Australian Competition and Consumer Commission v Air New Zealand Limited

[2014] FCA 1157

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157

Citation:

Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157

Parties:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AIR NEW ZEALAND LIMITED (ARBN 000 312 685)

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v P.T. GARUDA INDONESIA LTD (ARBN 000 861 165)

File numbers:

NSD 534 of 2010
NSD 955 of 2009

Judge:

PERRAM J

Date of judgment:

31 October 2014

Catchwords:

TRADE PRACTICES – price fixing – alleged arrangements or understandings between airlines to fix fees and surcharges in relation to the carriage of air cargo – Trade Practices Act 1974 (Cth) ss 45 and 45A – whether airlines engaged in collusive practices – whether airlines bound by domestic law or practice of foreign countries to fix charges

TRADE PRACTICES – price fixing – whether alleged price fixes had purpose, or were likely to have the effect, of substantially lessening competition in a market in Australia – whether markets were ‘in Australia’ for the purposes of Trade Practices Act 1974 (Cth) s 4E – definition of market – assessment of substitution and switching behaviour – assessment of product, geographical and functional dimensions

EVIDENCE – proving a contract, arrangement or understanding within the meaning of Trade Practices Act 1974 (Cth) s 45 – circumstantial proof of collusive behaviour – evidence to be looked at as a whole

Legislation:

Commonwealth Constitution s 109

Acts Interpretation Act 1901 (Cth) s 23(b)
Air Navigation Act 1920 (Cth) ss 12,13, 22
Air Navigation Amendment Act 1989 (Cth) s 3
Aviation Transport Security Act 2004 (Cth)
Civil Aviation Act 1988 (Cth)
Competition Policy Reform Act 1995 (Cth) s 15
Evidence Act 1995 (Cth) ss 63, 140, 144
Foreign Antitrust Judgments (Restriction of Enforcement) Act 1979 (Cth)
Foreign Proceedings (Prohibition of Certain Evidence) Act 1976 (Cth)
Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth)
Trade Practices Act 1974 (Cth) ss 4, 4E, 5, 45, 45A, 46, 47, 51(1)(a), 51(1)(b), 51(1C), 112
Transport and Communications Legislation Amendment Act 1992 (No 2) (Cth) s 10
Air Navigation Regulations 1947 (Cth) rr 16, 20, 258(1)
Air Navigation Amendment Regulations 1998 (No 1) (Cth)
Air Navigation Amendment Regulations 2000 (No 3) (Cth)

Explanatory Memorandum, Trade Practices Bill 1974 (Cth)

Co-operation Act 1923 (NSW)  s 82
Co-operatives Regulations 1961 (NSW)  reg 35A

Agreement between the Government of the Commonwealth of Australia and the Government of Hong Kong concerning Air Services, signed 15 September 1993, [1993] ATS 28 (entered into force 15 September 1993)
Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of Indonesia for Air Services Between and Beyond their Respective Territories,  signed 7 March 1969, [1969] ATS 4 (entered into force 7 March 1969)
Agreement between the Government of Hong Kong and the Government of the Republic of Indonesia Concerning Air Services, signed 6 June 1997, [1981] I-33911 (entered into force 27 June 1997)
Agreement between the United States and the United Kingdom relating to Air Services, signed 11 February 1946, 3 UNTS 253 (entered into force 11 February 1946) 
Convention on International Civil Aviation, signed 7 December 1944, 15 UNTS 295 (entered into force 4 April 1947)
Exchange of Notes constituting an Agreement between the Government of Australia and the Government of Indonesia to amend the Annex to the Agreement for Air Services between and beyond their respective Territories of 7 March 1969, signed 16 August 1986, [1986] ATS 23 (entered into force 16 August 1986)
International Air Services Transit Agreement, signed 7 December 1944, 84 UNTS 389 (entered into force 8 February 1945)
Statute of the International Court of Justice, 39 AJIL Supp 215 (entered into force 24 October 1945) 
Vienna Convention on the Law of Treaties, opened for signature 23 May 1969, 1155 UNTS 331 (entered into force 27 January 1980)

Air Transport (Licencing of Air Services) Regulations (Hong Kong) cap 448A rr 3(1), 5(2)
Competition Act (Singapore, cap 50B, 2004)

Undang-Undang Republik Indonesia Nomor 15 Tahun 1992 Tentang Penerbangan [Law No 15 of 1992 on Aviation] (Indonesia) Art 13(2)
Peraturan Pemerintah Republik Indonesia Nomor 40 Tahun 1995 Tentang Angkutan Udara [Government Regulation No 40 of 1995 on Aviation] (Indonesia) Arts 38, 40
Undang-Undang Republik Indonesia Nomor 5 Tahun 1999 Tentang Larangan Pratek Monopoli Dan Persaingan Usaha Tidak Sehat [Law No 5 of 1999 Regarding the Ban on Monopolistic Practices and Unfair Business Competition] (Indonesia)
Federal Aviation Act of 1958, 49 USC 1301 (1958) (USA)  §§ 412, 414
Sherman Antitrust Act, 15 USC §§ 1 – 7 (1890) (USA) §§ 1 - 7

Cases cited:

Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452 considered
Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (No 8) (1999) 92 FCR 375 considered
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321; [2007] FCA 794 considered
Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297 cited
Australian Competition and Consumer Commission v Mobil Oil Australia Ltd [1997] ATPR ¶ 41-568 cited
Bradshaw v McEwans (1951) 217 ALR 1 cited
Browne v Dunn (1893) 6 R 97 cited
Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 cited
Commissioner of Police v Eaton (2013) 294 ALR 608 cited
Commissioner of Taxation v Qantas Airways Ltd (2012) 247 CLR 286 distinguished
Currie v Dempsey [1967] 2 NSWR 532 cited
Habib v Commonwealth (2010) 183 FCR 62 cited
Heli-Aust Pty Ltd v Cahill (2011) 194 FCR 502 cited
International Air Transport Association [1984] ATPR (Com) ¶ 150-083  considered
International Air Transport Association [1986] ATPR (Com) ¶50-101  considered
Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 cited
Palmer v Dolman [2005] NSWCA 361 cited
Qantas Airways Limited [1987] ATPR (Com) ¶ 150-056  considered
QIW Retailers Limited v Davids Holdings Pty Ltd (No 3) (1993) 42 FCR 255 cited
Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Company Ltd (1989) 167 CLR 177 cited
Re Fortescue Metals Group Ltd (2010) 271 ALR 256 cited
Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 distinguished
Re Queensland Co-operative Milling Association Ltd (1976) 8 ALR 481 cited
Refrigerated Express Lines (Australasia) Pty Limited v Australian Meat and Livestock Corporation (No 2) (1980) 29 ALR 333 cited
The Queen v Halton; ex parte A.U.S. Student Travel Pty Limited (1978) 138 CLR 201 distinguished
Thiel v Commissioner of Taxation (1990) 171 CLR 338 cited
Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446 cited
Trade Practices Commission v Email Ltd (1980) 31 ALR 53 considered
Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 considered

Hartford Fire Insurance Co v California, 509 US 764 (1993) cited
In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 906 F 2d 432 (9th Cir, 1990) cited
In re Flat Glass Antitrust Litigation, 385 F 3d 350 (3rd Cir, 2004) cited
Monsanto Co v Spray-Rite Service Corp, 465 US 752 (1984) considered
Re Uranium Antitrust Litigation, 480 F Supp 1138 (9th Cir, 1979) cited
Re Uranium Antitrust Litigation 617 F 2d 1248 (7th Cir, 1980) cited
Serfecz v Jewel Food Stores, 67 F 3d 591 (7th Cir, 1995) cited
Theatre Enterprises Inc v Paramount Film Distributing Corp, 346 US 537 (1954) cited
United States v Aluminium Co. of America, 148 F.2d 416, 443 (CA2 1945) cited
Williamson Oil Co Inc v Phillip Morris USA, 346 F 3d 1287 (11th Cir, 2003) cited

Commerce Commission v Air New Zealand Ltd (2011) 9 NZBLC 103 (24 August 2011)  distinguished

Case Concerning the Arrest Warrant of 11 April 2000 (Democratic Republic of Congo v Belgium) (Judgment) [2002] ICJ Rep 3  cited
Case No COMP/M.5141 – KLM/Martinair (European Commission decision of 17 December 2008)  distinguished
SS ‘Lotus’ (France v Turkey) (Judgment) [1927] PCIJ (ser A) No 10.  cited
The Fisheries Case (United Kingdom v Norway) (Judgment) [1951] ICJ Rep 116  cited
Appellate Body Decision, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina, WTO Doc WT/DS268/AB/R, AB-2004-4  cited

Texts cited:

Beaton-Wells, C, and Fisse, B, Australian Cartel Regulation: Law policy and practice in an international context (Cambridge University Press, 2011)
Brunt, M, ‘Market Definition Issues in Australian and New Zealand Trade Practices Litigation’ (1990) 18 Australian Business Law Review 86
Corones, SG, Competition Law in Australia (Lawbook, 5th ed, 2010)
Fugate, WL, ‘Antitrust Jurisdiction and Foreign Sovereignty’ (1963) 49 Virginia Law Review 925
Haanappel, P, Pricing and Capacity Determination in International Air Transport (Kluwer Law and Taxation Publishers, 1984)
Kovacic, WE,  ‘The Identification and Proof of Horizontal Agreements under the Antitrust Laws’ (1993) 38 The Antitrust Bulletin 5
Senz, S, and Charlesworth, H, ‘Building Blocks: Australia’s response to foreign extraterritorial legislation’ (2001) 2 Melbourne Journal of International Law 69

Dates of hearing:

6-9, 12-15, 20, 21, 23, 27-30 November 2012;  3-7, 11, 13, 14, 19 December 2012;  4-7, 11, 13, 14, 18, 19, 25, 27, 28 February 2013;  1, 4-8, 12, 14, 15, 19, 27 March 2013;  4, 11, 17, 18 April 2013;  9, 10, 13-15 May 2013;  and 5 June 2013

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

1287

Counsel for the Applicant in NSD 534 of 2010 and NSD 955 of 2009:

Mr JA Halley SC, Ms E Collins SC, Mr JR Clarke SC, Mr J Clark, Mr C Arnott, Ms N Shaw, Ms V Bosnjak and Ms T Dinh

Solicitor for the Applicant in NSD 534 of 2010 and NSD 955 of 2009:

Australian Government Solicitor

Counsel for the Respondent in NSD 534 of 2010:

Mr RM Smith SC, Mr NJ Owens and Mr R Yezerski

Solicitor for the Respondent in NSD 534 of 2010:

Corrs Chambers Westgarth

Counsel for the Respondent in NSD 955 of 2009:

Mr M Leeming SC and Mr T Brennan

Solicitor for the Respondent in NSD 955 of 2009:

Norton White

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 534 of 2010

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	AIR NEW ZEALAND LIMITED (ARBN 000 312 685) Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	31 OCTOBER 2014
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Vary Order 1 of 1 May 2013 in the manner foreshadowed at paragraph 1287 of these reasons.

2.The application be dismissed.

3.Direct the parties to file and exchange written submissions on costs by 4:15 pm on Friday 19 December 2014 together with any affidavit upon which reliance is placed.

4.Stand the matter over for a hearing on costs at 10.15 am on Wednesday 4 February 2015.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 955 of 2009

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	P.T. GARUDA INDONESIA LTD (ARBN 000 861 165) Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	31 OCTOBER 2014
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Vary Order 1 of 1 May 2013 in the manner foreshadowed at paragraph 1287 of these reasons.

