Pilbara Infrastructure Pty Ltd & Anor v Australian Competition Tribunal & Ors; National Competition Council v Hamersley Iron Pty Ltd & Ors; National Competition Tribunal v Robe River Mining Co Pty Ltd & Ors

[2011] HCATrans 300

[2011] HCATrans 300

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M42 of 2011

B e t w e e n -

THE PILBARA INFRASTRUCTURE PTY LTD (ACN 103 096 340)

First Applicant

FORTESCUE METALS GROUP LIMITED (ACN 002 594 827)

Second Applicant

and

AUSTRALIAN COMPETITION TRIBUNAL

First Respondent

HAMERSLEY IRON PTY LTD (ACN 004 558 276)

Second Respondent

HAMERSLEY IRON-YANDI PTY LTD (ACN 009 181 793)

Third Respondent

ROBE RIVER MINING CO PTY LTD (ACN 008 694 246)

Fourth Respondent

NORTH MINING LTD (ACN 000 081 434)

Fifth Respondent

PILBARA IRON PTY LTD (ACN 107 216 535)

Sixth Respondent

RIO TINTO LIMITED (ACN 004 458 404)

Seventh Respondent

MITSUI IRON ORE DEVELOPMENT PTY LTD (ACN 008 734 361)

Eighth Respondent

NIPPON STEEL AUSTRALIA PTY LTD (ACN 001 445 049)

Ninth Respondent

SUMITOMO METAL AUSTRALIA PTY LTD (ACN 001 444 604)

Tenth Respondent

BHP BILLITON IRON ORE PTY LTD (ACN 008 700 981)

Eleventh Respondent

BHP BILLITON MINERALS PTY LTD (ACN 008 694 782)

Twelfth Respondent

Office of the Registry
  Melbourne  No M43 of 2011
  No M44 of 2011

B e t w e e n -

THE PILBARA INFRASTRUCTURE PTY LTD (ACN 103 096 340)

First Applicant

FORTESCUE METALS GROUP LIMITED (ACN 002 594 827)

Second Applicant

and

AUSTRALIAN COMPETITION TRIBUNAL

First Respondent

ROBE RIVER MINING CO PTY LTD (ACN 008 694 246)

Second Respondent

NORTH MINING LTD (ACN 000 081 434)

Third Respondent

PILBARA IRON PTY LTD (ACN 107 216 535)

Fourth Respondent

RIO TINTO LIMITED (ACN 004 458 404)

Fifth Respondent

MITSUI IRON ORE DEVELOPMENT PTY LTD (ACN 008 734 361)

Sixth Respondent

NIPPON STEEL AUSTRALIA PTY LTD (ACN 001 445 049)

Seventh Respondent

SUMITOMO METAL AUSTRALIA PTY LTD (ACN 001 444 604)

Eighth Respondent

BHP BILLITON IRON ORE PTY LTD (ACN 008 700 981)

Ninth Respondent

BHP BILLITON MINERALS PTY LTD (ACN 008 694 782)

Tenth Respondent

Office of the Registry
  Melbourne  No M45 of 2011

B e t w e e n -

THE NATIONAL COMPETITION COUNCIL

Applicant

and

HAMERSLEY IRON PTY LTD (ACN 004 448 276)

First Respondent

HAMERSLEY IRON-YANDI PTY LTD (ACN 009 181 793)

Second Respondent

ROBE RIVER MINING CO PTY LTD (ACN 008 694 246)

Third Respondent

NORTH MINING LTD (ACN 000 081 434)

Fourth Respondent

PILBARA IRON PTY LTD (ACN 107 216 535)

Fifth Respondent

RIO TINTO LIMITED (ACN 004 458 404)

Sixth Respondent

MITSUI IRON ORE DEVELOPMENT PTY LTD (ACN 008 734 361)

Seventh Respondent

NIPPON STEEL AUSTRALIA PTY LTD (ACN 001 445 049)

Eighth Respondent

SUMITOMO METAL AUSTRALIA PTY LTD (ACN 001 444 604)

Ninth Respondent

BHP BILLITON IRON ORE PTY LTD (ACN 008 700 981)

Tenth Respondent

BHP BILLITON MINERALS PTY LTD (ACN 008 694 782)

Eleventh Respondent

FORTESCUE METALS GROUP LIMITED (ACN 002 595 872)

Twelfth Respondent

THE PILBARA INFRASTRUCTURE PTY LTD (ACN 103 096 340)

Thirteenth Respondent

AUSTRALIAN COMPETITION TRIBUNAL

Fourteenth Respondent

Office of the Registry
  Melbourne  No M46 of 2011

B e t w e e n -

THE NATIONAL COMPETITION COUNCIL

Applicant

and

ROBE RIVER MINING CO PTY LTD (ACN 008 694 246)

First Respondent

NORTH MINING LTD (ACN 000 081 434)

