FEDERAL COURT OF AUSTRALIA National Competition Council v Hamersley Iron Pty Ltd [1999] FCA 1370 PRACTICE AND PROCEDURE – Competency of appeal – party did not actively participate in hearing – party submitted to order of Court – whether that party is precluded from appealing. Trade Practices Act 1974 (Cth): s 44F(1), s 44F(2)(b), s 44W(5) Pt IIIA Federal Court Rules: O 52 r18 The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 - distinguished Banque Commerciale S A v Akhil Holdings Limited (1990) 169 CLR 279 - cited Petersen v Moloney (1951) 84 CLR 91 - cited NATIONAL COMPETITION COUNCIL v HAMERSLEY IRON PTY LTD & ORS VG 403 of 1999 HEEREY, GOLDBERG & FINKELSTEIN JJ MELBOURNE 5 OCTOBER 1999 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 403 of 1999 BETWEEN: NATIONAL COMPETITION COUNCIL Appellant AND: HAMERSLEY IRON PTY LIMITED (ACN 004 558 276) First Respondent ROBE RIVER MINING CO PTY LTD (ACN 008 694 246) Second Respondent MITSUI IRON ORE DEVELOPMENT PTY LTD (ACN 008 734 361) Third Respondent NORTH MINING LIMITED (ACN 000 081 434) Fourth Respondent NIPPON STEEL AUSTRALIA PTY LIMITED (ACN 001 445 049) Fifth Respondent SUMITOMO METAL AUSTRALIA PTY LTD (ACN 001 444 604) Sixth Respondent HOPE DOWNS MANAGEMENT SERVICES PTY LTD (ACN 081 380 930) Seventh Respondent JUDGE: HEEREY, GOLDBERG & FINKELSTEIN JJ DATE OF ORDER: 5 OCTOBER 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The first respondent's motion filed 16 August 1999 is dismissed. 2. The first respondent pay the appellant's costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 403 of 1999 BETWEEN: NATIONAL COMPETITION COUNCIL Appellant AND: HAMERSLEY IRON PTY LIMITED (ACN 004 558 276) First Respondent ROBE RIVER MINING CO PTY LTD (ACN 008 694 246) Second Respondent MITSUI IRON ORE DEVELOPMENT PTY LTD (ACN 008 734 361) Third Respondent NORTH MINING LIMITED (ACN 000 081 434) Fourth Respondent NIPPON STEEL AUSTRALIA PTY LIMITED (ACN 001 445 049) Fifth Respondent SUMITOMO METAL AUSTRALIA PTY LTD (ACN 001 444 604) Sixth Respondent HOPE DOWNS MANAGEMENT SERVICES PTY LTD (ACN 081 380 930) Seventh Respondent JUDGE: HEEREY, GOLDBERG & FINKELSTEIN JJ DATE: 5 OCTOBER 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The present motion before the Court is for an order pursuant to O 52 r18 of the Federal Court Rules that the appeal of the National Competition Council ("the NCC") is incompetent and should be dismissed. The application arises in the following circumstances. Hamersley Iron Pty Limited ("Hamersley") operates six mines in the Pilbara region in Western Australia. Hamersley has a railway line which, in general terms, including spur lines runs from points proximate to these mines to Dampier on the coast of Western Australia. Robe River Mining Co Pty Ltd, Mitsui Iron Ore Development Pty Ltd, North Mining Limited, Nippon Steel Australia Pty Limited and Sumitomo Metal Australia Pty Ltd carry on business under the registered business name "Robe River Iron Associates" which is the registered business name for the unincorporated Robe River Joint Venture ("Robe"). Robe operates a mine in the Pilbara which mine is linked by railway to port and processing facilities at Cape Lambert. Robe is planning to develop a new mine at West Angelas in the vicinity of one of Hamersley's mines. Robe's railway crosses Hamersley's railway at a point called the Robe overpass. 2 Hope Downs Iron Ore Pty Ltd holds rights to an undeveloped iron ore deposit in the vicinity of one of Hamersley's mines and a related company Hope Downs Management Services Pty Ltd ("Hope Down") is managing the development of the possible new mine. Hope Downs has approached Hamersley to seek access to its railway for the purpose of ore transportation from the mine. 3 On 24 September 1998 Robe made an application to the NCC under s 44F(1) of Pt IIIA of the Trade Practices Act 1974 (Cth) ("the Act") to recommend to the designated Minister (the Commonwealth Treasurer) the declaration of a service. The application identified Hamersley as the provider of the service and the owner of the facility to which the application related. Robe was in effect seeking the NCC's recommendation that it have access to the rail track service provided by Hamersley by means of a facility owned by Hamersley including mainline, signalling, control systems, maintenance and protection systems but not including locomotives, rolling stock and operational personnel. The access is sought by Robe in connection with the development of its West Angelas iron ore project. 