to Ansett's and Australian Airlines' traffic whereas in truth it related to that traffic and East~-West's traffic. As the BTE's factor is a growth rate for the whole market which already takes into account to some extent the impact of new services the Minister, by adjusting those forecasts to take into account East-West's growth, erred because the forecasts themselves included an element of East-West's growth. The submission that the Minister took the BTE's forecasts into account in this way is based on what is described in the evidence as the BTE's Occasional Paper No. 79. It has not been established that within the BTE's Occasional Paper No. 79 itself any account whatever was taken of the substantial increase in additional traffic proposed by East-West within the period of February to June 1987. It does not appear that the authors of the paper treated for forecasting purposes the proposals of East-West as part of the future traffic 37. estimates. The reasonable inference to be drawn from the content of the paper is that no account was taken by the authors of the proposed East-West services on the Queensland routes in question in making their forecast of growth rates. This criticism fails. 5.1.6 Bast-West's traffic estimate for Sydney/Coolangatta and Brisbane/Cairns Ansett made a number of challenges relating to the method adopted by the Minister in calculating traffic estimates for the routes Sydney/Coolangatta and Brisbane/Cairns. The question relates to both capacity determinations No. 54 and No. 6. The point is closely related to other challenges by Ansett to the Minister's estimates of traffic and capacity determinations, in particular the first ground of attack with which I have dealt, namely, his alleged failure to estimate total traffic on competitive routes. The argument is based upon the calculations which are said to support the Minister's estimate of East-West's traffic over the routes Sydney/Coolangatta and Brisbane/Cairns and his adjustment of the estimate for traffic of Ansett and Australian Airlines on those two routes. The calculations were examined in detail by counsel for Ansett and Australian Airlines and various criticisms were made. The first of these (as amended during the course of the hearing) was that, in making an adjustment to his traffic estimates for Ansett's and Australian Airlines' routes in Queensland, the Minister adopted figures which were based upon East-West's traffic estimates for the routes Sydney/Coolangatta and Brisbane/Cairns rather than upon his own estimates of East-West's traffic on those routes. \ 37. ¢ estimates. The reasonable inference to be drawn from the content of the paper is that no account was taken by the authors of the proposed East-West services on the Queensland routes in question in making their forecast of growth rates. This criticism fails. 5.1.6 East-West's traffic estimate for Sydney/Coolangatta and Brisbane/Cairns Ansett made a number of challenges relating to the method adopted by the Minister in calculating traffic estimates for the routes Sydney/Coolangatta and Brisbane/Cairns. The question relates to both capacity determinations No. 54 and No. 6. The point 1s closely related to other challenges by Ansett to the Minister's estimates of traffic and capacity determinations, in particular the first ground of attack with which I have dealt, namely, his alleged failure to estimate total traffic on competitive routes. The argument is based upon the calculations which are said to support the Minister's estimate of East-West's traffic over the routes Sydney/Coolangatta and Brisbane/Cairns and his adjustment of the estimate for traffic of Ansett and Australian Airlines on those two routes. The calculations were examined in detail by counsel for Ansett and Australian Airlines and various criticisms were made. The first of these (as amended during the course of the hearing) was that, in making an adjustment to his traffic estimates for Ansett's and Australian Airlines' routes in Queensland, the Minister adopted figures which were based upon East-West's traffic estimates for the routes Sydney/Coolangatta and Brisbane/Cairns rather than upon his own estimates of East-West's traffic on those routes. 38. This point was later abandoned so I need not deal with it. It plainly cannot be supported. Then it was said that the calculations reveal the following: (a) (b) (c) (d) (e) the ascertainment by the Minister of total traffic on the routes Sydney/Coolangatta and Brisbane/Cairns using the conversion factor of 150/181; the acceptance by the Minister of growth rates for the routes Sydney/Coolangatta and Brisbane/Cairns which were substantially higher than the BTE''s growth rates for those routes and much higher than the growth rates which the Minister accepted in estimating traffic on those routes for the purposes of capacity determination No. 54; the erroneous statement that East-West would have to capture one-third of the estimated growth, whereas it would, on the Minister's own figures, have to capture about two-thirds of the estimated growth to achieve the estimate allowed by him; the growth estimates accepted by the Minister in estimating East-West's traffic for the Sydney/Coolangatta and Brisbane/Cairns routes depend upon the introduction by East-West of a Boeing 737-200 aircraft to those routes for the whole of the determination period; the growth estimates accepted by the Minister involved the addition of a further growth rate to the BTE's growth rate to 39. ' take account of market stimulation which involved an element of double counting; (£) the Minister went to considerable lengths to try to "justify" East-West's traffic estimates for the Sydney/Coolangatta and Brisbane/Cairns routes; and (g) in the result, the Minister accepted an estimate for East-West's traffic on the Sydney/Coolangatta route that was much higher than East-West's own estimate. It was said that, based upon these calculations, adjustments were made by the Minister to the estimates which he had made for Ansett's and Australian Airlines' traffic on the Sydney/Coolangatta and Brisbane/Cairns routes. The final determination was based on an assumed market stimulation of 3.3% not 10%. It was submitted that this change affected the size of the Minister's final estimate of East-West's traffic for the routes Sydney/Coolangatta and Brisbane/Cairns and the size of the final adjustment made to the Minister's traffic estimates in capacity determination No. 54. It was argued that it appears from a comparison of the total traffic figure of 4,043,998.7 revenue passenger kilometres in Table 1 on page 4 of the Department's submission to the Minister and the total traffic figure of 4,036,917.0 revenue passenger kilometres in Annexure C to the Minister's statement of reasons furnished under s. 13 of the Judicial Review Act with respect to capacity determination No. 54 that the deduction finally made by the Minister for his traffic estimates : 39. take account of market stimulation which involved an element of double counting; (£) the Minister went to considerable lengths to try to "justify" East-West's traffic estimates for the Sydney/Coolangatta and Brisbane/Cairns routes; and (g) in the result, the Minister accepted an estimate for East-West's traffic on the Sydney/Coolangatta route that was much higher than East-West's own estimate. It was said that, based upon these calculations, adjustments were made by the Minister to the estimates which he had made for Ansett's and Australian Airlines' traffic on the Sydney/Coolangatta and Brisbane/Cairns routes. The final determination was based on an assumed market stimulation of 3.3% not 10%. It was submitted that this change affected the size of the Minister's final estimate of East-West's traffic for the routes Sydney/Coolangatta and Brisbane/Cairns and the size of the final adjustment made to the Minister's traffic estimates in capacity determination No. 54. It was argued that it appears from a comparison of the total traffic figure of 4,043,998.7 revenue passenger kilometres in Table 1 on page 4 of the Department's submission to the Minister and the total traffic figure of 4,036,917.0 revenue passenger kilometres in Annexure C to the Minister's statement of reasons furnished under s. 13 of the Judicial Review Act with respect to capacity determination No. 54 that the deduction finally made by the Minister for his traffic estimates t 40. for the two major airlines was 7.0817 million revenue passenger kilometres. It was submitted that in these circumstances: (i) (ii) the Minister's estimates and adjustments were so unreasonable that they ought to be set aside; the adjustment of Ansett's and Australian Airlines' estimates to take account of East-West's alleged position on the