A.E. Bishop & Associates Pty Ltd v Trade Practices Commission

[1989] FCA 621

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IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY )	NO. NG 579 of 1989

)

GENERAL DIVISION )

BETWEEN:  A.E. BISHOP & ASSOCIATES PTY
LIMITED

Applicant

AND :  TRADE PRACTICES COMMISSION

First Respondent

AND :  TRW AUSTRALIA LIMITED

second Respondent

28 September 1989

EX TEMPORE REASONS FOR JUDGMENT

A preliminary question of some importance has arisen in this application. The question is whether a party who seeks to challenge the correctness in law of a decision of the Trade Practices Commission ("the Commission") should make his challenge in the manner envisaged by the Trade Practices Act 1974 ("the Act") viz. by an application to the Trade Practices Tribunal ("the Tribunal") under s.101 of the Act for a revlew of the Commission's decision and whether, if the challenge is made by way of an application for an order of revlew under the Administrative Decisions (Judicial Revlew) Act 1977 ("the Judicial Review Act"), the Court should decline to entertain the application on the discretionary

grounds referred to in s.l0(2)(b) of that Act.

The applicant ("Bishop") 1s a prominent inventor and designer of steering gears for motor vehicles and of processes and machines for their manufacture. It is said to be one of the world leaders in this field. It has successfully licensed the use of its patents and technical information to steering gear manufacturers in several countries.

James N. Kirby Products Pty Limited ("Kirby") is Bishop's exclusive licensee in Australia. Bishop depends upon Kirby for sales to Australia's major motor vehicle manufacturers and for the support and collaboration necessary for the successful promotion of the applicant's technology to existlng and potential licensees and their customers around the world.

TRW Australia Limited ("TRW") is one of a group of many related companies in different countries engaged in the design, manufacture and supply of steering gears for motor vehicles which compete directly with those made under Bishop's patents or by use of its technical information. TRW is Bishop's most significant

competitor in the world.

TRW has applied for authorisation under s.88(9) of the Act to acquire all of the issued shares in Klrby or, in the alternative, substantially all of Klrby's assets relating to the design, manufacture, assembly and sale of steering gears. On 9 August 1989 the Commission, by majority, granted the authorisation. Bishop claims that the acquisition will enable TRW and its related companies to limit and eventually eliminate the use of Bishop's patents and technical information in Australia and in other countries. It also claims that the acquisition will enable TRW and its related companies to use in their competition with Bishop and its other licensees information as to its business plans obtained pursuant to a licence agreement entered into between Bishop and Kirby, to the detriment of Bishop.

On 29 August 1989 Bishop applied pursuant to s.101 of the Act for a review by the Tribunal of the Commission's determination. A review by the Tribunal of a determination of the Commission is a re-hearing: s.lOl(2). The application for review has already been listed before the President of the Tribunal. On 26 September 1989 he gave directions which, if followed by the parties, will ensure that the matter will be ready for hearing some time this year. I understand that the President has indicated to the parties that, in all probability, the Tribunal will be able to hear the matter

in December 1989.

The application before this Court is an application under the the Judicial Review Act for an order of review of the Commissionrs decision to grant the authorisation. Bishop claims that the decision involves an error of law insofar as the Commission expressed itself as being satisfied that, in the event of a material change of circumstances after the completion of the proposed acquisition, Bishop's position as TRW's competitor could be protected by the exercise by the Commission of its power to revoke its decision. It is further claimed that the making of the Commission' S decision was not a proper exercise of the power conferred upon it by s.88(9) of the Act in that it took into account an irrelevant consideration, namely, the existence of its power to revoke its decision in the event of a material change of circumstances after completion of the proposed acquisition.

It is common ground that the Commission's decision is one to which the Judicial Review Act applies and that Bishop has standing to bring these proceedings under that Act. However, as well as seeking to support the correctness in law of the Commission's decision, the respondents submit that the Court should, in the exercise of the discretion vested in it by s.l0(2)(b) of the Judicial Review Act, refuse to grant the application for the reason that adequate provision is made by the Act

