Australian Gas Light Company (ACN 052 167 405) v Australian Competition & Consumer Commission (No 3) [2003] FCA 1525

FEDERAL COURT OF AUSTRALIA

Australian Gas Light Company (ACN 052 167 405) v Australian Competition & Consumer Commission (No 3) [2003] FCA 1525

TRADE PRACTICES – mergers and acquisitions – partial acquisition of electricity wholesaler by electricity retailer – whether likely to have effect of substantially lessening competition in a market – National Electricity Market – whether wholesale market in electricity and derivative contracts – whether separate wholesale markets in electricity and derivative contracts – geographic scope – temporal sub-markets – inter-regional supply constraints - retail markets for delivery of electricity to end users – market transactions governed by bidding, dispatch and pool pricing – auction system – pool price volatility – necessity for hedging through derivative contracts – acquisition of partial interest in generator creating natural hedge for retailer – whether retailer likely to reduce hedge contract cover – whether generator with greater exposure to spot price more likely to exercise market power increasing price bids – apprehended cascade of vertical integration – raised barriers to entry into wholesale and retail markets – market foreclosure – market characteristics – application by retailer for declaration of non-contravention of s 50 – onus of proof – 'likely' – 'substantial lessening of competition' – nature of threshold test – declaratory relief – discretionary factors – whether authorisation proper alternative – differences between administrative authorisation and judicial declaration – whether application for declaration confers illegitimate forensic advantage on applicant – whether deprives regulator of legitimate forensic advantage – declaration granted – subject to undertaking to Court previously offered to ACCC Trade Practices Act 1974 (Cth) s 50, s 87B, s4, s 163A National Electricity (South Australia) Act 1996 (SA) s 6 National Electricity (Victoria) Act 1997 (Vic) s 6 National Electricity (New South Wales) Act 1977 (NSW) s 6 Electricity - National Scheme (Queensland) Act 1997 (Qld) s 6 Electricity (National Scheme) Act 1997(ACT) s 5 Electricity Industry Act 1993 (Vic) Electricity Industry Act 2000 (Vic) Electricity Industry Legislation (Miscellaneous Amendments) Act 2000 Electricity Industry (Residual Provisions) Act 1993 (Vic) Office of the Regulator-General Act 1994 (Vic) Essential Services Commission Act 2001 (Vic) Judiciary Act 1903(Cth) s 39B(1A) Federal Court of Australia Act 1976 (Cth) s 21, s 23. Electricity Industry (Prohibited Interests) Regulations 2003 Australian Gas Light Company (ACN 052 167 405) v Australian Competition & Consumer Commission (No 2) [2003] FCA 1229 cited Re Queensland Co-operative Milling Association; Re Defiance Holdings Ltd (1976) 25 FLR 169 applied Re Howard Smith Industries Pty Ltd (1977) 15 ALR 645 cited Outboard Marine Australia Pty Ltd v Hecar Investments (No 6) Pty Ltd (1982) 44 ALR 667 cited Broken Hill Pty Co Ltd v Trade Practices Tribunal (1980) 31 ALR 401 cited Tilmanns Butcheries Pty Ltd v Australasian Meat Industry Employees Union (1979) 42 FLR 331 discussed Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 cited News Limited v Australian Rugby League Football Ltd (1996) 64 FCR 410 cited Munro Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110 discussed Trade Practices Commission v Ansett Transport Industries (Operations) Pty Ltd (1978) 32 FLR 305 cited Radio 2 UE Sydney Pty Ltd v Stereo FM Pty Ltd (1982) 62 FLR 437 cited Trade Practices Commission v Australian Iron and Steel Pty Ltd (1990) 22 FCR 305 cited Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 applied Stirling Harbour Services Pty Ltd v Bunbury Port Authority (2000) ATPR 41-752 cited Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission (2003) 201 ALR 636 cited Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 64 FLR 238 followed Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 cited Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd (1984) 157 CLR 149 cited Whitehouse v Carlton Hotel Property Ltd ` (1987) 162 CLR 285 cited Levine Clark [1962] NSWR 686 cited Re Broadcasting Station 2GB Pty Ltd [1964-5] NSWR 1648 Berlei Hestia (NZ) Ltd v Fernyhough [1980] 2 NZLR 150 Abrasive Materials Pty Ltd v Australian Fused Materials Pty Ltd (1998) 16 ACLC 1172 cited Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd (1991) 33 FCR 158 cited Queensland Wire Industries Pty Ltd v The Broken Hill Pty Co Ltd (1988-89) 167 CLR 177 cited QIW Retailers Ltd v Davids Holdings Pty Ltd (No 3) (1993) 42 FCR 255 cited Re Tooth Co Ltd and Tooheys Ltd (1979) 39 FLR 1 applied Commonwealth v Stirling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 cited Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334 cited