Sydney/Coolangatta and Brisbane/Cairns routes did not accord with the requirements of sub-s. 12(1) of the Equipment Act, involved errors in calculation and was made on an assumption that East-West would obtain and use a Boeing 737-200 aircraft during the whole of the determination period; and the making of traffic estimates on the footing that East-West would obtain a Boeing 737-200 aircraft during the determination period (for which it did not have approval at the time capacity determinations No. 54 and No. 6 were made) was contrary to law. It distorted the statutory nexus between s. 18 and para. 19(1)(c). The result of the Minister's approach was that, because he made his traffic estimates on the footing that East-West would obtain a Boeing 737-200 aircraft, East-West was granted higher traffic estimates and higher capacity which in turn was used by the Minister later to justify the grant by him of an acquisition certificate under para. 19(1)(c) of the Equipment Act which would enable East-West to obtain the Boeing 737-200 aircraft. It was said also to involve an inconsistency in approach by the Minister. A Boeing 727 aircraft was not counted in 41. Ansett's fleet in capacity determination No. 54 because approval had not at that time been obtained by Ansett to return it from Jamaica to Australia, whereas East-West's traffic estimates were based on the introduction of a Boeing 737-200 aircraft for which approval had not at that time been obtained. The criticism relating to the conversion factor 150/181 mentioned in (a) above has been dealt with earlier in my reasons. I shall consider the other criticisms (b) to (g) by adopting the same letters. (b) The Minister acknowledges that he accepted growth rates for the routes Sydney/Coolangatta and Brisbane/Cairns which were higher than the BTE's growth rates for those routes and higher than the growth rates which he accepted in estimating traffic on those routes for the purposes of capacity determination No. 54. The Minister took the view that the operations of East-West on those routes would in fact produce substantially higher growth rates for Bast-West's traffic than would be achieved by the two major airlines. The Minister also took the view that the volume of traffic carried on those routes by the two major airlines was much larger. Hence, in order to generate an equivalent growth rate, the two major airlines would have to carry a much larger number of passengers to match the growth rates for East-West. This criticism fails. (c) This particular criticism was based on the Department's documents and the evidence of Mr. Comber, an expert retained by 41. Ansett's fleet in capacity determination No. 54 because approval had not at that time been obtained by Ansett to return it from Jamaica to Australia, whereas East-West's traffic estimates were based on the introduction of a Boeing 737-200 aircraft for which approval had not at that time been obtained. The criticism relating to the conversion factor 150/181 mentioned in (a) above has been dealt with earlier in my reasons. I shall consider the other criticisms (b) to (g) by adopting the same letters. (b) The Minister acknowledges that he accepted growth rates for the routes Sydney/Coolangatta and Brisbane/Cairns which were higher than the BTE's growth rates for those routes and higher than the growth rates which he accepted in estimating traffic on those routes for the purposes of capacity determination No. 54. The Minister took the view that the operations of East-West on those routes would in fact produce substantially higher growth rates for East-West's traffic than would be achieved by the two major airlines. The Minister also took the view that the volume of traffic carried on those routes by the two major airlines was much larger. Hence, in order to generate an equivalent growth rate, the two major airlines would have to carry a much larger number of passengers to match the growth rates for East-West. This criticism fails. (c) This particular criticism was based on the Department's documents and the evidence of Mr. Comber, an expert retained by 42. BD Ansett. He was cross-examined by counsel for the Minister about this question and said that the point was demonstrated in the relevant Material before the Minister only indirectly. I am not satisfied that the Department's own figures (which I examined), when considered in the light of Mr. Comber's inconclusive evidence on this point, support the argument of Ansett. (d) The complaint of Ansett and Australian Airlines here is essentially that growth estimates accepted by the Minister establishing East-West's traffic on the Sydney/Coolangatta and Brisbane/Cairns routes depend upon the introduction of a Boeing 737-200 aircraft by East-West on those routes for the whole of the determination period (February to June), whereas the Boeing 737-200 was to be introduced only in March. The short answer to this point is that the traffic forecasts made by East-West were made on the basis of the introduction of the 737-200 aircraft on 1 March so that the services provided by East-West on those routes would be operated by F28 aircraft during February and by the Boeing 737 aircraft in the months of March to June inclusive. (e) In my opinion this complaint has not been established. Examination of the BTE's Occasional Paper No. 79 does not establish the point. Indeed, the contents of the Paper rather negate the point. Mr. Comber gave some evidence touching this question; but this evidence was somewhat speculative. (f£) East-West had obtained licences to operate routes in Queensland. It proposed to commence operations over those routes and 43. : had made it clear that it proposed to commence those operations. It has in fact operated them since the middle of 1986. In its submissions to the Minister East-West put forward a great deal of material to support its case for an increase in aircraft capacity. There is no evidence that the Minister went to considerable, or any lengths, to try and justify East-West's traffic estimates for the Sydney/Coolangatta and Brisbane/Cairns routes. All that the evidence establishes relevant to this point is that the calculations made by the Minister were an attempt by him to estimate East-West's likely traffic over these routes. The decision of the Minister was that additional capacity was warranted and the decision was made to grant the relevant acquisition certificate to East-West. This criticism has not been established. (g) The answer to this submission is that, far from accepting ar, estimate for East-West's traffic on the Sydney/Coolangatta route that was much higher than East-West's own estimate, the Minister reduced significantly East-West's estimates of traffic on the routes Sydney/Coolangatta/Brisbane and Brisbane/Cairns. As to the more general criticisms of the Minister's estimates and capacity determinations which I mentioned above as (i), (ii) and (iii), much of what I have dealt with so far covers them although certain other matters should be stated. (i) No conclusion is warranted that the Minister's estimates and adjustments are so unreasonable that they ought to be set aside. 43. e had made it clear that it proposed to commence those operations. It has in fact operated them since the middle of 1986. In its submissions to the Minister East-West put forward a great deal of material to support its case for an increase in aircraft capacity. There is no evidence that the Minister went to considerable, or any lengths, to try and justify East-West's traffic estimates for the Sydney/Coolangatta and Brisbane/Cairns routes. All that the evidence establishes relevant to this point is that the calculations made by the Minister were an attempt by him to estimate East-West's likely traffic over these routes. The decision of the Minister was that additional capacity was warranted and the decision was made to grant the relevant acquisition certificate to East-West. This criticism has not been established. (g) The answer to this submission 1s that, far from accepting an estimate for East-West's traffic on the Sydney/Coolangatta route that was much higher than East-West's own estimate, the Minister reduced significantly East-West's estimates of traffic on the routes" Sydney/Coolangatta/Brisbane and Brisbane/Cairns. As to the more general criticisms of the Minister's estimates and capacity determinations which I mentioned above as (i), (ii) and (iii), much of what I have dealt with so far covers them although certain other matters should be stated. (i) No conclusion is warranted that the Minister's estimates and adjustments are so unreasonable that they ought to be set aside. 