Envestra Limited v District Court of South Australia
[2007] SASC 177
•18 May 2007
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application for Judicial Review)
ENVESTRA LIMITED v DISTRICT COURT OF SOUTH AUSTRALIA AND ANOR
[2007] SASC 177
Judgment of The Honourable Justice White
18 May 2007
ADMINISTRATIVE LAW - JUDICIAL REVIEW - PROCEDURE AND EVIDENCE - EVIDENCE
Application for judicial review of an interlocutory decision of a District Court judge - District Court conducting an appeal from a decision of a regulator concerning access arrangements to a gas pipeline - whether District Court appeal to be conducted wholly upon the material before the regulator - whether decision refusing to allow oral evidence and cross-examination in the course of hearing the appeal constituted an error of law - whether error present on the face of the District Court record.
Held: District Court was precluded by law from receiving new evidence on appeal - no error on the record - application dismissed.
Gas Pipelines Access (South Australia) Act 1997 (SA), s 9, s 42, s 43, s 38 of Sch 1, s 39 of Sch 1, Sch 2; District Court Act 1991 s 42C, s 42D, s 42E, s 42F, s 42G, Part 7, referred to.
Application by Epic Energy South Australia Pty Ltd [2004] ACompT 4; (2003) 25 ATPR 41-932, applied.
Envestra Limited v Essential Services Commission of SA [2007] SADC 28; Australian Competition and Consumer Commission v Australian Competition Tribunal [2006] FCAFC 83; (2006) 152 FCR 33; Application by GasNet Australia (Operations) Pty Ltd [2003] ACompT 6; (2004) ATPR 41-978, discussed.
Re Michael; ex parte Epic Energy (WA) Nominees Pty Ltd [2002] WASCA 231; (2002) 25 WAR 511; Kioa v West (1985) 159 CLR 550; Annetts v McCann (1990) 170 CLR 596, considered.
ENVESTRA LIMITED v DISTRICT COURT OF SOUTH AUSTRALIA AND ANOR
[2007] SASC 177Civil
WHITE J:
This is an application for judicial review of a decision of the District Court.
On 10 November 2006, the plaintiff (“Envestra”) filed in the Administrative and Disciplinary Division of the District Court an application for review of a decision of the second defendant, the Essential Services Commission (“the ESC”). The application was made pursuant to s39(1) of Schedule 1 to the Gas Pipelines Access (South Australia) Act 1997 (SA) (“GPA”). Envestra foreshadowed an application to cross-examine an expert retained by ESC in the course of the review and also to present an expert retained by it for cross examination. The ESC disputed the authority of the District Court to hear oral evidence of this kind.
In an interlocutory decision delivered on 16 March 2007, a District Court Judge held that s39(5) of Schedule 1 to the GPA precluded the District Court from hearing oral evidence on the review, and precluded any party from calling or cross-examining any witness.[1] An order to that effect was made. It is in respect of that decision that Envestra seeks judicial review.
[1] Envestra Limited v Essential Services Commission of SA [2007] SADC 28.
The first defendant to the proceedings is the District Court. It did not participate in the proceedings and, in accordance with custom, indicated that it would abide the outcome of the application to this Court.
Although the ESC opposed the application for judicial review, it raised no issue as to the jurisdiction of this Court to grant the relief sought by Envestra in the event that the Court was satisfied that the decision of the District Court was wrong. It accepted that if the District Court was in error in the way for which Envestra contended, that error was apparent on the face of the Court record, so that certiorari would be available. I am satisfied that that is an appropriate view of the matter. That makes it unnecessary to address the submissions of Envestra relating to the availability of judicial review in relation to an order of the District Court.
The Uniform Scheme
On 7 November 1997, the Commonwealth, the States and the Territories agreed upon a uniform national framework by which third parties could gain access to gas pipelines. The framework comprises agreed uniform legislation and a Code entitled “National Third Party Access Code for Natural Gas Pipelines Systems” (“the Code”).
In South Australia, effect has been given to the framework by the GPA. The agreed uniform legislation is Schedule 1 to the GPA, and the Code is Schedule 2. Together they are called the “Gas Pipelines Access Law”.