Second Respondent

PILBARA IRON PTY LTD (ACN 107 216 535)

Third Respondent

RIO TINTO LIMITED (ACN 004 458 404)

Fourth Respondent

MITSUI IRON ORE DEVELOPMENT PTY LTD (ACN 008 734 361)

Fifth Respondent

NIPPON STEEL AUSTRALIA PTY LTD (ACN 001 445 049)

Sixth Respondent

SUMITOMO METAL AUSTRALIA PTY LTD (ACN 001 444 604)

Seventh Respondent

BHP BILLITON IRON ORE PTY LTD (ACN 008 700 981)

Eighth Respondent

BHP BILLITON MINERALS PTY LTD (ACN 008 694 782)

Ninth Respondent

FORTESCUE METALS GROUP LIMITED (ACN 002 595 872)

Tenth Respondent

THE PILBARA INFRASTRUCTURE PTY LTD (ACN 103 096 340)

Eleventh Respondent

AUSTRALIAN COMPETITION TRIBUNAL

Twelfth Respondent

Applications for special leave to appeal

FRENCH CJ
HAYNE J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 28 OCTOBER 2011, AT 9.31 AM

Copyright in the High Court of Australia

____________________

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR C.A. MOORE, SC and MR M.I. BORSKY for the applicants in M42/2011, M43/2011 and M44/2011 and for the twelfth and thirteenth respondents in M45/2011 and for the tenth and eleventh respondents in M46/2011.  (instructed by DLA Piper Australia)

MR P.J. HANKS, QC:   May it please your Honours, I appear with MR J.P. SLATTERY for the applicant in M45/2011 and M46/2011.  We also seek to intervene in the applications brought by our learned friends for Fortescue Metals Groups Limited.  (instructed by Clayton Utz Lawyers)

MR N.J. YOUNG, QC:   May it please the Court, I appear with MR P.W. COLLINSON, SC and MR S.H. PARMENTER for the second to tenth respondents in M42/2011 and for the second to eighth respondents in M43/2011 and M44/2011 and for the first to ninth respondents in M45/2011 and for the first to seventh respondents in M46/2011.  (instructed by Allens Arthur Robinson)

MR A.C. ARCHIBALD, QC:   May it please the Court, I appear with MR M.H. O’BRYAN for the eleventh and twelfth respondents in M42/2011 and for the ninth and tenth respondents in M43/2011 and M44/2011 and for the tenth and eleventh respondents in M45/2011 and for the eighth and ninth respondents in M46/2011.  (instructed by Blake Dawson Lawyers)

FRENCH CJ:   Thank you.  Mr Gleeson, just in relation to your notices of appeal in M42 to M44, is it correct to say that the grounds, apart from the particular relief sought, are essentially identical?

MR GLEESON:   Yes, your Honour.

HAYNE J:   And you seek alternative relief.  Do you really seek to have this Court finally decide it or do you seek remitter?

MR GLEESON:   In the event that we are successful on both paragraph (b) and (f) and there is no discretionary issue which arises, it would follow that there would be a final decision.  If we are successful on paragraph (b) only, there would be a remitter to deal with the procedural fairness question.

FRENCH CJ:   Yes, all right.  Mr Young, it might assist us if you could address us first on why special leave should not be granted.

MR YOUNG:   Yes, your Honour.  If the Court pleases, I will start with the proposition that Mr Gleeson has just addressed which is that this Court is in a position to deal with the final disposition of the matter.  In our submission, it is not.  This matter came to the Full Federal Court by way of judicial review of a Tribunal decision.  The Tribunal decision was based decisively on findings of fact concerning the public interest and the exercise of its discretion under section 44H.  Those findings of fact and that exercise of discretion are, in our submission, conclusive.  It does not matter what determination is made about the proper construction of criterion (b).  It would not be capable of altering the outcome of the case insofar as it relates to the Hamersley railway line.  It would, to a limited extent, alter the outcome of the case relating to the Robe line.

The reason for that is this.  Both the NCC and Fortescue argue, in essence, for a construction of criterion (b) that would reinstate the previous approach of the Tribunal.  Under the previous approach of the Tribunal, all economic costs relating to economic efficiency, both costs and benefits and all aspects of efficiency would be taken into account in a broad cost benefit analysis under criterion (b).  What the Tribunal did and what the Full Federal Court did was to undertake that same analysis under criterion (f) and both made it very clear that it does not matter whether it is done under criterion (b) or under criterion (f).  That full cost benefit analysis addressing all aspects of economic efficiency, both costs and benefits of access, has to be undertaken. 

