DBCT Management Pty Ltd v Treasurer and Minister for Infrastructure and Planning (Qld)
[2021] QSC 335
•10 December 2021
SUPREME COURT OF QUEENSLAND
CITATION:
DBCT Management Pty Ltd v Treasurer and Minister for Infrastructure and Planning (Qld) & Ors [2021] QSC 335
PARTIES:
DBCT MANAGEMENT PTY LIMITED
(applicant)
v
TREASURER AND MINISTER FOR INFRASTRUCTURE AND PLANNING (QUEENSLAND)(first respondent)
And
ANGLO AMERICAN METALLURGICAL COAL PTY LTD
BHP BILLITON MITSUI COAL PTY LTD
BM ALLIANCE COAL OPERATIONS PTY LIMITED
FOXLEIGH MANAGEMENT PTY LTD
HAIL CREEK COAL HOLDINGS PTY LTD
OAKY CREEK HOLDINGS PTY LTD
PEABODY ENERGY AUSTRALIA PCI (C&M MANAGEMENT) PTY LTD
PEMBROKE OLIVE DOWNS PTY LTD
ROLLESTON COAL HOLDINGS PTY LTD
SOUTH32 EAGLE DOWNS PTY LTD
STANMORE IP COAL PTY LTD(second respondents)
FILE NO/S:
BS No 7058 of 2020
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court of Queensland at Brisbane
DELIVERED ON:
10 December 2021
DELIVERED AT:
Brisbane
HEARING DATE:
23, 24, 25 November 2020
JUDGE:
Davis J
ORDER:
1. The application is dismissed.
2. The applicant pay the first respondent’s costs of the application.
3. There be no order as to the costs of other respondents.
CATCHWORDS:
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION - SUPERVISION - OTHER BODIES - where the applicant is the operator of the Dalrymple Bay Coal Terminal (the facility) at Hay Point in North Queensland - where the facility provides port services to the mines in the Goonyella region - where the applicant enjoys a monopoly - where the service was declared or deemed declared pursuant to the Queensland Competition Authority Act 1997 (QCA Act) - where the declaration expired in 2020 - where the users of the service enjoyed contracts negotiated with approval of the Queensland Competition Authority (the Authority) - where to avoid declaration post-2020 the applicant offered terms to new users and existing users exceeding present capacity allotted to them - whether declaration would promote a material increase in competition in a market upstream or downstream from the market for the service - where there is a market for the development of new mining tenements (development stage tenements market) - where the Minister found that declaration of the service would promote a material increase in the development stage tenements market - where the Minister declared the mine - where the applicant alleges administrative error in making the declaration
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - RELEVANT CONSIDERATIONS - where the applicant is the operator of the facility - where the Minister declared the service under the provisions of the QCA Act - whether the Minister failed to take into account relevant considerations - whether the Minister did take the considerations into account - whether the considerations were ones which the Minister was obliged to take into account
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - ERROR OF LAW - where the applicant is the operator of the facility - where the Minister declared the service under the provisions of the QCA Act - whether the Minister made an error of law by misunderstanding the test of “would promote a material increase in competition” - where the Minister consistently stated the correct test in the reasons - whether the Minister has impermissibly considered likelihood of increased competition generally as the relevant test
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - ERROR OF LAW - where the applicant is the operator of the facility - where the Minister declared the service under the provisions of the QCA Act - whether the Minister made an error of law in that there was no evidence to justify making the decision - whether there was such evidence - whether the Minister was required by law to reach the decision only if particular matters were established - whether such matters were jurisdictional facts
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - ABUSE OF POWER - where the applicant is the operator of the facility - where the Minister declared the service under the provisions of the QCA Act - whether the making of the decision was an improper exercise of the power because the decision was so unreasonable that no reasonable person could make it - whether the decision was logical - whether there was evidence supporting the Minister’s findings
Corones’ Competition Law in Australia 7th ed 2019
Journal of Contract Law, vol 25 (2009) 1
Queensland Government Gazette No. 31; 1 June 2020Administrative Decisions (Judicial Review) Act 1997 (Cth), s 5
Competition and Consumer Act2010 (Cth), s 44CA
Competition Policy Reform Act1995 (Cth)
Judicial Review Act1991 (Qld), s 4, s 20, s 23, s 24, s 30
Motor Accident Insurance and Other Acts Amendment Act 2010 (Qld): Explanatory Memorandum
Motor Accident Insurance and Other Legislation Amendment Act 2010 (Qld)
Motor Accident Insurance and Other Legislation Amendment Bill 2010 (Qld)
Payment Systems (Regulation) Act 1998 (Cth)
Queensland Competition Authority Act 1997 (Qld), s 69E, s 70, s 71, s 72, s 73, s 76, s 79, s 80, s 84, s 86, s 87, s 87C, s 88, s 97, s 99, s 100, s 101, s 248, s 250
Queensland Competition Authority Amendment Regulation (No. 1) 2012 (Qld)
Queensland Competition Authority Bill 1997 (Qld)
Queensland Competition Authority Regulation 2007 (Qld)
Trade Practices Act1974 (Cth), s 44H
Trade Practices Amendment (National Access Regime) Bill 2005 (Cth)Abel Point Marina (Whitsundays) Pty Ltd v Uher & Anor [2006] QSC 295, followed
Antaios Compania Naviera SA v Salen Rederierna A.B. [1985] AC 191, cited
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, followed
Attorney-General (NSW) v Quin (1990) 170 CLR 1, cited
Australian Competition and Consumer Commission v Pacific National Pty Ltd (No 2) [2019] FCA 669, cited
Australian Pacific LNG Pty Ltd & Ors v The Treasurer, Minister for Aboriginal and Torres Strait Islander Partnership and Minister for Sport [2019] QSC 124, followed
Australian Retailers Association v Reserve Bank of Australia (2005) 148 FCR 446, followed
Avon Downes Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353, cited
Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 374, cited
Brown v Tasmania (2017) 261 CLR 328, cited
Buck v Bavone (1976) 135 CLR 110, followed
Burns v Corbett (2018) 265 CLR 304, cited
Byrnes v Kendle (2011) 243 CLR 253, followed
City of Enfield v Development Assessment Commission (2000) 199 CLR 135, cited
Club v Edwards; Preston v Avery (2019) 267 CLR 171, cited
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, followed
Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, followed
DPB16 v Minister for Home Affairs [2020] FCA 781, cited
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, cited
East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007) 233 CLR 229, cited
Elderslie Property Investments No 2 Pty Ltd v Dunn [2008] QCA 158, cited
Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd (2014) 251 CLR 640, cited
Griffith University v Tang (2005) 221 CLR 99, cited
Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123, cited
House v The King (1936) 55 CLR 499, cited
Intel Corporation v Unwired Group Ltd [2008] FCA 1927, considered
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151, cited
Kioa v West (1985) 159 CLR 550, cited
Martincevic v Commonwealth of Australia (2007) 164 FCR 45, cited
McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609, cited
McCloy v New South Wales (2015) 257 CLR 178, cited
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, followed
Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1, cited
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, followed
Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611, followed
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, followed
Minister for Immigration and Multicultural Affairs v Singh (2000) 98 FCR 469, cited
Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, followed
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd & Anor (2015) 256 CLR 104, considered
Murphy v Electoral Commissioner (2016) 261 CLR 28, cited