under which Bishop is entitled to seek a review by the	Tribunal of the Commission's decision. It is to that
submission that I now turn.
In a case, such as the present, where the Court undoubtedly has jurisdiction to entertain an application and grant relief under the Judicial Review Act, an onus rests on the respondents to persuade the Court that it should not exercise the jurisdiction: Kelly v Coats (1981) 3 5 A.L.R. 93 per Toohey J at p.94. The respondents submit that, on the facts of the present case, the onus is discharged. In my opinion, they are correct in this submission.
It is important in the interests of the parties that the question whether the Commission's determination should stand should be determined as quickly as possible. TRW wishes to act upon the authorisation expeditiously. It is unable to move forward with its plans until the proposed acquisition is completed. It plans to invest approximately $50 million in its Australian operations, including the proposed acquisition of Kirby for about $12 million. The purpose of this investment is to up-grade TRWrs Australian operations. TRW is unable to implement its plans, which involve major restructuring of its operations, until it knows whether it will be able to merge its existing business with the Kirby business.
It is clear from the reasons given by the Commission that it regarded the matter which it had to
decide as being finely balanced. That this is so appears not only from the Commission's reasons, but also from the fact that its decision was made by a majority.
It was virtually common ground before me that the losing
party before the Commission will inevitably exercise its right to a re-hearing of the matter before the Tribunal. Thus, it will be the Tribunal which will ultimately decide whether the authorisation sought by TRW should be granted. This will be the case whether the matter is decided on the re-hearing of the Commission's determlnation of 9 August 1989 or on a re-hearing of any subsequent determination.
To say the least, there is a very significant risk that the Tribunal's consideration of the matter will be delayed if this Court considers and rules upon the questions which Bishop claims the Commission decided erroneously. If the Court determines these questions favourably to Bishop there is at least the possibility that one of other of the respondents may exercise its rights of appeal. In that event, the delay could be very considerable indeed.
Mr Limbury, who appeared for Bishop, submitted that if his client's application succeeds in this Court and the Commissionls decision is set aside, the Court should give a direction to the Commission to redetermine the matter within seven days. He submitted that if this
were done, there would be no undue delay in the final determination of the matter by the Tribunal, which could
still review the Commission's determination in the latter pact of this year. I do not think this submission is sound. In the first place, it ignores the possibility that an appeal may be lodged against a decision setting aside the Commission's determination. Secondly, even if there were no appeal, it would be necessary for the Commission to re-determine the application for authorisation in the light of this Court's reasons setting aside its original determination. It would be unreasonable for this Court to direct the Commission to re-determine the matter within seven days. The re-determination would not be a formality and the Commission would be entitled to a reasonable time to undertake the re-determination. If it were called upon to re-determine the matter, it could well take the view that it should give notice to the persons who have already made submissions to it. These include Bishop, TRW, Kirby and a number of other companies including Ford Motor Company of Australia Limited, General Motors-Holden's Automotive Limited, Nlssan Motor Manufacturing Co. (Australia) Limited, Mitsubishi Motors Australia Limited, the Automotlve Industry Authority, Australian Power Steering Pty Limited and several other companies and organizations with interests in the automotive industry.
Counsel for the Commission stated that his client would need about six weeks to re-determine the
application for authorisation if it were directed so to
do. I do not think that this period is unreasonably long. As I have observed, it is virtually common ground between the parties that any re-determination by the Commission would be the subject of a fresh application to the Tribunal under s.101 of the Act. Any such application could not be made until the latter part of November at the earliest, thus effectively postponing a hearing in the Tribunal until some time in 1990.
It is difficult to see what advantage there is to Bishop in selecting this Court, instead of the Tribunal, as the forum for determining the questions of law which it wishes to have determined. ~t is not in doubt that the Tribunal can determine those questions. They will be determined in accordance with the opinion of the President (s.42(1) of the Act). The President is, of course, a judge of this Court. I can see no advantage to Bishop in the questions being considered in separate proceedings under the Judicial Review Act.
If this Court embarked upon a consideration of the questions the Tribunal would in all probability feel constrained to adjourn the proceedings before it pending determination of the proceedings in this Court, including any appeal. Mr Limbury stated that his client would not appeal if the decision of this Court were adverse to it. However, if the decision were adverse to
the respondents either of them may wish to test it on
appeal.
The Act contains elaborate provisions enabling the Commission to grant authorisations of the kind sought by TRW and empowering the Tribunal to review decisions by the Commission granting authorisations. It is plain that Parliament envisaged that a decision of the Commission granting authorisation, if its correctness were to be called into question, would be reviewed by the Tribunal. This of itself raises a serious question whether it is appropriate to bring matters of this kind before the Court: cf Swan Portland Cement Limited v. The Comptroller-General of Customs (Burchett J. - 16 February 1989 at p.19).
Mr Limbury submitted that his client might suffer some disadvantage if any errors of law in the Commission's decision of 9 August 1989 are not corrected before the hearing in the Tribunal. If I thought there were substance in this submission I would be inclined to take a different view on the matter of discretion. But I do not think the submission has substance. The hearing in the Tribunal is a re-hearing: s.101(2) of the Act. Whilst it may be going too far to say (as was said in In re Tooth & Co. Limited: In re Tooheys Limited (1979) A.T.P.R. 40-113 at p.18,183) that the Tribunal should not attach any weight to any views expressed by
consider the matter afresh. If the Tribunal is of the the Commission, it is plain that the Tribunal must
view that the Commission misapprehended its powers under the Act it will no doubt bear that matter in mind in deciding what, if any, weight it should give to the Commission's reasons. Of course, any party who is dissatisfied with the Tribunal's decision on a question of law will have the right to challenge the decision in this Court.
Thus there is no real advantage to Bishop in the questions being determined in this Court rather than in the Tribunal. In these circumstances, the fact that the Parliament has made special and adequate provision under which Bishop is able to have the Commission's decision reviewed by the Tribunal and the further fact that the proceedings in the Tribunal will almost certainly be delayed if this Court determines the questions make it proper for the Court to exercise its discretion under s.l0(2)(b) of the Judicial Review Act to refuse to grant the application.
In my opinion, as a general rule, challenges to the correctness in law of the Commission's decisions should be made in the Tribunal and not in this Court. There may well be cases where time and expense will be saved if the question whether the Commission has made an error of law is determined in this Court rather than in the Tribunal. In other statutory contexts, saving of time and expense has been found to be a sufficient reason for the exercise of the Court's jurisdiction under the
an alternative remedy: cf Mercantile Credits Limited v Judicial Review Act notwithstanding the availability of
Federal Commissioner of Taxation (1985) 61 A.L.R. 331 at p.338. But there is nothing in the facts of the present case to take it outside the general rule which I think should apply.