2.The application be dismissed.

3.Direct the parties to file and exchange written submissions on costs by 4:15 pm on Friday 19 December 2014 together with any affidavit upon which reliance is placed.

4.Stand the matter over for a hearing on costs at 10.15 am on Wednesday 4 February 2015.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 534 of 2010

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	AIR NEW ZEALAND LIMITED (ARBN 000 312 685) Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 955 of 2009

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	P.T. GARUDA INDONESIA LTD (ARBN 000 861 165) Respondent

JUDGE:	PERRAM J
DATE:	31 October 2014
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1  INTRODUCTION

1. The Australian Competition and Consumer Commission (‘the Commission’) sues Air New Zealand Limited (‘Air NZ’) and P. T. Garuda Indonesia Limited (‘Garuda’) alleging collusive behaviour in the fixing of surcharges and fees on the carriage of air cargo from overseas into Australia, allegedly contrary to the combined effect of ss 45 and 45A of the Trade Practices Act 1974 (Cth). The two airlines are not said to have acted alone but instead in the company of a large number of other international airlines. Whilst there were proceedings on foot against many of those airlines at an earlier time, all of those proceedings had been settled or were in the process of being settled prior to the present trial commencing.

2. Involved are four different kinds of charge:

   (a)a fuel surcharge:  This was a charge usually calculated by reference to the weight of cargo and was designed to compensate airlines for fluctuations in the price of aviation fuel.  The significance of it being levied as a surcharge was that it appeared as a separate charge on air waybills rather than being absorbed invisibly in an overall freight charge.  An air waybill is the basic document of carriage in the air cargo market.

   (b)an insurance and security surcharge (‘ISS’):  This was a surcharge designed to compensate airlines for increased insurance costs in the wake of the attacks on the World Trade Center on 11 September 2001.  Again it was charged by reference to weight and appeared as a separate charge on an air waybill.

   (c)a customs fee:  This fee was imposed by the Indonesian Government on airlines by reference to the number of air waybills contained in a cargo manifest.  The airlines passed this fee on to their customers.  There were only two such fees imposed in this case and their role is peripheral.  These also appeared on the air waybill.

   (d)a freight rate:There was a single example in Indonesia where it was alleged that Garuda had been involved in fixing an overall freight rate.

3. The Commission’s case was that anti-competitive conduct, including price fixing, had occurred in the markets in which cargo was flown into Australia from:

   (a)Hong Kong;

   (b)Singapore; and

   (c)Indonesia.

4. With one minor exception, the Commission’s case was not concerned with the imposition of surcharges or fees on flights out of Australia.  As will be seen, this is significant.

5. As a matter of industry structure, the airlines imposed the fuel and insurance surcharges at the airport of origin.  The customs fee in Indonesia, however, was imposed on flights both out of and into Indonesia, including from Australia.

6. In each of the three jurisdictions above, most international airlines were members of industry representative bodies which had so-called ‘cargo sub-committees’.  In Hong Kong, the relevant body was the Hong Kong Board of Airline Representatives Cargo Sub-Committee (‘the HK BAR CSC’) and it met in Hong Kong.  In Singapore, the equivalent body was the Singapore Board of Airline Representatives Cargo Sub-Committee (‘the Singapore BAR CSC’), whilst in Indonesia it was known as the Air Cargo Representative Board (‘the ACRB’).

7. Air NZ and Garuda, together with very many other international carriers, were members of these three industry bodies.

8. The Commission’s basic contention is that the HK BAR CSC, the Singapore BAR CSC and the ACRB became forums in which the airlines were either able directly to engage in price fixing with respect to the surcharges and customs fees or that they provided an environment in which such conduct was facilitated.

9. The personnel of the airlines was not the same in each of the three jurisdictions although there was some overlap.  Consequently, the Commission’s case in each jurisdiction is different.  Further, the internal mechanics of its case in the three jurisdictions is also different.  Those differences require an appreciation of the common element in all three cases, ‘the Lufthansa Index’, also sometimes referred to as the ‘Lufthansa Methodology’.  I will use both expressions interchangably.

10. Beginning in around the mid-1990s international airlines had sought to impose fuel surcharges to compensate them for fluctuations in the price of aviation fuel.  This was organised initially by the International Air Transport Association (‘IATA’).  It adopted a resolution, known as ‘resolution 116ss’, which specified an appropriate level of fuel surcharge depending upon the average of five spot prices for aviation fuel (Singapore, US Gulf, US West Coast, Rotterdam and Italy).  The appropriate level was expressed as a percentage of the baseline price in June 1996 and each level indicated a specified or particular surcharge once that percentage was reached.  If resolution 116ss had come into force, it would have provided a system in which international airlines charged the same fuel surcharges at the same time.  In other words, it would have provided a framework which allowed the airlines to move in unison in the face of fluctuations in the price of aviation fuel.

11. Of course, many airlines have hedging programmes to protect against just such fluctuations.  On that basis, and other bases too, on 14 March 2000 the United States Department of Transport declined to give IATA or the airlines anti-trust immunity (the complex regulatory régime is discussed below in Chapter 3).  This prevented resolution 116ss from being given effect to in the United States.  IATA consequently did not formally promulgate resolution 116ss.  It notified its members of this development and warned them against publishing their own indexes, no doubt for anti-trust reasons.

12. Despite this, Lufthansa then began publishing an identical index to the, now defunct, resolution 116ss, which it did on its publicly available website.  This index has given rise to a large amount of anti-trust litigation in many jurisdictions.  In effect, a common theme has been that the Lufthansa Index facilitated price fixing by international carriers of fuel surcharges.

13. The Commission’s case in this litigation arises out of that general concept.  However, there are significant variations.

14. In Hong Kong, the Commission alleges that the Lufthansa Index (and a later index created within the HK BAR CSC) was used as the basis for making joint applications to the Hong Kong Civil Aviation Department (‘the HK CAD’).  That body’s approval was necessary for the imposition of any surcharge on flights out of Hong Kong and, through the HK BAR CSC, the airlines lodged joint applications for the approval of the Lufthansa (and later) indexes.  The Commission alleges that this was price fixing.  Both Air NZ and Garuda deny that they engaged in price fixing.  They also say that they were obliged to lodge joint applications by Hong Kong law.  I have concluded that they did engage in some, but not all, of the conduct alleged against them and that they were not required to act as they did by the law of Hong Kong.

15. In Singapore, only Air NZ was pursued.  It was not directly alleged that Air NZ or other airlines had used the Lufthansa Index to set their surcharges.  Instead, it was said that the approach of the index’s trigger points as the price of aviation fuel fluctuated provided multiple occasions for the airlines to discuss what surcharge they were going to impose and that this led to price fixing.  Even if this practice was not price fixing in itself it was, so the Commission alleged, a practice which substantially lessened competition.  In addition to its case about fuel surcharges, the Commission also alleged that the airlines had colluded on the imposition of an ISS. 

1. I have concluded that the Commission has not demonstrated that Air NZ was involved in collusive practices with respect to the fuel surcharges in Singapore although it did engage in price fixing with respect to the ISS.

2. In Indonesia, the Commission pursued only Garuda.  It was said that Garuda had engaged in price fixing with the other airlines using the Lufthansa Index as a means to determine fuel surcharges.  This was alleged to have occurred at meetings of the ACRB.  With one minor exception, I have accepted this case.  I have also concluded that similar collusion took place with respect to the customs fee on outbound but not inbound flights.

3. Garuda argued that it was required to act as it did by Indonesian law or practice.  This contention was of no substance.

4. Both airlines pursued a large number of technical defences.  I have rejected all of these, including an ambitious submission that international commercial aviation in Australia is not subject to regulation under the Trade Practices Act 1974. These arguments were, in the main, of little merit and occupied much of a trial which spanned over six months. 

5. Despite that, I have concluded that one of the airlines’ defences ought to be accepted. The Commission alleged conduct contrary to s 45 in respect of each act of collusion. Section 45 applies only to competition in a market in Australia. Because the Commission’s case was limited (in all but one minor case) to flights from airports outside Australia into airports inside Australia I have concluded that no market in Australia was involved. The evidence showed that the surcharges were imposed and collected at the origin airports. The competition which occurred between the airlines and which the surcharges interfered with was competition in markets in Hong Kong, Singapore and Indonesia and not competition in any market in Australia. Prices may well have been affected in Australia by the conduct but that does not mean the market in which the airlines were competing was located here.

6. In this regard, it is worth noting that the ‘market in Australia’ requirement is quite different to the effects doctrine in the United States under the Sherman Antitrust Act, 15 USC §§ 1 – 7 (1890) (USA) (‘the Sherman Act’), where a price effect in the United States will suffice to bring that legislation into play.  That is not what the Trade Practices Act 1974 does.