Norbis v Norbis (1986) 161 CLR 513, cited
Ogawa v Carter of the Department of Home Affairs (as the Second Delegate of the Finance Minister) [2021] FCAFC 16, cited
Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451, cited
Pilbara Infrastructure Pty Ltd & Ors v Australian Competition Tribunal & Ors (2012) 246 CLR 379, considered
Plaintiff M64/2015 v Minister for Immigration and Border Protection (2016) 258 CLR 173, cited
Port of Newcastle Operations Pty Ltd v Glencore Coal Assets Australia Pty Ltd [2021] HCA 39, followed
Probuild Constructions(Aust) Pty Ltd v Shade Systems Pty Ltd (2017) 264 CLR 1, cited
Re Application by Fortescue Metals Group Limited & Ors [2006] ACompT 6, followed
Re Application by Glencore Coal Pty Ltd [2016] ACompT 6, followed
Re Application by Services SydneyPty Ltd (2005) 227 ALR 140, followed
Re Duke Eastern Gas Pipeline Pty Ltd (2001) 162 FLR 1, followed
Re Golden Key Ltd [2009] EWCA Civ 636, cited
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2002) 214 CLR 1, cited
Re Sydney Airports Corporation (2000) 156 FLR 10, followed
Re Telstra Corporation Ltd (No 3) (2007) 242 ALR 482, cited
Re Virgin Blue Airlines (2005) 195 FLR 242, followed
Reardon Smith Line Ltd v Yngvar Hansen-Tangen (Trading as HE Hansen-Tangen) [1976] 1 WLR 989, cited
SAAP v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 228 CLR 294, cited
Spence v Queensland (2019) 367 ALR 587, cited
TCL Air Conditioner (Zhongshan) Company Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361, cited
Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55, cited
Toll (FGCT) Pty Ltd v Alphafarm Pty Ltd (2004) 219 CLR 165, cited
Vodafone Hutchison Australia Pty Ltd v Australian Competition and Consumer Commission [2020] FCA 117, cited
Zhu v Treasurer of New South Wales (2004) 218 CLR 530, consideredCOUNSEL:
R Higgins SC with R Yezerski and N Derrington for the applicant
J McKenna QC with G del Villar QC, J O’Regan and D Bampton for the first respondentD Clothier QC with S McCarthy for the second respondents
SOLICITORS:
DLA Piper for the applicant
GR Cooper, Crown Solicitor for the first respondentAllens for the second respondents
The applicant, DBCT Management Pty Ltd (DBCTM), is the operator of the Dalrymple Bay Coal Terminal (the terminal) which is located at the Port of Hay Point south of Mackay.
By decision published[1] 1 June 2020, the first respondent, the Treasurer and Minister for Infrastructure and Planning (Queensland) (the Minister), declared DBCTM’s activities as operator of the terminal a “service” pursuant to s 84(1)(a) of the Queensland Competition Authority Act 1997 (the QCA Act). DBCTM seeks to judicially review that decision.
[1]Queensland Government Gazette No 31; 1 June 2020.
The Minister is the first respondent to the application. The second respondents are all users of the terminal. They were joined to the proceedings on their own application on terms that they would not seek their costs and costs would not be sought against them.[2]
[2]Order of Dalton J, 18 August 2020.
All respondents oppose the application for judicial review.
Statutory context and history
The QCA Act was the product of the passing of the Queensland Competition Authority Bill 1997. In the Explanatory Memorandum to that Bill, the objects of the legislation were described as:
“Policy Objectives of the Bill and the reasons for them
The policy objective of the Bill is to create an independent statutory body, the Queensland Competition Authority (QCA), to perform several functions associated with National Competition Policy. In particular, the QCA will:
· undertake prices oversight of monopoly or near monopoly Government business activities;
· act as a competitive neutrality complaints mechanism;
· regulate third party access to infrastructure.” (emphasis added)
As the reference to “National Competition Policy” suggests, the QCA Act was intended to supplement a Commonwealth approach. The Commonwealth passed the Competition Policy Reform Act 1995 (the CPR Act). The CPR Act extensively amended the Trade Practices Act 1974 (Cth) (the TP Act). The CPR Act established the National Competition Council[3] and inserted into the TP Act “Part IIIA - Access to Services”.
[3]The Commonwealth equivalent to the Queensland Competition Authority.
The Queensland Parliament followed the lead of the Commonwealth and passed the QCA Act in 1997. The QCA Act established the Queensland Competition Authority (the QCA) and gave it various functions and powers.
Part 5 of the QCA Act introduced a scheme similar to that of Part IIIA of the TP Act which regulated access to significant infrastructure. The rationale for such a scheme was described in the Explanatory Memorandum of the QCA Act as:
“(c) Third party access
The underlying rationale of creating third party access rights to significant infrastructure is to ensure that competitive forces are not unduly stifled in industries which rely upon a natural monopoly at some stage in the production process, especially where ownership or control of significant infrastructure is vertically integrated with upstream or downstream operations.[4]
A key aspect of the market system is that an infrastructure owner is entitled to choose with whom it will deal. The threat of competitors providing substitutes constrains a seller’s ability to charge excessive prices or otherwise restrict supply. However, in cases where these substitutes do not exist, a seller possesses significant market power. A seller may exercise its market power to increase its profit by restricting output because doing so enables the seller to increase its price.
In cases of natural monopoly, one facility meets all of a market’s demand more efficiently than a number of smaller and more specialised facilities. Accordingly, it is not socially desirable that the infrastructure comprising a natural monopoly be duplicated. At the same time, the absence of competition enables a natural monopoly infrastructure owner to extract excessive profits through exercising market power.
This is especially the case where the business which operates the natural monopoly also has a commercial interest in upstream or downstream markets (for example a rail operator who also owns the track). Such a business may discriminate against its upstream or downstream competitors by offering access on more favourable terms and conditions than is offered to competitors. In this way, an owner of a natural monopoly is able to stifle competition in upstream or downstream markets.
The purpose of third party access is therefore to provide a legislated right to use another person’s infrastructure. This should prevent owners of natural monopolies charging excessive prices. It should also encourage the entry of new firms into the potentially competitive upstream and downstream markets which rely on a natural monopoly infrastructure in the production process, and thereby enable greater competition in those markets. This in turn would promote more efficient production and lower prices to consumers.
The Bill provides for a streamlined approach to access, and incorporates mechanisms to increase certainty for infrastructure owners and prospective users alike.” (emphasis added)
[4]DBCTM has no interest in any business in the chain of supply apart from the terminal.
Section 69E, which states the objects of Part 5 was inserted by later amendment. It provides:
“69E Object of pt 5
The object of this part is to promote the economically efficient operation of, use of and investment in, significant infrastructure by which services are provided, with the effect of promoting effective competition in upstream and downstream markets.”
Critically, the terms “facility”, “market” and “service” are defined, relevantly, as follows:
“70 Meaning of facility
(1)Facility includes—
(a) rail transport infrastructure; and
(b) port infrastructure; and
(c) electricity, petroleum, gas or GHG stream transmission and distribution infrastructure; and
(d) water and sewerage infrastructure, including treatment and distribution infrastructure. …” (emphasis added)
71Meaning of market
(1)A market is a market in Australia or a foreign country.