The Tribunal expressed views to that effect at pages 218 and 221 of the application book in paragraphs 838, around about line 18 and at 846 on page 221.  When the Tribunal turned to the cost benefit conclusion, it concluded that the costs and inefficiencies would dwarf any benefits in relation to Hamersley and have reached a similar conclusion in relation to Robe beyond 2018.  That appears at page 333 of the application book, paragraph 1319, the last sentence in relation to Hamersley.  The conclusion in relation to Hamersley, after a discussion of every possible permutation, appears at 1331:

access . . . would not be contrary to the public interest.  Indeed . . . we think access would be contrary to the public interest.

That was rested as well on the discretion.  So you have two foundations for the factual decision; public interest which is a matter solely for the Tribunal really to assess in the light of the facts, and discretion, and that too rests with the Tribunal. 

KIEFEL J:   You are really saying that the Full Court’s approach, which assumes that criterion (b) is determinative of the matter, is not correct?

MR YOUNG:   Not entirely, your Honour.  Criterion (b) was a determinative reason relied upon by the Full Court, but it also found that the assessment of costs and benefits was equally determinative and they agreed with the Tribunal’s assessment.  It only makes a difference in relation to Robe, because the Tribunal had made a declaration in relation to Robe but only up until 2018.  The Full Court set that aside and said there should be no declaration at all, but in relation to Hamersley, the Tribunal’s decision was untouched.  They had refused a declaration, the reason being that that was the outcome of the cost benefit analysis.  The Full Court provided an additional reason for the same conclusion, being the construction of criterion (b).

In relation to Robe, the factual disposition of the matter appears at paragraph 1337.  Those decisions are founded both on public interest and on discretion and, in our submission, those matters are not capable of being the subject of a re‑examination when it has come up by way of judicial review and particularly having regard to the nature of the questions, public interest and discretion.

HAYNE J:   Is this a path which the Full Court took?

MR YOUNG:   Yes.  They said it made no difference to the outcome, your Honour.  The Full Court addressed it first at page 420, paragraph 50.  That is introductory.  That is explaining that costs and benefits could be previously considered under (b), now under (f), and then at paragraph 108, page 446.  A full assessment of costs and benefits and all aspects of efficiency were taken into account by the Tribunal under (f).  Alternatively, they would have to be taken into account under (b).  It cannot be right that they be ignored.

FRENCH CJ:   Or does this mean it does not matter whether you take an economic analysis as distinct from a private economics approach under (b)?  It does not matter in any case?

MR YOUNG:   It does not matter at all for Hamersley.  It will matter to the assessment of the 2018 cut-off point for Robe.

HAYNE J:   Where do we find this in the Full Court other than at 108?  Is 108 the high point of what you say to be the Full Court’s adoption of the argument you now advance?

MR YOUNG:   No, it runs through that section, your Honour, from 108 – well, really from 104 through to 117 is the conclusion.  Paragraph 117, the conclusion, is to express concurrence with the Tribunal as to the Tribunal’s approach to (f), that is to say, you do need to take into account in assessing the public interest the likely consequences of access and to the extent to which you have not taken them into account already by adopting a cost benefit analysis under (b), it must be done under (f).

The consequence is this.  When one turns to the special leave arguments advanced both by FMG and the NCC, their principal argument is that the Full Court erred in relation to criterion (b) by overturning the established tests.  Fortescue advances that as its first special leave reason in paragraphs 36 and 37 of its outline at 565.  The NCC likewise argues for a return to the previous Tribunal position in paragraphs 37 and 41 of its outline.  The point I am making is it does not alter the result, except in a marginal respect relating to Robe, if that were to be correct.  In our submission, it would be inappropriate for this ‑ ‑ ‑

HAYNE J:   But you have to go the further point, have you not, of saying not only does it not make any difference, but also the Full Court determined it on that footing?  That is, are you in truth now advancing a notice of contention point or are you supporting reasoning which we find in the Full Court?

MR YOUNG:   No, I am supporting the Full Court’s reasoning, your Honour.  What the Full Court did, cascading down the criteria, was this.  They determined that (b) required the application of a private economic feasibility test.  You ask, is anyone capable economically, that is, making an economic return, to develop another alternative and competing facility?  They adopted that approach.  If you adopt a private economic feasibility approach to criterion (b), you do not do the full calculus of costs and benefits of access under (b).  It is a narrower inquiry effectively about barriers to entry.  Not having done that under (b), the Full Court then ruled that the Tribunal was right to undertake a full assessment of the consequences of access, assessing all aspects of economic efficiency and all economic costs and benefits under (f).  They embraced and endorsed the Tribunal.  So this is not a point of contention.  It is pointing out the twin bases of the Full Court’s determination.

Conversely, the applicants for special leave argue that the full cost benefit analysis should be done under (b).  If it is done under (b), that will not change the result.  That is the effect of the previous Tribunal decisions.  The Tribunal below took a very narrow view of (b) and looked only at the production cost function, treating it as essentially asking a natural monopoly question.  So they looked at only one subset of costs, production costs, and then only below rail costs and having narrowed (b) in that fashion, the Tribunal then said all the other costs and benefits have to be considered when you come to public interest and discretion.