7. Accordingly, the actions will be dismissed. I will hear the parties on costs.

8. These reasons are set out as follows:

1  INTRODUCTION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1]
2  THE INTERNATIONAL CARGO INDUSTRY – A GENERAL DESCRIPTION....	[24]
Judgment Acronyms........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[25]
2.1  International transportation of cargo........ ........ ........ ........ ........ ........ ........ ........ ......	[25]
2.1.1  Demand from consignors and consignees........ ........ ........ ........ ........ ........ .......	[25]
2.1.2  Modes of international cargo transport........ ........ ........ ........ ........ ........ ........ ...	[30]
2.1.3  Categories of international air cargo........ ........ ........ ........ ........ ........ ........ .......	[35]
2.2  Freight forwarders........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[38]
2.2.1  Services supplied by freight forwarders........ ........ ........ ........ ........ ........ ........ ..	[38]
2.2.2  Consolidation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[39]
2.2.3  Customs clearance services........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[40]
2.2.4  Tracking........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[42]
2.2.5  Types of freight forwarders........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[43]
2.2.6  Transactions between freight forwarders and consignors/consignees........ ....	[45]
2.2.7  IATA accreditation of freight forwarders........ ........ ........ ........ ........ ........ .......	[54]
2.3  Integrators........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[55]
2.4  Air cargo transport........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[56]
2.4.1  Substitutable airports at which the airline first takes or relinquishes possession........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[56]
2.4.2  Substitutable intermediate airports........ ........ ........ ........ ........ ........ ........ ........ ..	[58]
2.5  Airline cargo operations........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[60]
2.5.1  Services supplied by airlines........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[60]
2.5.2  Types of airlines and aircraft........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[63]
2.5.3  Designation and capacity grants to airlines........ ........ ........ ........ ........ ........ .....	[70]
2.6  Domestic regulation of international transportation of cargo........ ........ ........ ........	[75]
2.7  Landing slots........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[77]
2.8  Route network decisions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[79]
2.9  Inter-airline arrangements........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[84]
2.9.1  Interlining........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[84]
2.9.2  Code share arrangements and airline alliances........ ........ ........ ........ ........ .......	[87]
2.10  Prices charged by airlines........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[89]
2.10.1  Standard rates........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[94]
2.10.2  Contract/special rates........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[95]
2.10.3  Ad hoc rates........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[98]
2.10.4  TACT rates........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[99]
2.10.5  Surcharges........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[100]
2.11  Factors affecting prices........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[102]
2.12  Sales and marketing........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[103]
2.13  Negotiations........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[107]
2.14  Terms of supply........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[108]
2.15  Air waybills........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[111]
2.16  Payments for air cargo transport........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[121]
3  THE APPLICATION OF THE TRADE PRACTICES ACT 1974 TO INTERNATIONAL COMMERCIAL AVIATION........ ........ ........ ........ ........ ........ ........ ..	[129]
3.1  Background to the regulation of international commercial aviation........ ........ ......	[131]
3.2  Whether the Trade Practices Act 1974 applied to international commercial aviation at all........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[149]
3.3  Was the Trade Practices Act 1974 inconsistent with the Australia-Indonesia ASA as applied by the Air Navigation Act 1920?........ ........ ........ ........ ........ ........ ........ ........ ..	[161]
3.4  Did the Air Navigation Act 1920 operate inconsistently with the TradePractices Act 1974 in the period 2001-2006?........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[188]
3.5  The application of the Trade Practices Act 1974 to bundles of contractual rights	[207]
4  WAS THERE A MARKET IN AUSTRALIA?........ ........ ........ ........ ........ ........ ........ ....	[210]
4.1  The product dimension........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[220]
4.1.1  What were the relevant routes?........ ........ ........ ........ ........ ........ ........ ........ .......	[224]
4.1.2  Was mail included in the relevant markets?........ ........ ........ ........ ........ ........ ...	[236]
4.1.3  Were chartered flights included in the relevant markets?........ ........ ........ .......	[248]
4.1.4  Was the use of integrators included in the relevant markets?........ ........ ........ .	[251]
4.1.5  Conclusions on product dimension........ ........ ........ ........ ........ ........ ........ ........ .	[252]
4.2  Geographical dimension........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[253]
4.2.1  Transport services........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[254]
4.2.2  Ground handling services........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[255]
4.2.3  Enquiry services at airport........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[256]
4.2.4  Identity of market participants........ ........ ........ ........ ........ ........ ........ ........ ........	[259]
4.3  The functional dimension........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[266]
4.4  Market in Australia?........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[310]
4.4.1  Source of demand in Australia........ ........ ........ ........ ........ ........ ........ ........ ........	[313]
4.4.2  Downstream substitution in Australia........ ........ ........ ........ ........ ........ ........ .....	[327]
4.4.3  Conclusion........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[333]
4.5  The market for flights ex Singapore and Indonesia........ ........ ........ ........ ........ .......	[336]
5  THE EXTRA-TERRITORIAL OPERATION OF THE TRADE PRACTICES ACT...	[339]
5.1  The need for actual conduct........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[340]
5.2  Interference with sovereign rights of other States........ ........ ........ ........ ........ ........ ..	[359]
5.3 Whether Parliament intended the TPA to interfere with the sovereign affairs of other States........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[388]
6  HONG KONG LAW AND DOMESTIC PRACTICE........ ........ ........ ........ ........ ........ .	[390]
6.1  The requirements of the law of Hong Kong........ ........ ........ ........ ........ ........ ........ ...	[395]
6.1.1  The Hong Kong-New Zealand ASA........ ........ ........ ........ ........ ........ ........ .......	[401]
6.1.2  The Hong Kong-Indonesia ASA........ ........ ........ ........ ........ ........ ........ ........ .....	[413]
6.1.3  The Australia-Indonesia ASA........ ........ ........ ........ ........ ........ ........ ........ ........ .	[415]
6.1.4  Obligations with respect to approved tariffs........ ........ ........ ........ ........ ........ ...	[418]
6.2  The requirements of the HK CAD........ ........ ........ ........ ........ ........ ........ ........ ........ .	[428]
7  INDONESIAN LAW AND DOMESTIC PRACTICE........ ........ ........ ........ ........ ........ .	[450]
8 PROOF IN SECTION 45 CASES........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[462]
8.1  What needs to be proved?........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[463]
8.2  How is an understanding to be proved?........ ........ ........ ........ ........ ........ ........ ........ .	[464]
8.3  Who bears the onus of proof?........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[488]
8.4  A Jones v Dunkel inference against the Commission?........ ........ ........ ........ ........ ..	[489]
8.5  Standard of proof........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[490]
9  BACKGROUND TO THE UNDERSTANDINGS ALLEGED BY THE COMMISSION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[492]
10  THE UNDERSTANDINGS ALLEGED BY THE COMMISSION IN HONG KONG........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[508]
10.1  Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[508]
10.2  Witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[514]
10.3  The 2002 Hong Kong Lufthansa Methodology Understanding........ ........ ........ ...	[520]
10.3.1  Air NZ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[559]
10.3.2  Garuda........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[592]
10.3.3  Implementation........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[596]
10.3.4  Were the provisions of the understanding ones to which s 45A applied?....	[600]
10.4  The Hong Kong Imposition Understanding........ ........ ........ ........ ........ ........ ........ .	[623]
10.4.1  Increase to Level 2 (Index Level: 135)........ ........ ........ ........ ........ ........ ........ .	[631]
10.4.2  Increase to Level 3 (Index Level: 165)........ ........ ........ ........ ........ ........ ........ .	[634]
10.4.3  Increase to Level 4 (Index Level: 190)........ ........ ........ ........ ........ ........ ........ .	[637]
10.4.4  Decrease to Level 3 (Index Level: 170)........ ........ ........ ........ ........ ........ ........	[639]
10.4.5  Decrease to Level 2 (Index Level: 145)........ ........ ........ ........ ........ ........ ........	[641]
10.4.6  Increase to Level 3 (Index Level: 165)........ ........ ........ ........ ........ ........ ........ .	[643]
10.4.7  Increase to Level 4 (Index Level: 190)........ ........ ........ ........ ........ ........ ........ .	[644]
10.4.8  Subsequent increases and decreases........ ........ ........ ........ ........ ........ ........ ......	[645]
10.4.9  Was the Understanding reached and implemented?........ ........ ........ ........ .....	[647]
10.5  The First Hong Kong Surcharge Extension Understanding........ ........ ........ ........ .	[659]
10.6  The Second to Eighth Surcharge Extension Applications........ ........ ........ ........ ...	[668]
Second Extension (additional six months)........ ........ ........ ........ ........ ........ ........ ........	[669]
Third Extension (additional year, new levels 5 and 6)........ ........ ........ ........ ........ ......	[670]
Fourth Extension (new levels 7 and 8)........ ........ ........ ........ ........ ........ ........ ........ ......	[671]
Fifth Extension (additional year, new levels 9 and 10)........ ........ ........ ........ ........ .....	[672]
Sixth Extension (new levels 11 and 12)........ ........ ........ ........ ........ ........ ........ ........ ....	[673]
Seventh Extension (new levels 13 and 14)........ ........ ........ ........ ........ ........ ........ .......	[674]
Eighth Extension (additional year)........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[675]
10.7  The October 2001 Hong Kong Insurance Surcharge Understanding........ ........ ...	[694]
10.8  The December 2002 Hong Kong Insurance Surcharge Understanding........ .......	[698]
10.9  Conclusions on the facts in Hong Kong........ ........ ........ ........ ........ ........ ........ .......	[702]
11  THE COMMISSION’S CASE IN SINGAPORE........ ........ ........ ........ ........ ........ .......	[706]
11.1  Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[706]
11.1.1  The BAR CSC and the LIDC........ ........ ........ ........ ........ ........ ........ ........ ........	[717]
11.1.2  The Witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[721]
11.2  The Overarching Understanding........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[734]
11.2.1  FSC movements in the period September 2002 to September 2005........ .....	[745]
Data for FSCs charged ex-Singapore in TC1 and TC2........ ........ ........ ........ ........ .	[750]
Data for FSCs charged ex-Singapore in TC3 North Asia........ ........ ........ ........ .....	[751]
Data for FSCs charged ex-Singapore in TC3 SE Asia........ ........ ........ ........ ........ ..	[751]
Graphs........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[752]
11.2.2  The implementation of the FSCs........ ........ ........ ........ ........ ........ ........ ........ ...	[752]
11.2.2.1  The First Implementation Allegation........ ........ ........ ........ ........ ........ .....	[753]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[753]
b   The internal decision making process of SQ........ ........ ........ ........ ........ ........ ....	[763]
c   The decision making process of Air NZ........ ........ ........ ........ ........ ........ ........ ..	[771]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[772]
11.2.2.2  The Second Implementation Allegation........ ........ ........ ........ ........ ........ .	[774]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[775]
b   The internal decision making process of SQ........ ........ ........ ........ ........ ........ ....	[781]
c   The internal decision making process of Air NZ........ ........ ........ ........ ........ .....	[784]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[786]
11.2.2.3  The Third Implementation Allegation........ ........ ........ ........ ........ ........ ...	[787]
a   SQ’s internal decision making process (increase to SGD0.38)........ ........ ........	[810]
b   Air NZ’s internal decision making process (non-increase)........ ........ ........ ......	[814]
c   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[815]
d   SQ’s internal decision making process on decreases........ ........ ........ ........ .......	[817]
e   Air NZ’s internal decision making process (SGD0.17)........ ........ ........ ........ ...	[818]
f   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[819]
11.2.2.4  The Fourth Implementation Allegation........ ........ ........ ........ ........ ........ ..	[823]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[823]
b  The decision making process within SQ and Air NZ........ ........ ........ ........ .......	[833]
c   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[841]
11.2.2.5  The Fifth Implementation Allegation........ ........ ........ ........ ........ ........ .....	[842]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[842]
b   SQ’s decision-making process........ ........ ........ ........ ........ ........ ........ ........ ........ .	[853]
c   Air NZ’s decision making process........ ........ ........ ........ ........ ........ ........ ........ ...	[864]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[868]
11.2.2.6  The Sixth Implementation Allegation........ ........ ........ ........ ........ ........ ....	[869]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[869]
b   SQ’s internal decision making process........ ........ ........ ........ ........ ........ ........ ....	[879]
c   Air NZ’s internal decision making process........ ........ ........ ........ ........ ........ ......	[887]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[888]
11.2.2.7  The Seventh Implementation Allegation........ ........ ........ ........ ........ .......	[889]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[889]
b   SQ’s internal decision making process........ ........ ........ ........ ........ ........ ........ ....	[896]
c   Air NZ’s decision making process........ ........ ........ ........ ........ ........ ........ ........ ...	[897]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[898]
11.2.2.8  The Eighth Implementation Allegation........ ........ ........ ........ ........ ........ ..	[899]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[899]
b   SQ’s internal decision making process........ ........ ........ ........ ........ ........ ........ ....	[907]
c   Air NZ’s internal decision making process........ ........ ........ ........ ........ ........ ......	[912]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[913]
11.2.2.9  The Ninth Implementation Allegation........ ........ ........ ........ ........ ........ ...	[914]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[914]
b   SQ’s internal decision making process........ ........ ........ ........ ........ ........ ........ ....	[927]
c   Air NZ’s internal decision making process........ ........ ........ ........ ........ ........ ......	[932]
d   Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[933]
11.2.2.10  The Tenth Implementation Allegation........ ........ ........ ........ ........ ........ .	[934]
a   The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........	[934]
b  SQ’s internal decision making process........ ........ ........ ........ ........ ........ ........ .....	[942]
c  Air NZ’s internal decision making process........ ........ ........ ........ ........ ........ .......	[945]
d  Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[948]
11.2.2.11  The Eleventh Implementation Allegation........ ........ ........ ........ ........ ....	[949]
a  The FSCs which were imposed........ ........ ........ ........ ........ ........ ........ ........ ........ .	[949]
b  SQ’s internal decision making process........ ........ ........ ........ ........ ........ ........ .....	[957]
c  Air NZ’s decision making process........ ........ ........ ........ ........ ........ ........ ........ ....	[960]
d  Analysis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[962]
11.2.3  The Commission’s circumstantial case........ ........ ........ ........ ........ ........ ........ .	[963]
11.2.3.1  The historical context of the airlines’ purpose in agreeing fuel surcharges........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[967]
11.2.3.2  The airlines’ admissions as to the purpose of their conduct........ ........ ..	[975]
11.2.3.3  Previous dealings between the airlines in Singapore........ ........ ........ .....	[996]