The Gas Pipelines Access Law has been outlined and discussed in other authorities.[2] A detailed summary of the whole of its provisions is unnecessary in the present case.
[2] Re Michael: ex parte Epic Energy (WA) Nominees Pty Ltd [2002] WASCA 231; (2002) 25 WAR 511; Australian Competition and Consumer Commission v Australian Competition Tribunal [2006] FCAFC 83 at [36]-[64]; (2006) 152 FCR 33 at 41-9.
Access Arrangements
Envestra is the owner of pipelines comprising a gas distribution network to which the Code applies. It is required to permit access by third parties to its network. The Gas Pipelines Access Law regulates the terms upon which that access is to be provided. Envestra is required to have an “Access Arrangement” (Schedule 2, s 2 of the Code). The Access Arrangement must be approved by a “Relevant Regulator” which, in this case, is the ESC.
The Gas Pipelines Access Law does not require Envestra and a user of its pipelines to adopt the terms of the Access Arrangement. However, the Access Arrangement forms, in effect, a benchmark for the tariff and other terms and conditions of any user agreement. This is so because the Code requires a service provider such as Envestra and a user, or prospective user, who are unable to agree on some aspect of their own arrangement to refer the dispute to arbitration (Code s 6). On the arbitration of such a dispute, the arbitrator cannot make a decision which is inconsistent with the terms of the Access Arrangement (Code s 6.18). The fixing of the terms of the Access Arrangement is therefore important both to Envestra and any user or prospective user of its pipelines.
An approved Access Arrangement must include a date for review of the Arrangement. A service provider must, prior to that date, submit to the Relevant Regulator its proposed revisions to the Access Arrangement.
The Code contains an elaborate number of provisions governing the process by which a service provider may obtain approval of an Access Arrangement, or of its proposed revisions to such an Arrangement.
A service provider is required to submit to a Relevant Regulator a proposed Access Arrangement or, as the case may be, proposed revisions to an Access Arrangement (s 2.2, s 2.28) together with “Access Arrangement Information”, ie, such information as in the opinion of the Relevant Regulator will permit an understanding of the derivation of the elements of the Access Arrangement or revision and the formation of an opinion as to their compliance with the requirements of the Code (s 2.6). A Relevant Regulator is able at any time before approval of an Access Arrangement or a revision to require a service provider to amend or resubmit the “Access Arrangement Information” (s2 2.9; s 2.30). The Relevant Regulator must then seek “submissions” on the application from interested persons and from the public (s 2.10; s 2.31). The Relevant Regulator is required to consider any “submissions” received and to issue a draft decision either proposing to approve the Access Arrangement or revision or, in the alternative, proposing not to approve it, and stating the revisions which would have to be made in order for approval to be given (s 2.13, s 2.35). A copy of the draft decision must be provided to the service provider, to any person who made a “submission” to the Relevant Regulator, and to any other persons who requested a copy. Further “submissions” are to be sought from such persons (s 2.15; s 2.36).
The service provider is then able to submit a revised Access Arrangement or revision (s 2.15A; s 2.37A). If the service provider does not submit a revised Access Arrangement, the Relevant Regulator must then make a final decision either approving the Access Arrangement or revision in its original form, or not approving it and stating the revisions which would have to be made in order for approval to be given (s 2.16(a); s 2.38(a)). If the service provider does submit a revised access arrangement, the Relevant Regulator must make a final decision either approving the revised Access Arrangement or revision or not approving it, and stating the revisions which would have to be made in order for approval to be given (s 2.16(b); s 2.38(b)). The Relevant Regulator must provide a copy of its final decision to the service provider, to any person who made a submission, and to any other person who requests a copy (s 2.17; s 2.39).
If the Relevant Regulator makes a final decision not to approve, the service provider is required to submit a revised Access Arrangement or revision (s 2.18; s 2.40). If the service provider does submit a revised Access Arrangement in response to a final decision, the Relevant Regulator must make a further final decision either approving the revised Access Arrangement or revision or not approving it (s 2.19; s 2.41).