KIEFEL J:   Having regard to the conclusion stated by the Full Court at paragraph 137, can it really be said that it has determined the question under criterion (f)?  It seems to base it upon a hypothetical.

MR YOUNG:   Sorry, 137, your Honour?

KIEFEL J:   It seems to say on either approach to criterion (f) Fortescue cannot succeed and some of the language in the paragraphs preceding it say that you cannot say that the matters addressed by the Tribunal were outside (f).  It is within the compass of (f), but is it really stating a conclusion?

MR YOUNG:   Yes, it is, your Honour, because the previous analysis involves considering all of the arguments about the scope of (f) and considering the Tribunal’s evaluation of public interest under (f) and in those paragraphs running from 104 to 117, the Full Court endorses and concurs with the Tribunal’s interpretation and application of (f) and all that paragraph 137 does is to say even if the Tribunal’s conclusions in relation to (f) were affected by some want of procedural fairness, that does not alter the result because the result follows from their construction of criterion (b) in any event.

Whilst I have mentioned procedural fairness, can I say this about it.  What the Full Court failed to notice is that the Tribunal assessed the facts on three different assumptions.  The procedural fairness issue related to the provision to the Tribunal of an ASX announcement by Fortescue in March 2010 saying that they intended to construct a Dixon line from the Solomon deposit to Anketell Point in about 2014/2015.  That was an ASX announcement.  The Tribunal assessed the facts on the assumption that that was not the position and that the Dixon line would not be built.  That was one of the assumptions and they said on that assumption we come to the same conclusion, but costs vastly outweigh the benefits.  That appears in the Tribunal’s reasons at 1324 at page 335, the first paragraph on that page:

There are three possibilities presented before us.  The first is that . . . the Dixon line is not built.  The second possibility is that . . . the Dixon line is delayed.  The third is that . . . the Dixon line will be built.

The date emanating from the March 2010 ASX announcement only related to the last possibility.  The Tribunal then analysed costs and benefits in relation to each possibility, but they concluded in each case that the costs vastly outweighed the benefits.  In relation to the first possibility, the reasoning appears in 1325 to 1328, but the conclusion is the one I earlier mentioned in paragraph 1331:

In none of the above scenarios would we be satisfied that access . . . would not be contrary to the public interest.

So they have assumed there was no such announcement as that provided in the later information and that the Dixon line would not be built, but it did not change the result.  That is why the remarks about procedural fairness do not have any impact on the point I am making, that is, that the facts have decisively determined the position in relation to Hamersley and much of the position in relation to Robe and those matters rest there.

HAYNE J:   Is the position in relation to Robe reflected in what the Full Court has ordered?

MR YOUNG:   Yes, because the Full Court, relying on the criterion (b) construction, overturned the Tribunal’s declaration of Robe up until 2018.  The Tribunal’s determination was that they were not satisfied about the period beyond 2018.  Beyond 2018, they felt that costs outweighed benefits and so the declaration the Tribunal made only ran until 2018.  But if you adopt a private feasibility approach to criterion (b), there is no basis even for that limited declaration, and that is reflected in the Full Court’s orders.  I see I have the caution light on.  Because of the number of applications, your Honours, may I continue and deal with what we say about discretion and criterion (b)?

FRENCH CJ:   Yes, all right, Mr Young.

MR YOUNG:   Thank you, your Honour.  On discretion, it is not in dispute but that the Minister has a discretion to refuse to make the declaration or to make a declaration under section 44H(1) and (2).  FMG, in its special leave application draft notice of appeal, disputes the ambit of the discretion.  That point is contrary to the determination of the Full Federal Court in Sydney Airport which said there was a wide discretion and a wide range of considerations of an economic or commercial character might arise.  There is no reason to doubt the ambit of the discretion noted by the Full Court.  There is nothing in the section that would narrow the discretion.  Section 44H(1) makes it clear it is very wide, as does subsection (2) ‑ ‑ ‑

FRENCH CJ:   You are going to the merits of the argument rather than the importance of the proposition.  I am not saying you cannot, I am just trying to put it from a special leave perspective.

MR YOUNG:   I am, but can I say this, that there is really no basis articulated as to why the discretion should be narrow.

FRENCH CJ:   Well, you cannot have a discretion swallow up the criteria, can you?

MR YOUNG:   No, we are not suggesting that, your Honour, but if the criteria are as the Full Court found it, there still remains the discretion at the end of the day.  It may be difficult to separate what matters go to the public interest and what matters go to discretion, as the Tribunal found, but they have rested their decision on the combined operation of both, but, in our submission ‑ ‑ ‑

FRENCH CJ:   This reminds me of some of the debates about authorisation and you get a two level public interest test in forming the residual discretion.