(2)If market is used in relation to goods or services, it includes a market for—
(a) the goods or services; and
(b) other goods or services that are able to be substituted for, or are otherwise competitive with, the goods or services mentioned in paragraph (a).”
72Meaning of service
(1)Service is a service provided, or to be provided, by means of a facility and includes, for example—
(a) the use of a facility[5] (including, for example, a road or railway line); and
[5]Which includes use of a port; see s 70(1)(b).
(b) the transporting of people; and
(c) the handling or transporting of goods or other things; and
(d) a communications service or similar service.
(2)However, service does not include—
(a) the supply of goods (except to the extent the supply is an integral, but subsidiary, part of the service); or
(b) the use of intellectual property or a production process (except to the extent the use is an integral, but subsidiary, part of the service); or
(c) a service—
(i)provided, or to be provided, by means of a facility for which a decision of the Australian Competition and Consumer Commission, approving a competitive tender process under the Competition and Consumer Act 2010 (Cwlth), section 44PA, is in force; and
(ii)that was stated under section 44PA(2) of that Act in the application for the approval. …” (emphasis added)
73References to facilities
In this part, a reference to a facility in association with a reference to a service or part of a service is a reference to the facility used, or to be used, to provide the service or part of the service.”
Division 2 of Part 5 concerns the declaration of services. By this division, a process is established where the QCA makes a recommendation to the Minister that the service be or not be declared pursuant to the QCA Act.[6] In order to make that recommendation, the QCA may conduct an investigation.[7] Then the Minister, once the declaration recommendation is received, decides whether to declare or not declare the service.[8]
[6]Section 79.
[7]See Part 5, Division 3.
[8]Section 84.
Critical to the process of the QCA, and the decision of the Minister, is s 76. In its present form, it is:
“76 Access criteria
(1)This section sets out the matters (the access criteria) about which—
(a) the authority is required to be satisfied for recommending that a service be declared by the Minister; and
(b) the Minister is required to be satisfied for declaring a service.
(2)The access criteria are as follows—
(a) that access (or increased access) to the service, on reasonable terms and conditions, as a result of a declaration of the service would promote a material increase in competition in at least 1 market (whether or not in Australia), other than the market for the service;
(b) that the facility for the service could meet the total foreseeable demand in the market—
(i)over the period for which the service would be declared; and
(ii)at the least cost compared to any 2 or more facilities (which could include the facility for the service);
(c) that the facility for the service is significant, having regard to its size or its importance to the Queensland economy;
(d) that access (or increased access) to the service, on reasonable terms and conditions, as a result of a declaration of the service would promote the public interest.
(3)For subsection (2)(b), if the facility for the service is currently at capacity, and it is reasonably possible to expand that capacity, the authority and the Minister may have regard to the facility as if it had that expanded capacity.
(4)Without limiting subsection (2)(b), the cost referred to in subsection (2)(b)(ii) includes all costs associated with having multiple users of the facility for the service, including costs that would be incurred if the service were declared.
(5)In considering the access criterion mentioned in subsection (2)(d), the authority and the Minister must have regard to the following matters—
(a) if the facility for the service extends outside Queensland—
(i)whether access to the service provided outside Queensland by means of the facility is regulated by another jurisdiction; and
(ii)the desirability of consistency in regulating access to the service;
(b) the effect that declaring the service would have on investment in—
(i)facilities; and
(ii)markets that depend on access to the service;
(c) the administrative and compliance costs that would be incurred by the provider of the service if the service were declared;
(d) any other matter the authority or Minister considers relevant.” (emphasis added)
Section 76 was amended to its present form in 2010 by s 23 of the Motor Accident Insurance and Other Legislation Amendment Act 2010. Section 76, in its form before the 2010 amendment, was:
“76 Access criteria
(1)This section sets out the matters (the ‘access criteria’) about which—
(a)the authority is required to be satisfied for recommending that a candidate service be declared by the Ministers; and
(b)the Ministers are required to be satisfied for declaring a candidate service.
(2)The access criteria are as follows—
(a)that access (or increased access) to the service would promote competition in at least 1 market (whether or not in Australia), other than the market for the service;
(b)that it would be uneconomical to duplicate the facility for the service;
(c)that access (or increased access) to the service can be provided safely;
(d)that access (or increased access) to the service would not be contrary to the public interest.
(3)In considering the access criterion mentioned in subsection (2)(d), the authority and the Ministers must have regard to the following matters—
(a)legislation and government policies relating to ecologically sustainable development;
(b)social welfare and equity considerations including community service obligations and the availability of goods and services to consumers;
(c)legislation and government policies relating to occupational health and safety and industrial relations;
(d)economic and regional development issues, including employment and investment growth;
(e)the interests of consumers or any class of consumers;
(f)the need to promote competition;
(g)the efficient allocation of resources.” (emphasis added)
In these reasons:
1.the criterion defined by s 76(2)(a) is “Criterion A”;
2.The criterion defined by s 76(2)(b) is “Criterion B”;
3.the criterion defined by s 76(2)(c) is “Criterion C”; and
4.the criterion defined by s 76(2)(d) is Criterion D.
The significant amendment to s 76 for present purposes is to s 76(2)(a). In its original form, the issue for Criterion A was whether access or increased access to the service “would promote competition in at least 1 market”.[9] Post-amendment, the question is whether declaration of the service, “would promote a material increase in competition in at least 1 market”.[10]
[9]Other than the market for the service. See Port of Newcastle Operations Pty Ltd v Glencore Coal Assets Australia Pty Ltd [2021] HCA 39 at [24].
[10]Other than the market for the service.
Section 44H(4) of the TP Act, as originally enacted, was in identical terms as s 76 of the QCA Act, as originally enacted. Section 44H(4) was also amended in precisely the same way as s 76 of the QCA Act. The TP Act has been repealed and the scheme now sits in the Competition and Consumer Act 2010 (the CC Act). Section 44CA of the CC Act is in the same terms as s 76 of the QCA Act.
The amendment to s 44H(4) of the TP Act was effected by the Trade Practices Amendment (National Access Regime) Act 2005. The revised Explanatory Memorandum to the Bill is in these terms, relevantly:
“Item 23- Paragraph 44H(4)(a)
1.38 Item 23 amends paragraph 44H(4)(a), to provide that the designated Minister cannot declare a service unless he or she is satisfied, inter alia, that access ( or increased access) to the service would promote a material increase in competition in at least one market (whether or not in Australia), other than the market for the service. In responding to the Productivity Commission’s report, the Government indicated that while the current declaration criteria (such as ‘the national significance’ test) preclude declaration where the relevant infrastructure and subsequent public benefits are not significant, this does not sufficiently address the situation where, irrespective of the significance of the infrastructure, declaration would only result in marginal increases in competition. The change will ensure access declarations are only sought where increases in competition are not trivial.” (emphasis added)
The Explanatory Memorandum to the Motor Accident Insurance and Other Legislation Amendment Bill 2010, which amended s 76 of the QCA Act is, relevantly, in these terms:
“amend section 76(2)(a) to clarify that access (or increased access) to the service should be expected to promote a material increase in competition in order for this criterion to be satisfied. This will prevent the declaration of services where only a trivial increase in competition is expected to result;” (emphasis added)
Section 80 of the QCA Act provides for the QCA to make a recommendation to the Minister. It is in these terms:
“80 Factors affecting making of recommendation
(1)The authority must recommend that a service be declared by the Minister if the authority is satisfied about all of the access criteria for the service.