4 On 25 September 1998 the NCC wrote to Hamersley notifying it that the NCC had accepted the application by Robe and on 29 September 1998 the NCC released an issues paper in respect of the application for declaration. 5 On 30 October 1998 Hamersley filed an application in the Federal Court in which it sought a declaration: "the bulk iron ore rail track transportation services provided by the Hamersley Rail Iron Infrastructure Facility (the Hamersley rail track service) as defined in Part 4 of the Declaration Application (the access application) filed by the second to sixth respondents (RRIA) under section 44F(1) of Part IIIA of the Trade Practices Act 1974 (the Act) is not a service within the meaning of section 44B of the Act". In the alternative a declaration was sought that Hamersley had the right to sole and exclusive possession and control of the Hamersley rail infrastructure facility giving rise to the Hamersley rail track service which right was a protected contractual right within the meaning of s 44W(5) of the Act. A declaration was also sought that the NCC did not have jurisdiction or power to accept or consider Robe's application or to make a recommendation regarding declaration of the Hamersley rail track service to the Minister pursuant to s 44F(2)(b) of the Act. An order was also sought that the NCC provide Robe with no less than five days' written notice of its intention to make a declaration recommendation to the Minister pursuant to s 44F(2)(b) of the Act. 6 After the application was filed the NCC decided to pursue its consideration of the Robe application for declaration, to file a defence in the proceeding putting in issue all relevant matters and otherwise not to take an active part in the proceeding. The NCC adopted this approach because it believed if it took an active part in the proceeding it could be seen to have formed a view on the Robe application for declaration, which was not in fact the case. 7 A directions hearing was held before Kenny J on 4 December 1998 at which directions were given as to the further conduct of the proceeding. Hope Downs was joined as a respondent as it proposed to seek to negotiate access itself to the Hamersley service in accordance with Pt IIIA of the Act. In the course of the hearing senior counsel for the NCC informed her Honour that the NCC was conscious of the decision in The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 and the need for the NCC to be impartial. He said that the NCC was primarily concerned about the integrity of its own processes and that it was prepared to give an undertaking that it would provide Robe with no less than five days' written notice of its intention to make a declaration recommendation to the Minister pursuant to s 44F(2)(b) of the Act. He stated: "We don't at this stage expect to be taking a particularly active part in the proceeding altogether." 8 On 22 December 1998 the NCC filed a defence in which it put in issue all relevant matters. In response to the allegations that it did not have jurisdiction or power to accept the access application it said that it would form a view as to the truth of that allegation in the course of its consideration of the access application. 9 There were further directions hearings before Kenny J on 22 January 1999 and 16 March 1999. At those hearings senior counsel for the NCC informed her Honour of the progress of the application and that the Council's current estimate was that it would be in a position to make a recommendation during June 1999. At the directions hearing on 16 March 1999 senior counsel said that the NCC would not be putting on any material of its own and that depending on events up to the commencement of trial it might be that on the first day there would simply be a request by the NCC to be excused from further attendance but that no decision had been made about that matter at that time. 10 On 16 April 1999 the solicitor for the NCC wrote to Kenny J's associate in the following terms: "1. The hearing of this matter is due to commence on 19 April 1999. I am instructed to write to the Court in the following terms. 2. The First Respondent does not wish to be represented at the hearing. It does not wish to make submissions save as to where injunctive relief or a costs order is sought against it. It will abide by any order of the Court. Accordingly it asks to be excused from further attendance. 3. The First Respondent will be following developments in the case and at a future time it may be that [it] will seek to be represented and to make submissions. If this does happen it will of course give notice to the parties and to the Court. 