Accordingly, the application should be

dismissed. I order that Bishop pay the costs of the ordered to pay TRW's costs. Bishop did not join TRW as a respondent in its application. TRW applied to be added as a respondent after the proceedings had been commenced. It is true that it had a substantial interest to protect in these proceedings. Nevertheless, the actual decision vfhich was challenged was a decision of the Commission. TRW opposed the application upon the same grounds as those relied upon by the Commission. There was no reason to suppose that the Commission would not oppose the application on every available ground. Commission. However, I do not think it should be

Mr Harvey submitted on behalf of TRW that his client was unaware of the attitude which counsel for the Commission would take on the hearing. However, when the matter was in the list for directions on 8 September

1989, counsel for the Commission made it plain that the

Commission would appear at the hearing and oppose the application. Indeed, he gave notice (albeit, in the form of a challenge to the Court's jurisdiction) that the

Commission would submit that relief sought by Bishop	should be refused on discretionary grounds. In the
light of what was said by the High Court in The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 C.L.R. 13 at pp. 35-36, it is a question whether it would have been preferable for the Commission to have adopted a neutral stance in these proceedings. However, it did not adopt such a stance and no argument has been addressed to me as to the propriety of the part which it has taken in the proceedings. In the circumstances of the present case, it ought to have been apparent to TRW that the Commission would oppose the application.
This case is distinguishable from Kaycllff Pty Limited & Ors. v Australian Broadcasting Tribunal h Anor. (18 August 1989) in which I ordered unsuccessful applicants to pay the costs of a respondent (a public interest organization) which was joined in the proceedings at its own request. In that case the Australian Broadcasting Tribunal, which was the sole respondent named in the application when it was filed, took only a limited part in the proceedings and, had the public interest organization not appeared, its interests might not have been protected. In the present case, it was proper for TRW to be added as a respondent to protect its interests. But as its interests were, in any event, protected by the appearance of the Commission I do not think Bishop should have to pay a double set of costs.
The purpose of the Judicial Review Act is to consolidate challenges to administrative decisions which are said to be affected by errors of law. It would be unfortunate if the risk of being visited with orders to pay multiple sets of costs deterred persons from exercising their rights under the Act.
In all the circumstances, I think no order should be made as to TRW's costs.

I certify that this and the twelve (12) preceding pages are a true copy of the Reasons for Judgment of his Honour Mr Justlce Morling.

Associate: U/ /'

Date: 28 BPl-EMBe, 1987

Solicitor for applicant:	A.L. Limbury of Minter Ellison
Counsel for first respondent:	P.W. Gray

instructed by:  Australian Government
Solicitor

Counsel for second respondent:  G.G. Masterman Q.C. with
I. Harvey

instructed by:  Allen Allen & Hemsley

Date of Hearing:	27, 28 September 1989
Date of Judgment:	28 September 1989