There are circumstances in which a Relevant Regulator may draft and issue its own approved Access Arrangement or revision. This occurs if a service provider fails entirely to submit a proposed Access Arrangement or revision (s 2.23; s 2.45), if a service provider does not submit a revised Access Arrangement or revision in response to a final decision (s 2.20(a); s 2.42) or if the Relevant Regulator makes a further final decision not approving the revised Access Arrangement or revision (s 2.20; s 2.42).
The Decision of the Essential Services Commission
The process outlined above has been followed by Envestra and the ESC in relation to revisions proposed by Envestra to its Access Arrangement.
On 27 October 2006 the ESC (as the Relevant Regulator) published a decision described as a Further Final Decision. By that decision the ESC did not approve Envestra’s amended revisions to its proposed Access Arrangement. Instead, it approved its own amended revisions to the Access Arrangement.
On 10 November 2006 Envestra filed an application for review of ESC’s decision in the District Court.
The Conduct of a Review
Part 6 of Schedule 1 to the GPA contains provisions for review on appeal of a decision by a Relevant Regulator. Two kinds of appeal are contemplated. Section 38 of Schedule 1 identifies six different kinds of decision by a Relevant Regulator which may be appealed in accordance with the provisions contained in s 38. Section 39 of Schedule 1 provides for review on appeal of a decision made by a Relevant Regulator to approve the Regulator’s own Access Arrangement or the Regulator’s own revision of an Access Arrangement, and of certain other decisions. It is the appeal right contained in s 39(1) which is invoked by Envestra.
By s 9 of the GPA and s 2(c) of Schedule 1, the District Court of South Australia in its Administrative and Disciplinary Division is identified as the entity to which an application for review of a decision by the ESC may be made. When hearing an appeal (other than an appeal limited to a question of law) the District Court must sit with two assessors (GPA s 42(4)). Those assessors must be drawn from a panel of experts consisting of persons with knowledge of, or experience in, the gas supply industry or the fields of commerce or economics (s 42(1)).
Certain provisions of the District Court Act 1991 (SA) (“DCA”) which would otherwise be applicable to the hearing of an appeal in the Administrative and Disciplinary Division of the District Court do not apply to appeals under the GPA. Reference will be made later to those provisions.
Statutory Provisions
Section 39 of Schedule 1 to the GPA provides as follows:
(1)If the relevant Regulator makes a decision under the Code to approve the Regulator's own access arrangement or the Regulator's own revisions of an access arrangement—
(a) in place of an access arrangement or revisions submitted for approval by a service provider; or
(b) because a service provider fails to submit an access arrangement or revisions as required by the Code,
the following persons may apply to the relevant appeals body for a review of the decision:
(c) the service provider;
(d) a person who made a submission to the relevant Regulator on the access arrangement or revisions submitted by the service provider or drafted by the Regulator and whose interests are adversely affected by the decision.
(1a) If the relevant Regulator makes a decision under the Code—
(a) to disallow a variation proposed by a service provider of a Reference Tariff within an Access Arrangement Period; or
(b) to make the Regulator's own variation of a Reference Tariff within an Access Arrangement Period—
(i) on disallowing a variation proposed by a service provider; or
(ii)because a service provider fails to submit such a variation as required by the Code,
the service provider may apply to the relevant appeals body for a review of the decision.
(2) An application under this section—
(a) may be made only on the grounds, to be established by the applicant—
(i) of an error in the relevant Regulator's finding of facts; or
(ii)that the exercise of the relevant Regulator's discretion was incorrect or was unreasonable having regard to all the circumstances; or
(iii) that the occasion for exercising the discretion did not arise; and
(b) in the case of an application under subsection (1), may not raise any matter that was not raised in submissions to the relevant Regulator before the decision was made.
(3)An application under this section must give details of the grounds for making the application.
(4)In a review of a decision under this section, the relevant appeals body may give directions to the parties excluding from the review specified facts, findings, matters or actions that the relevant appeals body considers should be excluded having regard to—
(a) the likelihood of the decision being varied or set aside on account of those facts, findings, matters or actions;
(b) the significance to the parties of those facts, findings, matters or actions;
(c) the amount of money involved;
(d) any other matters that the relevant appeals body considers relevant.