4. I am sending a copy of this letter to the parties." (emphasis added) 11 The trial of the proceeding commenced on 19 April 1999 and on the fourth day of the hearing, 22 April 1999, senior counsel for the NCC appeared and informed Kenny J that the NCC would wish to be heard on the question of whether an injunction should be granted against the NCC should the Court find the service described in Robe's application for declaration was a service under Pt IIIA of the Act but that Hamersley had a protected contractual right within the terms of s 44W of the Act. Kenny J granted leave to the NCC to file written submissions on that matter and these were filed on 26 April 1999. The submissions were directed solely to whether the Court should grant an injunction against the NCC restraining it from further dealing with Robe's access application on making a recommendation to the Minister pursuant to s 44F(2)(d) of the Act. 12 The trial before Kenny J concluded on 28 April 1999 and her Honour reserved her decision. 13 On 21 June 1999 the President of the NCC wrote to the parties to the proceeding and to Kenny J's associate, referring to the undertaking previously given to the Court and giving notice of the NCC's intention to forward its recommendation to the Minister on 28 June 1999. The letter noted that the recommendation would be forwarded by overnight courier and it was expected that the Minister would receive the recommendation on 29 June 1999. 14 On 28 June 1999 Kenny J published and handed down her reasons for judgment. In those reasons her Honour concluded that Hamersley's use of its railway line was part of its production process and that the service in respect of which access was sought came within sub‑par (f) of the definition of "service" in s 44B of the Act. Her Honour declared that: "1. The Rail Track Service, as defined in Part 3 of the application for a declaration recommendation made pursuant to section 44F(1) of Part IIIA of the Trade Practices Act 1974 (Cth) (the Act) by the second to sixth respondents, is not a service within the meaning of section 44B of the Act. 2. The first respondent does not have power to make a recommendation regarding declaration of the Rail Track Service to the designated Minister pursuant to section 44F(2)(b) of the Act." On that day counsel for the NCC said that no injunctive relief should be granted as the NCC would abide the decision of the Court. Kenny J directed the parties to file submissions on the issue of costs. 15 On 30 June 1999 the NCC sent a letter to Hamersley's holding company stating, inter alia, that: "… as the Federal Court has found that Hamersley's rail line service is not a service under Part IIIA, I wish to confirm that the Council cannot, and will not, make a recommendation." In its submissions on costs the NCC submitted: (a) although it was a necessary party to Hamersley's application, the parties with the real interest in the outcome of the dispute were Hamersley, Robe and Hope Downs; (b) in the proceeding, the NCC made no submissions on the substantive questions before the Court; (c) the NCC indicated at the outset of the proceeding that it would play only a limited part in the proceeding and leave the other parties to fight out the substantive issues; (d) this was not a case where it was appropriate for the NCC to do more than file an appearance and submit to any order the Court might make. 16 On 3 August 1999 Kenny J ordered Robe and Hope Downs to pay 73% of Hamersley's costs and to pay the NCC's costs of and incidental to its participation in the proceeding. 17 Hope Downs has appealed against the declarations made by Kenny J. The NCC has also appealed against those declarations and, pursuant to leave granted, amended its notice of appeal on 3 September 1999. Robe has appealed but only against the costs order. These appeals have been listed for hearing on 22 November 1999 before a Full Court differently constituted. 