Ansett Transport Industries Ltd v Morris, P.F.

[1988] FCA 319

CATCHWORDS

AVIATION - two-airline agreement	- Airlines Equipment Act 1958	-
determination of permitted maximum aircraft capacity	for	each

airline - estimation of traffic on competitive routes -

"competitive route" - construction - whether traffic between same

end points on non-competitive route counted as if on competitive

route - purpose and policy of two airlines agreement	and Airlines
Equipment Act.
Airline Equipment Act 1958	8.12
Adminicltrative Decisions (Judicial Review) Act	1911
Airlino.	Agreennt Act 1981
ANSETT TRANSPORT INDUBTRIES LIMITED v PETER FREDERICK MORRIS	AND
THE AUSTfuLIAN NATIONAL AIRLINES COMMISSION
NO. G 249 O? 1987
FOX, HORLING AM) FRENCE JJ.
SYDNEY
14 JUNE 1988
IN THE FEDERAL COURT	1
O? AUSTEALIA	)
NEW SOUTH WALES	)
DISTRICT REGISTRY	1
GENERAL DIVISION	1 NO. G 249 OF 1987

On Appeal from the Judgment and Orders of the Honourable Mr. Justice Lockhart of the Federal Court of

Australia given 20 May 1987.

B E T W E E N :  ANSETT TRANSPORT INDUSTRIES LIMITED

Appellant

and

PETER FREDERICK MORRIS AND
THE AUSTRALIAN NATIONAL AIRLINES

COMMISSION

Respondents

MINUTE OF ORDER

JUDGES MRING ORDER:	FOX, MORLING, FRENCH JJ.
DATE 01 ORDER:	14  JUNE 1988
WHERE WADS:	SYDNEY
THE COURT ORDERS	TEAT:

1. Tho appeal is allowod.

2. Liborty to tho parties to apply as to the form of

doclaratlon.

3. Tho rorpondonts to pay the appellant's costs of the

appeal to be taxed.

NOTE: Settlo~ent and entry of orders is dealt with in

Order 36 of tho Federal Court Rules.

IN THE FEDERAL COURT	1
OF AUSTRALIA	1
NEW SOUTH WALES	1
DISTRICT REGISTRY	1

GENERAL	DIVISION	1	NO. G 249 OF 1987
On Appeal from the Judgment and
Orders of the Honourable Mr.
Justice Lockhart of the Federal
Court of Australia given 20 May
1987.

B E T W E E N :  ANSETT TRANSPORT INDUSTRIES LIMITED

Appellant

and

PETER FREDERICK MORRIS AND

THE AUSTRALIAN NATIONAL AIRLINES

COMNISSION

Respondents

- CORAM: FOX, MORLING, FRENCH JJ.

14 JUNE 1988

TEE COURT:

There are many paths that an aircraft can take in flying

between two locations.	The question in this appeal is whether its
route is defined by the path	it takes or only by its destination
and point of departure.	The English language appears to supply an

immediate answer, but when it comes to construing the Airline

Equivment Act 1958 the ordinary meaning	of words is said to be an
unreliable guide.

What is commonly known as the Two Airlines Agreement is

currently embodied in a written agreement made on 28 nay 1981

L.

between the Commonwealth, The Australian National Airlines

Comiaaion, now known aa Auatralian Airlines Limited, and Ansett

Transport Induatries Limited. Its recited purposes are "the

efficient and economic operation of air passonger services within

Australia" and "the continued existence in competition with each

other of only two operators of air passenger services over the

entire trunk network within Australia".

The carrying capacities of the two airlines over the

routes on which they both operate, known as "competitive routes" - and over one-airline or "non-competitive" routes, are regulated for the purpoaea of the Agreement according to periodic

detOrBinbtiOna of maximum aircraft capacities made by the Minister

for Aviation. The determinationa, operative for specified

perioda, are baaed upon eatimatea of total traffic	for those
perioda.	These eatimatea are projections derived from historic

traffic volumes. The object of the exercise, in relation to "competitive router", is to arrive at a global figure for aircraft capacity required to aervice the eatimated traffic for these

route8 and to allocate to each airline half the capacity so

determined. Both the estimates and the determinations are made

purauant to a.12 of the Airline. Equipment Act 1958.