(2)The authority must recommend that a service not be declared by the Minister if the authority is not satisfied about all of the access criteria for the service.
(3)Despite subsection (1), the authority may recommend that a service not be declared by the Minister if the authority considers the request was not made in good faith or is frivolous.
(4)Subsection (3) does not apply to a request made by the Minister.
(5)Despite subsections (1) and (2), the authority may recommend that part of a service be declared by the Minister if the authority is satisfied about all of the access criteria for the part of the service.” (emphasis added)
Section 84 requires the Minister to take steps upon receipt of a recommendation of the QCA. That section provides, relevantly:
“84 Making declaration
(1)On receiving a declaration recommendation, the Minister must do 1 of the following—
(a) declare the service;
(b) declare part of the service, that is itself a service;
(c) decide not to declare the service. …
(4)If the Minister declares the service, or part of the service, the declaration must state the expiry date of the declaration.
(5)If the Minister decides not to declare the service and the declaration recommendation was made under subdivision 4A, the decision does not affect the existing declaration for the service.” (emphasis added)
Importantly, s 86 is in these terms:
“86 Factors affecting making of declaration
(1)The Minister must declare a service if the Minister is satisfied about all of the access criteria for the service.
(2)The Minister must decide not to declare a service if the Minister is not satisfied about all of the access criteria for the service.
(3)Despite subsections (1) and (2), the Minister may declare part of a service if the Minister is satisfied about all of the access criteria for the part of the service.” (emphasis added)
Once a declaration is made, a person seeking access to the service has a right to negotiate an access agreement with the provider of the service.[11] Importantly, by s 100(2):
“100 Obligations of parties to negotiations
…
(2)In negotiating access agreements, or amendments to access agreements, relating to the service, the access provider must not unfairly differentiate between access seekers in a way that has a material adverse effect on the ability of 1 or more of the access seekers to compete with other access seekers.”[12]
[11]Section 99.
[12]Statutory note omitted.
By s 101(1):
“101 Obligation of access provider to satisfy access seeker’s requirements
(1)In negotiations between an access provider and access seeker for an access agreement, the access provider must make all reasonable efforts to try to satisfy the reasonable requirements of the access seeker. …”
Division 4 of Part 5[13] regulates access agreements and the parties to them in various ways. It is not necessary to analyse those provisions. Division 5 of Part 5 concerns disputes about access to a service. Again, it is not necessary to analyse these provisions. Suffice to say that upon declaration, the service becomes subject to regulation.
[13]Which contains ss 100 and 101. As to the operation of the access rights, see generally Port of Newcastle Operations Pty Ltd v Glencore Coal Assets Australia Pty Ltd [2021] HCA 39.
A declaration will expire. Section 84(a) requires the Minister to set an expiry date and s 87 provides:
“87 Duration of declaration
(1)A declaration starts to operate on—
(a) the day notice of the decision to declare the service is published in the gazette; or
(b) if a later day of operation is stated in the notice—the later day.
(2)A declaration continues in operation until its expiry date, unless it is earlier revoked.”
Subdivision 4A of Part 5 concerns the review of a declaration. It effectively mirrors Subdivision 4. The QCA must make a recommendation to the Minister.[14] The access criteria are again picked up by s 87C, which is in these terms:
“87C Factors affecting making of recommendation
(1)The authority must make a recommendation under section 87A(1)(a)[15] if the authority is satisfied about all of the access criteria for the service.
(2)The authority must make a recommendation under section 87A(1)(c)[16] if the authority is not satisfied about all of the access criteria for the service.
(3)Despite subsections (1) and (2), the authority may make a recommendation under section 87A(1)(b) if the authority is satisfied about all of the access criteria for the part of the service.” (emphasis added)
[14]Section 87A.
[15]A recommendation to declare the service.
[16]A recommendation not to declare the service.
Section 88 provides as follows:
“88 Recommendation to revoke
(1)The authority may recommend to the Minister that a declaration of a service or part of a service be revoked.
(2)Without limiting subsection (1), the owner of the declared service may ask the authority to recommend revocation of the declaration of the service or part of the service.
(3)The authority may recommend revocation of a declaration of a service or part of a service only if it is satisfied that, at the time of the recommendation, section 86 would prevent the Minister from declaring the relevant service or the part of the relevant service.”
The term “declaration recommendation” is defined as:
“declaration recommendation means—
(a)for part 5—a recommendation made by the authority under section 79 or 87A; or
(b)for part 5A[17]—a recommendation made by the authority under section 170I.”
[17]Which relates to water supply.
Therefore, upon receipt of a declaration recommendation relevant to the renewal of a declaration (under s 87A), ss 84 and 86 are engaged requiring the Minister to make a decision to declare or not declare the service.
General observations about the legislation
The QCA must make a recommendation to either declare or not declare the service. That determination is governed by the access criteria.[18] A recommendation to declare the service can only be made if all the access criteria are present. That no doubt requires the exercise of some judgment.[19] However, if all access criteria are found to be present, then there is no discretion to refuse to make a recommendation to declare.[20]
[18]Section 76(2).
[19]Of the type discussed in Norbis v Norbis (1986) 161 CLR 513.
[20]Pilbara Infrastructure Pty Ltd & Ors v Australian Competition Tribunal & Ors (2012) 246 CLR 379 at [115]-[119].
That determination by the QCA has no apparent legal effect other than its delivery to the Minister triggers s 84 and requires the Minister to make a decision. There is nothing in the QCA Act which obliges the Minister to follow or even consider the recommendation.
Pilbara Infrastructure Pty Ltd & Ors v Australian Competition Tribunal & Ors[21] concerned a decision under the TP Act to declare services involving three train lines and not to declare a fourth. The National Competition Council (NCC)[22] made recommendations for various services to be declared. By force of the TP Act, upon the Minister not making a decision, the services were declared. Those declarations were reviewed by the Australian Competition Tribunal who set them aside. Issues for the High Court included the nature of the review by the Tribunal and the proper construction of access criteria then appearing in the TP Act. The High Court considered the interplay between the recommendation by the NCC and the role of the Minister.
[21](2012) 246 CLR 379.
[22]Which performed the same role as does the Queensland Competition Authority under the Queensland Competition Authority Act 1997.
It was observed:
1.the NCC had powers of investigation;[23]
2.the Minister had none;[24]
3.some of the criteria were of a technical kind (effect of competition on a particular market for example);
4.but some were of a political kind (the public interest for example);[25]
5.the Minister had only a short time (90 days) from receipt of the recommendation to make a decision to declare the service or not.
[23]Paragraphs [39]-[40].
[24]Paragraph [46].
[25]Paragraph [43].
Having made those observations, the High Court said this:
“The content of those provisions of Pt IIIA to which reference has been made suggests that it was expected that, armed with a recommendation from an expert and non-partisan body (the NCC), the Minister would make a decision quickly and would do so according to not only the Minister’s view of the public interest but also the expert advice given by the NCC about the more technical criteria of which the Minister had to be satisfied before a declaration could be made. And it is the Minister’s decision, not the NCC’s recommendation, that was the matter that was to be reviewed by the Tribunal.”[26]
[26]Paragraph [47].
