Auskay International Manufacturing & Trade Pty Ltd (ACN 078 654 243) v Qantas Airways Limited (ACN 009 661 901)
[2010] FCA 521
FEDERAL COURT OF AUSTRALIA
Auskay International Manufacturing & Trade Pty Ltd (ACN 078 654 243) v Qantas Airways Limited (ACN 009 661 901) [2010] FCA 521
Citation: Auskay International Manufacturing & Trade Pty Ltd (ACN 078 654 243) v Qantas Airways Limited (ACN 009 661 901) [2010] FCA 521 Appeal from: Federal Court of Australia Parties: AUSKAY INTERNATIONAL MANUFACTURING & TRADE PTY LTD (ACN 078 654 243) v QANTAS AIRWAYS LIMITED (ACN 009 661 901), DEUTSCHE LUFTHANSA AKTIENGESELLSCCHAFT (ARBN 495232), SINGAPORE AIRLINES LTD (ARBN 1056195), SINGAPORE AIRLINES CARGO PTE LTD (ARBN 95934857), CATHAY PACIFIC AIRWAYS LIMITED (ARBN 479514), AIR NEW ZEALAND LTD (ARBN 312685), AIR NEW ZEALAND (AUSTRALIA) PTY LTD (ACN 084 974 569), JAPAN AIRLINES INTERNATIONAL CO LIMITED (ARBN 564358) and BRITISH AIRWAYS PLC (ARBN 2747597); AUSTRALIAN COMPETITION AND CONSUMER COMMISSION File number(s): VID 903 of 2009 Judge: DODDS-STREETON J Date of judgment: 17 May 2010 Catchwords: TRADE PRACTICES – considerations relevant to grant of leave to Australian Competition and Consumer Commission to intervene in private proceedings under s 87AC of the Trade Practices Act 1974 (Cth) – leave limited to filing and serving written submissions Legislation: Trade Practices Act1974 (Cth) s 87CA Cases cited: Shahid v Australasian College of Dermatologists (2008) 168 FCR 46 Date of hearing: 17 May 2010 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 19 Counsel for the Applicant: N Hutley SC, Dr K Hanscombe SC and M Pesman Solicitor for the Applicant: Maurice Blackburn Cashman Counsel for the First Respondent: J Lockhart SC Solicitor for the First Respondent: Johnson Winter & Slattery Counsel for the Second Respondent: B Quinn Solicitor for the Second Respondent: Freehills Counsel for the Third and Fourth Respondents: A Archibald QC and M O'Bryan Solicitor for the Third and Fourth Respondents: Minter Ellison Counsel for the Fifth Respondent: M Sloss SC and M Borsky Solicitor for the Fifth Respondent: DLA Phillips Fox Counsel for the Eighth Respondent: A Bell and D Star Solicitor for the Eighth Respondent: Norton Rose Counsel for the Ninth Respondent: A Payne SC Solicitor for the Ninth Respondent: Mallesons Stephen Jaques Counsel for the Intervener N O’Bryan SC, J Halley SC and R Higgins Solicitors for the Intervener Australian Government Solicitor
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 903 of 2009
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN: AUSKAY INTERNATIONAL MANUFACTURING & TRADE PTY LTD (ACN 078 654 243)
ApplicantAND: QANTAS AIRWAYS LIMITED (ACN 009 661 901)
First RespondentDEUTSCHE LUFTHANSA AKTIENGESELLSCCHAFT (ARBN 495232)
Second RespondentSINGAPORE AIRLINES LTD (ARBN 1056195)
Third RespondentSINGAPORE AIRLINES CARGO PTE LTD (ARBN 95934857)
Fourth RespondentCATHAY PACIFIC AIRWAYS LIMITED (ARBN 479514)
Fifth RespondentAIR NEW ZEALAND LTD (ARBN 312685)
Sixth RespondentAIR NEW ZEALAND (AUSTRALIA) PTY LTD
(ACN 084 974 569)
Seventh RespondentJAPAN AIRLINES INTERNATIONAL CO LIMITED
(ARBN 564358)
Eighth RespondentBRITISH AIRWAYS PLC (ARBN 2747597)
Ninth Respondent
JUDGE:
DODDS-STREETON J
DATE OF ORDER:
17 MAY 2010
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Pursuant to s 87CA of the Trade Practice Act 1974 (Cth), the Australian Competition and Consumer Commission have leave to intervene in the appeal proceeding VID 903 of 2009, such intervention being limited to filing and serving written submissions.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 903 of 2009
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN: AUSKAY INTERNATIONAL MANUFACTURING & TRADE PTY LTD (ACN 078 654 243)
ApplicantAND: QANTAS AIRWAYS LIMITED (ACN 009 661 901)
First RespondentDEUTSCHE LUFTHANSA AKTIENGESELLSCCHAFT (ARBN 495232)
Second RespondentSINGAPORE AIRLINES LTD (ARBN 1056195)