11.2.3.4  Communications between airlines to settle on a co-ordinated outcome for the reintroduction of a fuel surcharge in Singapore........ ........ ........ ........ .......	[1003]
11.2.3.5  Communications between the airlines to settle on co-ordinated increases of FSCs........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1045]
11.2.3.6  The extraordinary meeting of the BAR CSC on 8 December 2003.....	[1049]
11.2.3.7  Further BAR CSC meetings........ ........ ........ ........ ........ ........ ........ ........ .	[1056]
22 April 2004 LIDC-C meeting........ ........ ........ ........ ........ ........ ........ ........ .......	[1057]
28 April 2004 BAR CSC meeting........ ........ ........ ........ ........ ........ ........ ........ ....	[1059]
24 September 2004 BAR CSC meeting........ ........ ........ ........ ........ ........ ........ ...	[1061]
20 October 2004 BAR CSC meeting........ ........ ........ ........ ........ ........ ........ ........	[1066]
Conclusions on the Seventh Proposition........ ........ ........ ........ ........ ........ ........ ..	[1069]
11.2.3.8  Fuel surcharge surveys........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1070]
11.2.3.9  The Singapore Competition Act 2004........ ........ ........ ........ ........ ........ ...	[1072]
11.2.3.10  Implementations of the FSCs........ ........ ........ ........ ........ ........ ........ ......	[1074]
11.2.4  Was the Overarching Understanding reached?........ ........ ........ ........ ........ ....	[1077]
11.2.4.1  Mr Gregg........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[1078]
11.2.4.2  Mr Chew........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[1079]
11.2.4.3  Ms Goh........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1087]
11.2.4.4  Was Air NZ a party to the understanding?........ ........ ........ ........ ........ ...	[1092]
11.2.5  Was the understanding a price fix under s 45A?........ ........ ........ ........ ........ .	[1106]
11.2.6  Substantial lessening of competition?........ ........ ........ ........ ........ ........ ........ .	[1107]
11.3  The remaining Understandings........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[1109]
11.3.1  The December 2003 Singapore Understanding........ ........ ........ ........ ........ ...	[1110]
11.3.2  The October 2004 Singapore Understanding........ ........ ........ ........ ........ ......	[1111]
11.3.3  The Singapore ISS Understanding........ ........ ........ ........ ........ ........ ........ .......	[1112]
11.4  Conclusions on the facts in Singapore........ ........ ........ ........ ........ ........ ........ ........	[1128]
12  THE COMMISSION’S CASE IN INDONESIA........ ........ ........ ........ ........ ........ ......	[1129]
12.1  Introduction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1129]
12.2  Background........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1133]
12.2.1  The Air Cargo Representative Board........ ........ ........ ........ ........ ........ ........ ..	[1133]
12.2.2  Witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[1140]
12.3  The Understandings........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[1141]
12.3.1  The October 2001 Fuel Surcharge Understanding........ ........ ........ ........ ......	[1141]
12.3.2  The October 2001 Air Freight Rate Understanding........ ........ ........ ........ ....	[1149]
12.3.3  The April 2002 Fuel Surcharge Understanding........ ........ ........ ........ ........ ...	[1156]
12.3.4  The June 2002 Fuel Surcharge Understanding........ ........ ........ ........ ........ ....	[1177]
12.3.5  The September 2002 Fuel Surcharge Understanding........ ........ ........ ........ ..	[1178]
12.3.6  The January 2003 Fuel Surcharge Understanding........ ........ ........ ........ .......	[1179]
12.3.7  The May 2003 Fuel Surcharge Understanding........ ........ ........ ........ ........ ....	[1180]
12.3.8  The May 2004 Customs Fee Understanding........ ........ ........ ........ ........ .......	[1190]
12.3.9  The September 2004 Fuel Surcharge Understanding........ ........ ........ ........ ..	[1205]
12.3.10  The April 2005 Fuel Surcharge Understanding........ ........ ........ ........ ........ .	[1209]
12.3.11  The July 2005 Fuel Surcharge Understanding........ ........ ........ ........ ........ ...	[1214]
12.3.12  The September 2005 Fuel Surcharge Understanding........ ........ ........ ........	[1217]
12.3.13  The October 2001 Security Surcharge Understanding........ ........ ........ ......	[1227]
12.3.14  The January 2003 Indonesia Security Surcharge Understanding......... .....	[1230]
12.3.15  The May 2003 Security Surcharge Understanding........ ........ ........ ........ ....	[1231]
12.3.16  The September 2004 Security Surcharge Understanding........ ........ ........ ..	[1233]
12.3.17  The July 2005 Indonesia Security Surcharge Understanding........ ........ ....	[1235]
12.3.18  The Overarching Indonesia Understanding........ ........ ........ ........ ........ .......	[1237]
13  THE AUTHORISATIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[1244]
14  TIME AND LIMITATION ISSUES........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1273]
15  REMAINING INTERLOCUTORY ISSUES........ ........ ........ ........ ........ ........ ........ ....	[1280]
15.1  The Commission’s reply to Garuda’s defence........ ........ ........ ........ ........ ........ ....	[1280]
16  CONCLUSIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[1287]

2  THE INTERNATIONAL CARGO INDUSTRY – A GENERAL DESCRIPTION

1. The industry involves a considerable amount of terminology.  The purpose of this section is to introduce that terminology and also to highlight some structural aspects of the industry.  This section is heavily drawn from the parties’ agreed statement of facts.  In addition to the description below I will set out the acronyms often used in these reasons:

   Judgment Acronyms

ACRB	Air Cargo Representative Board (Indonesia)
Air NZ	Air New Zealand Limited
ANA	Air Navigation Act 1920 (Cth)
ANR	Air Navigation Regulations 1947 (Cth)
ARBN	Australian Registered Business Number
ASA	Air Services Agreement
AWB	Air Waybill
BAR CSC ExCom	Hong Kong Board of Airline Representatives Cargo Sub-Committee Executive Committee
BARINDO	Board of Airline Representatives in Indonesia
BSA	Block Space Agreement
CAB	Civil Aviation Board (USA)
CAD	Civil Aviation Department (USA)
CASA	Civil Aviation Safety Authority (Australia)
CASS	Cargo Account Settlement System
CIF	Cost Insurance Freight
EDN	Export Declaration Number
FSAG	Fuel Surcharge Action Group
FSC	Fuel Surcharge for Cargo
FOB	Free On Board
GSA	General Sales Agents
GSSA	General Sales and Service Agents
Garuda	P.T. Garuda Indonesia Limited
HAFFA	Hong Kong Association of Freight Forwarding Agents Limited
HAWB	House Air Waybill
HK BAR CSC	Hong Kong Board of Airline Representatives Cargo Sub-Committee
HK BAR CSC Ex Com	Hong Kong Board of Airline Representatives Cargo Sub-Committee Executive Committee
HK CAD	Hong Kong Civil Aviation Department
HMT	Hypothetical Monopolist Test
IATA	International Air Transport Association
IASC	International Air Services Commission
Indonesia ASA	Australia-Indonesia Air Services Agreement
ISC	Insurance Surcharge for Cargo
ISS	Insurance and Security Surcharge
LIDC-C	Singapore Local Industry Development Committee - Cargo
MAWB	Master Air Waybill
Qantas	Qantas Airways Ltd
Singapore BAR CSC	Singapore Board of Airline Representatives Cargo Sub-Committee
SPA	Special Prorate Agreement
SQ	Singapore Airlines Ltd
SSNIP	Small but Significant Non-Transitory Increase in Price
SWG	Surcharge Working Group
TACT	The Air Cargo Tariff
TC1	IATA Cargo Tariff Conferences - Area 1
TC2	IATA Cargo Tariff Conferences - Area 2
TC3	IATA Cargo Tariff Conferences - Area 3
the Commission	Australian Competition and Consumer Commission
the Conferences	IATA Cargo Tariff Conferences
ULD	Unit Load Device

2.1  International transportation of cargo

2.1.1  Demand from consignors and consignees

1. There is a requirement for the transportation of cargo on the part of persons who wish to send cargo from a place of origin to an international place of destination and on the part of persons who wish to receive cargo at an international place of destination sent from an international place of origin. 

2. Within the international cargo transport industry, a person who sends cargo, or from whom cargo is sent, is typically referred to as the ‘consignor’.  A person to whom cargo is sent is typically referred to as the ‘consignee’.  The consignor and consignee may be the same person or related bodies corporate.  The transport of cargo between a consignor and consignee does not necessarily involve the sale of the cargo by one to the other or any commercial transaction between them.

3. The international transportation of cargo involves the following activities (amongst others):

   (a)transport of the cargo from the consignor to the sea or air port from which the cargo will be transported internationally;

   (b)when necessary, storage at the port;

   (c)transport from the origin port to the destination port;

   (d)customs handling at the destination port;

   (e)when necessary, storage at the destination port; and

   (f)transport of the cargo from the destination port to the consignee.

4. If there is a sale of the cargo involved then the terms of sale between a consignor and consignee relating to the transport of cargo may include terms as to risk and responsibility for arranging the transport and payment.  Within the international cargo transport industry, there are a number of common arrangements, including ‘ex-works’, ‘free on board’ (‘FOB’) and ‘cost insurance freight’ (‘CIF’).  The effect and nature of these arrangements are defined in the Incoterms published by the International Chamber of Commerce.  For ex-works and FOB, the consignee is ordinarily responsible for making the arrangements for the cargo to be transported from the place of origin or the origin port as applicable to the place of destination and is liable for the cost and risk.  For CIF, the consignor is ordinarily responsible for making the arrangements for the cargo transport and is liable for the cost and risk.

5. Most consignors or consignees who wish to transport cargo only require the transportation of the cargo in one direction, that is, from a specific place of origin to a specific place of destination.  The uni-directional nature of nearly all cargo transport is materially different to passenger transportation.  The vast majority of passengers acquire transport services from a place of origin to a place of destination and a return service back to the place of origin, although not necessarily from the initial destination. 

   2.1.2  Modes of international cargo transport

6. Cargo is transported internationally by air, land (road and rail), sea and combinations of these modes of transport.  Cargo can only be transported to or from Australia by sea or air.  The key differences between sea, air and land modes of international cargo transport include speed and cost.  In respect of transport between Australia and other countries, sea transport is almost always the slower mode of international cargo transport and the lower cost mode of international cargo transport for high volume and/or heavy weight cargo.  In respect of transport between Australia and other countries, air transport is almost always the quicker mode of international cargo transport and the higher cost mode of international cargo transport for most types of cargo. 

7. Air transport is generally the preferred mode for the international transport of time-sensitive cargo (including perishable cargo) and cargo that is high value, low volume and/or low weight.  In the relevant period there were frequent and material fluctuations in the cost of fuel used for transportation of air cargo between other countries and Australia.