44, (ii) The argument that the Minister could not take into account the proposed addition to East-West's fleet of a Boeing 737-200 aircraft during the determination period for the purposes of forecasting traffic is without substance. Obviously the Minister must determine the capacity required to accomodate a proposed addition to East-West's fleet before issuing any acquisition certificate to it. If no allowance is made for future traffic to be carried in new aircraft for the purpose of determining capacity, then East-West, asa regional operator, would never be able to secure the acquisition of new aircraft other than by replacing existing aircraft having the same capacity. (iii) Nor is any inconsistency in the approach by the Minister demonstrated by the fact that a Boeing 727 was not counted in Ansett's fleet in capacity determination No. 54 because approval had not at the time been obtained by Ansett to return it from Jamaica to Australia whereas East-West's traffic estimates were based on the introduction of the Boeing 737-200 aircraft for which approval had not at that time been obtained. The evidence rather suggests that the Minister took the view that the importation by Ansett of its Boeing 727 aircraft from Jamaica was not required to perform services that would necessarily produce increased traffic. 5.1.7 Stability Ansett submitted that the Minister failed to have regard to the stability of the domestic air transport industry as he is required to do by para. 12(2)(h) of the Equipment Act in that he acted on the basis that the Equipment Act is directed at matching the traffic 45. demand and aircraft supply factors on an aircraft by aircraft basis. It was submitted that the relevant exercise for the Minister is to assess the total industry demand against total aircraft available between operators. Reliance was placed upon certain provisions of the Department's submission to the Minister regarding capacity determination No. 54 and certain pages of the Department's submission to the Minister regarding capacity determination No. 6. It was submitted that, if the Minister had applied para. 12(2)(h) in accordance with law, he may have reached a different conclusion having regard to the adverse effect on the profitability of Ansett and Australian Airlines of the capacity determinations which he in fact made. I am not persuaded that the Minister did fail to have regard to the matters to which para. 12(2)(h) is directed or that he misapplied them. When the whole of the evidence is taken into account, including the contents of the Department's submissions, the criticism of Ansett is not supported. There are suggestions here and there in the material which may, taken in isolation, lend some support to the submission; but when viewed as a whole the submission fails. An argument was advanced by counsel for East-West that, even if it is established by Ansett and Australian Airlines that the Minister erred in law as asserted in points numbered (a) to (g) above, Ansett and Australian Airlines must nevertheless demonstrate that the error or errors produced a significant effect before they are entitled to the exercise of the Court's discretion to quash the Minister's decisions. The argument involved a refined and close analysis of the evidence and culminated in the submission that none of the matters 45. ' demand and aircraft supply factors on an aircraft by aircraft basis. It was submitted that the relevant exercise for the Minister is to assess the total industry demand against total aircraft available between operators. Reliance was placed upon certain provisions of the Department's submission to the Minister regarding capacity determination No. 54 and certain pages of the Department's submission to the Minister regarding capacity determination No. 6. It was submitted that, if the Minister had applied para. 12(2)(h) in accordance with law, he may have reached a different conclusion having regard to the adverse effect on the profitability of Ansett and Australian Airlines of the capacity determinations which he in fact made. I am not persuaded that the Minister did fail to have regard to the matters to which para. 12(2)(h) is directed or that he misapplied them. When the whole of the evidence is taken into account, including the contents of the Department's submissions, the criticism of Ansett is not supported. There are suggestions here and there in the material which may, taken in isolation, lend some support to the submission; but when viewed as a whole the submission fails. An argument was advanced by counsel for Bast-West that, even if it is established by Ansett and Australian Airlines that the Minister erred 1n law as asserted in points numbered (a) to (g) above, Ansett and Australian Airlines must nevertheless demonstrate that the error or errors produced a significant effect before they are entitled to the exercise of the Court's discretion to quash the Minister's decisions. The argument involved a refined and close analysis of the evidence and culminated in the submission that none of the matters 46. * é asserted by the two major airlines as constituting Ministerial error could have any significant impact or effect. In view of my findings that no error of law has been established and that the Minister's decisions have not been shown to be otherwise tainted with error it is not necessary to consider this further submission on behalf of East-West. 5.2 GENERAL It is timely to make some general observations with respect to the operation of the Equipment Act and, in particular, as to the relation, if any, between ss. 12 and 13 on the one hand and ss. 18 and 19 on the other. The purpose of ss. 12 and 13 is essentially to control the total capacity of Ansett and Australian Airlines on competitive routes and non-competitive routes and to ensure that neither of them has available for deployment on competitive routes more aircraft capacity than the other: sub-para. 12(1)(b)(i) and para. 13(a). Neither Ansett nor Australian Airlines is required by s. 12 or otherwise to deploy the whole of its half share of capacity as determined by the Minister for competitive routes on those routes. Nor do ss. 12 or 13 require each of the two major airlines to deploy the whole of its capacity as determined for a particular time during that determination period. Section 12 denies Ansett and Australian Airlines the capacity to compete for a greater share than the other of air traffic on competitive routes by deploying greater aircraft capacity. However, 47. ' ' each of the two airlines is free to compete for more than half of the traffic on competitive routes. Each can also compete with the other in various ways including quality and frequency of service and price. The purpose of ss. 18 and 19 is essentially to control the capacity of each regional airline operating passenger air services over prescribed routes; to ensure that no regional operator deploys on prescribed routes a greater aircraft capacity than has been determined for it; and to ensure that each regional operator deploys the whole of the capacity determined for it on prescribed routes during the relevant period. Although the two sets of provisions (ss. 12 and 13 on the one hand and ss. 18 and 19 on the other) have certain elements in common, they nevertheless operate separately. There are indications in the Equipment Act itself that this is so and they include the following: (a) the absence of any requirement that capacity determinations be made concurrently for Ansett, Australian Airlines and the regional operators; (b) the absence of any requirement that capacity determinations, whether made under s. 12 or s. 18, be in force at all times; (c) the fact that there is a discretion in the Minister as to the period during which a capacity determination made under s. 12 or s. 18 shall be operative; and , 47. $ each of the two airlines is free to compete for more than half of the traffic on competitive routes. Bach can also compete with the other in various ways including quality and frequency of service and price. The purpose of ss. 18 and 19 is essentially to control the capacity of each regional airline operating passenger air services over prescribed routes; to ensure that no regional operator deploys on prescribed routes a greater aircraft capacity than has been determined for it; and to ensure that each regional operator deploys the whole of the capacity determined for it on prescribed routes during the relevant period. Although the two sets of provisions (ss. 12 and 13 on the one hand and ss. 18 and 19 on the other) have certain elements in common. they nevertheless operate separately. There are indications in the Equipment Act itself that this is so and they include the following: (a) the absence of any requirement that capacity determinations be made concurrently for Ansett, Australian Airlines and the regional