In practice, as occurred in the present case, the QCA conducts an investigation which will involve the gathering of information and opinions. The recommendation is not a bare statement of satisfaction or otherwise of the access criteria, but is a full report for the consideration of the Minister. What is contemplated is that the Minister may have regard to any opinions (including the ultimate recommendation by the QCA) and may adopt or reject findings of fact made by the QCA. Ultimately though, the Minister’s decision is unfettered by the view of the QCA as to the existence or otherwise of any of the access criteria.
By s 79 of the QCA Act, the QCA “may consult with any person it considers appropriate”. Section 79A recognises that persons with an interest in the making of a declaration (or the failure to make a declaration) are involved in the process. The existence or content of any obligations to afford procedural fairness[27] are not in issue. Submissions were directed to the Minister and there is no complaint about the process adopted.
[27]Kioa v West (1985) 159 CLR 550, Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2002) 214 CLR 1 at [38], and see generally TCL Air Conditioner (Zhongshan) Company Ltd v Castel Electronics Pty Ltd (2014) 232 FCR 361 at [85]-[113].
As later explained, the dispute here is whether the declaration “would promote a material increase in competition”[28] in only one of various markets affected by the terminal; the development stage tenements market.
[28]Queensland Competition Authority Act 1997, s 76(2)(a).
There was a substantial body of evidence before the QCA and the Minister as to the impact of making a declaration upon that market. There is no challenge to the existence of that market, although it is obvious that it is not the largest or most significant market in the chain of supply. The test is not whether the declaration promotes a material increase in competition throughout the chain of supply or whether the market affected is “material”. Once a market is identified, the question is whether the declaration would promote a material increase in competition in that market.
No provision is made in the QCA Act for any appeal from, or review of the Minister’s decision to declare or not declare a service. Any challenge to what is clearly an exercise of executive power, must be mounted under the Judicial Review Act 1991 (the JR Act). That is what DBCTM has done.
Background
DBCTM Holdings Pty Ltd (DBCTM Holdings) is the owner of the terminal. DBCTM Holdings is a Queensland Government entity. DBCTM is the operator of the terminal.
Both the QCA and the Minister identified the “facility”[29] as:
[29]Queensland Competition Authority Act 1997, s 70.
“3.3.1I accept the QCA’s recommendation for the reasons set out in the QCA analysis[30] that the relevant facility is the port infrastructure as currently defined in section 250 of the QCA Act, namely the port infrastructure located at the port of Hay Point owned by Ports Corporation of Queensland or the State, or a successor or assign of Ports Corporation of Queensland or the State, and known as DBCT and which includes the following which form part of the terminal:
[30]Part C, section 2.3.1 at page 8.
(a)loading and unloading equipment;
(b)stacking, reclaiming, conveying and other handling equipment;
(c)wharfs and piers;
(d)deepwater berths;
(e)ship loaders.”[31] (emphasis added)
And the “service”[32] as:
“3.2.1I accept the QCA’s recommendation for the reasons set out in the QCA analysis[33] that, as currently defined in section 250[34] of the QCA Act:
(a)the relevant service is the handling of coal at DBCT by the terminal operator; and
(b)handling of coal includes unloading, storing, reclaiming and loading.”[35] (emphasis added)
[31]Minister’s reasons, 3.3.1.
[32]Queensland Competition Authority Act 1997, s 72.
[33]Part C, section 2.2.1 at page 7.
[34]Section 250 deems the handling of coal at the terminal to be a declared service; see these reasons, paragraphs [52]-[54].
[35]Minister’s reasons, 3.2.1.
The terminal services mines in the Goonyella region. There was some dispute during the QCA’s consideration as to the relevant market for the service. This is directly relevant to Criterion B. Criterion A concerns markets other than the market for the service. However, identification of the market for the service is relevant to determining the impact of declaration of the service upon Criterion A markets.
In a finding of the Minister’s which does not now seem to be challenged:
“3.4 Identify the market in which the service is provided
3.4.1I accept the QCA’s recommendation that the relevant market for Criterion B is the market for DBCT coal handling services for mines connected to the Goonyella system and that in this market there are no close substitutes for DBCT. I do so for the reasons set out in the QCA analysis.[36] In particular, I note and accept that:
[36]Part C, section 2.4.3 at pages 13-47; Part C, Appendix B at pages 264-269.
(a)the majority of demand for DBCT’s contracted capacity comes from mines in the Goonyella coal chain;
(b)mines in the Goonyella coal chain are unlikely to seek coal handling services from terminals outside the Goonyella coal chain in response to price or quality incentives given the significant cost and non-cost advantages to them in using DBCT compared to other coal terminals;
(c)certain mines in the Goonyella system have been, or are, using terminals other than DBCT but this has been behaviour based on strategic and commercial considerations rather than in response to price or quality incentives; and
(d)mines outside the Goonyella system are unlikely to seek to use DBCT on price or quality grounds.
3.4.2In addition, Hay Point Coal Terminal (HPCT) has to date not been operated as a common user terminal. I accept the submission provided by BHP to the effect that BMA has no incentive or intention to operate HPCT as a common user facility in the future.[37]
3.4.3Accordingly, I do not accept the market definition proposed by DBCTM, that the relevant market is the market for coal handling services for mines that are proximate to the Port of Hay Point. This is particularly because:
(a)while mines within the Goonyella system may use other terminals, as set out above, I accept the QCA’s conclusion that this is based on strategic and commercial considerations rather than in response to price or quality incentives—this is not evidence of close substitutability between terminals;
(b)HPCT is not in the relevant market, given it is not currently operated as a common user facility and I accept BHP’s evidence that BMA has no incentive or intention to operate HPCT as a common user facility in the future.”
[37]BHP submissions, 26 April 2019, section 2 at pages 2-3.
The facility is, practically speaking, a natural monopoly in the market. There are no other coal terminals servicing the mines connected to the Goonyella system except as explained in the Minister’s reasons and set out at paragraph [43] of these reasons.
Of some significance to the consideration to declare or not declare the service:
(a)the terminal has a name plate capacity of 85 million tonnes of coal per annum;[38]
(b)DBCTM is not vertically integrated[39] in the supply chain which means that other than as operator of the terminal, DBCTM has no interest in any other business concerned in the supply of coal to end users.
[38]See paragraphs [73]-[75] and [182]-[188] of these reasons where capacity of the terminal is considered in depth.
[39]As to the significance on competition on vertical integration, see Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 374.
Vertical integration is a theme mentioned in the Explanatory Memorandum to the QCA Act.[40] Criterion A concerns competition in markets other than the market for the service, that is, markets upstream and downstream from the market for the service.
[40]See paragraph [8] of these reasons.
As Criterion A requires a consideration of markets other than the market for the service, what needs to be considered is the impact of declaration of the service on markets upstream or downstream of the market for handling coal at the terminal.
In the QCA’s report, the Under Treasurer’s briefing note and the Minister’s reasons, three separate and distinct markets for coal tenements were identified:
(a)exploration stage tenements - the market for the supply and acquisition of new or early stage exploration permits of coal in the Central Queensland region;
(b)development stage tenements - the market for the supply and acquisition of late stage exploration and development tenements for metallurgical coal in the Hay Point catchment; and
(c)operating mines - the market for the supply and acquisition of operating mines in relation to the metallurgical coal in the Hay Point catchment.
Markets for coal tenements are not markets for the service, but are “other” markets and therefore relevant to Criterion A.