(5)The relevant appeals body, in reviewing a decision under this section must not consider any matter other than—
(a) the application for review and submissions in support of the application (other than, in the case of an application under subsection (1) any matter not raised in submissions to the relevant Regulator before the decision was made);
(ab) the relevant access arrangement or proposed access arrangement or revision or proposed revision of an access arrangement, together with any related access arrangement information or proposed access arrangement information;
(ac) in the case of an application under subsection (1a)—any notice of a proposed variation of Reference Tariff within an Access Arrangement Period given by the service provider to the relevant Regulator under the Code;
(ad) any written submissions made to the relevant Regulator before the decision was made;
(c) any reports relied on by the relevant Regulator before the decision was made;
(d) any draft decision, and submissions on any draft decision made to the relevant Regulator;
(e) the decision of the relevant Regulator and the written record of it and any written reasons for it;
(f) the transcript (if any) of any hearing conducted by the relevant Regulator.
(6)Except as otherwise provided in this section, section 38 (except subsections (1) and (13)) applies to an application under this section.
(7) In this section—
Access Arrangement Period and Reference Tariff have the same meanings as in the Code.
It can be seen that an appeal under s 39(1) is confined in a number of ways. First, the grounds of appeal are limited to those listed in s 39(2)(a) (in effect an applicant must demonstrate an error of a specified kind by the Relevant Regulator); secondly, the application may not raise any “matter” which was not raised in “submissions” to the Relevant Regulator (s 39(2)(b)); and thirdly, s 39(5) limits the “matters” which the appeals body may consider.
Section 39(6) makes applicable to a s 39 appeal a number of the provisions contained in s 38 in relation to appeals governed by that section. Subsections 38(9) and (12) are relevant for present purposes as they provide for the powers of the District Court on the appeal, and for the effect of its decision. Subsections 38(9) and (12) provide as follows:
(9)In proceedings under this section, the relevant appeals body may make an order affirming, or setting aside or varying immediately or as from a specified future date, the decision under review and, for the purposes of the review, may exercise the same powers with respect to the subject matter of the decision as may be exercised with respect to that subject matter by the person who made the decision.
(12)A determination by the relevant appeals body on the review of a decision has the same effect as if it were made by the person who made the decision.
The Decision of the District Court
The District Court judge placed reliance upon s 39(2)(b) and s 39(5) of Schedule 1 to the GPA and said:
[I]t is clear the policy of the legislation was that the court should not consider any other matter other than those before the Regulator. Secondly, it should only consider that matter in the form in which it was actually presented to the Regulator, whether by way of submission, proposed arrangements, reports, transcripts or otherwise. [3]
The Judge held that s 39(2)(b) and s 39(5) precluded the Court from hearing the oral evidence proposed by Envestra. The judge also rejected a submission that s 38(9) empowered the Court to hear that evidence.
[3] Envestra Limited v Essential Services Commission of SA [2007] SADC 28 at [21].
The Submissions by Envestra on the Judicial Review
The submission of Envestra was that the District Court was in error in holding that it was precluded from hearing the oral evidence which it proposed adducing in the review proceeding. This submission was put in two ways. The first was that s 39 in Schedule 1 to the GPA, considered in conjunction with s 38(9), authorised the District Court to hear oral evidence of the kind proposed. The second was that provisions in the DCA empowered the Court to receive the evidence proposed.
It was submitted that neither s 39(2)(b) nor s 39(5) in Schedule 1 prohibited cross-examination of an expert concerning the subject matter of a report from that expert relied upon by the Regulator for its decision. Such examination or cross-examination did not, it was submitted, introduce any new “matter” as it was merely the testing of the expert’s opinion.
It was submitted that the District Court judge had taken an unduly narrow view of the Court’s function when he held that the Court should consider a matter on the appeal “in the form in which it was actually presented to the Regulator”. A reformulation of the evidence and of the argument should, it was submitted, be permitted. In this respect, reliance was placed upon the following passage in the decision of the Australian Competition Tribunal (“ACT”) in Application by Epic Energy South Australia Pty Ltd:[4]
Thus, if any matter, whether by way of argument or evidentiary material, cannot be identified as broadly arising out of a matter fairly raised in the submissions to the relevant Regulator before the decision under review was made, it will not be permitted to be raised in the review. That is not to say that a reformulation of an argument or contention previously put to the relevant Regulator on material which was before it before the decision was made would be excluded.[5]
The submission, as I understood it, was that cross-examination of an expert whose report was before the Regulator could be said to arise broadly from the matters raised before that Regulator in the manner contemplated by the ACT in this passage.