operators; (b) the absence of any requirement that capacity determinations, whether made under s. 12 or s. 18, be in force at all times; (c) the fact that there is a discretion in the Minister as to the period during which a capacity determination made under s. 12 or s. 18 shall be operative; and 48. (d) the language of s. 12 itself. Sub-paragraph 12(1)(b)(i) requires that the estimated traffic to be carried by regional operators over competitive routes be deducted from the estimate of total traffic on those routes. However, this is for the purpose of achieving an equal division of capacity between Ansett and Australian Airlines. The section does not require that a similar adjustment be made in respect of total traffic or total capacity on non-competitive routes. The Minister is required by para. 12(2)(g) to have regard to any services operated otherwise than by Ansett or Australian Airlines; but that is the extent of the requirement so far as regional operators are concerned except, of course, for the specific requirements to which I have already referred of sub-s. 12(1). What sub-ss. 12(2) and 18(4) require is that, in making estimates of traffic and determining maximum aircraft capacity, the Minister shall have regard to the particular matters specified in those sub-sections. He must take them into account; but it is for him to determine what weight he gives them in making traffic estimates and capacity determinations. This must depend upon the facts and circumstances of the particular case. The statutory discretion with which the Minister is ultimately invested by ss. 12 and 18 requires in all the circumstances the exercise by him of a broad judgement and a decision that in his view is fair and reasonable: see Palser v. Grinling [1948] A.C. 291 per Viscount Simon at pp. 314 and 315; Ishak v. Thowfeek [1968] 1 W.L.R. 1,718 at 1,725; The Queen v. Hunt; Ex parte Sean Investments Pty. Limited (1979) 25 A.L.R. 497; and The Queen v. Toohey; Ex parte Meneling Station Pty. Limited (1982) 158 49. ' C.L.R. 327 per Gibbs C.J. at p. 333. The task of the Minister in making traffic estimates and capacity determinations under ss. 12 and 18 of the Equipment Act is essentially an exercise involving the making of estimates and predictions, exercising discretions and forming judgements. In performing this task the Minister must have regard to such of the matters specified in sub-ss. 12(2) and 18(4) as relate to the case in hand. What weight he gives to each of the matters specified in the sub-sections and other matters which he may take into account generally in the exercise of his discretion is for him. Much of the criticism made by Ansett and Australian Airlines of the Minister's decisions in this case is in reality a criticism of the exercise of his discretion or of the weight which he gave to certain matters rather than to others or of opinions and judgements formed by him. It is true that the submissions were not put on this basis as they were directed to the question whether the Minister did in fact fulfil his statutory duty or not. Alleged errors of law were pointed to; but upon analysis much of this criticism is essentially of the exercise by the Minister of his judgement. The submissions involved close consideration of highly detailed and complex questions of fact, calculations of traffic forecasts and of estimates or predictions of one kind or another. These are essentially matters for the Minister himself to consider. This highlights the importance of the oft repeated injunction in the cases that this Court, when exercising its powers under the Judicial Review Act, is not considering whether the Court would, if it were itself to examine the facts afresh, form the same opinions or reach the same conclusions as those of the decision-makers. The function of this Court is to 49. é C.L.R. 327 per Gibbs C.J. at p. 333. The task of the Minister in making traffic estimates and capacity determinations under ss. 12 and 18 of the Equipment Act is essentially an exercise involving the making of estimates and predictions, exercising discretions and forming judgements. In performing this task the Minister must have regard to such of the matters specified in sub-ss. 12(2) and 18(4) as relate to the case in hand. What weight he gives to each of the matters specified in the sub-sections and other matters which he may take into account generally in the exercise of his discretion is for him. Much of the criticism made by Ansett and Australian Airlines of the Minister's decisions in this case is in reality a criticism of the exercise of his discretion or of the weight which he gave to certain matters rather than to others or of opinions and judgements formed by him. [It is true that the submissions were not put on this basis as they were directed to the question whether the Minister did in fact fulfil his statutory duty or not. Alleged errors of law were pointed to; but upon analysis much of this criticism is essentially of the exercise by the Minister of his judgement. The submissions involved close consideration of highly detailed and complex questions of fact, calculations of traffic forecasts and of estimates or predictions of one kind or another. These are essentially matters for the Minister himself to consider. This highlights the importance of the oft repeated injunction in the cases that this Court, when exercising its powers under the Judicial Review Act, is not considering whether the Court would, if it were itself to examine the facts afresh, form the same opinions or reach the same conclusions as those of the decision-makers. The function of this Court is to 50. Fy determine whether any of the grounds of review specified in the Judicial Review Act have been made out. 5.3 DENIAL OF NATURAL JUSTICE - GENERAL Ansett submitted that the rules of natural justice applied, but were not observed by the Minister, in the process of making traffic estimates and capacity determinations No. 54 and No. 6. In particular, Ansett submitted that the Minister did not inform it of significant matters or factors which he proposed to take into account when forming his opinion on the estimates and making his determinations. It was argued that the Minister's statement of reasons under s. 13 of the Judicial Review Act, in relation to capacity determination No. 54 for Ansett and Australian Airlines, manifests that the Minister, in making his estimate of traffic and determination of capacity, took into account "a series of values and factors, though critical to his reasoning and prejudicial to Ansett, were not disclosed to Ansett in order that Ansett might comment on them". Certain specific matters were identified by Ansett to which I shall refer later when dealing with each of them. It was also submitted by Ansett that the Minister's statement of reasons in relation to capacity determination No. 6 for East-West established that the Minister, in making his estimate of traffic and determination of capacity, took into account "a series of values and factors which, though critical to his reasoning and prejudicial to Sl. ' & Ansett, were not disclosed to Ansett in order that Ansett might comment on them". Some nine matters were identified by Ansett. Generally speaking a decision-maker has a common law duty to act fairly in the making of administrative decisions which will affect some right or interest or legitimate expectation of a benefit. The duty may be excluded, but only where there is a clear and strong manifestation by statute of a contrary intention. The duty is not attracted however to every decision of an administrative character. Mason J. observed in Kioa v. Minister for Immigration and Ethnic Affairs (1985) 62 A.L.R. 321 at p. 346 that decisions which do not directly affect the person or corporation individually, but simply as members of the public or a class of the public, do not attract the duty. He cited as examples a decision to impose a rate or a general charge for services rendered to rate payers. The expressions right, interest or legitimate expectation call for no narrow or rigid interpretation. A right or interest in administrative law is not confined to proprietary rights and interests, but extends to rights or interests of status, liberty, livelihood and reputation. The concept of a legitimate expectation includes an expectation that a right, interest or privilege will be granted or renewed and extends beyond enforceable legal rights. The following observations of Mason J. in Kioa (supra) at pp. 346-7 are in point in the present case:- "Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or duty to act fairly depends to a large extent on the 51. Y Ansett, were not disclosed to Ansett in order that Ansett might comment on them". Some nine matters were