Capacity Determination 54 for the period 1 February 1987

to 30 June 1987 waa made on 3 November 1986. It was challenged under the Administrative Decision8 (Judicial Review) Act 1977 for error of law, and aa having been made in breach of the rules of

natural juatice in cognete application. by Ansett and Australian

Airline..	Their hearing before a judge of	this Court occupied ten
days and ultimately they were dismissed.	Many points of law	were

agitated before hir Iionour, several of which were taken in the

notice of appeal. In substance however, only one issue was debated on the hearing of the appeal which is brought only in

respect of Anrett's application G584/1986. The question was

whether, in determining the maximum permitted capacity for each airline on "competitive" or two-airline routes, the Minister could

add to his estimate of projected traffic over each of those

routes, estimate. of traffic carried by one-airline services between points served by the two-airline routes. One way in which

the question arises in practice may be seen by posing the

following question: Can traffic travelling	from Sydney to Hobart
on ~ n r e t t ~ s Sydney/Devonport/Hobart route be counted as though it were traffic travelling direct from Sydney to Hobart, a	route used

by both Ansett and Aurtralian Airlines? This reduces to a

question of the conrtruction of the expression "competitive route"

as ured in r.12 of the Act. To appreciate how the point arises it

is nocersary firrt to turn to the statutory framework and then	to
the ninister'r determination.

Statutory Framework

(1) The Agreement

The Two Airliner Agreement in it8 current form is found

in a rchedule to the Airlines Agreement Act 1981 by which it is

given legirlative approval. Claure 6 provides that the parties

shall take all rearonable action within their powers to ensure

that Australian Airliner and Anrett "are the only two operators

which provide rcheduled domestic passenger air services over trunk

routes within Australia". It also makes provision for exceptions

to that general principle which are not material for present purposes. By sub-c1.6(1)(0) "trunk route" is defined as "a route

linking any two trunk route centres". Trunk route centres are

then listed by reference to capital cities and other major centres

within Australia. Sub-clause 9(2) requires the two airlines to

comply with the provisions of the Airlines Equipment Act as

amended from time to time and by sub-c1.9(3) it is provided:-

"The Commonwealth will ensure that the Minister will

exercise his powers under the Airlines Equipment Act

1958, as amended from time to time, to allow equal

capacity to the Commission and the Company over

competitive routes."

The agreement is also concerned with the maintenance of services on less profitable non-trunk routes in rural areas. This

is reflected in sub-c1.12(1) which stipulates that "For the

purpose of providing for the maintenance and encouragement of

rural airline services", the airlines are, except as otherwise

provided, to maintain airline services to all places already

covered by them at the commencement of the clause.

(ii) Airlines Equipment Act 1958

Principal definitions in the Act are set out in

sub-s.ll(l), those relevant to the appeal being:-

"'aircraft capacity', in relation to an aircraft in

respect of a period, means the number of revenue

passenger kilometres capable of being performed	by	the
aircraft in the period";

"'competitive route' means a route over which passenger

air services are operated both by the Commission and by

the Company";

"'non-competitive route' means a route other than a

competitive route";

"'traffic' means traffic in respect of passengers".

The obligations and associated powers of the Minister to

make stimates of traffic and determine maximum aircraft

capacities derive from 8.12 which provides:-

"(1) The Minirter 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 Conirrion; and
(iii)	the non-competitive routes of the Company; and

(b) 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 ertimated 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

(ii) operating its services on non-competitive

routes.

(2) ?or the purposes of this section, the Minister

shall have regard to -

(a) eater 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 parrenger revenue load factor for the
oporation of aircraft on each route during the

period concornod, due conrideration being given to the interertr of the public and the maintenance of

a propor relation between revenue and costs:

the necersity for  the overhaul and maintenance of

aircraft; 

the noccsaity for having aircraft available to meet
emergency situations;

aircrew training requirements; 

any  rervicer operated otherwise than by the

Commirsion or the Company; and 

any other factors affecting the stability of the
domertic air tranrport industry.

where the Miniater makes an estimate and a

determination under rub-section	(1) of this section, he
rhall, not less than 90 days before	the commencement of

the relevant period, give notice of the terms of the eatimate and of the determination to the Commission and to Anrott Tranrport Indurtrier Limited and shall, in the notice, rpecify the portion of the determined aircraft

capacity that ir related	to traffic on the competitive
router:

