Emirates v Australian Competition and Consumer Commission

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FEDERAL COURT OF AUSTRALIA

Emirates v Australian Competition and Consumer Commission [2009] FCA 312

TRADE PRACTICES – Investigative function – Validity of s 155 Notices – ‘Matter’ under investigation – Relevance of information sought – Burdensome – Unreasonableness of decision to issue s 155 Notice – Market definition – Market in Australia

Administrative Decisions(Judicial Review) Act 1977 (Cth), s 5(2)(g), s 16
Federal Court of Australia Act 1976 (Cth), s 17, s 50
Sherman Act 15 USC § 1
Trade Practices Act 1974 (Cth), s 4D, s 4E, s 45, s 45(2), s 45(3), s 45A, s 45A(1), s 45A(8), s 155, s 155(1), s 155(5), s 155(6A), s 163A

A. B. Pty Limited v Australian Crime Commission [2009] FCA 119 cited
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 cited
Auskay International Marketing & Trade Pty Ltd v Qantas Airways Ltd [2008] FCA 1458 cited
Australian Competition and Consumer Commission v Qantas Airways Limited [2008] FCA 1976 cited
Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127 cited
Australian Retailers Association v Reserve Bank of Australia (2005) 148 FCR 446 cited
Azriel v NSW Land & Housing Corporation [2006] NSWCA 372 cited
Bannerman v Mildura Fruit Juices Pty Ltd (1984) 2 FCR 581 cited
Bray v F Hoffmann-La Roche Ltd (2002) 118 FCR 1 cited
Bray v F Hoffmann-La Roche Ltd (2003) 130 FCR 317 cited
Bruce v Cole (1998) 45 NSWLR 163 cited
Deloitte Touche Tohmatsu v Australian Securities Commission (1996) 136 ALR 453 cited
Eastern Express Pty Ltd v General Newspapers Pty Ltd (1991) 30 FCR 385 cited
F Hoffmann-La Roche Ltd v Empagran S.A. 542 US 155 (2004) cited
Hartford Fire Insurance Co v California 509 US 764 (1993) cited
Korean Air Lines v Australian Competition and Consumer Commission (No 3) [2008] FCA 701 cited
Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 47 FLR 163 cited
Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 cited
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 cited
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 cited
NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 cited
Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460 cited
Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 followed
Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Company Ltd (1989) 167 CLR 177 cited
Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S 20/2002 (2003) 198 ALR 59 cited
Re Tooth & Co Ltd (1978) 31 FLR 314 followed
Riverstone Computer Services Pty Ltd v IBM Global Financing Australia Limited [2002] FCA 1608 approved
Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 cited
S A Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 cited
SCAS v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 397 cited
Seven…

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Details
Case
[2009] FCA 312
Decision Date

CaseChat Overview and Summary

The case of Emirates v Australian Competition and Consumer Commission involved the applicants, Emirates, challenging the validity of certain notices issued by the ACCC under the Competition and Consumer Act 2010 (Cth). The applicants sought a declaration of invalidity of the notices and an injunction preventing the ACCC from relying on them. The notices in question were related to an investigation into potential breaches of the Act by the applicants and other airlines in relation to the supply of international air cargo services in Australia. The applicants argued that the notices were invalid as they extended beyond conduct capable of constituting a contravention of the Act, and that the ACCC had failed to take into account relevant considerations when issuing the notices.

The court was required to decide whether the notices were valid and if the ACCC had properly exercised its discretion in issuing them. The court examined whether the notices extended beyond conduct capable of constituting a contravention of the Act and if the ACCC had failed to take into account relevant considerations in making the decision to issue the notices.

In considering the validity of the notices, the court held that it was not necessary to have all the facts to conclude that particular conduct was not capable of constituting a contravention of the Act. The court found that the notices did not extend beyond conduct capable of constituting a contravention of the Act. The court also found that the ACCC had not failed to take into account relevant considerations in issuing the notices, as the ACCC had properly exercised its discretion in making the decision.