8. The decision whether to transport cargo by sea or air between Australia and other countries is affected by a number of factors including:

   (a)relative transport costs, including to and from relevant ports and airports;

   (b)the value, size and weight of the cargo;

   (c)whether the delivery of the cargo is time-sensitive;

   (d)the delay in reaching the destination port; and

   (e)the distance between the place of origin and the place of destination and the directness of the available sea and air services. 

9. Types of cargo that are frequently transported by sea:

   (a)to Australia, by weight, include coal tar, pitch and other crude oils; ores; and inorganic chemicals and, by FOB value, include motor vehicles, parts and accessories; coal tar, pitch and crude oil; and engines and motors; and

   (b)from Australia, by weight, include iron and other ores; mineral fuels; and unmilled grains and, by FOB value, include mineral fuels; iron and other ores; and fresh meat. 

10. Types of cargo that are frequently transported by air:

    (a)to Australia, by weight, include engines and machines; motors and electrical appliances; and polymer plastics and, by FOB value, include motors and electrical appliances; engines and machines; and pharmaceutical goods;

    (b)from Australia, by weight, include fresh meat; fresh fruits and nuts; and seafood and, by FOB value, include precious stones and metals; medical products; and office machinery.

    2.1.3  Categories of international air cargo

11. General air cargo is all cargo other than specialised air cargo and mail.  Specialised air cargo are items which by their nature require special handling on the ground or in the air and includes items such as live animals, and oversize items such as boats or cars.  Certain types of specialised cargo must be transported on freighters such as oversized items and some dangerous goods.

12. General air cargo is in turn usually classified as:

    (a)perishable cargo (that is, cargo that will deteriorate over a short period of time or if exposed to adverse temperature, humidity or other environmental conditions); and

    (b)non-perishable or dry cargo.

13. Perishable cargo ordinarily requires particular handling on the ground and/or in the air (e.g. cold storage) or may be subject to particular time pressures.  The time-sensitivity of the transport of non-perishable cargo depends upon the nature of the cargo and the circumstances of the particular shipment.  Transport of non-perishable cargo may also be required to occur quickly, for example when parts are required regularly or urgently for a production process that uses the part or otherwise required for urgent repairs.  Certain types of goods need to be stored in particular conditions such as securely or at a particular temperature during transportation.   The proportion of air cargo exported from Australia which is non-perishable is higher than the proportion of air cargo imported into Australia which is perishable.

    2.2  Freight forwarders

    2.2.1  Services supplied by freight forwarders

14. Freight forwarders offer to supply, and when engaged, do supply consignors and/or consignees with services associated with the transport of cargo from a place of origin to a place of destination.  When these activities are performed by freight forwarders they are usually supplied by a freight forwarder located at the place of origin and a separate or related freight forwarder located at the place of destination. 

    2.2.2  Consolidation

15. Depending on the nature of the goods to be transported and the requirements of the consignor/consignee, freight forwarders endeavour to combine different shipments into one, larger, shipment, a process known as ‘consolidation’.  Freight forwarders prefer to consolidate if practicable because the per kilogram cargo rate payable to an airline to carry the consolidated shipment usually decreases as the chargeable weight of a consignment increases.  If a forwarder combines several small shipments into one large shipment the per kilogram rate payable by the freight forwarder is usually lower based on the total chargeable weight of the consolidated shipment.  In addition, if a heavy, low volume consignment can be combined with a light, large volume consignment, the amount payable to the airline to carry the consolidated shipment is usually less than the amount that would be payable for the two shipments separately.  Accordingly, consolidated cargoes usually qualify for better overall rates, by leveraging the volume and weight ratios of different cargo shipments.  A freight forwarder may agree with another freight forwarder to consolidate cargo being handled by the two freight forwarders.

    2.2.3  Customs clearance services

16. When cargo is delivered to an origin airport, customs clearance services are required to process the cargo through customs.  For example, an export declaration must be submitted to Australian customs for cargo being transported from Australia.  The Export Declaration Number (‘EDN’) assigned by customs is normally placed on the air waybill (in this chapter, ‘AWB’) in the box entitled ‘Accounting Information’.  Australian Customs require the airline to lodge a main manifest within three working days after departure which lists all cargo loaded on the aircraft.

17. When cargo is delivered to the airport where the airline relinquishes possession, customs clearance services are required to process the cargo through customs.  All cargo must be cleared at that airport by an entity authorised by the applicable customs authority to provide customs clearance services.  This can be performed by a customs broker, integrator or a freight forwarder. 

    2.2.4  Tracking

18. Freight forwarders monitor the cargo’s progress from the place of origin to the place of destination.  Most freight forwarders provide tracking facilities on their websites which enable a user with access to the relevant AWB number to monitor the progress of transportation.

    2.2.5  Types of freight forwarders

19. Freight forwarders range from multinational firms with staff and branches throughout the world to firms that operate in a single country or city.  To enable freight forwarders effectively to provide their services to consignors and consignees across several countries, freight forwarding companies generally establish, or participate in, freight forwarding networks.  The type of network depends on the type of freight forwarder:

    (a)multinational freight forwarders generally operate and have offices in a number of countries.  An example is DB Schenker, which has a worldwide network comprised of subsidiary companies.  Some multinational freight forwarders operate only within particular regions.  For example, the New Zealand-based company Mainfreight has a regional network in Asia, with some offices in the United States; 

    (b)national or local freight forwarders are locally based companies without an established international presence.  Such freight forwarders have arrangements with other freight forwarders, situated at various locations internationally.

1. Some freight forwarders have separate ‘export’ and ‘import’ divisions.  Others will divide their business in terms of ‘sea’ and ‘air’ cargo and/or ‘perishable’ and ‘non-perishable’ cargo.  There are also specialist freight forwarders for particular industries.  Some freight forwarders operate as wholesale freight forwarders, providing services to other (often non-IATA-accredited) freight forwarders.

   2.2.6  Transactions between freight forwarders and consignors/consignees

2. Major freight forwarders may approach major consignors or consignees at their global or regional headquarters to promote the services they provide.  Where a consignor is responsible for initiating a shipment and it does not have a standing arrangement in place, it usually contacts one or more freight forwarders located at the place of origin to negotiate and contract for the acquisition of services (the origin freight forwarder).  The origin freight forwarder provides the services required of it at the place of origin and in turn contacts a freight forwarder at destination (a destination freight forwarder) to provide services required of them at the place of destination.

3. Where a consignee initiates the shipment it may contact either a freight forwarder at the place of origin or the place of destination to negotiate and contract for the acquisition of services.  Where it contacts the destination freight forwarder, the destination freight forwarder provides the services required at the place of destination and, in turn, contacts an origin freight forwarder to arrange the necessary services (including arranging for freight to be carried by air) at the place of origin.  These origin and destination freight forwarders may be part of one multinational group, members of an alliance of independent freight forwarders or simply parties that deal with each other on a regular or ad hoc basis. 

4. Where the origin freight forwarder and the destination freight forwarder are not part of the same company, the forwarder which transacts with the consignor or consignee (as the case may be) usually pays the other freight forwarder for the services provided by it.  The amount paid by one freight forwarder to another in such circumstances depends upon the terms agreed between them. 

5. Following this contact the freight forwarder may offer its standard rates to the consignor/consignee or, where the consignor or consignee sends or receives shipments regularly, the freight forwarder may offer a particular rate or rates to apply to those shipments (together, fixed rates).  Fixed rates may apply for several months or a few weeks and change depending on the size of the shipment (larger or regular shipments attracting better rates) and the requirements of the consignor or the consignee. 

6. Alternatively, where the consignor/consignee requires a price for a particular shipment, the freight forwarder may prepare a specific quote.  Quotes are most often provided in relation to large orders where no fixed rates have been agreed with the consignor/consignee or unusual orders, such as transporting unusual cargo or transporting to an unusual place of destination.  Quotes may be provided in a form which shows the various components of the quote.

7. On occasions, some consignors and consignees tender for, and then contract for, services they require from freight forwarders for set periods of time.  Different rates may apply for faster or slower services, direct and indirect routes, dangerous goods or depending on other relevant considerations such as the nature of the services required (door-to-door, door-to-airport, airport-to-door, etc). 

8. The price for the carriage of freight by air is normally based on the ‘chargeable weight’ of a shipment.  The chargeable weight of cargo is the higher of the actual weight (in kilograms) or the volumetric weight of the cargo.  Volumetric weight (sometimes also known as ‘dimensional weight’) is a measure of the volume or space that a consignment takes up, converted to be expressed in kilograms.  Different freight forwarders may apply different conversion rates.  AWBs have the two weights (i.e. actual weight and volumetric weight) identified in respect of any consignment.

9. Once the shipment is delivered to its final place of destination, the origin freight forwarder invoices the consignor or the destination freight forwarder invoices the consignee depending on whether it is the consignor or consignee that arranged the freight transaction and is responsible for payment of the overall freight cost. 

10. If the consignor is responsible to the freight forwarder for the freight cost, it pays the origin freight forwarder for the overall freight cost.  If the consignee is responsible to the freight forwarder for the freight cost, the consignee pays the freight cost to the origin or destination freight forwarder.  The freight forwarders will then settle amongst themselves for their respective services. 

    2.2.7  IATA accreditation of freight forwarders

11. Freight forwarders may apply for accreditation with IATA.  IATA accreditation is given to a freight forwarder in respect of its outbound cargo operations within a specified country, being the preparation of cargo for air carriage from that country.  On accreditation, IATA assigns the freight forwarder a numeric code which covers the forwarder’s outbound cargo operations throughout the country concerned.  In order to obtain accreditation with IATA, freight forwarders must meet certain minimum criteria including staff qualifications, financial requirements, suitability of premises and cargo handling equipment and appropriate licenses to trade.  IATA accreditation enables freight forwarders to utilise IATA’s Cargo Account Settlement System (‘CASS’) clearing house and settlement system to remit transaction details and make payments to airlines (which is discussed later). 

    2.3  Integrators

12. Integrators may also use contracted space on freighter or passenger aircraft of third party airlines on particular routes and/or at particular times, according to demand and the capacity of the integrator to meet demand using capacity in its own aircraft. 

    2.4  Air cargo transport

    2.4.1  Substitutable airports at which the airline first takes or relinquishes possession

13. The carriage of freight by air is more often than not undertaken by an airline from the airport closest to the place of origin of the cargo (primary origin airport) and to the airport closest to the place of destination of the cargo (primary destination airport).  The carriage of freight by air may be undertaken by an airline to or from an airport other than the airport closest to the place of origin of the cargo (alternative origin airport) or to an airport other than an airport closest to the place of destination (alternative destination airport).  Accordingly, the airport at which the international airline first takes possession or relinquishes possession of the cargo may not be the origin airport or destination airport respectively.  Some international airlines use land transport between various airports selected by them so they can accept cargo from and to airports where they do not fly.  For example, during the relevant period some international airlines accepted cargo to and from Brisbane but only flew to Sydney and used overnight road transport to transport cargo between Brisbane and Sydney and vice versa. 

14. Whether an alternative origin or destination airport is a substitute for the primary origin or destination airport depends on factors such as the cost, timeliness, availability and capacity of the alternatives including the availability of land transport between alternative airports.  In some cases where the carriage of freight by air is undertaken by an airline from an alternative origin airport and/or to an alternative destination airport the cargo does not arrive at its place of destination as quickly as if the cargo had been transported between the primary origin airport and the primary destination airport.

