Envestra Limited v Essential Services Commission of SA
[2007] SADC 28
•16 March 2007
DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division: Interlocutory Application)
ENVESTRA LIMITED v ESSENTIAL SERVICES COMMISSION OF SA
[2007] SADC 28
Judgment of His Honour Judge Tilmouth
16 March 2007
ADMINISTRATIVE LAW - ADMINISTRATIVE TRIBUNALS - STATUTORY APPEALS FROM ADMINISTRATIVE AUTHORITIES TO COURTS
Held the parties to review pursuant to s38 Gas Pipelines Access Act 1997 (SA), being prohibited from raising "any matter" other than those specified in s39(5)(a) - (f) inclusive, precludes an appeals body conducting a review under s38(1) from considering oral evidence and any party calling, examining or cross-examining any witness.
Gas Pipeline Access Act 1997 (SA) s38, s39 of Schedule 1; Gas Pipeline Access Act 1997 (SA) s42, s43 of Part 6; District Court Act 1991 (SA) s20(5), s20(4) and s42E; Administrative Appeals Act (Cth) s43, referred to.
Re Epic Energy South Australia Pty Ltd (2003) ATPR 41-932; Project Sky Inc and Ors v Australian Broadcasting Authority (1998) 194 CLR 355; (1998) 153 ALR 490; (1998) 72 ALLJR 841; Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32, applied.
Australian Competition and Consumer Commission (ACCC) v Australian Competition Tribunal (2006) 152 FCR 33; (2006) 232 ALR 153; (2006) ATPR 42-124; Re Michael: Ex parte Epic Energy (SA) Nominees Pty Ltd (2002) 25 WAR 511; (2002) ATPR 41-886; Re Appliction by East Australian Pipeline Ltd (2004) ATPR 42-006; Re Application by GasNet Australia (Operations) Pty Ltd (2004) ATPR 41-978; Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 , considered.
ENVESTRA LIMITED v ESSENTIAL SERVICES COMMISSION OF SA
[2007] SADC 28Judge Tilmouth
CivilPreliminary
The Gas Pipeline Access (SA) Act 1997 (the Act) makes elaborate provision for access to natural gas pipeline systems in this State. It was enacted following an agreement by the Council of Australian Governments to implement the principles of competitions policy and to facilitate the development and operation of a free and fair trade in the market place for natural gas. Schedule 1 (the Schedule) thereof relates to third party access to gas pipelines, one of several pieces of legislation implementing a uniform national framework regulating such access.
2Schedule 1 and the National Third Party Access Code for National Gas Pipeline Systems (the Code) together make up the Gas Pipeline Access Law. The national scheme and its origins are discussed in some detail in Re Michael: Ex parte Epic Energy (WA) Nominees Pty Ltd.[1]
The primary proceedings
3Envestra Ltd is a service provider within the meaning of the Act. By application filed 10 November 2006, it applies for the review of the decision of the respondent “Regulator” published on 27 October 2006, by which it declined to approve Envestra’s amended revision to a proposed Access Arrangement.
4The application for review is heard by this court, sitting in its Administrative Appeal Division being “the relevant appeals body” as defined in s2 of the Schedule. This judgment concerns an interlocutory issue raised by the Commission seeking orders declaring that Envestra is not entitled to rely on any report or statement not submitted to or relied upon by the Commission in making the decision under review or to examine or cross-examine any witness. This has important implications for the conduct of the hearing which is due to commence on 30 April 2007, constituted by a Judge and two expert assessors, as required by s42 of the Act. In its proposed list of witnesses, Envestra indicates a desire to call or have cross-examined certain experts who prepared reports considered by the local Regulator. In simple terms it complains the Regulator improperly preferred some experts to others, and in one case disregarded a report commissioned by it.
[1] (2002) 25 WAR 511; (2002) ATPR 41-886 at [14] - [16] and [88-99].