identified by Ansett. Generally speaking a decision-maker has a common law duty to act fairly in the making of administrative decisions which will affect some right or interest or legitimate expectation of a benefit. The duty may be excluded, but only where there is a clear and strong manifestation by statute of a contrary intention. The duty is not attracted however to every decision of an administrative character. Mason J. observed in Kioa v. Minister for Immigration and Ethnic Affairs (1985) 62 A.L.R. 321 at p. 346 that decisions which do not directly affect the person or corporation individually, but simply as members of the public or a class of the public, do not attract the duty. He cited as examples a decision to impose a rate or a general charge for services rendered to rate payers. The expressions right, interest or legitimate expectation call for no narrow or rigid interpretation. A right or interest in administrative law is not confined to proprietary rights and interests, but extends to rights or interests of status, liberty, livelihood and reputation. The concept of a legitimate expectation includes an expectation that a right, interest or privilege will be granted or renewed and extends beyond enforceable legal rights. The following observations of Mason J. in Kioa (supra) at pp. 346-7 are in point in the present case:- "Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or duty to act fairly depends to a large extent on the t 52. construction of the statute. In Mobil Oil Aust Pty Limited v. FC of T (1963) 113 CLR 475, Kitto J pointed out (at pp 503-4) that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on 'the particular statutory framework'. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject matter and the rules under which the decision-maker is acting (R. v. Comonweath {sic] Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 552-3; National Companies and Securities Commission v. Newscorp Limited (1984) 58 ALJR 308 at 314, 318; 52 ALR 417 at 427-8, 434). In this respect the expression 'procedural fairness' more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, that is, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations (c.f. Salemi (No. 2) CLR at p 451, per Jacobs J)." See also the reasons for judgment of Brennan J. at pp. 367-370. Also of relevance to this case is the following passage from the judgment of Brennan J. in National Companies and Securities Commission v. Newscorp Ltd (1984) 52 A.L.R. 417 at p. 440:- "When the limits of a statutory function are ascertained the interests which are apt to be affected by the performance of the function can be identified. Then it is possible for a court to say - in the absence of express statutory provision - what has to be done to be fair to those whose interests are apt to be affected by the performance of the function. The terms of the statute which creates the function, the nature of the function and the administrative framework in which the statute requires the function to be performed are material factors in determining what must be done to satisfy the requirements of natural justice:" 53. The critical question in most cases is not whether the rules of natural justice apply, but what does the common law duty to act fairly require in the circumstances of the particular case. The starting point here is the Equipment Act itself. The capacity determination process which occurs from time to time is an ongoing process. The determination of capacity, whether under s. 12 or s. 18, in fact affects a very limited number of airlines; at present only three. The two major airlines are directly affected by determinations under s. 12. As s. 18 relates to regional operators who have in fact imported large turbo jet aircraft and have been required to give an undertaking pursuant to s. 16, the only relevant regional operator for s. 18 determination purposes is East-West. Whether the methodology applied by the Minister in the capacity determination procedure is well-known to the three airlines is arguable but it is clear from the evidence that the relevant officers of the Department responsible for the capacity determination process are well-known to the relevant executives of the airlines. They work closely and frequently together for considerable periods of time. They know each other well. They are also familiar, at least in a broad sense, with the departmental processes which lead in due course to the making of the capacity determinations by the Minister. Capacity determinations under ss. 12 and 18 may be contrasted with other classes of administrative decisions that have come before the courts for judicial review. Often those decisions are of an isolated or permanent character or occur only once. Often the person affected by the decision is not familiar with the decision-making 54. * process or the decision-maker himself or the process of collecting information leading to the decision. Often the person is unable to put his views before the decision-maker unless he is expressly given the opportunity to do so by the decision-maker. The capacity determination process under the Equipment Act stands in marked contrast to decisions of those kinds. As the facts of the present case demonstrate, the administrative process of estimating traffic and determining maximum aircraft capacity can be a detailed, involved and highly complex process. It is also a process that generally must be carried out expeditiously. Although the Equipment Act stipulates no particular time for the making of capacity determinations for the two major airlines, determinations must be made at least annually in the case of regional operators (sub-s. 18(6)). In both cases, however, not less than 90 days notice to the relevant operator must be given before the commencement of the determination period (sub-s. 12(3) and 18(7)). The decision-making process involved in capacity determinations under ss. 12 and 18 of the Equipment Act has a distinguishing feature from many other kinds of decision-making, namely, that in order to make capacity determinations the Minister must obtain information which the airlines affected by his decision regard as commercially confidential in the sense that it would be a great advantage to one of the other airlines, being competitors, to be given it. Once the Minister receives this information he must treat it as confidential to himself and his Department. This is a significant attribute of the capacity determination processes under Equipment Act. Special account must be taken of the distinct . 55. *limitations which the obligations of confidentiality impose upon the Minister. It is not appropriate that the Court expresses its views with respect to the application of the rules of natural justice in this case other than with reference to its particular facts and what I say must be read with that in mind. Any consideration of questions of fairness in this case must take into account ss. 14 and 20 of the Eguipment Act. It is sufficient to refer to s. 14 as the two sections are essentially the same. That section provides that the Secretary to the Department of Aviation may from time to time convene conferences to be attended by representatives of the Department of Aviation, Ansett and Australian Airlines and other persons invited by the Secretary to the Department for the purpose of considering matters relevant to the making of estimates and determinations by the Minister under s. 12. The Director-General of Aviation is required to report to the Minister any conclusions arrived at or views expressed at a conference held pursuant to s. 12 and the Minister is required before making an estimate or determination under the section to give full consideration to any such conclusions or views. Section 20 provides the same procedure for consultation between the regional operators and the Secretary of the Department of Aviation. In my opinion ss. 14 and 20 do not exclude the application of the rules of natural justice. They are simply part of the particular statutory framework in which the content and scope of the duty to act fairly is to be determined in this case. These sections do not ' 56. *manifest any intention by the Legistalure to exclude the duty to act fairly. In this case the Department and the Minister considered matters relating to the estimates and determinations under both ss. 12 and 18 at or about the same time (bearing in mind that capacity determinations No. 54 and No. 6 were both made on the same day) and this involved consideration of many matters common to_ both determinations. Each of the three airlines was entitled to put before the Minister whatever relevant material bearing on the making of the determination that it wished and to have that material considered by the