Accordingly, the court dismissed the applications and ordered that the parties confer and file and serve any submissions as to costs by a specified date. The court held that the notices were valid and that the ACCC had properly exercised its discretion in issuing them. The court also held that the applicants had not established that the ACCC had failed to take into account relevant considerations in making the decision to issue the notices.

Orders

Orders of the court

1. The application be dismissed.

2. The parties confer and thereafter file and serve any submissions as to costs by 4.00pm on 16 April 2009.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Singapore Airlines adopted a similar stance in oral submissions.EVIDENCE At the outset I indicate that ‘as a matter of logic and without the necessity to have all of the facts’ it may be concluded in any given case that particular conduct is not capable of constituting a contravention of the Act: see S A Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 377 per Wilcox J. Evidence may be admitted to show conclusively that, even without all of the facts, the particular conduct as described in a s 155 notice would not be capable of constituting a contravention of the Act. However, evidence could not be led to show that there is in fact no contravention, assuming the particular conduct as described in a s 155 notice was capable of constituting a contravention of the Act. I accept that evidence that was not before the decision-maker may be admissible if it is relevant to a particular ground of review, such as unreasonableness: see, eg, Australian Retailers Association v Reserve Bank of Australia (2005) 148 FCR 446, 564-66 per Weinberg J; but see Aronson M, Dyer B, and Groves M, Judicial Review of Administrative Action (4th ed, Lawbook Co, 2009) at 256-58. In addition, sometimes it will also be necessary to have established the facts upon which legal issues can be resolved. In the Singapore Airlines proceeding, the parties filed a statement of agreed facts concerning the supply of international air cargo services, which included the following statements and facts:The following facts are agreed between the parties for the purpose of s 191 Evidence Act 1995 (Cth). Unless stated otherwise, the facts are applicable as at all relevant times, being the period 1 January 2000 to date.1. Singapore Airlines Ltd (SIA) is incorporated in Singapore.2.SIA supplies international air transport services to passengers on routes between many different countries, including on routes between Australia and other countries. The hub of SIA’s international passenger services is in Singapore.3.Prior to 1 July 2001, SIA operated a Cargo Division which supplied air transport services for cargo on routes between many different countries, including on routes between Australia and other countries. Air freight is transported either in the ‘bellyhold’ or lower deck of passenger aircraft or in cargo ‘freighters’, i.e. planes dedicated to carrying cargo. Prior to 1 July 2001, SIA’s Cargo Division supplied international air freight services using both passenger aircraft and cargo freighters.4.Singapore Airlines Cargo Pte Ltd (SIAC) is a wholly owned subsidiary of SIA. It is incorporated in Singapore. With effect on 1 July 2001, SIA transferred to SIAC the assets, liabilities, cargo-related contracts, operations and business activities of the Cargo Division of SIA. With effect on 3 July 2001, employees of the Cargo Division of SIA ceased to be employed by SIA and were transferred to SIAC. Since that time, only SIAC has supplied international air transport services for cargo within the Singapore Airlines group of companies.5.SIAC conducts business in 57 countries worldwide including Australia and SIA or SIAC operate aircraft in 38 countries. SIAC or its general sales agents operate out of 76 stations located at international airports to or from which SIAC will carry or arrange for the carriage of cargo. A list of those countries and stations is annexed and marked “A”. Each station provides services in relation to the airport at which it is located.6.In Australia, SIAC currently operates stations at Brisbane, Sydney, Melbourne, Adelaide and Perth international airports. The stations that SIA previously operated at Cairns and at Darwin were closed in March 2001.7.To supply international air transport services for cargo, SIAC purchases from SIA all non-passenger baggage space in the bellyhold of SIA’s passenger airplanes and also operates cargo freighters. The operating fleet of SIAC as at 31 March 2007 comprised 14 B747-400 cargo freighters. SIAC also purchases cargo space from other carriers, or carriage services by road transport operators. Typically SIAC will do this in order to deliver freight to airports which are not serviced by either SIA or SIAC aircraft or to allow stations to access available cargo space on SIA or SIAC aircraft which are operated from another station.8.Singapore is the main hub and freight distribution centre for SIAC. Charts depicting the routes flown by SIAC freighter aircraft and SIA passenger aircraft as at March 2007 are shown in the routing charts annexed and marked “B”. SIAC can offer a freight service from any of its origin ports to Australia, routed through Singapore.9.The types of freight that are shipped from different countries and different cities can differ substantially. Carriers offer different types of air freight services from different locations in order to meet the requirements of the particular types of freight that are transported from those locations. For example, much of the freight shipped out of Melbourne is perishables such as meat, fruit and vegetables. This type of freight may need to be transported quickly and kept at special temperatures. …(The annexures referred to above are not annexed to this judgment.)