The current interlocutory proceedings
The application comes before a Judge in this way. Section 43 of the Act excludes the operation of sections 42C, 42D, 42F, 42G(2) and Part 7 of the District Court Act 1991 (SA) in applications for review under the Act and the Schedule. However s20(5) of the District Court Act, which is not so excluded, permits the court to “be separately constituted in accordance with this section for the hearing and determination of any number of separate matters”. Then s20(4)(ab) further permits the court to make orders in its Administrative Appeals Division, without sitting with assessors, for the purposes of dealing with “preliminary, interlocutory or procedural matters” or when entering “consent orders”. Accordingly the court resolved - with the consent of both parties - that the preliminary issue referred to could be determined by a Judge sitting without assessors.
The Commission filed a notice for specific directions seeking orders that the Applicant was not entitled to call oral evidence. The question to be determined is clearly preliminary and interlocutory, if not procedural. In any case pursuant to s20(4)(b)(i) of the District Court Act (above), questions of law and procedure fall for determination of the presiding Judge.
Access Arrangements
The procedure by which the Regulator Commission makes decisions relating to access arrangements is complicated and elaborate. Section 2 of the Code sets out the detailed steps required as an integral part of “a carefully regulated decision-making process”: Re Michael.[2] Proposed Access Arrangements are first submitted to the Regulator. It considers submissions related to those proposals pursuant to Code s2.12 and issues a draft decision proposing to approve or not approve the Arrangement. Should it not so approve, it must state the amendments required in order for approval to be given (Code 2.13). It then must make a so-called “final decision” (Code 2.16) following which it must receive further submissions thereon. Next it is required to make a “further final decision” (Code s2.19). It is s38(1) of the Schedule which provides the avenue for review of, in effect, the “further final decision” of the Regulator.
[2] Above at [30].
The application for review within the terms of s39 is heard by an appeals body, constituted under s42 of the Act, a Judge of this court and two expert assessors. They are selected from a panel established by the Minister having “knowledge of, or experience in, the gas supply industry or in the fields of commerce or economics”. In making its decision in this matter, the Regulator received a large number of documents and submissions from the parties, including expert reports. It did not itself take evidence or conduct a hearing, as such.
The Review Process
Part 6 of the Schedule is entitled “Administrative Appeals”. Section 38, as already noted, provides for the means of redress for any person “adversely affected by the decision”. Sub-section 38(9) contains the source of power available to the court upon exercising the jurisdiction vested by s38(1).It reads:-
38-Application for review
(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.
Section 39(2) then provides:-
(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.
Counsel for Envestra described this provision as providing for “merits” review, but that states the position too highly. Whilst it is correct to assert, as he did in oral submissions, that in Australian Competition and Consumer Commission (ACCC) v Australian Competition Tribunal,[3] the Court drew a distinction in the context of this provision between “merits review” and “judicial review”, in deciding that “(E)rror of law informing the exercise of a discretion goes as much to its merits as error of facts”. It did not describe the situation under this section as being either. The position here is that the jurisdiction to review is vested by s38(1) and yet the power to affirm, set aside or vary contained in s38(9), is only triggered once one or more of the limited grounds specified by s39(2) are made good. Hence it stands in the broad category of an “hybrid” appeal in the sense described by Cox J in Wigg v Architects Boardof SA.[4]
[3] (2006) 152 FCR 33; (2006) 232 ALR 153; (2006) ATPR 42-124 (French, Goldberg and Finkelstein JJ) at [175].
[4] (1984) 36 SASR 111 at 114.
As pointed out in the joint judgment of Brennan CJ, Toohey, McHugh and Gummow JJ in Minister for Immigration and Ethnic Affairs v Wu Shan Liang,[5] approving the judgment of Brennan J in Attorney-General (NSW) v Quin:[6]
The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository's power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone.
[5] (1996) 185 CLR 259 at 272, 291.
[6] (1990) 170 CLR 1 at 35-36.
The focus of s39(2) is therefore not upon the court reviewing the merits of the Regulator's decision, so much as the process by which it arrived at its conclusion: Abebe v Commonwealth of Australia,[7] Minister for Immigration and Multicultural Affairs v Eshetu.[8]
[7] (1999) 197 CLR 510.
[8] (1999) 197 CLR 611.