The principal consequence of the determination made

under 8.12 is that the airlines are obliged to tailor their

aircraft capacity accordingly. This is provided for in 6.13:-

“The obligationr to which the Colamismion and the Company

are, in	accordance with the agreement referred to	in
section 5 of the Airline.	Agreement Act 1981 or,	if that

agreonnt doe. not have force and effect, the agreements

referred to in roction 3 of the Airliner Agreements Act

1952, to b. aubject are the following:
(a)	whoro the Miniater har made a determination under
the last precoding roction in relation to a period
- an  obligation not to provide, on competitive
router, during that period, air services capable of

porforming a nurbor of revenue passenger kilometres

in excear of the aircraft capacity specified in

rorpoct of the competitive router in the notice

undor rub-rection ( 3 ) of the last preceding

rectionr

(b)	whore, at any timo during a period in relation to
which the linirter ha. made a determination under

the lart preceding section, the Minister -

(i) notifior the Commirrion or Anrett Transport

Induatrioa Limited that he is satisfied that

the aircraft owned, operated, or otherwise

l .

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 o a

specified extent (being the extent which the

Minister considers necessary to eliminate the

excess 1 ,

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 Commisrion 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."

There are also in the Act analogous provisions relating to regional operators (ss.18 and 19).

Against that background consideration must be given to

the Hinistervs decision.

The Minister's "Working Definition" of Competitive

Routes and Notional Transfer of Traffic

The decision in question was set out in a document

described as "Determination Number 54 for the Company and the Commission", dated 3 NOVenbOr 1986 and signed by the Minister. It

related to the period 1 February 1987 to 30 June 1987. The

document shows that after excluding traffic carried by regional or

commuter operators (see para.l2(b)(i)) the Hinister estimated

-	total passenger traffic on all competitive routes to be 4,036.917
million passenger kilometres. His estimate for traffic on
non-competitive routes war 51.522 million passenger kilometres on
those operated by Aurtralian Airlines and 330.9 million passenger
kilometres on those operated by Ansett. Dividing maximum aircraft
capacity on the competitive routes equally between the two

- airlines, his determination for each was 2,703.767 million

available seat kilometres. Separate maximum aircraft capacities

at 92.046 million and 542.786 million available seat kilometres were determined for AUStrlrlian Airlines and Ansett respectively on their non-competitive router.

In a statement dated 1 December 1986 and made pursuant

to 8.13 of the Administrative Decisions (Judicial Review) Act the Minister set out the reasons for his decisions. There is nothing

to be gained by canvasring in detail those reasons and their

extensive annexure.. The important point emerging from them

however, i# that in estimating total traffic on "competitive

routes", he used his own "working definition" of that term and took into account passengers travelling on non-competitive routes between points served by competitive routes. As his Honour found at p.33 of hir reasons:-

"The Minister's	approach was to examine the routes	over
which pasmengers who used the passenger	air	services

that operated over the relevant routes had common

origins and destinations."

This is borne out by a departmental submission upon which the

Minister acted in coming to his decisions. In section 1 of the

submission entitled "Ansett and Australian Capacity Determination

Number 54" , it was said:-

"The Act defines a competitive route as a route over

which pamsenger air services are operated	by both the
Commirsion and the Company
-	the interpretation of this definition has been
dirputed in appealr to the Arbitrator and
Co-ordinator unde r previous Agreements.

The working definition of competitive routes adopted for

this deterrin8tion, developed in the light of decisions

by the Co-ordinator and	Arbitrator	under	previous
Airlines Agreements is

-	a competitive route is a city pair between which traffic is carried either directly or indirectly by
both Ansett and Australian, including their

subsidiaries and operating	divi~ions.~
It was propomcd in Attachment	G to the submission that

"base period traffic statistics	be prepared on a city pairs basis,
being city pairs between which traffic is carried by both	Ansett
and [Aumtralian Airliner],	either directly or indirectly".

The Arbitral Decisions

The previous arbitration decisions referred to were

those of Sir John Spicer on 11 December 1964 and Sir Nigel Bowen

on 11 march 1980, each made under the Agreement of 1961. In its

recital that Agreement specified as one of its objects the

securing and maintenance of aapability for "effective

competition" between the two airlines. The first arbitration

related to Ansett's desire to get equal accesa with its rival to

intermediate points in the Adelaide/Darwin run. It was in this

context that S i r John Spicer observed that the provision of

competitive aervicea did	not necessarily mean	that each service
would b . and stopping at the same intermediate stopping	a mete duplicate of the other leaving	at the same time

places.