MR YOUNG:   Yes.  In relation to discretion, your Honour, it was a foundation of the factual analysis by the Tribunal.  No sensible reason has been articulated as to why there is no discretion and why it should be narrowed in some fashion so as to prevent costs and benefits of access being considered to the extent they have not already been considered under (f) and there is no reason to doubt the accuracy of the previous Full Court decision or this Full Court decision.

In relation to criterion (f), in our submission, there is no point of principle raised in relation to (f).  It is only FMG that seeks to raise the point.  The NCC does not.  There is no coherent argument as to why the assessment of the public interest is confined or restricted.  It is unconstricted on the face of the Act.  There is no reason to doubt the public interest means anything other than Australia’s welfare.  There is no reason to doubt that the Minister must assume access and then look at the consequences of access.  Nor has Fortescue ever articulated what costs can be taken into account in assessing public interest and what ones cannot.  There is no line to be drawn, in our submission. 

The Full Court, in our submission, was right to say that under (f) it cannot be right that its proper construction requires you to ignore costs and inefficiencies caused by access.  Two restrictions are argued by Fortescue.  One is that, in some fashion, the reference to the public interest in paragraph (f) is cut down by what precedes criteria, that is to say, criteria (a) to (e).  That is an attempt to pigeonhole these criteria in a fashion which is contrary to the Full Federal Court’s decision in Sydney Airport and on Fortescue’s argument, you never address costs and benefits of access.  You do not do it under (b) because that is limited to the production cost function.  Other costs and benefits you never address and they say there is some kind of restriction under (f) that excludes it.

FRENCH CJ:   Merits apart, would you accept that the interaction of these criteria and the residual discretion raises a point of general principle.  You say, though, it does not matter in this case because it does not affect the outcome?

MR YOUNG:   We do say that, your Honour, but as to the interaction of a criteria, in our submission, there is no point of general principle as to the way in which (f) and the discretion are to be approached having regard to the construction of (b).  That is the only issue that is raised, whether the construction of (b) as adopted by the Full Court means that (f) should be in some way restricted.  In our submission, the only coherent overall approach to the criteria is that articulated by the Full Court for this reason.  If (b) is a private economic feasibility test, (b) does not require a full assessment of the costs and benefits and efficiencies of access.  It is a barrier to entry.

HAYNE J:   You have said that, I think, more than once, Mr Young, but is not the point that a coherent overall construction must be arrived at?

MR YOUNG:   There are three options, your Honour.  They are three alternatives, that is what I was trying to address, and only three alternatives have ever been suggested.  I have mentioned the Full Court’s ‑ ‑ ‑

HAYNE J:   If we were to bring up (b), we would be at risk, would we not, if we failed to bring up (f), of not achieving a coherent construction of the whole?

MR YOUNG:   We will not dispute that, your Honour.  Your Honour is correct, but can I make ‑ ‑ ‑

HAYNE J:   It is one in all in, one out all out, or both out all out, is it not?

MR YOUNG:   Yes, your Honour.  But there are three rivals in terms of the approach to the interaction of the criteria.  The Full Court says private economic feasibility, then public interest requires all consequences of access to be addressed, a residual discretion.  The previous Tribunal’s approach was that you do a full cost benefit analysis of all aspects of economic efficiency.  All costs and benefits allocative, productive ‑ ‑ ‑

FRENCH CJ:   The tension in (b) is between the words which might suggest one thing and the economic matrix and setting of it and the legislative history out of which it emerged.

MR YOUNG:   In our submission, there is no tension for the reasons articulated by the Full Court.  But can I mention the third option which was the Tribunal’s, which is (b) is a natural monopoly, production costs only.  That leaves all other costs to be assessed somewhere.  The Tribunal did it under (f) and the discretion.  They are the three competitors.  Other than the Full Court’s approach, every one of them involves some strangeness, some overlap.  The Full Court’s approach is logical and coherent because it addresses separate issues under the separate criteria.  Can I turn to criterion (b) and provide a list of reasons why we say the Full Court’s construction is not open to serious doubt.

FRENCH CJ:   I thought you would be moving on to (f) and discretion.

MR YOUNG:   I have finished what I wanted to say about (f) and discretion.

FRENCH CJ:   All right.  So this is just about (b)?

MR YOUNG:   This is just about (b) what I am about to say.

FRENCH CJ:   Okay.  Keep it brief.

MR YOUNG:   I am endeavouring, your Honour, to do my best to do that.  First, the Full Court’s is the only considered analysis of criterion (b).  First, Sydney Airport was obiter.  Duke adopted that without full argument and, in particular, without any analysis of the competition principles agreement, and the later cases have simply adopted the previous Tribunal’s approach.

KIEFEL J:   That tends to suggest that there is reason to consider the Full Court’s approach.