In Re Epic Energy South Australia Pty Ltd,[9] it was said of s39(2):
[30]Section 39(2)(a)(ii) is concerned with the correctness or unreasonableness of an exercise of discretion having regard to the circumstances relevant to the proper exercise of that discretion. Those circumstances are ones which are demonstrable from the matters to which the Tribunal may refer under s 39(5). For the purposes of the subsection, error is made out if it is demonstrated that the exercise of the discretion was so unreasonable on the basis of the matters available to the decision maker that no reasonable decision maker could ever come to it: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 223-234. It also deals with the situation where the decision is so far outside the range of decisions open to a reasonable decision maker that it bespeaks of error even though the particular error cannot be identified: House v R (1936) 55 CLR 499at 505. For the purposes of s 39(2)(a)(ii) of GPA Law, correctness and reasonableness are to be determined by reference to applicable criteria contained in the Code applied to the matters which were before the relevant Regulator before the decision under review was made.
[9] (2003) ATPR 41-932 (Cooper J presiding).
The statutory remit on review
The question currently before the court centres around the prohibition on the appeals body against considering “any matter” other than those specified in ss39(5)(a) – (f) inclusive. The general prohibition against raising “any matter that was not raised in submissions to the relevant Regulator” occurs twice, in s39(2)(b) and s39(5) respectively, but in materially different terms. The proscription is confined to “submissions” in the former whereas the latter is standing alone, unqualified. The second is followed by five specific classes of “material” - to adopt a neutral expression - permitted by the secondary prohibition, “any matter other than”.
It can be seen that these materials are highly specific. The conclusion must be reached that they are exhaustive of the matters which the court is allowed to entertain on review. It is significant in this respect that the general word “matter” was employed rather than for example “subject matter” (s38(9)) or “facts, findings, matters on actions” (s39(4)). Accordingly the introduction to s39 embraces essentially subject matter, whereas the mode of presentation of such matters is limited by s39(5)(a) – (f) inclusive.
Prohibition seen in context
At first sight a review under the Schedule is to be dealt with by the applicable law governing the “practice and procedures … of the court” (Schedule s38(1)). Ordinarily the court would be enjoined by s42E of the District Court Act (above) to:
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 be presented to it.
In doing so it is not bound by the rules of evidence (s42E(2)(a)), must act according to equity, good conscience and the substantial merits of the case (s42E(2)(b)) and is required to give due weight to the decision being appealed against and not to depart from that decision except for “cogent reasons” (s42E(3)). Within this statutory remit the court not infrequently hears evidence, usually but not limited to “fresh evidence” strictly so-called, and to appraise the court of developments since the decision in the Tribunal or Board below was given.
Formerly appeals instituted pursuant to s58 of the repealed Local and District Criminal Courts Act 1976 (SA) were appeals stricto sensu, so that error had to be shown before the power to interfere arose, Millbank v Price,[10] Cheeseman v Launer,[11] Bagshaw v Taylor & Taylor[12]and Cross v Reilly.[13]
[10] [1954] SASR 166 at 173.
[11] (1972) 3 SASR 573 at 576.
[12] (1978) 18 SASR 564.
[13] (1979) 21 SASR 553.
As to reviews under the Schedule and the Act, they are to be first conducted in accordance with Part 6 of the Schedule. From that point, local “practice and procedures” are significantly modified when it comes to such reviews in several critical respects. These include:
·the mandate to make determination within strict time limits (s38(3));
·limited powers of disposition, not including the power to remit (s38(9)); contrast s42F of the District Court Act;
·the dual prohibitions erected by s39(2)(b) and 39(5);
·the limitations on the grounds of review (s39(2));
·the ability to exclude specified facts, findings or matters (s39(4));
·the limitation on the matters it is permitted to consider (s39(2) – (5));
·the exclusion in s43 of the Act of substantial portions of the District Court Act of local procedures and practices in relation to extensions of time, stays, orders for costs and appeals to the Supreme Court.
The submission for Envestra was heavily reliant on s38(9) of the Schedule insofar as it clothes the court with the ability to “exercise the same powers with respect to the subject matter of the decision” as may be exercised by the Regulator. It was submitted this imported the capacity to conduct hearings, as contemplated by s39(5)(f). This was reinforced, as the argument developed, by reference to The Essential Services Commission Act (2002) (SA) which enables the Commission to hold enquiries. By s37 the Essential Services Commission can conduct enquiries into the areas coming within its statutory functions. However, that kind of enquiry is a different sort of exercise altogether from that contemplated by the Gas Pipeline Access Law. On Envestra’s submission that would necessarily include the elaborate and exhaustive procedures spelt out by s2 of the Code in relation to Access Arrangements.