"what ia required is that each operator shall be	capable
of effective competition with	the other on the route."

No question of the definition of "route"	or "competitive	route"
arose.

The queation before Sir Nigel Bowen in the 1980

arbitration was whother the Australian National Airlines

Couiraion, as it then was, should be permitted to operate a second woekly DC9 service Perth/Port Hedland/Darwin. He made

referonce to c1.10 of the 1961 Agreement which required the

partiea to keop undor roview at	all times paasenger and	freight
load factors necesaary	to permit their profitable operation	"in
relation to particular porioda	on specified groups of	competitive
routes'.	Re referred to the fact that both the Commission	and

the Company were operating a weekly DC9 service Perth/Port

Hedland/Darwin and return on Wednesdays. In this respect both were conducting a trunk route in competition. He also adverted to five a times weekly F28 service offered by Ansett for

Perth/Derby/Kunanarra/Darwin and	concluded	that	it must be
considered to be	operating in competition with the	DC9	service.
As he commented	"It	offers travellers an alternative means	of

travel from Perth to Darwin". He therefore rejected an argument

that he should restrict his consideration	to competition solely
between the DC9 services and disregard the	F28 service.

Both these arbitral decisions were concerned with

effective competition between services irrespective of the routes

used by the operators.

The Purposes of the Airlines Equipment Act

The approach taken by the Minister was said, by his

counsel, to serve the purposes	of the Act which,	in relation	to
the two airlines, were:-

1. To ensure the continual existence in competition

with each of	only two operators of air passenger
services over the entire trunk	route.

2. To match capacity with demand for passenger

services .

3. To prevent development of excess capacity or

pursuit of increased market share,	an objective
served by:-

(i) the distinction between competitive and

non-competitive routes;

(ii) the allocation in equal shares of aircraft

capacity which may be deployed on	competitive
routes8

(iii)preventing the two airlines from deploying, in

the course of competition, capacity beyond

their respective fifty per cent shares.

And as to these purposes reliance was	placed	upon the fourth
recital and clauses of the 1981 Agreement, the provisions	of	the
Airlines Equipment Act and the	Minister's	Second Reading speech
upon the introduction of the Bill	for the Act in 1958.	In the

course of that speech it was said:-

"The rationalization of fleets will eliminate excess

aircraft capacity and, at the same time, retain the

competitive incentive which has contributed so greatly

to tho efficiency of the domestic air tranaport	system.
rurthermore,	it should contribute greatly to stability

in an industry which is receiving considerable financial

support from the Government."

Counsel for the Minister also referred to the judgment of Lockhart

J. in Ansett Transport Industries Limited v Morris (No. 1) (1986)

69 ALR 49, in which his Honour comprehensively	reviewed the
history of the Two	Airlinos Agreement in its various forms since

1952 and that of the logislative machinery established to

implement it. Of the Airlines Equipment Act he said (at p.55)

that, at equipped, was seeking to acquire suitable aircraft tho time it was passed, Ansett, which was poorly

to enable it to

compete with T M (as it then was). He said:-

"The Governunt sought to ensure that a "re-equipment

race" causing surplus capacity did not occur; hence

there arose the policy of comparable equipment which

became a corneratone of the two airlines policy. The

roderal Parliament paamod the Airlines Equipment Act

1958 which ontained detailed provisions €or

rationalisation of aircraft fleets designed to ensure

that noither airlino had excess capacity and that the

acquisition of additional aircraft would be governed	by
principles which onsured that neither airline had a qualitativo advantage over the other in relation to
equipmont .	"

And later in the judgment (at p.751,	speaking of capacity control
his Honour identified its principal objectives as matching	the

supply of aircraft capacity and forecast demand for passenger

travel, thus avoiding excess capacity, the cost	of which would
ultimately be borne by the travelling public	and ensuring that

regional airlines do not have excess capacity available which

could be used on trunk routes. There was no controversy about the

accuracy of these general observations.