18 Hamersley objects to the competency of the NCC's appeal on three grounds which it submits are interrelated: (a) The NCC is bound by the conduct of its case in the proceeding and it elected not to make submissions on the substantive issues. It ought not to be allowed to prosecute an appeal on the substantive issues. (b) In its amended notice of appeal the NCC seeks to raise arguments that were not raised before Kenny J or dealt with by her. Neither of the matters raised in grounds 9 and 10 of the NCC's notice of appeal are raised in Hope Downs's notice of appeal and no party contended at trial that the legislative purpose of Pt IIIA of the Act is "the facilitation of access to infrastructure facilities displaying natural monopoly characteristics" as contended in ground 10. If such an issue had arisen at trial Hamersley would have led evidence from expert economists addressing the concept of "natural monopoly" and its defining characteristics. (c) The NCC falls within the principle discussed in The Queen v Australian Broadcasting Corporation; Ex parte Hardiman (supra), namely that if the NCC becomes a protagonist in this Court there is a real risk that by doing so it will endanger the impartiality it is expected to maintain in any subsequent proceeding which takes place if and when the relief is granted. 19 As to the first ground, the NCC's limited participation was, in our view, understandable in the light of the fact that Robe and Hope Downs were putting the argument in favour of jurisdiction. But nothing the NCC did or said amounted to a representation that it would not exercise any right of appeal that might be available in the event of an adverse decision by the trial judge. Indeed the NCC expressly reserved its position as to future participation in its letter of 16 April 1999. Nothing it did in its conduct of the trial amounted to an abandonment of that reservation. 20 No estoppel has been raised. As to election there was no unequivocal choice by the NCC between the alternatives of appealing or not appealing. Nor did Hamersley change its position to its detriment. It had to argue the cases raised by Robe and Hope Downs in any event. 21 Limited participation for a time in a proceeding is not necessarily inconsistent with full participation subsequently: Banque Commerciale S A v Akhil Holdings Limited (1990) 169 CLR 279; Petersen v Moloney (1951) 84 CLR 91. In the present case there is the further practical circumstances that the NCC is a party to the Hope Downs appeal and will be able, as of right, to advance arguments in that appeal. 22 The second ground (the failure to raise the "natural monopoly" point) is not a matter of competence. It is a matter for the Court which hears the substantive appeal. Nothing that we say should be taken as an indication that Hamersley may not have good grounds for complaint in this regard. 23 As to The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (supra) at 35, the language of the High Court does not suggest that active participation by an administrative decision‑maker in judicial review litigation (including appeals) is a matter of jurisdictional competence. The presentation of an active case by the Australian Broadcasting Tribunal in that case was said to be an "unusual course" and "not one which [the Court] would wish to encourage". Such a course should be regarded as "exceptional". All this necessarily assumes that there can be a case which is exceptional. It is a matter of degree. 24 The NCC argues as follows: "Now that the Council has concluded its consideration of the Robe application for declaration, it wishes to take an active role in the proceeding. The principal issue in the proceeding – concerning the definition of 'service' in section 44B of the Trade Practices Act – is, in the Council's view, a matter of great public significance. It affects the Council's jurisdiction to consider applications and is fundamental to the implementation of the competition policy on which Part IIIA of the Trade Practices Act is based. Accordingly, the Council is most desirous of being heard on this question on the appeal in this proceeding." We accept that contention. Part IIIA of the Act is a major new area of competition regulation. The body entrusted with it by Parliament should have some say in litigation concerning fundamental principles as to its operation. 25 The present case is distinguishable from The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (supra) where the litigation turned on the circumstances of the Tribunal's conduct of an individual case. 26 Hamersley's motion will be dismissed with costs. I certify that the preceding twenty‑six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of Heerey, Goldberg & Finkelstein JJ Associate: Dated: 5 October 1999 Counsel for the Appellant: A J Myers QC and M G Rinaldi Solicitor for the Appellant: Herbert Geer & Rundle Counsel for the First Respondent: N J Young QC and Ms M Sloss Solicitor for the First Respondent: Arthur Robinson & Hedderwicks Date of Hearing: 5 October 1999 Date of Judgment: 5 October 1999