Obeid v Australian Competition and Consumer Commission - [2014] FCAFC 155

FEDERAL COURT OF AUSTRALIA
Obeid v Australian Competition and Consumer Commission [2014] FCAFC 155

Citation: Obeid v Australian Competition and Consumer Commission [2014] FCAFC 155

Appeal from: Obeid v Australian Competition and Consumer Commission [2014] FCA 839

Parties: MOSES EDWARD OBEID and PAUL OBEID v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and DELIA ANN RICKARD

File number: NSD 862 of 2014

Judges: ALLSOP CJ, MANSFIELD AND MIDDLETON JJ

Date of judgment: 20 November 2014

Catchwords:
TRADE PRACTICES – challenge to validity of notices issued pursuant to s 155 of the Competition and Consumer Act 2010 (Cth) – whether notices identify a matter that constitutes or may constitute a contravention of the Act –alleged anti-competitive contract, arrangement or understanding in contravention of s 45 – alleged cartel conduct under ss 44ZZRG or 44ZZRK – contract, arrangement or understanding entered into in context of the Mining Act 1992 (NSW) – definition of “services” under s 4(1) of the Competition and Consumer Act 2010 (Cth) – nature of services specified in the s 155 notices

TRADE PRACTICES – definition of “services” – whether identified services conducted in trade and commerce – competitive tender process

Legislation: Competition and Consumer Act 2010 (Cth)
Mining Act 1992 (NSW)
Trade Practices Amendment Act 1977 (Cth)

Cases cited:
Adamson v New South Wales Rugby League Limited (1991) 31 FCR 242
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
Cohns Industries Pty Ltd v Deputy Federal Commissioner of Taxation (1979) 37 FLR 508
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503
Federal Commissioner of Taxation v St Hubert’s Island Pty Ltd (In Liq) (1978) 138 CLR 210
Gold and Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281
IW v City of Perth (1997) 191 CLR 1
Kelly v R (2004) 218 CLR 216
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357
Seven Network Ltd v Australian Competition and Consumer Commission (2004) 140 FCR 170
Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245
Thiess v Collector of Customs (2014) 250 CLR 664

Date of hearing: 30 October 2014

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 71

Counsel for the Appellants: Mr D Williams SC and Mr J Smith SC

Solicitor for the Appellants: Breene and Breene

Counsel for the Respondents: Mr J Sheahan QC and Mr M O’Meara

Solicitor for the Respondents: Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 862 of 2014

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
MOSES EDWARD OBEID
First Appellant

PAUL OBEID
Second Appellant

AND:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Respondent

DELIA ANN RICKARD
Second Respondent

JUDGES:

ALLSOP CJ, MANSFIELD AND MIDDLETON JJ

DATE OF ORDER:

20 NOVEMBER 2014

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The appeal be dismissed.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FCAFC 155
Decision Date: 20 November 2014

CaseChat Overview and Summary

The case of Obeid v Australian Competition and Consumer Commission involved the validity of notices issued by the Australian Competition and Consumer Commission (ACCC) under section 155 of the Competition and Consumer Act 2010 (Cth). The notices in question pertained to an alleged anti-competitive contract, arrangement, or understanding in contravention of section 45 of the Act, and potential cartel conduct under sections 44ZZRG or 44ZZRK of the Act. These allegations stemmed from a coal exploration licensing process conducted under the Mining Act 1992 (NSW), where certain companies were alleged to have engaged in anti-competitive practices. The central issue before the court was whether the notices identified matters that constituted or may constitute a contravention of the Act and if the specified services fell within the definition of "services" under the Act.

The legal issues addressed by the court included whether the notices were validly issued under section 155, and if the identified matters and services were within the scope of the Competition and Consumer Act. A significant part of the argument revolved around the interpretation of "services" under section 4(1) of the Act and whether the activities in question were conducted in the context of trade and commerce, as required for the Act's provisions to apply. The court also needed to consider whether the competitive tender process conducted under the Mining Act was subject to the Act's prohibitions against anti-competitive conduct.

In reaching its decision, the court examined the nature of the services specified in the notices and whether they were conducted in the context of trade and commerce. The court found that the activities in question did indeed constitute services under the Act and that the competitive tender process did not exempt the conduct from the Act's prohibitions. The court further determined that the notices were validly issued as they identified matters that constituted or may constitute a contravention of the Act. Consequently, the court dismissed the appeal, holding that the notices were properly issued and the respondents were entitled to their costs.

The final orders of the court were that the appeal be dismissed and that the appellants pay the respondents' costs of the appeal as agreed or taxed. The court's decision upheld the validity of the notices issued by the ACCC and reinforced the applicability of the Competition and Consumer Act to activities related to coal exploration licensing under the Mining Act 1992 (NSW).

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellants pay the respondents’ costs of the appeal as agreed or taxed.