Third RespondentSINGAPORE AIRLINES CARGO PTE LTD (ARBN 95934857)
Fourth RespondentCATHAY PACIFIC AIRWAYS LIMITED (ARBN 479514)
Fifth RespondentAIR NEW ZEALAND LTD (ARBN 312685)
Sixth RespondentAIR NEW ZEALAND (AUSTRALIA) PTY LTD
(ACN 084 974 569)
Seventh RespondentJAPAN AIRLINES INTERNATIONAL CO LIMITED
(ARBN 564358)
Eighth RespondentBRITISH AIRWAYS PLC (ARBN 2747597)
Ninth Respondent
JUDGE:
DODDS-STREETON J
DATE:
17 MAY 2010
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
By a notice of motion dated 7 May 2010, the Australian Competition and Consumer Commission (“ACCC”) seeks leave pursuant to section 87CA of the Trade Practices Act1974 (Cth) (“the Act”) to intervene (“the intervention application”) in an application for leave to appeal (“the strike out leave application”) from the decision of the primary judge made 11 December 2009 to strike out the fourth amended statement of claim (“FASC”) of the applicant, Auskay International Manufacturing & Trade Pty Ltd (“Auskay”). In the FASC Auskay, in a representative action under Part IVA of the Federal Court of Australia Act 1976 (Cth), alleges that the first to ninth respondents (all international airlines) contravened s 45(2)(a)(ii) and (b)(ii) of the Act by fixing the price of air freight services to and from Australia, whereby Auskay and the group members suffered loss and damage. A principal issue in the strike out leave application concerns the definition and proper identification of the market in which infringing conduct allegedly occurred.
The ACCC proposes that its intervention be limited to making written and oral submissions in relation to the matters raised in grounds 2 to 5 of Auskay’s draft notice of appeal in the strike out leave application. In summary, those grounds are that the primary judge erred in concluding that the FASC failed to identify any market in Australia within the meaning of Part IV of the Act, in concluding that the FASC suggested that there were, potentially, thousands of discrete markets, in propounding the wrong test of what constitutes a market and in applying a test of strong substitutability.
The intervention application was opposed by the first, third, fourth, fifth, eighth and ninth respondents.
The affidavit of Michael Kylie, the general manager of Enforcement Operations, ACT and National Projects, in the Enforcement and Compliance division of the ACCC, was sworn on 4 May 2010 in support of the intervention application. By his affidavit, Mr Kylie deposed that the ACCC has instituted 12 proceedings in this Court against international airlines, alleging contraventions of the Act relating to air freight carriage. Today I was informed that five of those proceedings have settled, but further similar proceedings are in the pipeline or anticipated.
Mr Kylie deposed that the ACCC was granted leave to be heard as an amicus curiae in the strike out application before the primary judge and made oral submissions on 29 April 2009. Mr Kylie deposed that the Court would usually be assisted by expert evidence in relation to the core issue of market definition for the purposes of section 4E of the Act. Due, however, to the interlocutory status of the strike out leave application, such expert evidence had not been provided. The ACCC could assist the Court in relation to the proper approach to market definition, including the application of the concept of substitutability, and the construction of s 4E of the Act in relation to the meaning of “market” in Australia.
Mr Kylie deposed that this Court’s findings on those issues were likely to have important implications for the ACCC’s current proceedings, its future investigations into cartel conduct, and the alleged contraventions of Part IV of the Act.
The ACCC filed and served written submissions in relation to the identified issues with its notice of motion. In the present appeal, Auskay, perhaps assuming a favourable exercise of the Court’s power to grant leave to intervene, seeks to adopt the ACCC’s written submissions.