Minister. If the Minister intended to make an estimate or determination with reference to some material affecting one of the airlines concerned on the basis of information obtained from another source, procedural fairness required in this case that an opportunity of responding to the matter be given to the airline affected. There is, however, a qualification to this requirement. If the information so obtained by the Minister came from a competitor of the airline affected by it and is confidential then that confidentiality must be preserved and the information must not be disclosed. The preservation of the confidentiality of commercially sensitive material is essential to the efficient and proper working of the estimate and capacity determination processes under the Equipment Act which must prevail over any conflicting right of an airline to be given the competitor's confidential information. No comprehensive rule can be stated because it may be possible in some cases for the Minister to inform an airline of the gist of the information supplied by another without revealing , 57. confidential material while enabling that airline to sufficiently comprehend and respond to the matter. Nor can the method which the Minister employs to give an opportunity to an airline to deal with these matters be universally prescribed. In the present case, where the capacity determination process is ongoing and involves the ebb and flow of discussion and exchange of written material between officers of the Department and executives of the airlines, the rules of fair play may be sufficiently complied with during the course of this informal process without the necessity for formal requests for information or responses thereto. Indeed, provided the spirit of the rules of natural justice is observed in practice, the informality of the process will probably aid, rather than hamper or impede, the observance of any relevant right, interest or expectation of the airlines concerned. In my opinion there is no general rule that, where an airline has been afforded an opportunity to put relevant information or comment to the Minister or has been informed by the Minister of information obtained from another source, it is entitled to be given an opportunity to comment upon the view which the Minister may take of the observation or comment. Nor is there a general rule that the Minister is obliged to inform an airline of his draft or preliminary views for the purposes of making an estimate or capacity determination. I agree with what was said by Fox J. in Sinnathamby v. Minister for Immigration and Ethnic Affairs (1986) 66 A.L.R. 502 where his Honour held that, as the decision-maker had disclosed to the applicant the prejudicial allegation that was made against him (in the context of the Migration Act 1958) and invited comment thereon, he was . 58. "not required to give the applicant a chance to comment on the view that he had taken of it. If this were a general requirement under the Equipment Act the working of the processes of estimation and capacity determinations would be unnecessarily delayed and impeded. That is not to say that in an appropriate case the Minister may not be obliged to inform one of the airlines of a preliminary view he has formed or of a particular basis upon which he proposes to make his decision. Such a case may arise and nothing which I say in this case should be taken as excluding that possibility. The present case is not in my view such a case. It is unwise, if not impossible, to lay down any general rule in a case such as the present except to say that the rules of fairness do apply to the estimate and capacity determination processes of the Equipment Act; but the special features of the Equipment Act and the Matters to which I have referred sufficiently illustrate the point that the content and application of the rules must be determined with reference to each case. I am satisfied that in the present case the requisite interest, right or legitimate expectation existed in favour of Ansett and Australian Airlines in the case of capacity determination No. 54 and in favour of East-West in the case of capacity determination No. 6. Taking the case of Ansett itself for the moment. A glance at s. 12 shows that Ansett has an interest in the processes of estimating . 59. "traffic and capacity determinations. Also, a capacity determination under s. 12 gives rise to the obligations on Ansett, mentioned in s. 13 of the Equipment Act, not to provide on competitive routes air services capable of performing a number of revenue passenger kilometres in excess of that specified in a determination of capacity (para. 13(a)); to dispose of aircraft when directed to do so by the Minister, if the Minister is satisfied that Ansett has capacity in excess of that determined by him (para. 13(b)); and not to acquire any aircraft unless the Minister has certified that the acquisition of the aircraft will not result in Ansett having the use of an aircraft in excess of the aircraft required to provide the aircraft capacity determined by the Minister (para. 13(c)). Clearly, capacity determination No. 54 affects the interests of Ansett. Likewise it affects the interests of Australian Airlines. For substantially the same reasons East-West has an interest in the making of traffic estimates and capacity determinations pursuant to s. 18; the consequential and comparable obligations or prohibitions in East-West's case are imposed by s. 19. I turn to the criticisms made by Ansett, and joined in by Australian Airlines, in support of their submission that the rules of natural justice were breached by the Minister in this case. The criticisms of the approach adopted by the Minister in relation to both capacity determinations No. 54 and No. 6 centre on the alleged denial to Ansett and Australian Airlines of the opportunity to comment on the methodology or calculations employed by the Minister and the base figures and proposed growth estimates which 60. *he adopted. The methodology which the Minister adopts is plainly a Matter for him to determine in his judgement subject to the constraints imposed in the terms of the Equipment Act itself. Information about base figures and growth rates or estimates would necessarily, it seems to me, involve the disclosure of information; much of which would be confidential. Without the disclosure of the confidential material, the information would be of little assistance to Ansett or Australian Airlines. Not only was the Minister not bound to disclose to Ansett or Australian Airlines information confidential to East-West; in my view he was bound not to disclose it except with East-West''s consent. The same applies, of course, to information confidential to each of Ansett and Australian Airlines. In addition to general submissions that the observance of the rules of fair play do not extend to requiring the Minister to give Ansett and Australian Airlines a chance to comment on the Minister's methodology, provisional conclusions and matters of this kind, counsel for the Minister submitted that on the facts of this case the two major airlines in fact had an opportunity to submit material or comment to the Minister with respect to most of the matters which are the subject of criticism. It is to these matters that I now turn. 5.4 DENIAL OF NATURAL JUSTICE - CAPACITY DETERMINATION NO. 54 I propose to consider first various heads of criticism of the Minister in relation to capacity determination No. 54. Counsel for Ansett and Australian Airlines submitted that the Minister in making his estimate of traffic and determination of capacity took into account matters which though critical to his reasoning and prejudicial . 61. "to Ansett and Australian Airlines were not disclosed to either of them in order that they might comment upon them. 5.4.1 Factoring It was asserted that the Minister factored estimates for six months in order to estimate traffic for the five month period 1 February to 30 June 1987 using a factor which was not 150/181; a factor said to have been agreed by Ansett and Australian Airlines and mentioned to the Department in a telex to the Department of 14 October 1986. It was submitted that the two major airlines were denied an opportunity to comment on the method of factoring adopted by the Minister. At a meeting held on 24 September 1986 and convened by the Secretary of the Department pursuant to s. 14 of the Equipment Act, the Department undertook to get in touch with Ansett about reducing the capacity determination period from a six month period (1 January to 30 June 1987) to a shorter period. By letter dated 7 October 1986 the Department wrote to Ansett and suggested two alternative methods which could be used to estimate traffic to be carried for the period 1 February to 30 June 1987. The Department suggested that both Ansett and Australian Airlines discuss the preferred approach to be adopted and let the Department know their view. By telex to the Department Ansett in effect replied to the letter of 7 October stating that the matter had been discussed between the two major airlines and that it had been agreed that the traffic estimates for the capacity determination period would be based on a base period 1 January to 30 June 1987 and then adjusted downwards using a factor of 150/181. This . 