MR YOUNG:   No, your Honour, it means that the Full Court has, for the first time, given a full consideration to the aspects of the proper construction of paragraph (b).  Parliament shows the language it did, which has a natural meaning of economic feasibility.

HAYNE J:   This is an application for leave.  It is not the appeal, Mr Young.  You say the decision is plainly right.  You have said that in your written submissions.  What do you add?

MR YOUNG:   I wanted to add this, your Honour.  In two other places the phrase “economically efficient” is used.  It is in 44X and it is in clause 6(4) of the competition principles agreement.  “Natural monopoly” is also used in the competition principles agreement.  Parliament chose not to use those terms that we used elsewhere in paragraph (b) suggesting that it was intended to have a different meaning and that different meaning is courted by the competition principles agreement which is not really extrinsic material.  It is embodied in the Act in criterion (e) and in subsection (5).  The subsection that deals with part of a service uses a similar cognate phrase.

FRENCH CJ:   This is really further exploration of the merits, I think, Mr Young.  What it seems to me you are saying is (a) they got it right and (b) if they did not get it right, it does not matter in this case.

MR YOUNG:   Exactly, your Honour.

FRENCH CJ:   All right.  That is enough.  Thank you.

MR YOUNG:   If your Honour please.

FRENCH CJ:   Yes, Mr Archibald.

MR ARCHIBALD:   The Full Court did get it right.  We only have three short points to add, two concerning criterion (b), one concerning criterion (f).  As to criterion (b), there is no tension between the text and the legislative history for the reasons identified by the Full Court in paragraphs 76 and 79.  When one sees the perspective of the section, one sees harmony between the two, not tension.  The second point in relation to criterion (b) is this, not a point dealt with by the Full Court but, in our submission, powerful confirmation of their conclusions.  Only the private economical feasibility test conduces to new investment in facilities.  The other alternative tests do not.  Section 44AA paragraph (a) of the Act states that one of the objects of the Part is to promote investment in the infrastructure by which the services are provided.  So the private economical feasibility test alone promotes that object of the Act and that supports the conclusion of the court. 

As to criterion (f), the criterion is not, in our submission, to be read down by reference to the possibility that the regulator in an arbitration may address the topic of public interest.  First, there may be no such arbitration, so in that event the question would never be addressed in the way contended

for by Fortescue and, secondly, the questions are different.  Before the regulator in an arbitration the question is whether access is in the public interest.  The question for the Minister is whether declaration is of the public interest.  So the questions are different and the perspectives of consideration of public interest differ.  Those points confirm, in our submission, the clear correctness in the conclusion of the Full Court.  If the Court pleases.

FRENCH CJ:   Thank you.  Yes, Mr Gleeson.  We will call on you separately, Mr Hanks, in relation to your application.

MR GLEESON:   Can I deal with the argument that it does not matter.  These are the answers to that.  Your Honours have referred to the Full Court at paragraphs 136 to 137 on page 457.  The effect of those paragraphs is that it was only because of the Full Court’s view on (b) that it overturned the Tribunal’s decision in respect to each.  If the Full Court were wrong on (b), that essential plank would go and we would then fall back to one of two situations.  At a minimum, the procedural fairness issue on (f) which the Court identified at paragraph 135 would need to be considered and, we submit, considered properly in the light of an overall coherent construction that the Court will give to the whole section.

Mr Young had one other answer to that, which was he took you to page 335 in the Tribunal, and said because the denial of procedural fairness was the Tribunal acting on a basis that the Dixon line would be built, it did not matter because the Tribunal went on to consider anyway what would happen if it was not built.  That is wrong because the Tribunal here considers three possibilities in paragraph 1324 and following.  The one possibility they do not consider is if the Dixon line is not built and there is no declaration.  In other words, if the Dixon line were not to be built and there were no declaration, that would be a critical matter to consider, and may I take that further in one respect.

Your Honours will see many references here to delays.  The reason this is a legal point about paragraphs (f) and the discretion and not a mere factual one is what is essential to the Tribunal’s reasoning seems to go like this.  Prima facie, I have a case for declaration based on the other criteria being met.  There is a possibility that the access seeker might be able to build a duplicative line which would be wasteful in terms of society’s resources on a natural monopoly test but something that that access seeker might do because of its own private position in a downstream market.  To put it crudely, the ore is worth a lot in China.  Therefore, if we were to assume a world of declaration – and this is where the assumptions start to go into stage two – the assumption is the access seeker will not build a Dixon line.  Everyone will come to Rio, and let us just assume there will be

a three month delay to Rio, that will delay its downstream sales to China.  That will cost Rio a lot of money.  That will affect GDP. 