Prior to amendments made to the QCA Act by the Motor Accident Insurance and Other Legislation Amendment Act 2010, a declaration concerning a service might be made by the making of a regulation.[41]
[41]Queensland Competition Authority Act 1997, s 97.
That occurred. On 22 March 2001, the Queensland Competition Authority Amendment Regulation (No 1) was made which declared the terminal pursuant to s 97 of the QCA Act. On 23 August 2007, the Queensland Competition Authority Regulation 2007 was made which continued the declaration of the terminal.
When the Motor Accident Insurance and Other Legislation Amendment Act 2010 was passed, the process of declaration by regulation was abolished and s 250 of the QCA Act was enacted. Section 250 is, relevantly, in these terms:
“250 Saving of declarations of particular services
(1)Each of the following services is taken to be a service declared by the Ministers under part 5, division 2—
(a) the use of a coal system for providing transportation by rail;
(b) the use of rail transport infrastructure for providing transportation by rail if the infrastructure is used for operating a railway for which Queensland Rail Limited, or a successor, assign or subsidiary of Queensland Rail Limited, is the railway manager;
(c) the handling of coal at Dalrymple Bay Coal Terminal by the terminal operator.
(2)Subsection (1) stops having effect in relation to a service, or part of a service—
(a) at the end of the expiry day; or
(b) if the declaration of the service or part of the service is revoked under part 5, division 2, subdivision 5—when the revocation takes effect. …”[42] (emphasis added)
[42]Legislative notes omitted.
Section 250(2) of the QCA Act refers to the “expiry date”. This is defined by s 248 in these terms:
“248 Definition for pt 12
In this part—
expiry day means the day that is 10 years from the day this section commences.”
Therefore, by force of ss 248 and 250, the declaration deemed to have been made by the Minister expired on 8 September 2020 and the process of review under Sub-Division 4A of Part 5 applies to the declaration.
During the time the service was declared, various access agreements were entered into between DBCTM and users. The QCA may approve access agreements entered into between an access provider and an access seeker. That occurred. Relevantly here, access agreements (the 2017 Access Agreements) were entered into pursuant to an access undertaking made in 2017 (the 2017 Access Undertaking). The 2017 Access Agreements were approved by the QCA. The 2017 Access Undertaking expires on 1 July 2021. However, the 2017 Access Agreements continue in force and can be renewed by users pursuant to what the parties have called an “evergreen clause”.
The review process was commenced by the QCA in April 2018.[43] In December 2018, the QCA recommended that the service be declared from 8 September 2020.
[43]Queensland Competition Authority Act 1997, Part 5, Division 2, subdivision 4A.
DBCTM entered into a deed poll (the Deed Poll) where it undertook to give access on terms for the next 10 years. The Deed Poll[44] referred to two documents which together were intended to contain the terms of access to the service by users. Those documents were the Access Framework and the Standard Access Agreements (together with the Deed Poll, “the New Access Documents”).
[44]An amended Deed Poll is now contemplated but that issue is really only relevant to the discretionary granting of relief, see paragraphs [310]-[321] of these reasons.
There can be no doubt that the making of the Deed Poll by DBCTM was an attempt to implement a scheme of access to the terminal so as to avoid declaration post 8 September 2020. While users of the service, in their submissions to the QCA, displayed some cynicism towards the New Access Documents, there is in my view no legal or commercial reason why a provider of a service might not offer terms to users even if motivated by an intention to avoid declaration.
The QCA considered the effect of the Deed Poll and in March 2020 issued a final recommendation to the Minister. That recommendation was that the terminal not be declared as, given the Deed Poll, neither Criterion A nor Criterion D were satisfied. As already observed, Criterion A is that the “declaration of the service would promote a material increase in competition in at least 1 market”.[45] Having been satisfied that the effect of the Deed Poll was that the declaration would not promote such an increase in competition, it was then also, in the QCA’s view, not in the public interest for the declaration to be made (Criterion D).
[45]Other than the market for the service.
The Under Treasurer provided a briefing note to the Minister on 23 May 2020. The Under Treasurer recommended that the terminal not be declared but advised the Minister it was reasonably open to him to find that all criteria had been fulfilled.
The Minister found that the service satisfied all of the access criteria and on 31 May 2020 declared it. Reasons for the decision were delivered.
In finding that Criterion A was satisfied, the Minister found that the declaration would promote a material increase in competition in only one market being the development stage tenements market.
Having been satisfied that Criterion A was fulfilled, the Minister found that the making of a declaration promoted the public interest and consequently Criterion D was satisfied. Both the QCA and the Under Treasurer recommended that Criteria B and C were satisfied and the Minister accepted those opinions.
The 2017 Access Agreements
As already observed, during the period over which the terminal was declared, various access agreements were entered into. In order to meet the concerns in the draft report of the QCA, the Deed Poll was executed which, primarily, benefits new users as existing users continue to enjoy the benefits of the 2017 Access Agreements which continue to operate due to the “evergreen clause” contained in those agreements. Users who have the benefit of the 2017 Access Agreements are subject to a limit of coal they can process through the terminal. Any user who wishes to process coal through the terminal beyond the limit set in the relevant 2017 Access Agreement is (in relation to the extra coal) in the same position as any new user who does not have a 2017 Access Agreement.
It is unnecessary to analyse the 2017 Access Agreements in any great depth because there are only a few features which are relevant. Clause 20 of the 2017 Access Agreement is the evergreen clause. It is in these terms:
“20. OPTIONS
If the period during which Coal is to be Shipped during the Term is 10 years or more, the following clauses apply:
(a)The User has an option to extend the Term for 5 years or more (or a lesser period, if it coincides with an expected end-of-mine-life), as nominated by the User at the time of exercise, exercisable at any time up to 12 months prior to the end of the Term (including the Term as already extended by the exercise of an option under this clause 20(a) for 5 years or more).
(b)If DBCT Management receives an Access Application for additional capacity which cannot be met without a Terminal Capacity Expansion if the option in clause 20(a) and other relevant options are exercised, it may notify the User, requiring it to respond within 90 days, either exercising the option in clause 20(a) in respect of all or part of an extended Term and/or tonnage the subject of the option, or waiving it.
(c)DBCT Management must give notices under clause 20(a)[46] to relevant Access Holders with options, in order of the earliest expiring User Agreement, for the purposes of deciding which option date is to be accelerated first. Where an Access Holder/s with the earliest expiring date exercise/s its/their option by the accelerated date, DBCT Management may then go to the next Access Holder/s in order of expiring agreements until there has been a waiver of sufficient options to ensure that the bona fide request can be accepted without the necessity for a Terminal Capacity Expansion. Access Holders whose terms expire within 6 months of each other will, for the purposes of this clause 20, be deemed to have terms which expire on the same date, and must be given notices at the same time.
(d)Where more than one Access Holder has tonnages which expire (or which are deemed to expire) on the same date, those Access Holders which do not exercise their accelerated option will lose the amount of tonnes the subject of the option proportionately with their respective annual contract tonnages immediately prior to the end of the current term. (For example, if a bona fide request for 5 Mtpa is received and Access Holders with 10, 5, 2 and 3 Mtpa of contracted tonnages do not exercise their options, then the options for those Access Holders will be reduced by 2.5, 1.25, 0.5 and 0.75 Mtpa respectively).