    2.4.2  Substitutable intermediate airports

15. The carriage of freight by air between a particular origin airport and destination airport may involve:

    (a)no stops at intermediate airports;

    (b)a stop without change of planes at one or more intermediate airports which means that cargo continues to its destination airport without being unloaded; or

    (c)a stop and change of aircraft at one or more intermediate airports, in which case the cargo must be unloaded and reloaded. 

16. Where the carriage of freight by air involves a stop at an intermediate airport, in most cases the cargo does not arrive at its destination airport as quickly as if the cargo had been transported on a non-stop service.

    2.5  Airline cargo operations

    2.5.1  Services supplied by airlines

17. In order to carry freight by air, an airline requires at least the following rights, facilities and services:

    (a)aircraft operated by it (which includes both aircraft that are leased or owned);

    (b)the right to fly aircraft of a specified capacity on specific routes pursuant to the applicable Air Services Agreements (‘ASAs’);

    (c)the right to access the international airports on specific routes (origin airport, destination airport and any intermediate airport used) including:

    (i)air traffic control services; and

    (ii)landing slots (the right to schedule an aircraft arrival or departure, on a specific day within a specific time); 

    (d)ground handling;

    (e)engineering services; and

    (f)sales and marketing staff and office facilities.

18. Ground handlers provide all ground handling for airlines, including receipt of export cargo for carriage, loading and unloading of the aircraft, warehousing (when required) and handling relevant documentation.  The generic term ‘ground handlers’ includes ‘cargo terminal operators’ and ‘ramp’ handlers.  Airlines may engage different companies to supply cargo terminal or ramp handling services. 

19. Cargo terminal operators accept freight, and prepare freight for export on each flight.  They also handle and release imported freight.  Cargo terminal operators also provide warehousing when required.  Ramp handlers are responsible for loading and unloading the aircraft, which includes the delivery and collection of freight to or from the ground handler’s warehouse. 

    2.5.2  Types of airlines and aircraft

20. Airlines carry freight by air using the cargo hold (also known as the bellyhold) of international passenger aircraft or dedicated air freighter aircraft.  For international passenger aircraft, passengers are seated on the main deck of the aircraft and passenger luggage is stowed in the bellyhold of the plane.  Remaining space in the bellyhold is available for the transport of cargo capable of being transported in the bellyhold.

21. For freighter aircraft, both the main deck and the bellyhold of the aircraft are available for cargo transport.  Freighter aircraft by reason of the dimensions of their main deck allow for the loading and unloading of oversized and irregular cargo including, for example, cars.  The revenue earned by airlines from carrying passengers on international passenger aircraft is greater than the revenue that is earned from the transport of cargo on the aircraft. 

22. Airlines which carry freight by air can be divided into the following categories:

    (a)bellyhold only airlines;

    (b)cargo only airlines; and

    (c)combination airlines.

23. Cargo only airlines are airlines that operate only freighter aircraft.  Cargolux is an example of a cargo only airline.  Neither Air NZ nor Garuda operated as a cargo only airline during the relevant period. 

24. Combination airlines operate both passenger aircraft (with cargo capacity in the bellyhold) and freighter aircraft.  Air NZ was a combination airline. Garuda was not.

25. Wide-bodied aircraft are capable of carrying large Unit Load Devices (‘ULDs’).  Examples of wide-bodied aircraft are the Boeing 777, Boeing 767, Boeing 747 and the Airbus A380.  Narrow-bodied aircraft have less storage space than wide-bodied aircraft.  For most narrow-bodied aircraft, cargo and baggage has to be stowed in the hold by hand.  An exception to this is the A320 which is capable of carrying small ULDs.  Examples of narrow-bodied aircraft are the Boeing 737 and Airbus A320.  On both narrow-bodied or wide-bodied aircraft, part of the cargo holds may be kept at a special temperature for the transport of sensitive cargo requiring lower or higher temperatures, such as perishable cargo (as referred to in paragraphs 36 – 37 above). 

26. During the relevant period, Garuda operated only wide-bodied passenger aircraft to and from Australia, Indonesia and Hong Kong.  Air NZ operated narrow-bodied and wide-bodied aircraft between Australia and New Zealand during the relevant period.

    2.5.3  Designation and capacity grants to airlines

27. An individual airline is not entitled to carry freight by air between two international airports unless the relevant traffic rights have been granted to it.  The airline must first be designated under the ASA by one of the countries which is a party to the ASA in respect of the route, and then must be allocated capacity on the route by the relevant governmental authority of the designating country, and must hold the necessary regulatory approvals.

28. During the relevant period, some ASAs provided that signatories could refuse designation if, by way of example, the airline was not incorporated in a contracting state, did not have a principal place of business in a contracting state, was not substantially owned by entities domiciled in a contracting state or effective control was not vested in a contracting state.  Except in the case of the Australia-Hong Kong ASA, the ASAs between each of New Zealand and Indonesia and Australia allowed a signatory to refuse designation if substantial ownership and control of the airline was not vested in the other party, or its nationals.  The Australia-Hong Kong ASA provides that each signatory may refuse designation of an airline in its country where it is not satisfied that the airline is incorporated and has its principal place of business in the other signatory’s country. 

29. Once designated by its ‘home’ country, an airline wishing to operate a service on a route governed by an ASA to which its ‘home’ country is a party must apply to the regulatory authority in its home country to obtain capacity rights.

30. In Australia, applications by Australian airlines for capacity to operate services on routes governed by ASAs to which Australia is a party, are made to a Commonwealth entity, the International Air Services Commission (‘IASC’).  The IASC makes determinations on the allocation of scheduled international air route capacity to Australian airlines on public benefit grounds.  Determinations allocating capacity are usually made for a period of five years for routes where capacity or route entitlements are restricted.  In cases where capacity entitlements and route rights are unrestricted, determinations may be issued for a period of 10 years.  In either case, the IASC has the discretion to make interim determinations, which are for a period of three years. 

31. Airlines that intend to operate non-scheduled international air services need to obtain the approval of the aeronautical authorities in each country to be served.  An airline usually has to be licensed by its home country to operate non-scheduled international air services.  Non-scheduled international air services are not licensed in Australia.  In Australia, foreign airlines may be required to obtain non-scheduled flight approvals in accordance with the Air Navigation Act 1920 (Cth).

    2.6  Domestic regulation of international transportation of cargo

32. Domestic regulations in Australia, Hong Kong, Singapore and Indonesia also control the carriage of freight by air to or from those countries.  Such regulations govern matters including licensing, the granting of capacity for scheduled services and permission for non-scheduled services.  Each of Australia, Hong Kong, Singapore and Indonesia has enacted legislation and regulations governing the operation of scheduled air services. 

33. An airline seeking to provide international scheduled services to or from a country for the first time is required to seek multiple approvals from regulatory authorities in all countries involved.  By way of example, any airline (whether Australian or foreign) seeking to operate international scheduled air services to or from Australia must:

    (a)obtain an International Airline Licence from the Department of Infrastructure and Transport.

    (b)obtain Civil Aviation Safety Authority (‘CASA’) clearances in accordance with the Civil Aviation Act 1988 (Cth). Operators (Australian and foreign) seeking to commence scheduled international air services to and from Australia are also required to apply to CASA for an Air Operator’s Certificate or Foreign Aircraft Air Operator’s Certificate together with a certificate in respect of airlines liability insurance. CASA is responsible for all operational and safety approvals pertaining to civil aviation in Australia;

    (c)obtain the approval of the Office of Transport of the Department in accordance with the Aviation Transport Security Act 2004 (Cth); and

    (d)obtain timetable approval from the Department.  Timetable details include the type of aircraft to be used for each scheduled international air service in accordance with regulations 16 and 20 of the Air Navigation Regulations 1947 (Cth).

    2.7  Landing slots

34. Airports are constrained by the physical capacity of their facilities (the main constraint being the capacity of the terminal building and the number of runway slots available for landing or take-off) or restrictions in the form of night curfews. Further, some international airports have reached their capacity.  Where, in practice, a constraint limits arrival and departure times, slot allocation is required and slot parameters are employed. 

35. Once an ASA is negotiated between Australia and another country and an airline has obtained a licence from the Department, the airline then needs to arrange times to take-off and land at the airports it intends to serve in Australia and the other country.  This is managed by the airports and airlines commonly using an IATA protocol for allocation of take-off and landing slots.

    2.8  Route network decisions

36. Decisions about whether to operate on a particular route and, if so, the frequency and aircraft type on the route are decisions made by the head office of an airline.  Most routes operated by Air NZ and Garuda for passenger aircraft are to and from an airport or airports in their home countries.  Such airports are described as the airline’s ‘hub’.  The location of the hub is primarily determined by the ‘flag’ or nationality of the airline, and the availability of air traffic rights for air services between countries. 

37. The factors that are relevant to a decision to operate a passenger aircraft on a particular route include but are not limited to (with varying degrees of significance):

    (a)potential passenger demand on the route (both to and from the destination airport) and the revenue likely to be earned from carrying passengers, which is a primary factor in deciding whether to operate the service on routes;

    (b)whether the airline holds or is able to acquire traffic rights to operate a service on the route (if the appropriate ASAs are in place or can be negotiated) and the time it may take to acquire these rights (if possible), particularly in relation to new routes;

    (c)the availability of necessary airport infrastructure;

    (d)the nature and capacity of services offered by competing airlines on the route; and

    (e)indirect revenue or marketing effects arising from a change to the route network or schedule or linkages with other routes serviced by the airline.

38. The total revenue earned by airlines from carrying passengers on an aircraft is greater than the total revenue that is earned from the transport of cargo on the aircraft.  For that reason, in relation to passenger aircraft, passenger rather than freight revenue considerations primarily determine routes, schedules and capacity. 

1. In 1984 IATA therefore sought approval from the Commission under s 88 authorizing it to conduct the process of reaching agreement between airlines on both passenger and cargo tariffs. The application also dealt with other presently irrelevant aspects of IATA’s procedures. The process of obtaining the authorizations was protracted and involved a diversion through the Trade Practices Review Tribunal which was ultimately settled. Following a number of interim determinations, the Commission issued its final determination on 23 December 1985: see International Air Transport Association [1986] ATPR (Com) ¶50-101 at 55-253.

2. Submissions were made to the Commission by a number of parties to the effect that permitting the airlines to fix tariffs through the tariff conferencing procedures of IATA was inherently anticompetitive.  IATA sought to rebut that proposition by a number of arguments.  One of these was that tariff conference pricing avoided the perils of bilateral tariff negotiations.  Another was that only by fixing the tariffs could consumers be provided with ‘stable, predictable and continuous service’.  Neither of these arguments commended itself to the Commission.  It did nevertheless accept that there was some public benefit to the publication of industry agreed tariffs by IATA.  The Commission reasoned this way:

   15.The Commission also accepts that there is public benefit in the preparation and availability of tariff information providing a basis for determining fares and for fare structuring that is known throughout the industry.  Fares are set by way of resolutions passed at Traffic Conferences (resolutions of a type contained in documentation filed in support of this application).  The Commission acknowledges that the compilation of fare information will reflect a consensus or agreement reached by airlines participating in the relevant Traffic Conferences.  In so far as such agreements are arrived at with respect to fares for the Australian market, the Commission accepts that there is a public benefit to be derived by reason of the fare information extracted from them.  What the Commission does not accept is IATA, acting itself or through its members compelling its members to charge in Australia tariffs set in accordance with IATA tariff resolutions so as to preclude competitive pricing or discounting in Australia.  But the form of authorization sought by IATA (see Attachment 1) allows room for such competition in prices and discounts.