[4] [2002] AcompT 4; (2003) 25 ATPR 41-932.
[5] Ibid at [24], 46,924.
Next, it was submitted that if s 39(5) was intended to confine a relevant appeals body to consideration of documentary material only, it is reasonable to suppose that an expression such as “documents” or “documentary material” would have been used in the preface to s 39(5) instead of the word “matter”.
Section 38(9) which is made applicable to s 39 appeals by s 39(6) specifically authorises the District Court “to exercise the same powers with respect to the subject matter of the decision as may be exercised with respect to the subject matter by the person who made the decision.” This included, it was submitted, the power to hear oral evidence.
The second aspect of Envestra’s submission derived from the provisions in the GPA and the DCA. Section 43 of the GPA makes certain provisions of the DCA, namely, s 42C (extension of time in which to appeal), s 42D (stay of operation of the decision appealed against), s 42F (power to affirm, rescind or remit the matter to the original decision-maker), s 42G(2) (costs) and Part 7 (appeals to the Supreme Court), inapplicable to appeals under s 38 and s 39 of Schedule 1. Envestra submitted that the fact that s 42E of the DCA (which permits the Court, on appeal, to receive further evidence) had not been made inapplicable, was significant. It indicated, it was said, a legislative intention that the District Court when hearing either a s 38 or a s 39 appeal could receive further evidence.
Section 42E is in the following terms:
(1)The Court must, on an appeal, examine the decision of the original decision-maker on the evidence or material before the original decision-maker but the Court may, as it thinks fit, allow further evidence or material to be presented to it.
(2) The Court, on an appeal—
(a) is not bound by the rules of evidence but may inform itself as it thinks fit; and
b) must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(3)The Court must, on an appeal, give due weight to the decision being appealed against and the reasons for it and not depart from the decision except for cogent reasons.
In relation to both ways in which its submissions were put, Envestra made two further submissions. The first was that the ability to hear a cross-examination of the author of material which was before the Regulator would better enable the District Court to discharge its appellate function. The Court would be better able, it was said, with the assessors to come to an appreciation of the substance, and merits, of the material which had been before the Regulator. Envestra submitted that that would be a particular advantage to the District Court in the present case because of its proposed submission that the ESC had inappropriately preferred the opinion of one expert over that of another.
The second general consideration put by Envestra was that unless it was able to cross-examine the expert upon whom the ESC had relied, it would be denied procedural fairness in the hearing in the District Court. It was submitted that s 39 should not be construed in a way which would produce that effect.
“Matter” and “Submissions”
It is evident that the meaning of the words “matter” and “submissions” appearing in s 39(2)(b) and s 39(5) is critical to Envestra’s present submissions. They are the words which limit the scope of the subjects (using this as a neutral word) which can be raised on the appeal (s 39(2)(b)), and which define the material (again using this word neutrally) to which the appeals body may have regard (s 39(5)). Each are words of imprecise meaning.
There is a natural tendency for the lawyer accustomed to the distinction between the evidentiary material before a court or tribunal, on the one hand, and the submissions based on that evidentiary material, on the other, to assume that the words “matter” and “submissions” when used in s 39 are used with a similar meaning.
Section 39 must be construed in its context. A relevant aspect of context is that s 39 is confined to appeals from decisions of a particular kind, namely, those specified in subsections (1) and (1a). It is also evident that s 39 contemplates a more confined appeal than in the case of appeals governed by s 38. This is reflected in the limitations on the grounds of appeal, the matters which may be raised in the appeal and in the matters to which the appeal body may have regard in a s 39 appeal, none of which are applicable to s 38 appeals. On a s 39 appeal, the appeals body may only intervene if satisfied that the Regulator has made an error of a defined kind. It is not a review at large.