Decision

Reasons for decision

MIDDLETON J
As I have said, time for compliance has been extended. This time frame is not in dispute. Documents have been delivered by the applicants to the ACCC by reason of some or all of the Notices. The applicants did not challenge the decision to issue the Notices or the Notices before supplying those documents. Some delay occurred before the applicants brought their applications in this Court. There is no suggestion that any prosecution is intended based upon the Notices and the original time frame for compliance. These would all be reasons for refusing as a matter of discretion the substantive relief sought by the applicants.CONCLUSION In view of the above reasons, the applications should be dismissed. I will make orders to facilitate the parties reaching an agreement as to costs. In the event that no agreement is reached, then orders will be made as to the exchange of submissions on the issue of costs.

Ratio Decidendi

Legal Principle Established

Established by: MIDDLETON J

Therefore, upon construing the Notices in the manner indicated, I do not regard them as invalid on the ground that the matters the subject of them extend beyond conduct that is capable of constituting a contravention of the Act.FAILURE TO TAKE INTO ACCOUNT RELEVANT CONSIDERATIONS The applicants also allege that the ACCC failed to take into account two relevant considerations:(a)whether and in what factual circumstances the applicants and other airlines supplied or offered to supply international air cargo services in a market in Australia; and(b)the burden imposed on the applicants by the issue of certain of the Notices. The principles relevant to this aspect of the proceedings can be simply stated:(a)The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is an abuse of discretion entitling a party with sufficient standing to seek judicial review of the decision. (b)This ground of review can only be made out if the decision-maker fails to take into account a consideration that they are bound to take into account in making the decision. (c)The factors a decision-maker is bound to take into account in making a decision are determined by construction of the statute conferring the power. Where the matters to be taken into account are not expressly stated in the statute, they must be determined by implication from the subject matter, scope and purpose of the Act: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J.(d)A decision-maker may not have had proper regard to a relevant consideration if they merely make a formalistic reference to the consideration: see Azriel v NSW Land & Housing Corporation [2006] NSWCA 372 at [49] per Basten JA (with whom Santow and Ipp JJA agreed at [1] and [3]).(e)A decision-maker is required to give proper, genuine and realistic consideration to a relevant consideration: see Deloitte Touche Tohmatsu v Australian Securities Commission (1996) 136 ALR 453 at 468 (per Lindgren J); Bruce v Cole (1998) 45 NSWLR 163 at 185-6 per Spigelman CJ and the authorities cited therein.(f)The mere failure to refer expressly to a matter will not necessarily give rise to the inference that it was not taken into account: see Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127 at 132 (per Burchett J). However, it is open to the Court to infer that a matter was not taken into account where no reference is made to it: see, eg, Sullivan v Department of Transport (1978) 20 ALR 323 at 349 (per Deane J).(g)In Deloitte Touche Tohmatsu 136 ALR 453, Lindgren J said (at 468):It is for an applicant to make out its case of “failure to take into account”, but the circumstances may be such that the applicant will be aided in this task by an absence of evidence from the decision-maker on a particular matter, such as an absence of evidence giving rise to an inference of a failure to make further inquiries when a genuine taking into account would have called for them.