62. was therefore a third method proposed by Ansett; different from each of the two methods put forward by the Department. Although invited to make submissions on the two methods suggested by the Department in the letter of 7 October Ansett declined to do so. The Minister in due course adopted the second method referred to in his letter of 7 October. In these circumstances the submission that Ansett was denied the opportunity to be heard on the method of factoring estimates adopted by the Minister has no foundation. 5.4.2 Growth Rate The Minister is said to have adopted a growth rate estimated by the BYTE, except for central and trans-Australian routes where Australian Airlines' growth rates were used rather than Ansett's growth estimates. It was submitted that Ansett was not afforded an opportunity to comment on this matter. The growth rate on competitive routes proposed by both Ansett and Australian Airlines was 2%. The Minister in fact adopted a higher rate of 2.76%. On non-competitive routes the Minister also adopted a higher growth rate than that submitted by Ansett. Although Ansett challenges the method of calculation of the base traffic by the Minister to which the growth rate is applied that is a distinct question from the matter under consideration at present. There is no foundation for this complaint. Ansett and Australian Airlines put to the Minister their proposed growth rates. He considered them. Neither airline was entitled to be informed of the conclusion reached by the Minister so that further comment could be made by them. . 63. 5.4.3 Diversion The Minister adjusted growth rates to allow for traffic diversion and market stimulation owing to proposed services by East-West on the routes Sydney/Coolangatta and Brisbane/Cairns during the period 1 February to 30 June 1987. On 16 September 1986 the Department wrote to Ansett seeking information to assist the Minister in making a capacity determination; including information as to each airline's estimate of its market share on each competitive route during the determination period. [It was clear that each of the two major airlines would need to take into account any diversion of traffic to East-West. By telex from Ansett to the Department, Ansett stated that it considered it almost impossible to make a meaningful assessment of the effect of East-West on the combined market of Ansett and Australian Airlines unless full details and understanding of East-West's capacity was known to Ansett. This was in essence a request for material much of which is in the confidential domain. Ansett was aware that the Minister intended to have regard to the impact of the services of East-West on competitive routes which included Sydney/Coolangatta and Brisbane/Cairns. It had the opportunity to make submissions on this question but it did not avail itself of it. This submission fails. . 64, 5.4.4 Utilisation Rates The Minister adopted aircraft utilisation rates for various kinds of aircraft based on figures supplied by the Independent Airfares Committee ("the IAFC") in preference to figures supplied by Ansett. On 18 September 1986 the Minister wrote to the IAFC seeking utilisation information on 26 September 1986. The IAFC telexed Ansett seeking its consent to the provision of this information to the Minister. By telex of 2 October 1986 Ansett gave its consent to the IAFC to this course of action. Ansett also stated that it wished to have a copy of any advice provided to the Minister containing this data to ensure that Ansett was fully aware of the information on which the Minister was basing his capacity determinations. The IAFC provided this information to the Minister on 20 October 1986 and also provided it to Ansett. Hence, Ansett knew that the Minister was basing his capacity determinations upon information provided by the IAFC. It received that information itself and had the opportunity to be heard on it but chose not to make submissions on the IAFC material. This submission fails. 5.4.5 Block Speeds The Minister averaged the block speed figures supplied by Ansett and Australian Airlines for Boeing 727 aircraft and used the average in calculating fleet productivity. 65. Again, in my opinion there was no obligation imposed on the Minister that he inform Ansett and Australian Airlines of any provisional conclusion that this was the method he proposed to employ. In any case, averaging block speeds has no practical effect of an adverse character upon Ansett or Australian Airlines. The system of averaging was such that no difference is made to the capacity for either of the two major airlines. Capacity loss to one is made up to the other and then the gains or losses, as the case may be, are divided between them. This submission fails. 5.4.6 Seating Density The Minister averaged the number of seats on Ansett's Boeing 737 aircraft and on Australian Airlines' Boeing 737 aircraft and used the average number of seats to calculate fleet productivity. The answer to this criticism is the same as in the immediately preceding criticism 5.3.5 with respect to block speeds. 5.4.7 Load Factor - Competitive Routes Again, for the reasons given earlier, there was no denial of natural justice to Ansett and Australian Airlines. They had put their case to the Minister. He took the course he did. Fairness did not require him to go back to the two major airlines and give them a further opportunity to comment on his proposed load factor. The Minister adopted an optimum passenger revenue load factor for competitive routes of 74.6% in preference to the load factor of 66. vw . 74% proposed by Ansett. As I said earlier, the Department used a higher growth rate, namely, 2.76%, than the growth rate agreed on by the two major airlines of 2%. The Minister accepted this load factor of 2% as the starting point, but adjusted the growth rate upwards which worked to the benefit of the two major airlines. It resulted in a higher load factor, namely, 74.6% rather than the 74% proposed by the major airlines. The alteration from 74% to 74.6% occurred because of the higher growth rate on some routes. 5.4.8 Load Factor - Non-Competitive Routes The Minister rejected the load factors proposed by Ansett for its non-competitive routes and adopted substantially lower load factors on the ground that a portion of the traffic carried by Ansett on its non-competitive routes should be regarded as traffic on competitive routes. For the reasons already given, no rule of fairness was contravened by the Minister. 5.4.9 Different Load Factors - Non-Competitive Routes The Minister adopted a different optimum passenger revenue load factor for the non-competitive routes of Ansett and Australian Airlines. The load factor was adjusted downwards by the Minister for the purpose of reconciling the transferring of some non-competitive routes, as classified by Ansett, to a competitive routes classification. The Department accepted Ansett's submission with respect to load factors. What it did not accept was Ansett's . 67. * » categorisation of some competitive routes as non-competitive routes. The transfer of some of Ansett''s routes from non-competitive to competitive has been a dispute of long standing between the Department and Ansett. Ansett was aware of the Department's attitude in this matter and, generally speaking, of its likely actions with respect to it. It was open for Ansett to make submissions on this matter if it chose to do so, but it did not. The load factor for Ansett for non-competitive routes was as submitted by it to the Department except for the adjustment to routes to which reference has already been made. 5.4.10 Adjustment of Traffic The Minister adjusted estimated traffic for Sydney/Coolangatta and Brisbane/Cairns to take account of services to be operated by East-West on those routes during the period 1 February to 30 June 1987. Ansett was aware at all relevant times that East-West had received licences to operate routes within Queensland. Ansett was aware that East-West was conducting air services within Queensland and was proposing to expand them and commence further services on the Gold Coast routes and that these would necessarily have an effect upon the estimated traffic carried by Ansett. Also, in a letter from the Department to Ansett of 16 September 1986 in which reference was made under point 5.4.3, the Department referred to an adjustment necessary to take account of competitive traffic being carried by the regional operator, East-West. Again, there was no denial of opportunity to 68. Ansett or Australian Airlines of an adequate opportunity to put their case or cases. 