(e)If the Access Application referred to in clause 20(a) is not converted into a User Agreement within 3 months after the above process is completed, the status quo existing before notice from DBCT Management will be re-instated (i.e. options will not be taken to have been forfeited merely because the accelerated date for exercise has not been complied with, and any accelerated exercise of an option will be taken not to have occurred).”
[46]Should be a referral to clause 20(b).
The effect of clause 20 is that users who are parties to the 2017 Access Agreements can perpetually renew those agreements even if the terminal ceases to be declared and even though the 2017 Access Undertaking has expired. In other words, they continue to obtain the benefit of the QCA approved access conditions.
By the terms of the 2017 Access Agreements, parties pay, relevantly here, two charges,[47] a capital charge and an “operation maintenance charge”.[48] The operation maintenance charge represents the cost to DBCTM of operating the terminal which is then, through a formula, passed on to the users.
[47]Clause 11.3(a).
[48]Clause 11.3(b).
The capital charge is calculated by reference to a formula which results in a dollar figure per tonne of coal which is then passed on to the users. It is also called a “terminal infrastructure charge” or “TIC”. The QCA must approve all the components to the formula by which the TIC is from time to time arrived at. Even though, by force of the evergreen clause the 2017 Access Agreements are perpetual, on the expiry of each undertaking there is a “agreement revision date” and all of the charges are subject to review, but again, subject to approval by the QCA.
New users, those who are not subject to the 2017 Access Undertaking and the 2017 Access Agreements, are, in practical terms, the parties to be accommodated by the Deed Poll.[49] The Deed Poll exhibits the Access Framework. The Access Framework contemplates new users entering into Standard Access Agreements.
[49]Although see paragraphs [64] and [182]-[188] of these reasons. Existing users must compete for access beyond the tonnage convered by existing contracts.
The Deed Poll is designed to operate in an environment where the terminal is not declared. Instead of any dispute being determined by the QCA, disputes are determined by private arbitration. Apart from that, the key difference between the 2017 Standard Access Agreements on the one hand, and the 2017 Access Framework and the 2017 Access Agreements on the other, is in relation to the calculation of the TIC. If the TIC cannot be agreed, then an arbitrator must determine the TIC which is effectively at market value, being the figure that would be agreed between a willing but not anxious buyer and a willing but not anxious seller of the service.
There is a ceiling on the TIC in that it cannot exceed $3.00 per tonne more than the TIC calculated under the 2017 Access Agreements. The effect of this is that new users[50] may pay up to but not in excess of $3.00 more per tonne of coal than the existing users who have the benefit of the 2017 Access Agreements and which contain the evergreen clause.
[50]And existing users acquiring capacity beyond that covered by their 2017 Access Agreements.
The Standard Access Agreements also contain an evergreen clause. The Minister assumed[51] that the Deed Poll and the Access Framework will expire in 2030 and cease to regulate access to the service.
[51]See paragraphs [210]-[214] of these reasons.
Capacity of the terminal
As previously observed, the current capacity of the terminal is 85 million tonnes of coal per annum. The current holders of contracts have, between them, contractual rights to move 85 million tonnes of coal per annum through the terminal. In other words, the terminal is presently at capacity. Access Criterion B[52] is that the facility can meet the total foreseeable demand in the market over the period the service would be declared. The Minister made such a finding. The Minister’s finding that Criterion B is satisfied is not challenged. The Minister found:
[52]Section 76(2)(b) and (3).
“3.5.1I accept the QCA’s recommendation that the appropriate period for assessing foreseeable demand is 10 years, for the reasons given in the QCA analysis.
3.5.2The QCA arrived at its estimate of total foreseeable demand over the 10 year period by reconciling various estimates provided by stakeholders. The QCA’s reconciliation is outlined in detail in Appendix D of Part C and section 2.6.3 at pages 44-54 of Part C. I consider the approach adopted by the QCA in estimating total foreseeable demand to be a reasonable and objective one, and I accept the QCA’s estimate of foreseeable demand for the 10 years from 2021, being demand over the period in a range from 80 mtpa[53] to 96 mtpa on a throughput basis and 89 mtpa to 107 mtpa on a contract entitlements basis.
[53]Millions tonnes per annum.
3.6.1I accept DBCT currently has a capacity of 85 mtpa, for the reasons given in the QCA analysis.
3.6.2The estimate of total foreseeable demand within the declaration period that I have accepted (89 mtpa to 107 mtpa on a contract entitlement basis) exceeds the current capacity of DBCT (85 mtpa). However, I am satisfied that incremental expansions of DBCT are reasonably possible which would enable DBCT to meet the total foreseeable demand. In this regard, for the reasons given in the QCA analysis, I note and accept the following.
(a)it is reasonably possible to expand DBCT to at least 102 mtpa within the declaration period (ie 10 years);
(b)DBCT, expanded to a capacity of 102 mtpa, would be able to meet foreseeable demand. This is because, while total demand for contract entitlements is estimated to exceed 102 mtpa (by at most 5.1 mtpa) for a period of five years during the proposed declaration period (2022-2026):
(i)in this five years period the estimated throughput demand ranges between 92 mtpa to 96 mtpa, which is well below DBCT’s expanded capacity of 102 mtpa; and
(ii)users may acquire capacity in the secondary trading market to meet those limited and short-term capacity requirements; and
(c)if, contrary to the conclusion in subparagraph (b) above, DBCT does require additional capacity beyond 102 mtpa to meet the foreseeable demand, it would be reasonably possible to further expand DBCT’s capacity within the declaration period to meet that additional demand.
3.6.3I have considered, but do not accept, DBCTM’s submission to the effect that there is an implicit timing aspect to section 76(3) of the QCA Act, namely that the Minister cannot treat a facility as having an expanded capacity for the entire declaration period, unless it is reasonably possible to expand the facility to that capacity by the commandment of the declaration period. I agree with and accept the QCA’s approach to section 76(3) of the QCA Act as set out in the QCA Approach.
3.6.4Accordingly, I am satisfied that DBCT (having regard to it as if it had such expanded capacity as is reasonably possible to obtain within the declaration period) could meet total foreseeable demand in the market.”
The finding by the Minister as to the availability of capacity to users without a 2017 Access Agreement was:
“4.7.12I accept that in order for New Users[54] to compete for development stage tenements, New Users require capacity to be available at DBCT.
[54]Those without 2017 Access Agreements.
(a)I accept the QCA’s finding that DBCT is fully contracted. Therefore capacity that can be obtained by a New User, would arise from one of the following:
(i)capacity at the existing terminal becoming available from DBCTM (eg relinquishment by an Existing User at the end of a mine life);
(ii)Existing Users allowing a third party to use their capacity (for example, assigning their capacity on a temporary or permanent basis);
(iii)capacity becoming available through terminal expansion, with the cost either being shared between all users (ie socialised expansion) or only charged to users of the expansion capacity (ie differentiated expansion).
(b)In light of the QCA’s recommendations (which I have accepted) in relation to Criterion B (namely that DBCT has capacity of 85 mtpa, and the foreseeable demand for the terminal over the declaration period is 80 mtpa to 96 mtpa (on a throughput basis) or 89 mtpa to 107 mtpa (on a contract entitlements basis)), while it is possible for New Users to obtain capacity through any of the mechanisms set out above, it appears most likely that New Users will obtain capacity from expansions of DBCT.”