   16. Thus the Commission proposes to grant authorization so that collaboration by carriers through IATA can continue in all IATA activities – technical, legal, ticketing, clearing house, safety and tariff co-ordination but that IATA cannot, acting through itself or its members, compel a member:

   ●to charge the fares (or pay the commissions) in Australia that have been set by carriers within IATA; or

   ●not to advertise in Australia tariffs they are actually charging; or

   ●to require their agents to so charge in Australia or not to so advertise in Australia.

   [emphasis added]

3. The Commission was talking here about passenger fares but elsewhere in the authorization it made clear (and this was not in dispute) that the same reasoning applied to cargo tariffs.  Thus the Commission had in mind that IATA and its members might collectively propose tariffs but not that there should be any obligation on an individual airline to charge such a tariff. 

4. The terms of the authorization reflected this reasoning.  In its final determination the Commission used the form of an earlier determination the relevant parts of which show an insistence by the Commission that the IATA procedures not in any way oblige the airlines to charge the tariffs resulting from the conferencing procedures.  Relevantly it was as follows:

   2.Noting IATA's undertaking that Pt XII and the Second Schedule to the Provisions for the Conduct of IATA Traffic Conferences (Document I) will not be used in Australia to:

   (i) compel members to charge in Australia tariffs set in accordance with those provisions; or

   (ii)compel members to pay in Australia agents commissions set in accordance with those provisions,

   authorization is granted for the contracts arrangements and understandings evidenced by:

   (a)IATA's Act of Incorporation (Document 1);

   (b) IATA's Articles of Association (Document 1);

   (c) IATA's Rules and Regulations of the Executive Committee (Document 1);

   (d) IATA's Committee Rules and Regulations of the Standing Committees (Document 1)

   (e) IATA's Manual of Clearing House Regulations and Procedures Document 19); and

   (f) IATA's Rules of Procedure of General Meetings (Document 1),

   And also authorization is granted for the contracts arrangements and understandings evidenced by the Provisions for the Conduct of IATA Traffic Conferences including Pt XII and the Second Schedule except to the extent that Pt XII and the Second Schedule are given effect in Australia by IATA, acting itself or through its members, to compel its members:

   (i)        to charge in Australia tariffs set in accordance with those provisions;

   (ii) to pay agents in Australia commissions set in accordance with those provisions;

   (iii)      not to advertise in Australia tariffs they are actually charging; or

   (iv)      to require their agents:

   (a)to charge in Australia tariffs set in accordance with those provisions; or

   (b) not to advertise in Australia tariffs they are actually charging,

   And further authorization is granted for the resolutions the members of IATA have adopted at conferences convened in accordance with the Provisions for the Conduct of IATA Traffic Conferences (Documents 6, 8, 20-42) except to the extent specified in the Schedule to this Determination.

   3. Authorization is granted for IATA and its members to give effect to:

   (a)       IATA's Act of Incorporation (Document 1);

   (b)       IATA's Articles of Association (Document 1);

   (c) IATA's Rules and Regulations of the Executive Committee (Document 1);

   (d) IATA's Committee Rules and Regulations of the Standing Committee (Document 1);

   (e) IATA's Manual of Clearing House Regulations and Procedures (Document 19);

   (f)       IATA's Rules of Procedure of General Meetings (Document 1),

   And also to give effect to the Provisions for the Conduct of IATA Traffic Conferences (Document I) (including Pt XII and the Second Schedule) except to the extent that Pt XII and the Second Schedule are given effect in Australia by IATA, acting itself or through its members, to compel its members:

   (i)to charge in Australia tariffs set in accordance with those provisions;

   (ii) to pay agents in Australia commissions set in accordance with those provisions;

   (iii) not to advertise in Australia tariffs they are actually charging; or

   (iv) to require their agents:

   (a) to charge in Australia tariffs set in accordance with those provisions; or

   (b) not to advertise in Australia tariffs they are actually charging,

   And further authorization is granted to IATA to collect information as to tariffs commissions and conditions actually applying in the market in Australia.

   4. Authorization is granted to IATA and its members to:

   (i)convene Traffic Conferences in accordance with the Provisions for the Conduct of IATA Traffic Conferences;

   (ii) adopt resolutions at such conferences (including resolutions setting tariffs); and

   (iii)give effect to any such resolutions

   except to the extent that such resolutions are given effect in Australia by IATA, acting itself or through its members, to compel its members:

   (i)to charge in Australia tariffs set in accordance with those provisions;

   (ii)to pay agents in Australia commissions set in accordance with those provisions;

   (iii) not to advertise in Australia tariffs they are actually charging; or

   (iv) to require their agents:

   (a) to charge in Australia tariffs set in accordance with those provisions; or

   (b) not to advertise in Australia tariffs they are actually charging,

   Provided that this authorization does not authorise IATA or its members to give effect in Australia to the resolutions specified in the Schedule or to give effect in Australia to any resolution passed in substitution for and substantially identical with such resolutions.

5. In the present case Garuda and Air NZ sought to argue that to the extent that I had found they had engaged in conduct in breach of s 45 by agreeing fuel or insurance surcharges at BAR CSC and ACRB meetings, these meetings were to be characterized as tariff conferences under the IATA rules and hence covered by the IATA authorization.

6. I do not accept this argument for three reasons.  First, the authorization was concerned with the setting of prices by airlines in Australia and not with the fixing of tariffs on inbound flights to Australia. There are a number of textual indications in the authorization to that effect.

   ·Paragraph 1:  ‘The application seeks authorization for certain rules, regulations, agreements and resolutions of IATA in so far as they apply to the activities of international airlines operating in Australia’(emphasis added);

   ·Paragraph 6:  ‘There are some 30 international carriers that operate from Australia and all but eight of them are members of IATA’;

   ·The discussion by the Commission of the nature of the ‘market’ (at [11]) adopted what it had earlier said in draft determination A3485:  see International Air Transport Association [1984] ATPR (Com) ¶150-083 at 55-541.  That discussion (which is at [30]-[49]) contained some references to inbound flights but taken as a whole it is quite clear that the Commission proceeded upon an assumption that the Australian market was in Australia;

   ·Paragraph 17 of the draft determination:  ‘In summary, this draft means that collaboration by carriers through IATA can continue in all IATA activities…other than compelling of members – to charge the fares (or pay the commissions) in Australia that have been set by carriers within IATA…’;

   ·Clause 2 of the authorization authorized participation in IATA tariff conferencing but not the enforcement procedures whose effect was to compel members ‘to charge in Australia tariffs set in accordance with those provisions’;

   ·As outlined above, paragraph 15 said:

   In so far as such agreements are arrived at with respect to fares for the Australian market, the Commission accepts that there is a public benefit to be derived by reason of the fare information extracted from them.  What the Commission does not accept is IATA, acting itself or through its members compelling its members to charge in Australia tariffs set in accordance with IATA tariff resolutions so as to preclude competitive pricing or discounting in Australia.

7. Secondly, the various meetings at which the surcharges were agreed were not tariff conferences under the IATA rules.  No person at any of those meetings conceived themselves to be engaged in IATA tariff conferencing.  Before a meeting may occur it is necessary that the persons at the meeting should intend that what is taking place is a meeting in the requisite sense.  There is not, for example, a meeting of the directors of a company when they coincidentally happen to be in the same place at once. Nor does a Full Court of this Court convene on any occasion three of its judges happen to be in the same room.  In this case, the participants at the meetings in question had only in mind that they were attending meetings of the HK BAR CSC, the Singapore BAR CSC or the ACRB respectively.  They did not have in mind that they had been attending a cargo tariff conference or related procedure under the IATA rules. 

8. Thirdly, the IATA authorization did not authorise IATA or its member airlines to ‘compel’ each other to charge a tariff. I do not accept that the authorization was referring only to a legal compulsion. It was referring to practices which would undermine competition. So much is clear from the Commission’s reasons at paragraph 15 (see above at [1252]). I therefore construe ‘compel’ to include the position of any airlines who have achieved a sufficient meeting of the minds and mutual undertaking to each other with respect to a price fix to engage s 45. To read the authorization otherwise would be to read it as a charter for price fixing which I do not think the Commission had in mind.

9. I do not, in those circumstances, need to resolve the somewhat technical arguments of the airlines that they had actually succeeded, through serendipity, in engaging the voting procedures under the IATA rules.  Once one recalls that the participants understood themselves to be at BAR CSC meetings (in Hong Kong and Singapore) or meetings of the ACRB (in Indonesia) these arguments become unsustainable.

10. I turn then to the airlines’ contention that their conduct had been rendered lawful by an authorization granted to Qantas on 20 July 1987:  Qantas Airways Limited [1987] ATPR (Com) ¶ 150-056.  This authorization related to the second limb of the tariff fixing arrangements in the ASAs referred to above, i.e., what to do if the IATA tariff conferencing procedure had not resulted in a stipulated tariff.  In that circumstance, the ASAs in issue in this case contemplated agreement between airlines on tariffs outside the IATA framework.  Of course, the authorization granted to IATA could not, as a matter of definition, apply to those kinds of arrangements.

11. The Qantas authorization was relevantly in the following terms:

    With respect to Application No. A90427, the TPC grants authorization to Qantas:

    (i)to give effect to the tariff arrangements with the airlines set out in Attachments A and B, or to make further arrangements of a like type with those airlines, on the basis of the conditions set out in para. 2 above; and

    (ii)to make arrangements of a like type with other airlines with which Qantas at present does not have such arrangements, provided that when such agreements are proposed they are first submitted to the TPC for consideration;

    on condition that in both circumstances there is no requirement on carriers or agents-

    ● to charge the fares (or pay the commissions) in Australia that have been set by the agreements;

    ●         not to advertise in Australia tariffs they are actually charging

    and that the carriers concerned and their agents are kept aware of this condition.

12. Attachment A contained a list of airlines with whom Qantas had tariff agreements which had been reached bilaterally outside the IATA tariff conferencing procedure.  Some of these were with airlines who were not members of IATA such as (at that time) Cathay and who could not take part in IATA’s conferencing procedures.  Others were agreements with airlines which were members of IATA but presumably in respect of situations where the IATA tariff conferencing procedure had not produced a tariff or the tariff it had produced had not been approved by the relevant national aeronautical authorities.  In Attachment B there were set out in list form the actual agreements involved.  So, for example, there appeared in Attachment B:

    Qantas/China Airlines promotional fares between Australia and Taiwan

    Air NZ and Garuda were both listed in Attachments A and B.

13. What the authorization did, therefore, was to approve the tariff agreements which, as a matter of history, had already been reached and also, relevantly for this case, to approve ‘further arrangements of a like type with those airlines’.  Thus, viewed broadly, what this authorization was about was permitting Qantas to enter into arrangements to agree tariffs with the identified airlines outside IATA.  Clause (ii) also permitted arrangements with airlines not identified in Attachment A but in that case only with the approval of the Commission.

14. Air NZ and Garuda now seek to characterize some (but not all) of the arrangements or understandings alleged against them as being non-IATA tariff arrangements covered by the Qantas authorization.