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

Background

Background to the litigation

The investigative power conferred by s 155(1) requires that the Chairperson of the ACCC (among others) has reason to believe that a person is capable of providing information, producing documents or giving evidence relating to “a matter that constitutes, or may constitute, a contravention of” the CC Act. To be valid a notice must specify a “matter” which, after allowing for undiscovered facts, does or may amount to a contravention of the CC Act: SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 371-372 per Fisher and French JJ; Seven Network Ltd v Australian Competition and Consumer Commission (2004) 140 FCR 170 at [49] per Sackville and Emmett JJ. BACKGROUND The primary judge set out the background to the proceedings and the Notices (see [3] to [7] of the primary judge’s reasons), and the parties in this appeal agreed upon a narrative statement (subject to one minor matter of no consequence) which more fully elaborates on this background. Before going to this narrative, it is useful to set out a brief summary of the background as provided by the primary judge. In September 2008, the Department of Primary Industries (‘DPI’) issued invitations to a limited number of companies to lodge expressions of interest (‘EOIs’) for coal exploration licences over 11 areas in New South Wales; the process was extended to a larger group of companies in January 2009 with a lodgement date of 16 February 2009 (‘EOI Process’). The relevant areas for the purposes of the appeal are the Mount Penny and Glendon Brook areas (‘Relevant Areas’). On 12 December 2007, the whole of New South Wales was declared a “mineral allocation area” in relation to coal under the Mining Act 1992 (NSW) (‘Mining Act’). As the Mining Act was then enacted, this had the result that a person could apply for a coal exploration licence under s 13(1) only with the consent of the Minister under s 13(4). The Minister had power to grant or refuse to grant an application for an exploration licence under s 22. The Minister could have elected to conduct a public tender process under ss 14 and 15 of the Mining Act, but he elected to conduct the limited EOI Process. In relation to the Relevant Areas, the invitations in the EOI Process were relevantly for the grant of exploration licences where no licence existed. To further understand the Notices, it is important to note that:(a)Loyal Coal Pty Limited (‘Loyal’) was formerly named Monaro Coal Pty Ltd and it was a subsidiary of Monaro Mining NL (‘Monaro’); (b)Monaro and Cascade Coal Pty Limited (‘Cascade’) submitted EOIs to the DPI to be awarded exploration licences for the Relevant Areas (among other mining areas); (c)Loyal came to be owned by a company called Voope Pty Limited (‘Voope’). In its July 2013 report entitled “Investigation into the Conduct of Ian McDonald, Edward Obeid Senior, Moses Obeid and Others” (‘ICAC Report’) the Independent Commission Against Corruption (‘ICAC’) found that Voope and Buffalo Pty Limited (‘Buffalo’) were controlled by the Obeid family and their associates; and (d)ICAC also found that the landowners referred to in the Notices include companies controlled by the Obeid family or in which they had interests.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Therefore, this further ground of invalidity of the Notices cannot be sustained.CONCLUSION For the above reasons, the appeal will be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:	Obeid v Australian Competition and Consumer Commission [2014] FCAFC 155
Appeal from:	Obeid v Australian Competition and Consumer Commission [2014] FCA 839
Parties:	MOSES EDWARD OBEID and PAUL OBEID v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and DELIA ANN RICKARD
File number:	NSD 862 of 2014
Judges:	ALLSOP CJ, MANSFIELD AND MIDDLETON JJ
Date of judgment:	20 November 2014
Catchwords:	TRADE PRACTICES – challenge to validity of notices issued pursuant to s 155 of the Competition and Consumer Act 2010 (Cth) – whether notices identify a matter that constitutes or may constitute a contravention of the Act –alleged anti-competitive contract, arrangement or understanding in contravention of s 45 – alleged cartel conduct under ss 44ZZRG or 44ZZRK – contract, arrangement or understanding entered into in context of the Mining Act 1992 (NSW) – definition of “services” under s 4(1) of the Competition and Consumer Act 2010 (Cth) – nature of services specified in the s 155 notices TRADE PRACTICES – definition of “services” – whether identified services conducted in trade and commerce – competitive tender process
Legislation:	Competition and Consumer Act 2010 (Cth) Mining Act 1992 (NSW) Trade Practices Amendment Act 1977 (Cth)
Cases cited:	Adamson v New South Wales Rugby League Limited (1991) 31 FCR 242 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 Cohns Industries Pty Ltd v Deputy Federal Commissioner of Taxation (1979) 37 FLR 508 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 Federal Commissioner of Taxation v St Hubert’s Island Pty Ltd (In Liq) (1978) 138 CLR 210 Gold and Copper Resources Pty Ltd v Newcrest Operations Ltd [2013] NSWSC 281 IW v City of Perth (1997) 191 CLR 1 Kelly v R (2004) 218 CLR 216 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 Seven Network Ltd v Australian Competition and Consumer Commission (2004) 140 FCR 170 Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245 Thiess v Collector of Customs (2014) 250 CLR 664
Date of hearing:	30 October 2014
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	71
Counsel for the Appellants:	Mr D Williams SC and Mr J Smith SC
Solicitor for the Appellants:	Breene and Breene
Counsel for the Respondents:	Mr J Sheahan QC and Mr M O’Meara
Solicitor for the Respondents:	Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 862 of 2014

JUDGES:	ALLSOP CJ, MANSFIELD AND MIDDLETON JJ
DATE OF ORDER:	20 NOVEMBER 2014
WHERE MADE:	SYDNEY