For those reasons, we will regard it as contrary to the public interest to declare in the first place.  Our critical argument is that that style of reasoning raises matters under the second stage at best and has wrongly been brought into the first stage.  If that is correct in that legal argument, then the central plank of the Tribunal’s decision is erroneous and would fail.  Your Honours see that plank over on page 336, that it is a $10 billion loss to Rio and a smaller loss to Australia.  Your Honour, that is our answer to that question.  The balance of our argument simply concerns the merits of our construction on (b), (f) and discretion.  We do contend that the three have to be looked at together.  No case has had to do that.  This case provides the perfect vehicle. 

We have offered the affidavit of Mr Uthmeyer showing that the similar criteria appear in virtually every scheme across the entire country and all I really hesitate but I would say is this.  Looking forward, this does appear to be a major issue which is likely to arise in many infrastructure projects in the country over the coming decades where it could just possibly be profitable for someone privately because of their downstream interest to do something that is highly wasteful from a viewpoint of society’s resources and the central issue in the case is whether, looking at the section as a whole, in a situation like the present where it is wasteful in a natural monopoly sense, is the correct result declaration such that at stage two there would at least be a negotiation between the current monopolist, Rio, and the prospective monopolist, Fortescue, to come up with potentially a solution that suits both of them and is a win/win for society’s resources?

What we have been deprived of by this decision is the effect or the benefit of the potential monopolist, Fortescue, achieving one extra trump card over its present position of no trump cards against Rio, to have a conversation and, if necessary, an arbitration which might produce a better result for Australia.  Unless your Honours wish to hear me further on the merits of the arguments, I have put it in writing.

FRENCH CJ:   Thank you.  Mr Hanks, we might hear from you now in relation to your application.

MR HANKS:   Thank you, your Honour.

HAYNE J:   You might begin by telling us how you are party to a matter.

MR HANKS:   Presentively we are not, your Honour.

HAYNE J:   Then how do you bring application for leave?

MR HANKS:   There is a such an application pending, your Honour.  We do not press it, but we have our own application for special leave.  Indeed, we have two applications for special leave.

HAYNE J:   How are the applications for special leave founded?  You are not a party below I think.

MR HANKS:   That is so, your Honour, but that is not sufficient to deny us standing to seek special leave to appeal to this Court and we have explained why that is so in our written submissions.  If I can go first to those arguments, your Honours, but, with respect, we think that if one goes to the second volume of the application book, to pages 657 to 658, the arguments that support our application for special leave are cogent and they ought to be, in our respectful submission, persuasive. 

There is no doubt that the Council for whom we appear has a significant special interest in the construction of this Part of the Act and, in particular, in the proper construction of criterion (b), it being one of the criteria on which the Council is charged to administer in the course of making recommendations to the Minister both as to declarations and as to revocations.  We have articulated, we believe, the reason why this is of particular significance to the Council and why the Council has a sufficient interest in the outcome of the proceedings before the Full Court.

KIEFEL J:   Is there a distinction, though, to be drawn between the question of standing to bring an application at first instance and standing to bring an appeal when there is no right involved of the party because you did not pursue the question of standing and of a right or interest at first instance?

MR HANKS:   Your Honour, there can be no doubt that the Council lacks the right to seek special leave to appeal.

KIEFEL J:   But that means your interests are not in question in relation to an appeal.  You have to bring yourself up by your shoe laces.  You have to create an interest first and then say that you should special leave with respect to it.  So far there is ‑ ‑ ‑

MR HANKS:   There is nothing artificial about this, your Honour.

KIEFEL J:   There is nothing artificial about the argument, but there may be about your position.

MR HANKS:   The position of the Council is clear if one looks at this Part of the Act and the Division with which this litigation ‑ ‑ ‑

HAYNE J:   But those are matters which may well have supported your being joined as party in the proceedings below and had you been joined as party in the proceedings below, you would have had a right to apply for leave.

MR HANKS:   Of course.  We are working from the obvious premise that we did not make such an application and were not joined.  We only made an application to intervene in the proceeding below, but we are in no worse position than if we had not even attended in the proceeding below.

KIEFEL J:   What is the difference from your perspective between pursuing a right of intervention or then seeking leave as amicus and pursuing a position as a party apart from exposing yourself to costs?

MR HANKS:   We do not seek to come to the Court or to join in any appeal that might be launched in this Court as amicus.  We seek to obtain leave from the Court to commence our own appeal.  In order to advance our particular interests, which are distinct from those of Fortescue, we have an interest in, as one might say, representing the public interest in the operation of this Part of the Act because of our distinct role and responsibility in making decisions and recommendations ‑ ‑ ‑

KIEFEL J:   But why cannot that role be pursued by the other means?

MR HANKS:   I think your Honour is asking me, why cannot we, if Fortescue would be given leave to appeal, then apply for leave to intervene in that proceeding, and we can do that, your Honour.  That is clear, although we have a distinct interest from Fortescue and that course ‑ ‑ ‑

KIEFEL J:   Will that limit your argument?