With the possible exception of an appeal pursuant to s 39(1)(b), an appeal under s 39(1a) will be from a decision which is the culmination of an extensive process before the Relevant Regulator. That process is one which involves the Regulator, at several stages, inviting and receiving “submissions” pertaining to the application before it. It is evident that the Code in s 2 uses the word “submission” in a general way, ie, to refer to whatever a service provider or other person “puts” before the Regulator, whether it be in the nature of evidentiary material, explanation or argument. Thus, for example, a service provider must “submit” with the proposed Access Arrangement “Applicable Access Arrangement Information”. Annexure A to the Code identifies the information to be included in the Access Arrangement Information. It includes information concerning the basis for the calculations, including the methodologies used, the calculations involved, as well as the source material relied upon. It is, in effect, the evidence (together with explanations) in support of the proposed Access Agreement.
Section 2 of the Code does not draw any distinction between oral and written material. The Relevant Regulator may hear oral evidence. This is confirmed by s 39(5)(f) which contemplates that the appeals body may have regard to “the transcript (if any) of any hearing conducted by the Relevant Regulator”. Envestra acknowledged that it could in this case have sought to cross-examine the expert retained by the ESC in a hearing before the ESC.
In short, the Code and the GPA contemplate that the “submissions” made to a Relevant Regulator may take a variety of forms, including evidence, explanation and argument, and that those matters may be in written or oral form. That suggests that the word “submissions” is used in its widest meaning. It is reasonable to suppose, in my opinion that the word “submissions” in the phrase “submissions to the relevant Regulator” in s 39(2)(b) and in its cognates in s 39(5) is used with the same wide meaning. Viewed in that way it is natural to construe s 39(2)(b) as indicating that in an appeal pursuant to s 39(1), a party may not raise any “thing” which was not raised before the relevant Regulator, whether in evidence or argument, and whether in oral or written form. The same meaning applies in the case of s 39(5). The relevant appeals body is not to consider any “thing” other than the specified material which was before the Regulator, whether then comprising evidentiary material or argument, and whether then in oral or written form. This means that the District Court is not to consider oral evidence not adduced before the ESC.
Such a conclusion is not of course to preclude the reformulation of an argument, or perhaps some new analysis drawn from the same material which was before the Relevant Regulator. But it does preclude the appeals body from considering new material, whether written or oral. By “new”, I mean material other than that specified in s 39(5) of Schedule 1.
Relevant Authority
A similar view has been adopted in other jurisdictions which have considered s 39. In relation to a transmission pipeline (as opposed to a distribution pipeline) the Relevant Regulator is the Australian Competition and Consumer Commission (“ACCC”). Appeals from decisions of the ACCC under the GPA are heard by the ACT.
On an appeal by Epic Energy South Australia Pty Ltd[6] the ACT considered the nature and extent of the review under s 39 of Schedule 1. The Tribunal[7] said:
The power to review given to this Tribunal is exercisable only upon it being established by Epic that a ground, falling within s 39(2)(a) of the GPA Law, occurred having regard to matters raised in submissions to the ACCC prior to the making of the decision under review (s 39(2)(b)). The only matters, other than Epic’s application for review and submissions in support of it, to which this Tribunal may refer are the matters specified in s 39(5)(a) to (f) inclusive which were available to the ACCC at the time of, or before, the decision under review was made… [T]he jurisdiction is dependent upon demonstrable error by reference to matters which were before the relevant Regulator before the decision, of which review is sought, was made. Accordingly, the power of review under s 39(1), although involving a re-hearing on the merits, ought to be construed as one to be exercised for the correction of error…
The ordinary meaning of the word “submission” in the context in which it appears in the Code and the GPA Law, is the act of referring something: a proposal, argument, document or the like, for consideration by someone else … In a legal context, it may mean the act of submitting a matter to a person for decision or consideration. Or, it may mean “the theory of a case put forward by an advocate”.
There is nothing in the Code or the GPA law to indicate that the word “submission” is to have other than its ordinary meaning in the context of its use in those provisions.