In particular, in relation to the queue, the QCA found:
“The QCA considers that despite tightening of provisions and some increased certainty around those participants who will contract capacity at DBCT - due to the removal of access seekers who do not wish to commit to capacity from the queue - the nature of the queue and the way it operates suggest that the volumes and timing reported in the queue are not accurate so as to represent a reliable estimate of demand at DBCT.
The QCA considers that the non-binding nature of access applications in the access queue means the queue cannot be relied upon as an accurate estimate of demand. The 2017 access undertaking provisions outline that in a notifying access seeker process, access seekers in the queue may provide signed access agreements for a ‘lower tonnage, shorter term or earlier date of commencement’ than requested in their access application, which DBCT Management can then choose to execute. The QCA considers that this ability to contract for a revised tonnage, term or date of commencement encourages access seekers to strategically provide more optimistic tonnage requests than if they were obligated to contract for those volumes.”
The Minister adopted those findings.[213]
[213]Reasons, paragraph 4.7.11-4.7.13.
Ground 3(a)(ii) has been abandoned in the sense that it was not separately argued. That tactic is explained in DBCTM’s written submissions in these terms:
“213.The Applicant does not challenge the Treasurer’s ultimate conclusion with respect to Criterion (b).
214.Ground 3(a)(ii) of the Application identifies reviewable error in respect of one aspect of the Treasurer’s findings with respect to Criterion (b), which is also relevant to Criterion (a). The Treasurer concluded that it was ‘reasonably possible’ that the so-called ‘9X’ expansion of DBCT would occur in the period 2020 to 2030, or at least so much of that expansion as necessary to meet a capacity of 107 mtpa. Ground 3(a)(ii) contends that that finding was not supported by evidence or other material to justify it.
215.Ultimately, it is not necessary to pursue that Ground because, as set out below, the Treasurer erred even if the capacity of DBCT could expand to 107 mtpa by 2030.”
Ground 4
Ground 4 alleges:
“Criterion (d)
4The Decision, in finding that criterion (d) was satisfied:
(a)was based upon substantively the same reasoning and findings that were susceptible to challenge for the reasons set out in Grounds 1 to 3; and
(b)was in error for substantially the same reasons as set out in Grounds 1 to 3.”
The agreed issues here are:
“Ground 4:
(a)raises the issue of whether, if Ground 3(a)(ii) is made out, Ground 4 would be made out;
(b)otherwise raises no distinct issue.”
It is not suggested that if the Minister did not err in finding Criterion A proved, then he still erred in finding Criterion D proved. As all the other grounds, which all attack the finding in relation to Criterion A, have failed, ground 4 also fails.
Dispute about the appropriate relief
Had DBCTM succeeded on any of its grounds of review, s 30 of the JR Act would be engaged, which provides, relevantly:
“30 Powers of the court in relation to applications for order of review
(1)On an application for a statutory order of review in relation to a decision, the court may make all or any of the following orders—
(a) an order quashing or setting aside the decision, or a part of the decision, with effect from—
(i)the day of the making of the order; or
(ii)if the court specifies the day of effect—the day specified by the court (which may be before or after the day of the making of the order);
(b) an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions (including the setting of time limits for the further consideration, and for preparatory steps in the further consideration) as the court determines;
(c) an order declaring the rights of the parties in relation to any matter to which the decision relates;
(d) an order directing any of the parties to do, or to refrain from doing, anything that the court considers necessary to do justice between the parties. …”
Had any grounds been established, an order setting aside the decision[214] would probably be appropriate. DBCTM though sought declarations that:
“(a)Criterion (a) was not satisfied in respect of the DBCT Service in the period 9 September 2020 to 8 September 2030; and
(b)the Treasurer was not empowered to declare the DBCT Service by reason that the Treasurer could not properly be satisfied of the access criteria in section 76(2) of the QCA Act as required by section 76(1)(b) of the QCA Act.”
[214]Section 30(1)(a).
The effect of the declarations would be to finally determine the question of declaration of the facility in favour of DBCTM.
The respondents submitted that in the event a ground of review was established, no relief ought to be given. That is because by the terms of the Deed Poll, the Access Framework does not operate.
Alternatively, the respondents submitted that in the event of the Minister’s decision falling, the matter should be remitted back to him.
Usually, in case the matter goes on appeal, it is desirable to determine all issues between the parties, including the exercise of any discretion concerning relief which may have been given had the decision of the Minister been successfully challenged. Here, however, the matters that have been argued allege a range of different legal errors. It is artificial and, frankly, not productive to engage in a theoretical exercise of discretion based on all the different permutations that are raised.
There is one aspect with which I should deal and that is that the respondents’ submission that the Access Framework does not now operate so all relief should be refused.
By clause E of the Deed Poll, which is set out at paragraph [240] of these reasons. The respondents submit that once the service is declared, the Access Framework ceases to have effect by clause E(b) and is not revived by the setting aside of the declaration. Therefore, any “no declaration” scenario does not include the New Access Documents.
As the terminal has been declared, the Access Framework is not “in effect” and does not “continue to apply to the use of the Terminal”. Therefore, even if the Deed Poll and Access Framework could be taken to form part of the post-2020 future before the Minister declared the service, that is not now the case. It follows, so the respondents submit, that even if the Minister erred in any of the respects alleged, relief should be denied because the Deed Poll and Access Framework are not now in effect.
Anthony Paul Timbrell is the Chief Executive Officer of DBCTM. He swore an affidavit on 6 November 2020 exhibiting an amended deed poll and identifying it as a document “which DBCTM is willing to execute in circumstances where the DBCT service ceases to be a declared service under Part 5, Division 2 of the Queensland Competition Authority Act 1997 (Qld)”. The amended deed poll provides:
“E.The Framework will remain in effect and continue to apply to the use of the Terminal (including Access to the Services) throughout the Term, which will commence on the first date, after execution of the deed Poll, on which use of the Terminal is not a service declared under Part 5, Division 2 of the QCA Act and end on the earlier of:
a.the date that is ten years from the Commencement Date; and
b.the date on, or after the Commencement Date from which coal handling services at the Terminal are a service declared under Part 5, Division 2 of the QCA Act.
However, notwithstanding (a) and (b), the Terminating Date will not occur if the decision of the Treasurer made on 31 May 2020 to declare coal handling services at the Terminal under Part 5, Division 2 of the Queensland Competition Authority Act 1997 (Qld) is set aside by a court, later reinstated, and then subsequently set aside.”
In the circumstances, there was, in my view, no reasonable prospect of DBCTM failing to execute the amended deed poll if it had been successful in the application for judicial review of the Minister’s decision to declare the service under the QCA Act. If the Minister’s decision was set aside and DBCTM did not enter into the amended deed poll, the Minister could declare the service. That threat of declaration would no doubt effectively commercially compel the execution of the amended deed poll.
Had DBCTM made out any of its grounds of review, I would not have refused relief based solely on the fact that the Access Framework as executed was no longer operative.
Conclusions
All the grounds of review have failed and the application must be dismissed.
DBCTM conceded that if unsuccessful in its application, then it should pay the Minister’s costs. As already observed, the other respondents joined the litigation on terms that they would neither seek nor pay costs.
I therefore order:
1.The application is dismissed.
2.The applicant pay the first respondent’s costs of the application.
3.There be no order as to the costs of the other respondents.
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