The fact remains that s39(2)(b) dictates that an applicant “may not raise any matter that was not raised in submissions to the relevant Regulator before a decision was made”, a prohibition repeated in s39(5)(a) with respect to the appeals body. It is then coupled with a secondary prohibition preventing it from considering “any other matter” other than those specifically enumerated. With these sanctions in mind, it 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.
In reaching this conclusion it must be acknowledged that the entire statutory scheme relating to reviews under the Act and the Schedule must be given effect to. Each component must be construed in context rather than in isolation, but this is precisely what the submission for Envestra does not do. Even though s39(6) applies s38 (except ss(1) and (13)) to applications under s39, it expressly does so “except as otherwise provided for in this section”. Giving s38(6) a broad or purposive construction out of context, by fastening upon the wider grammatical meanings of “matter”, fails to acknowledge the force of s39(5) and the significant qualification contained in s39(6). Such a construction would defeat the clear import of s39(5) rendering it practically useless, insofar as the form rather than the content of the matters considered by the court, is concerned.
It is not easy to appreciate just what powers of the Regulator the relevant appeals body could exercise or precisely what effective work it has to do, outside of the powers of disposition. The subject matter the Regulator was relevantly dealing with relates to the approval of compulsory Access Arrangements in accordance with s2 of the Code. Putting aside any powers it might otherwise have from other sources other than the Code, it is difficult to see why a court should exercise most of the powers available to the Regulator in relation to the subject matter of Access Arrangements, the bulk of which are simply inappropriate to the exercise of judicial functions.
Whatever role an appeals body has to play so far as exercising powers on review and no matter how difficult it is to reconcile s38(9) with s39(5) of the Schedule, it remains inescapable that Parliament has expressed the clear and unequivocal intent to limit the review process, both as to the matters that may be considered and the form in which they may be presented. It is that intention which must, then, control the construction of both provisions.
As the joint judgment of McHugh, Gummow, Kirby and Hayne JJ states in Project Sky Inc and Ors v Australian Broadcasting Authority:[14]
[14] (1988) 194 CLR 355, (1998) 194 CLR 355; (1998) 153 ALR 490; (1998) 72 ALJR 841, footnotes omitted.
Conflicting statutory provisions should be reconciled so far as is possible
[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
[71] Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".
Section 38(9) apparently has its origins in the original s43(1) of the Administrative Appeals Tribunal Act 1975 (Cth). Section 43(1) confers on that Tribunal “all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing”. This form is not uncommon. Practically identical words are chosen for s349 of the Migration Act 1958 (Cth) in relation to the powers of Migration Review Tribunal and in s415 in relation to the powers exercisable by the Refugee Review Tribunal under that Act.
In it was held in Secretary, Department of Social Security v Hodgson.[15]
The language of s43 is quite clear and unambiguous. It empowers the Tribunal to exercise all the powers and discretions conferred upon the original decision maker provided it does so for the purpose of reviewing a decision. Provided the necessary purpose is present, the power conferred upon the Tribunal is not otherwise limited. It is not necessary or permissible to put a gloss upon s43 that would permit the Tribunal to exercise the decision-maker's powers and discretions only when those powers or discretions are necessarily interdependent with the decision under review or where the power or discretion to be exercised by the Tribunal is necessarily involved in the making of the decision under review.
Of course there must be an association between the power to be exercised by the Tribunal and the decision under review, but that association is to be found in the restriction of the grant of power in s43(1) to the purpose of the Tribunal's review. The test is one of relevance rather than dependence. Where the exercise of a power or discretion is relevant to the making of the decision under review then, if requested, the Tribunal may exercise the discretion.
[15] (1992) 37 FCR 32 at 39-40.