15. A number of objections may be put to one side. First, it does not matter that the authorization was granted to Qantas rather than Air NZ or Garuda. The fact that an authorization had been granted to Qantas had the effect that authorization was also granted to any other airline with whom Qantas had reached such an understanding. This was the effect of s 88(6). This limited nevertheless the utility of the authorization for Air NZ and Garuda to those cases where Qantas was alleged to have been a party to an understanding with them.

16. Secondly, whilst the IATA authorization did not apply to inbound flights, the Qantas authorization seems in terms of Attachment B to have contemplated bilateral tariff arrangements on both inbound and outbound flights. On the conclusions I have reached the market for inbound flights was not a market in Australia. Section 45 could not, therefore apply to them and s 86 could not be used to dispense with its operation (s 45 not having any operation in the first place). Since I am considering this issue only on the alternative hypothesis that my conclusions on the scope of the concept of a market in Australia are wrong, this point must be put aside and the assumption made, for the purposes of argument, that the Qantas authorization applied to inbound routes as well.

17. The difficulty which afflicts the airlines’ arguments based upon the Qantas authorization are, in effect,  of a similar kind to some of those which required rejection of their arguments based on the IATA authorization. 

18. In particular, the participants at the meetings of the BAR CSCs and ACRB did not understand themselves to be engaging in tariff agreements under the relevant ASAs outside the IATA structure.  They understood themselves to be at the local collective airline body dealing with cargo related issues at the relevant airport.

19. Further, the Qantas authorization was explicit that there was to be ‘no requirement’ on carriers to charge any tariff so agreed. Yet the critical feature of each of the understandings I have found to exist is that the airlines involved undertook to each other to charge the agreed fuel and insurance surcharges. This falls outside what the Qantas authorization permitted unless it can be said that the words ‘no requirement’ in it means ‘no legal requirement’. The immediate effect of that interpretation would be to permit the airlines to engage in price fixing so long as it was not contractually enforceable price fixing. I can think of no good reason to construe the authorization in that way. In the context of s 45, it is difficult to understand why the language of contractual obligation should intrude when the focus of the provision has always been on the looser concept of a contract, arrangement or understanding. I do not think that the Commission intended to authorize conduct which would plainly breach s 45. What it had in mind was allowing rates to be agreed but not to be enforced. Accordingly, the expression ‘no requirement’ refers to a requirement of an informal nature as well as more formal arrangements.

20. Air NZ submitted that even if something less than a legal obligation was connoted by the expression ‘no requirement’ the fact was that the informal arrangements or understandings to which I have found it was a party were still not requirements within the meaning of the authorization.  Why?  Because sometimes Air NZ had failed to honour the alleged arrangements.  As I followed the argument, the point was that even if a requirement could be less than legally binding nevertheless one could not have a requirement which was constituted by an arrangement or understanding which ultimately was shown not to have been honoured.

21. I do not accept this argument.  A requirement does not lose its quality as such because of subsequent inconsistent conduct.

1. In those circumstances, I reject the arguments based on the authorizations.

   14  TIME AND LIMITATION ISSUES

2. It will follow from the conclusions I have reached that no relief should be granted to the Commission.  This makes it strictly unnecessary to consider the limitation issues which arise.

3. Substantial limitation issues did exist.  The Commission sought the imposition of pecuniary penalties as well as declarations and injunctions.  It was not in dispute that many of the claims for pecuniary penalties could not succeed because they were not commenced within six years of the alleged contravention:  see s 77(2).  By way of example, it appears that the Commission’s case against Air NZ was commenced on or around 17 May 2010.  It follows that every claim for a pecuniary penalty for conduct constituting a contravention arising prior to 17 May 2004 is statute barred.  This would include:

   ·October 2001 Hong Kong Insurance Surcharge Understanding;

   ·December 2002 Hong Kong Insurance Surcharge Understanding;

   ·2002 Hong Kong Lufthansa Methodology Understanding;

   ·First Hong Kong Surcharge Extension Understanding;

   ·Second Hong Kong Surcharge Extension Understanding;

   ·April 2002 Singapore Fuel Surcharge Survey;

   ·October 2002 Singapore Fuel Surcharge Survey Understanding;

   ·February 2003 Singapore Fuel Surcharge Survey Understanding;

   ·December 2003 Singapore Understanding;

   ·Singapore Insurance and Security Surcharge Understanding; and

   ·Overarching Singapore Understanding.

4. It would also include any contraventions constituted by implementations of these understandings occurring before 17 May 2004.  Of course, the Commission’s case about those understandings is not limited to the claims for pecuniary penalties.  It also seeks declarations that the various contraventions occurred and injunctive relief to restrain further contraventions.  It is common ground that the six year time bar in s 77(2) does not apply to those claims. Had these contraventions been established, Air NZ and Garuda submitted that declaratory and injunctive relief should nevertheless be declined on discretionary grounds, including the proposition that these remedies could not be used to outflank the time bar in s 77.

5. Since the question of relief was not addressed at the hearing I consider it inappropriate to express any views on the various discretionary issues which might otherwise arise.

6. Apart from arguments of that kind, Garuda made a separate argument based on s 77 which, if accepted, would lead to the Commission’s penalty case failing even when the relevant contravention was not statute barred.  The argument was as follows:  the Commission had filed its proceedings on 2 September 2009.  This meant that large parts of the Commission’s case against it in Hong Kong and Indonesia were time-barred at least so far as the imposition of penalties was concerned.  Garuda argued that the Commission’s decision to commence the proceeding was an administrative decision and that the power involved was constrained by the time limitation in s 77(2).  The full text of s 77 was:

   (1)The Commission may institute a proceeding in the Court for the recovery on behalf of the Commonwealth of a pecuniary penalty referred to in section 76.

   (2)A proceeding under subsection (1) may be commenced within 6 years after the contravention.

7. On this view, the Commission lacked power to commence a proceeding which did not comply with the requirements of s 77(2).  Thus, the Commission’s decision to commence a proceeding to seek a civil penalty with respect to a number of claims a single one of which was time barred was beyond power.  This would, of course, entitle Garuda to judicial review of the Commission’s decision to commence the proceeding but Garuda submitted that it could proceed without such a judicial review relying instead on a collateral challenge in these proceedings.  In any event, the result would be the same:  not only would the Commission’s proceeding fail with respect to its claims for penalties for contraventions which were statute barred but its claims for penalties for contraventions which were not statute barred would also fail.

8. The key word here is ‘proceeding’.  What may be commenced under s 77(2) is ‘[a] proceeding under subsection (1)’ and such a proceeding is for the recovery of a penalty under s 76.  It follows that a proceeding under s 77(1) relates to an identified contravention in s 76.  Although s 77(1) talks of ‘a proceeding in the Court’, read in the context of s 76(1) and s 77(2), it is apparent that ‘proceeding’ refers to individual claims for individual civil penalties.  It does not refer to the overall originating process and pleading.  If it were otherwise, it would be impossible for the Commission to institute a proceeding containing a claim for a civil penalty with any other non-penalty claim for such a claim would fall outside s 77(1) (not being a claim for a penalty).  Once that is appreciated, the argument fails.

   15  REMAINING INTERLOCUTORY ISSUES

   15.1  The Commission’s reply to Garuda’s defence

9. On day 51 of the trial (18 April 2013) a dispute arose about paragraph 48O.3 of the Commission’s reply to Garuda’s defence.  Paragraph 48O is as follows:

   48O. In answer to paragraph 302R of the Further Amended Defence, the Applicant:

   48O.1. repeats paragraph 48L above;

   48O.2. denies, as is alleged, that the Respondent was obliged or alternatively, authorised under Indonesian law, to seek to reach agreement with other airlines on the level of the surcharges and fees alleged in the Amended Statement of Claim and the terms or conditions upon which they were to be imposed;

   48O.3. says that the Respondent cannot have been so obliged or alternatively, authorised under Indonesian law as at all material times Article 5 of Law 5 of 1999 Concerning the Ban on Monopolistic Practices and Unfair Business Competition (1999 Competition Law) prohibited (relevantly) the Respondent from taking any action so as to bind itself with any other airline engaged in activities within the Republic of Indonesia in order to fix prices on the supply of air cargo services;

   48O.4. denies that it was a condition of the Australian Licence that the Respondent seek to reach agreement with other airlines on the level of the surcharges and fees alleged in the Amended Statement of Claim and the terms or conditions upon which they were to be imposed; and

   48O.5. otherwise denies the allegations in paragraph 302R. The Applicant denies the allegations in the second paragraph 302Q and the un-numbered paragraph that follows.

   [emphasis in original]

10. As will be apparent paragraph 48O.3 is responsive to paragraph 302R of Garuda’s Further Amended Defence which is as follows:

    302RQ.    In the premises, the Respondent was obliged, or alternatively, authorised to seek to reach agreement with other airlines on the level of the surcharges and fees alleged in the Amended Statement of Claim and the terms or conditions upon which they were to be imposed.

11. Paragraph 48O was added to the Commission’s reply only on 12 April 2013.  Prior to that it had consisted of a bare denial.

12. Garuda submitted that it was by then too late for the effect of the 1999 Indonesian Competition Law to be raised at trial.

13. By this time the evidence of Dr Butt and Professor Lindsey had already been elicited and this testimony had not included any evidence about the impact of 1999 Indonesian Competition Law on Garuda’s obligations under Indonesian domestic law to engage in tariff fixing.

14. The point of Garuda’s submission was that it would not be possible to deal adequately with the issues raised by the end of the trial.

15. Having seen Dr Butt and Professor Lindsey’s evidence about Indonesian statute law I considered that this was correct.  However, I was also of the view that it was unlikely, once mature consideration was given to the issue, that any further evidence or submission would be required.  In those circumstances, I severed the issue of the operation of the 1999 Indonesian Competition Law from the rest of the hearing and listed it several weeks later to allow it to be properly addressed.  Since that resolved any prejudice and because the Commission’s reply was a perfectly timely response to Garuda’s defence of 12 April 2003 I granted leave.  As events transpired, the parties provided written submissions on this issue and did not require a further hearing.

    16  CONCLUSIONS

16. Both applications will be dismissed.  I will hear the parties on costs.  Prior to delivery of judgment all parties affected by confidentiality issues were contacted about the making of orders which would lift various prior confidentiality orders sufficiently to permit the references to documents in this judgment.  Only Singapore Airlines was affected.  Both it and the parties to this case agreed that I should make the following orders in respect of confidentiality:

    1.Order 1 of the orders of 1 May 2013 in each of the proceedings numbered NSD 955 of 2009 and NSD 534 of 2010 be vacated only with respect to:

    1.1     the internal SIAC email dated 19 April 2002 from Kenn Ang which is identified by the document identifier SQC.142.900000002, and that same email where it appears as part of Confidential Annexure NR-2 to the affidavit of Nazim Ros affirmed 24 May 2012;

    1.2     the following sentence in an attachment to the email referred to above, which is identified by the document identifier SQC.142.900000004:

    “HDQ will monitor the movement of the [confidential] indices and trigger stations as to when to adjust your rates, and by what quantum”
    with the exception that a word in the sentence above be replaced by the text ‘[confidential]’ where indicated;

    1.3     the sentence identified in paragraph 1.2 above (subject to the same exception) where it appears as part of Confidential Annexure NR-2 to the affidavit of Nazim Ros affirmed 24 May 2012; and

    1.4     the fourth and fifth sentences of paragraph 21 of the affidavit of Nazim Ros affirmed 24 May 2012 (SQC.904.000000001).

I certify that the preceding one thousand two hundred and eighty seven (1287) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:       31 October 2014