The question arises whether capacity matched to demand

in equal shares would leave any room for competition with respect

to market share. However the capacity determinations are

calculated taking into account an optimum passenger revenue load

which	in	Determination	54 was assessed at 14.6% for the
competitive routes.	while this	factor is designed to maintain	a

proper relation between revenue and costs (s.l2(2)(c)), it does

support a capacity margin available	to each operator which should
enable it to benefit by competitive conduct.	The Act does not

seek to regulate competition in areas such as in-flight and

ancillary servicos, seat configuration and the like. It is,

however, intended to prevent competition in the provision of

aircraft capacity beyond the ceilings imposed by the Ministerial

determination. It would be consistent with that purpose that the

Act regulate, in the same way, effective competition arising from

the provision of capacity on one-airline routes which serve end points covered by a two-airline route. And it is substantially for that reason that the Court is invited to accept the Minister's

"working definition" as an	appropriate ba6is for identifying the
"total traffic on each of the competitive routes" even though	it
does not	reflect

the introducer the concepts of "city pair" and "direct" or terms of the statutory definition and

"indirect"

carriage of traffic. Before turning to the merits of that

proposition it is necessary to	see how his Honour dealt with the
question.

Approach taken by Trial Judge

His Honour accepted that the word "route" in its

ordinary usage contemplates a certain or particular direction

taken in travolling from one place to another or a regular line of travel or parrage but added the qualification that it is not to be treated roparately or distinctly from the passenger air service

provided over it. He continued (at p.33):-

"Soction 12 ir not concerned with routes as such but with

the paarenqor air rervicer which operate on them. For

preaontly relovant purporer an air route exists in my view only in relation to paaaenger air services that are

or may be conductod over it."

There ir nothing controversial in that proposition and

no complaint ia made of it. The next step in his Honour's

reaaoning however is the critical one for this appeal. In the

pasr&go immediately following that cited, he said:-

"The MiniEtar'S approach war to examine the routes over

which parrangers who used the passenger air services

that operatod ovor the relovant router had common

origin. and dortinationr. In my opinion that was a

perriraiblo appro8ch.	It has not been established that
tho	Hiniator fell into error in adopting the course
which h	.

did by applying his working definition ("city pairs") to which I referred earlier."

His Honour did not further elaborate upon his view that

the Minister's approach war permissible.	As can be seen however,
the reasoning implies a resolution of the question	f construction
in favour of the Minister.

Conrtruction of the Airline Equipment Act

We accept that when an Act of Parliament is open to a

construction which serves its purpose, whether that purpose be

ascertained from the text	or from extraneous material, it	should
be given that conrtruction. The	real question in this case	is

whether the language of sub-s.l2(l)(a) can accommodate the

procedure adopted by the Minister in forming his estimates.

The section draws a distinction in the estimatlon

procerr between "competitive routes" and "non-competitive	routes"
and the Miniater	is required by para.l2(l)(a) to estimate the

a ffic on:-

each of the competitive routes;

the non-competitive router of Australian Airlines;

)the non-competitive routes of Ansett.

This require., at h a r t notionally, a step in which there is a

route by route ertimate of traffic on the competitive routes. The non-competitive route# can be treated globally for each airline. From that route by route ertimate the Minister arrives at a figure

which is, for	the purpore of	para. 12(l)(b), "the total traffic
estimated by the Minirter	in rerpect of the competitive	routes".

.

16.

It is upon that figure that he bases his determination of maximum

aircraft capacity. The estimation process is not a control

device, it is in essence a predictive or actuarial exercise. The

control device	lies	in	the determination of maximum aircraft
capacity.

The proceas of estimating total traffic on "each

of the competitive routes" will not permit the taking in of any of

the traffic from one-airline	routes unless those routes,	insofar
as they serve the rame	end points,	are part of the "competitive

route" under consideration. That can only happen if the term

"competitive route" describes not only one primary path used by two airliner but extend8 to the group of secondary paths over

which services are offered by one airline in competition with

those offered on the primary path.

The definition of "competitive route" in s.11 limits its

meaning to "a route over which passenger air services are operated

both by the Corisaion and by the Company". The definition gives

meaning to the word "competitive" as used in the collocation so

defined. 'Competitive" on the face of it indicates no more and no

leas than that the route in question is operated by the two airlines. Counsel for the Minister pointed out that the word

"route" waa left undefined and submitted that it took its meaning

from the qualifier "competitive".	It was further submitted	that
one route in relation to two end	pointa means any path	that may be
followd betmen	them where there	is effective competition between

the service8 on thoro paths. It is at this point that the

argument bre8kr doun. It offends common sense to describe as

travel on one route, travel from Sydney	to Perth direct and Sydney
to Perth via Melbourne	and Adelaide.