5.4.11 Excess Traffic The Minister concluded that Ansett will own, operate or otherwise have available for use, aircraft in excess of the aircraft required to provide the aircraft capacity determined. The Minister reached this conclusion after taking into account the relevant material before him. Ansett was given an opportunity to put its views to the Minister. Again, it was not, in my opinion, entitled to comment on the Minister's provisional view. 5.4.12 Stability of Industry The Minister concluded that capacity determination No. 54 would not be detrimental to the stability of the domestic air transport industry. This was a conclusion of the Minister after taking into account all of the relevant material before him. As in the case of 5.4.11, no ground has been established as to why he could not do this as he did. 5.4.13 Draft Capacity Determination No. 6 The Minister took into account the contents of draft capacity determination No. 6 for East-West in making capacity determination No. 54. 69. This is fundamentally the same ground of attack as 5.4.10 above relating to adjustment of traffic. This submission fails for the reasons stated there. 5.4.14 East-West's Submission to the Minister on Capacity Determination No. 6. The Minister took into account the submission for capacity determination No. 6 provided by East-West to the Department in making capacity determination No. 54. This criticism reflects the fact that certain of the material before the Minister with respect to what became capacity determination No. 54 was before him also with respect to capacity determination No. 6. It must be remembered that at that time East-West had commenced services on its Queensland licensed routes and had announced its intention to introduce three Boeing 737-200 aircraft. Ansett was aware of these matters and of the fact that East-West had obtained licences to operate Queensland routes. Ansett was also aware that East-West would be making a submission to the Minister and that it would contain confidential information. Clearly Ansett had no entitlement to be informed of that information, nor did it seriously contend that it did have such a right. No ground of attack has been established under this head. 5.4.14 Other Submissions - The Minister took into account the BTE survey "A Fourth Survey of Passenger Response to EWA Discount Fares on Trunk Routes". - The Minister took into account the BTE Occasional Paper No. 79 of 1986. 70. - The Minister took into account an IAFC paper entitled "IAFC Efficiency Standards" dated 20 October 1986. Ansett was well aware that the Department took into account the BTE and IAFC material and information. Indeed, Ansett had consented to the Department's receiving information from the IAFC. Reference to this was made above under item 5.4.4 and therefore for similar reasons none of these grounds of attack has been established. 5.5 DENIAL OF NATURAL JUSTICE - CAPACITY DETERMINATION NO. 6 I turn then to the criticisms of Ansett with respect to capacity determination No. 6. I shall also deal with these in turn. 5.5.1 Secretary's Decision The Minister took into account the Secretary's decision that he was not satisfied that the scheduled passenger air services conducted by East-West over the successive prescribed routes Sydney/ Yulara and Yulara/Perth were not predominantly for use for the purpose of the carriage of passengers over separate prescribed routes. This point was but faintly pressed in argument, and this is not surprising because the Minister is required to have regard to the Secretary's decisions of this kind pursuant to para. 18(4)(h) of the Equipment Act. wo 71. 5.5.2 Stability of the Industry The Minister determined that the grant of additional aircraft capacity to East-West to enable it to carry the estimated traffic on prescribed routes would not be detrimental to the stability of the domestic air transport industry. This was a conclusion reached by the Minister from all the material that was before him and which he was entitled to reach if he wished. I see no denial of natural justice in the decision-making process followed by the Minister. 5.5.3 Rast-West's Submission to the Minister The Minister took into account the submission by East-West to the Minister applying for a certificate for the acquisition of an additional aircraft without giving the two major airlines sufficient opportunity to comment on it. Ansett was aware that an additional aircraft was being sought by East-West and the submission from East-West, like the submission in relation to the other capacity determination by Ansett and the separate submission by Australian Airlines, contained considerable confidential information. No ground has been established to support the conclusion that there was any absence of a duty of fairness. 5.5.4 Other Submissions - The Minister took into account BTE growth forecasts. 72. - The Minister took into account the BTE survey "A Fourth Survey of Passenger Response to EWA Discount Fares on Trunk Routes". - The Minister estimated the rate of traffic increase in East-West's services for the period 1 February to 30 June 1987 over the period 1 February 1986 to June 1986 would be 12.64%. - The Minister assumed that the type of aircraft which East-West would have available to it during the period 1 February to 30 June 1987 would include aircraft in respect of which East~West was seeking an acquisition certificate. The same considerations and answers apply with respect to these matters as in the case of the equivalent submission in relation to capacity determination No. 54. 5.6 CONCLUSION - SUBMISSIONS ON NATURAL JUSTICE In my opinion none of the grounds of attack have been established as a matter of fact on the evidence. In addition, certain of the criticisms are in essence complaints that Ansett did not have access to confidential information of East-West which was provided by that company to the Minister for the purposes of the traffic estimates and capacity determinations. Generally, I am satisfied on the evidence that in the course of discussions and exchange of material relating to the capacity determinations, both Ansett and Australian Airlines had sufficient opportunity to furnish whatever information they wished on relevant matters to the Minister and to seek further © @ ow" 73. clarification from him on matters that concerned them. To the extent that they sought clarification it was forthcoming. Neither Ansett nor Australian Airlines was denied the opportunity to make submissions on any materially relevant matters. Nor am I satisfied that the Minister was obliged to inform either of the airlines of his view or evaluation of the material that either of them had put forward before he made the relevant traffic estimates and capacity determinations. 6. CONCLUSION Ansett and Australian Airlines have not established their case for a review of the Minister's decisions relating to capacity determinations No. 54 and No. 6. All three applications for review are dismissed. Ansett must pay the costs of the Minister and East-West of proceeding G584/1986; and I make no order as to the costs of Australian Airlines of that proceeding since it was joined as a respondent during the hearing for the purpose of ensuring that it was bound by the Court's orders and in argument supported Ansett's case. Ansett and Australian Airlines must pay the costs of the Minister and East-West of proceeding G585/1986. Australian Airlines must pay the costs of the Minister and East-West of proceeding VG429/1986. cort y tnat ths and the aetna —Kro {an) pressing payss are atus cony of the Reas.As fe. aon) rain cA tus Honour we, Sstties . 5 Nees Dads 1G. Qe MES \AS 4 wae ee Counsel and Solicitors for Ansett Transport Industries Ltd. Counsel and Solicitors for Australian National Airlines Commission Counsel and Solicitor for Peter Frederick Morris Counsel and Solicitors for East-West Airlines (Operations) Limited Dates of Hearing: Date of Judgment: 74. T.E.F. Hughes Q.C. and J.D. Merralls 0.C. with N.J. Young and J.G. Santamaria instructed by Messrs. Arthur Robinson & Hedderwicks. J.I. Fajgenbaum Q.C. with D. Beach instructed by Messrs. Phillips Fox. D. Graham Q.C. with R. Robson instructed by the Australian Government Solicitor. R.A. Conti Q.C. with M. Martin instructed by Messrs. Sly & Russell. 2, 3, 4, 5, 6, 9, 17 February 1987. 10, 11, 16 and 20 May 1987.