The meaning of “submissions” in s 39(2)(b) and s 39(5)(a) takes it colour from the prohibition on recourse to “any matter” that was not raised in the submissions to the relevant Regulator before the decision was made. Section 39(2)(b) limits the matters to which recourse may be had to those that may be identified in the submissions which, in fact, were made prior to decision. The matters include the subject matters raised, the issues raised and the materials relied upon in support of the position or proposal put forward in the submission as being relevant to the decision to be made. Thus, if any matter, whether by way of argument or evidentiary material, cannot be identified as broadly arising out of a matter fairly raised in the submissions to the relevant Regulator before the decision under review was made, it will not be permitted to be raised in the review. This is not to say that a reformulation of an argument or contention previously put to the relevant Regulator on material which was before it before the decision was made would be excluded.
The use of the term “submissions” in s 39(5) including s 39(5)(a) has the same meaning. The word “submissions” does not include or permit recourse to matters, including evidentiary material, which were neither before the relevant Regulator nor relied upon by the applicant for review in support of any contention advanced by it to the relevant Regulator as relevant to the decision to be made. In any event, the submissions of the applicant for review in support of an application under s 39(1) are to demonstrate a ground for review in terms of s 39(2)(a). That ground is to be demonstrated by reference to matters raised in submissions to the relevant Regulator and consideration of the limited category of matters specified in s 39(5). …
Specifically, for the purpose of this ruling, s 39(5)(a) of the GPA Law does not allow Epic to seek to incorporate as part of its submissions in support of its application, new matters including expert opinion evidence or material of a rebuttal nature which were not before the ACCC, in order to attempt to make out a ground for the purposes of s 39(2)(a) of the GPA Law.
Even if a ground is made out, there is nothing in the Code or the GPA Law, to indicate that this Tribunal is to do other than exercise the power under s 38(9) on the basis of the materials before the ACCC. To the contrary, s 39(5) indicates that this Tribunal has no power to receive and rely upon new evidence and materials not before the ACCC.[8] [Emphasis added.] [Citations omitted.]
[6] Application by Epic Energy South Australia Pty Ltd [2002] ACompT 4; (2003) 25 ATPR ¶41-932.
[7] Cooper J from the Federal Court presiding.
[8] Application by Epic Energy South Australia Pty Ltd [2002] AcompT 4 at [20]-[27]; (2003) 25 ATPR ¶41-932 at 46,923-4.
It is to be noted that the ACT specifically rejected a submission that it was entitled, on an appeal pursuant to s 39, to receive and rely upon evidence and materials which were not before the ACCC.
As noted above, Envestra relied upon a portion of this quoted passage. When the passage relied upon by Envestra is read in context, it does not, in my opinion, provide any support for the proposition that expert opinion evidence or material of a rebuttal nature which was not before the ESC at first instance may be considered on the appeal. What the ACT contemplated as permissible is a reformulation of the argument, and not a revision of the evidentiary material put before the Regulator.
The ACT considered the construction of s 39 again in Application by GasNet Australia (Operations) Pty Ltd.[9]The Tribunal said:
[the review available] is not one at large; it is a review on the documents and material that was before the Relevant Regulator at the time the decision under review was made. It is a review limited to the matters specified in s 39(5) and matters which do not fall within s 39(5) must not be considered by the Tribunal. It is a review limited to those matters which were before the Relevant Regulator which the Service Provider contends were erroneously decided by it and which the Service Provider wishes reviewed. Ultimately those matters are constrained by the grounds of error pleaded and particularised in the Service Provider’s application to the Tribunal as required by s 39(2) and s 39(3), and the operation of s 39(5) on the deliberations of the Tribunal.[10] [Emphasis added]
[9] [2003] ACompT 6; (2004) 26 ATPR ¶41-978 (Cooper J again presiding).
[10] Ibid at [17], at 48,462.
Finally, the Full Federal Court in Australian Competition and Consumer Commission v Australian Competition Tribunal & Anor[11] has adopted a similar view of s 39. Having referred to the limited grounds pursuant to s 39(2)(a) on which an application for review may be made, the Full Court said:
It is also provided in s 39(2)(b) that an application under subs (1) may not raise any matter not raised in submissions to the ACCC before its decision was made. The constraints in s 39(2) are supported by the listing in s 39(5) of the matters which the Tribunal is permitted to consider. In effect, the Tribunal is limited by s 39(5)(ab) to (f), to the materials which were before the ACCC when it made its decision. It is also implicit in the limitation imposed by s 39(5)(a) that the Tribunal does not have an inquisitorial role in the conduct of a review. It cannot decide the matter on grounds or contentions not put before it by the parties to the review.[12]
These authorities support the view taken by the District Court concerning its powers on the s 39(1) appeal.