This does not mean that the term "route" is not

sufficiently wide to describe any number of paths separated	by
trivial deviations.	It would be wide enough, for example, to

cover the "sham" deviation exemplified in the evidence of Mr G . J .

Mcnahon, Deputy General Manager of Ansett Airlines of Australia

Limited, in relation to the operation by Air New South Wales of

the Melbourne/Albury/Sydney route. On that route, said by Mr

McMahon to have been wrongly treated by the Minister as

competitive, the aircraft lands	at Albury, taxis on the runway
without letting any passengers	out and then takes off. Such a

dovice is unlikely to prevent characterisation of the path

followed in that	case	as one	with	the	Melbourne/Sydney
competitive route.	But	these	are	questions	of judgment and

evaluation for the Minister and his advisers. Trivial or sham

deviations should not be permitted to change the identity of the

route followed from competitive to non-competitive. On the same

basim, difforences in flying heights or air corridors referred to

by counsol for Australian Airlines, would not justify

charactorisation of the paths followed as different routes.

Allowing for these penumbra1 areas, the Act requires

adherence to the central concept of a route as one path between

two points. It	is a concept which has been	part of the Act since
it warn pasrod in 1958.	And it may well be that	the draftsman did

not address the quostion of the use of one-airline routes to

competo with services provided on two-airline routes. It is

.
.

18.

apparent fror the evidence however that this kind of competitive conduct is now non-trivial and may have a real effect on the balance of capacities between the two airlines. If that is

thought to be undesirable, then the statute can be amended to

authorise the kind of estimating process that the Minister has

followed in this case. But in spite of the considerable support

it derives fror the general two airlines policy and the purpose of

the Act, that process does not accord with any reasonable

construction of sub-s.12(1) as it presently stands. Further, to take in those figures under the present statutory regime may

involve SOB^ distortion of the capacity determination given the

differing (generally greater) distance	covered	by the secondary
paths.	The Minister in making	his determination has therefore

erred and his error was an error of law.

In one sense the case is moot as the period covered by

the dotmrrination under reviow expired on	30 June 1987.	However
no subsequent determination has been made and the	Court	was

i n f o r d that tho next determination could be expected to proceed

on the sa- basis as its predecessor. It was submitted for Ansett

that tho Court ought	to award declaratory relief and various forms
of such relief were proposed.	Counsel for the respondents were of

the view that if the appeal were allowed a declaration could more

properly be fra8ed in the light of the Court's reasons.

In the circunstances of this case the Court is of the

view that there is a sufficient purpose to be served by a

declaration to warrant such relief being granted. The Court has

framed a proposed declaration but will hear from the parties

before making any final order.	As to the matter of costs, Ansett
has indicated that it does not aeek to disturb the costs order	in

the court below. It should however have the costs of the appeal

as against both respondents.

The declaration which the Court proposes to make subject

to hearing from the parties is as follows:-

"It is hereby declared that in making Capacity

Determination Number S4 under Section 12 of the Airlines Equipment Act 1958 the first-named respondent erred i n kroating as part of one competitive route, being a route

between two cities over which	both the appellant and
second-named	respondent operate passenger air services,
all other paths between thoso cities	on which passenger
air services are	operated directly or indirectly by

either the appollant or the second-named respondent or

their respective subsidiaries."

I certify that thir and the preceding eightoon (18) pages are a true copy

of tho R e a m J u d g m e n t of The - n Court.

Counsel for the Appellant : MK N.J. Young

Solicitor8 for the Appellant: Arthur Robinson h Hedderwicks

Counsel for the lirst Respondent:  Mr D. Graham Q.C. and

MK R. McK. Robson
Solicitors for the ?irst Respondent: Australian Government

SolicitOK

Counsel for the Second Respondent: MC J.I. Pajgenbaum Q.C.

and Hr D . ? . R . Beach

Solicitors for the Second Respondent: Phillips Fox

Date of Eearing:	24. 25 May 1988
Date of Judgment:	14 June 1988