These passages were approved in Commonwealth Bank Officers Superannuation Corporation Pty Ltd v Commissioner of Taxation[16] and referred to in Isaacs v Commissioner of Taxation[17] and in Commonwealth Bank Officers Superannuation Corporation Pty Ltd v Commissioner of Taxation.[18] They were also cited with approval in Commissioner of Taxation v Hornibrook[19] (Gyles, Stone and Young JJ) in the context of the Administrative Appeals Tribunal Act (above) and its “interplay” with the provisions of Pt IVC of the Taxation Administration Act 1953 (Cth) at [24-28]. Gyles J (Stone J agreeing) wrote in that case:-
[28] It may generally be correct to say that the Tribunal stands in the shoes of the decision maker, but that is subject to particular provisions which relate to the conduct of an appeal. The Tribunal exercises the powers granted by the Administration Act pursuant to the provisions of the AAT Act. The two statutes must be read together so far as possible. In that situation, a general power in the AAT Act cannot be used to circumvent the express limitations in the Administration Act. (See Saraswati v R (1991) 172 CLR 1; Hoffman v Chief of Army (2004) 137 FCR 520 per Black CJ, Wilcox and Gyles JJ at [7]-[27]); Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 per Gummow and Hayne JJ at [43]-[70]; per Heydon and Crennan JJ at [130]-[169]; and DC Pearce and RS Geddes, Statutory Interpretation in Australia, 6th edn, LexisNexis, Australia, 2006, paras [4.30]-[4.32].) In my opinion, s 14ZR, coupled with s 14ZS, govern the manner in which the Tribunal appeal was to be conducted in this case, whether or not the same provisions would bind the Commissioner.[20]
[16] (2005) 148 FCR 427.
[17] (2006) 151 FCR 427 at [35-37].
[18] [2005] FCAFC 244 at [29]-[30].
[19] [2006] FCAFC 170.
[20] Young J reached a similar conclusion at [97-105].
That is the situation pertaining here. The powers vested in the relevant appeals body under s38(9) are such of the powers and discretions it needs to call on and exercise solely for the purpose of reviewing the decision under review, within the limits of its statutory remit, if any. In doing so those powers and discretions are subject to the particular provisions relating to the proper conduct of a review, namely s38(1), s39(2), s39(5) and s39(6) of the Schedule and s42and s43 of the Act. Both s38(9) and s39(5) must be read and applied together so far as possible and construed in such a way so that the express limitations imposed by s39(5) and the other sections just noted are not circumvented by the general power contained in s38(9). In the result s39(5) coupled with s39(6) in particular, govern the manner and the form in which the reviews are conducted under the Act and the Schedule.
This conclusion is consistent with other authorities in point, including Epic Energy South Australia Pty Ltd (above), which held that it was a review under the Schedule “on the documents and material that was before the relevant regulator at the time the decision under review was made”.[21] That decision was cited without criticism in Re Application by East Australian Pipeline Ltd,[22] repeated in Re Application by GasNet Australia (Operations) Pty Ltd[23] and approved by the Full Court of the Federal Court in Australian Competition Consumer Commission v Australian Competition Tribunal & Anor.[24] The Court there reasoned:
[170] The grounds upon which an application can be made to the Tribunal under s 39(1) are confined by s 39(2)(a) to:
(i) error in the ACCC’s findings of fact;
(ii) that the exercise of the ACCC’s discretion was incorrect or was unreasonable having regard to all the circumstances;
(iii) that the occasion for exercising the discretion did not arise.
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. The review which may be sought by a Service Provider under s 39 is narrower than the review which can be undertaken pursuant to s 38 on the application of other persons adversely affected by a decision of the ACCC as the Relevant Regulator: Application by Epic Energy South Australia Pty Ltd (2003) ATPR 41-932. Against that background it is necessary to consider the grounds upon which review can be sought and the significance of their content to the nature of the review process.
[21] (2004) ATPR 41 – 987 at [17].
[22] (2004) ATPR 42-006 (Gyles J at [6]).
[23] (2004) ATPR 41-978.
[24] Above at [177].
Conclusion and Orders
The court concludes for the above reasons that s39(5) of the Schedule precludes an appeals body conducting a review under s38(1) thereof from hearing oral evidence and prevents any party calling, examining or cross-examining any witness. It should be noted that the relevant appeals body, sitting as it does with expert assessors holding appointment under the Act because of “knowledge and experience in the gas supply industry over the fields of commerce or economic” (Act s42(1)), is suitably constituted to assess the problems of apparent concern to Envestra.