[11] [2006] FCAFC 83; (2006) 152 FCR 33.
[12] Ibid at [170] at 73.
Other Submissions of Envestra
It is correct, as Envestra submitted, that the GPA does not contain any express prohibition on an expert whose opinion was placed before the Regulator being cross-examined during the course of an appeal. However, there would only be point to such a cross-examination if the appeal body could have regard to the matters elicited in the cross-examination. If in the cross-examination the expert modified the opinion previously expressed, or elaborated it, that modification or elaboration would be material which was not before the ESC. Depending upon the extent of the modification or elaboration, it could alter substantially the effect of the material considered by the ESC. That indicates that it is material which the District Court is prohibited from considering.
In my opinion, the content of s 38(9) does not assist Envestra. It will be recalled that s 38(9) provides (in part) that the relevant appeals body may exercise the same powers with respect to the subject matter of the decision as may have been exercised by the decision-maker. As the ESC in this case could have received oral evidence, and heard cross-examination of an expert, it was submitted that the District Court, on hearing the appeal, was in the same position. That submission, however, overlooks the opening words of the provision making applicable specified portions of s 38 to s 39 appeals. Section 39(6) commences with the words “[e]xcept as otherwise provided in this section”. The content of s 39(2)(b) and s 39(5) do “provide otherwise”. Applying s 38(9) in the way for which Envestra contended would involve a derogation from the operation of those provisions.
I do not consider that the statement of the District Court judge that a matter on the appeal had to be considered “in the form in which it was actually presented to the Regulator” indicates an erroneous understanding of s 39. The statement is not to be understood as an indication that the submissions on appeal had to replicate exactly those made to the ESC. All the judge was saying was that the expert evidence to be considered on appeal was the evidence in the form in which it was presented to the ESC.
I refer to Envestra’s submission that it would be denied procedural fairness if not permitted to cross-examine the expert. I accept that the construction of s 39 is to be approached with the view that any intention to exclude an entitlement to procedural fairness requires “clear manifestation”[13] or “plain words of necessary intendment”.[14] I do not accept, however, that the absence of ability to cross-examine an expert before the District Court will amount to a denial of procedural fairness. It is commonplace for appeals to be heard on the record of the Court or Tribunal at first instance, and without the cross-examination of witnesses before the appellate court. Further, if there was to be cross-examination of the expert, the proper place for that to occur was before the ESC. Envestra acknowledged that it could have sought cross-examination of the expert before the ESC in this case.
[13] Kioa v West (1985) 159 CLR 550 at 584 per Mason J.
[14] Annetts v McCann (1990) 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ.
Finally, I turn to Envestra’s reliance upon s 42E of the DCA. Given the exclusion of ss 42C, 42D, 42F, and 42G(2) from application to appeals under the GPA, it is a natural inference that the legislature did intend s 42E to apply. I accept that that includes an inference that the legislature intended that the District Court should be able to allow further evidence or material to be presented to it. However, the application of s 42E has to be considered having regard to s 42B(1). That subsection provides:
This sub-division applies in relation to the appellate jurisdiction conferred on the Court by another Act (the special Act) subject to the provisions of the special Act. [Emphasis added.]
Both s 42B and s 42E are contained in Division 2 of Part 6 of the DCA. This means that the power of the District Court to receive further evidence bestowed by s 42E is subject to the express provisions (including subsections (2)(b) and (5)) contained in s 39 of Schedule 1 to the GPA. They operate to exclude consideration of new material. This does not mean that the retention of the powers in s 4E is otiose. Section 42E does have application in relation to appeals heard by the District Court pursuant to s 38 of the GPA.
Conclusion
For the reasons given above, I am satisfied that the District Court is not entitled, when hearing Envestra’s appeal, to consider material adduced in either examination or cross-examination before it of an expert witness whose report was considered by the ESC. That being so, I am satisfied that the decision of the District Court is correct and that its record does not disclose an error.
The application for judicial review of the District Court’s decision is accordingly dismissed.
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