There are few decisions involving applications under section 87CA of the Act, which commenced on 26 July 2001. None appears to offer much guidance in relation to making a grant of leave. For example, in Shahid v Australasian College of Dermatologists (2008) 168 FCR 46, as the application for leave to intervene was unopposed, the Court gave no reasons for granting it (limited to the filing of written submissions).
Counsel for the ACCC referred me to the Explanatory Memorandum for the Bill introducing section 87CA. The Explanatory Memorandum stated, at item 33, paragraph 75, that the proposed new provision would allow the ACCC to intervene in private proceedings instituted under the Act only with leave of the Court. On intervention, it would become a party to the proceedings “and as such the Court may make a costs order against it”.
The Explanatory Memorandum at paragraph 76 stated:
The right to intervene, subject to the Court’s leave, will allow the ACCC to intervene in matters where the case raises issues of public interest which have not been fully addressed by the parties. In particular, the ACCC may seek the Court’s determination of untested areas of [the Act] to clarify the operation of the Act. Intervention by the ACCC will also allow the Court to make a more balanced judgment in cases which have a significant impact on the community at large.
The Explanatory Memorandum at paragraph 77 stated that the ACCC would develop guidelines outlining when it may intervene in private proceedings.
The Guidelines thus developed, ACCC intervention in private proceedings (July 2002), refer (at page 2) to cases prior to the introduction of s 87CA in which the ACCC had been granted leave to intervene under s 163A(3) of the Act.
The Guidelines note that courts had previously recognised that the public interest could be served if the ACCC were permitted to intervene in private proceedings, if the case involved an issue of public importance or if the outcome would help to clarify the law.
The Guidelines state that the ACCC would consider intervention in private proceedings in one or more of the following circumstances:
1.The case involved significant public interest.
2.The case involved construction of the Act in untested areas or to clarify its operation.
3.The case involved international conduct such as anti‑competitive conduct and consumer exploitation on an international scale.
The Guidelines state that the guiding principle would be whether the ACCC’s intervention would in some way serve the public interest.
Counsel for the ACCC submitted that the present matter answered the criteria in the Guidelines, in the light of the 12 proceedings issued by the ACCC (including the five resolved matters) and the further anticipated proceedings, particularly given the likelihood that this Court’s determination of the issue of definition of market would assist in that context. The subject matter of this application was, counsel said, large-scale in dimension, and the ACCC was critically focussed on s 4E of the Act and the associated errors alleged in the primary judge’s decision.
Counsel for the opposing respondents, in a number of separate submissions, contended, in summary, that:
(a)The judgment the subject of the strike out leave application was merely a decision on an interlocutory pleading summons, focussing on whether or not sufficient facts were provided to articulate the claim in the pleading and giving rise to no issue of principle sufficient to justify intervention by the ACCC.
(b)The ACCC’s submission was not useful or different, as all its subject matter was effectively canvassed by Auskay, and if there were indeed any difference in emphasis, it did not warrant leave to intervene.
(c)The ACCC’s intervention would involve prejudice to the respondents, both in the sense of the absorption of court time in what might be a tightly scheduled hearing and because the ACCC would, in consequence, become a party with a concomitant right to appeal.
(d)If, at this stage, it appeared premature to determine the issues relevant to the application to intervene, the decision should be reserved until Auskay had completed its oral submissions. Alternatively, particularly given the late stage at which the ACCC had made the intervention application and thereby sought to change its status from an amicus to a party, the intervention should be limited to the filing of written submissions.
The ACCC has already appeared, albeit as an amicus curiae, and has made submissions before the primary judge. It is well equipped to assist the Court in relation to matters on which it would usually be, but is not currently, assisted by expert economic evidence, which is significant given that, if leave be granted, the appeal will be heard instanter. Although the present matter concerns a pleading summons, its determination potentially raises issues of public interest in relation to untested areas and the ACCC is legitimately concerned with the outcome.
In my opinion, while the ACCC’s written submissions have been, in essence, adopted by Auskay, they are distinct and appear to have a different emphasis or focus. I am not persuaded that any prejudice to the respondents from the ACCC’s resultant constitution as a party would outweigh the considerations in favour of according it a limited right to intervene. I consider that leave to intervene should be granted, on the basis that the ACCC’s intervention be limited to the filing and serving of written submissions, and I so order.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton. Associate:
Dated: 17 May 2010
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