MR HANKS:   No, that course would tie us to their chariot wheels, your Honour, in the sense that they would be in a position either to pursue the appeal or abandon it and if they were to abandon it, we would have no way of indicating what we say is the proper construction of this Part of the Act.

HAYNE J:   That is right.  You would be in precisely the position, would you not, that the Attorney was in McBain?  Assume Fortescue, for whatever reason, abandons an appeal – assume it gets leave, assume it abandons the appeal, you would be back, would you not, into McBain territory?

MR HANKS:   If we were only intervening in that appeal.  If we had our own appeal, we would not.  We would be seeking, and the indeed the draft notice of appeal makes this clear, we would seeking orders that would set aside the judgment of the Full Court with certain consequences.  One of the consequences would be to reinstate the Tribunal’s decision in the Robe River matter and the other consequence would be to require the Full Court to address the issues that it decided not to address in the Hamersley matter.

HAYNE J:   The distinction between that and McBain is not instantly apparent to me, Mr Hanks.

MR HANKS:   Your Honour, this is sharply distinct from McBain where there was no real controversy on foot between the Bishops in that case and any party.  Here there is a controversy that would be on foot if we were given special leave to appeal; a controversy between us and the respondents as to, one, the proper construction of criterion (b) and, two, the orders made by the Full Court in the disposition of the judicial review proceedings before the Full Court.  We challenge those orders and seek to have them set aside, and that is controversy, your Honour, that was not paralleled in the McBain case.  These are the matters that we wish to place before your Honours on the question of why we should be recognised as having sufficient standing to seek special leave to appeal.

FRENCH CJ:   How does your relief differ from that of the other applicants?

MR HANKS:   The relief is set out in the draft notice of appeal, your Honour.  For example, at page ‑ ‑ ‑

FRENCH CJ:   Page 648, I think.

MR HANKS:   Yes.  Thank you, your Honour.  This is the Hamersley Case.  Different relief is sought in the Robe Case, your Honour.  In the Hamersley Case, because there is an outstanding question that the Full Court did not deal with – and our friend, Mr Gleeson, has taken your Honours to the relevant paragraphs in the Full Court’s reasons for judgment which were very clear – in fact, left, as it were, undealt with the procedural fairness point because they said criterion (b) renders that irrelevant to the outcome of the case.  So that outstanding point would have to be dealt with, hence the terms of paragraph (b) in the orders that are sought in the Hamersley Case.  But in the Robe case what we seek is that the orders of the Full Court be set aside with the effect that the Tribunal’s decision reducing the period of the declaration would remain in place, so that there would be a declaration but it would be for a diminished period.  The only basis on which, as the Full Court acknowledged, it set aside that aspect of the Tribunal’s decision was criterion (b).

KIEFEL J:   The relief that would be appropriate, if you were able to appeal in your own right, would alter depending on whether or not the

appellants and the applicants in the other matters proceeded.  If you were a stand alone applicant and if your worse fears came to pass and they faded away from the appeals ‑ ‑ ‑

MR HANKS:   There is a reason why that is not so.

KIEFEL J:   You would be left to declaratory relief, would you not, in relation to the construction of the legislation?

MR HANKS:   What we are considering here is a declaration made by the treasurer which was then reviewed by the Tribunal.  Its a declaration as to a particular service, being a service that is one that can be brought within this regime.  The right then to invoke that declaration is not a right that is confined to Fortescue; it is a right that is available to anyone.  It is a publicly available right and it is in that sense that we come here, we seek to be allowed to bring our proceeding in the Court, to preserve that right for the public, for anyone, not only Fortescue.  If the Full Court’s orders setting aside the declaration made by the Tribunal, in effect, if those orders disappear, if they are dissolved, if they are in turn set aside, the declaration will be there, it will be available to anyone.

FRENCH CJ:   Is that theoretical or does that apply to so‑called junior miners?

MR HANKS:   It is not theoretical, your Honour, it would apply to anyone, yes.  It is a generally available right.  This is the structure of the Act that some person will apply for a declaration ‑ ‑ ‑

FRENCH CJ:   Yes, I appreciate how the Act works.  I am just talking of the context of this case.

MR HANKS:   Yes, thank you, your Honours.  I do not with to say any more about the proper construction of criterion (b).  We have dealt with that in our written outline, although I would make one point.  The text that appears in that particular paragraph of section 44H(4) is capable of more than one meaning.  It is not only capable of the meaning given to it by the Full Court as a textual construction.  It rather depends on how you pronounce the words of the section, where you put the emphasis as you articulate them and if it is open to more than one meaning, then plainly the extrinsic material to which reference has been made will guide the construction of paragraph (b), as will the objects of the Act and of this particular Part.  If the Court pleases.

FRENCH CJ:    Yes, thank you, Mr Hanks.  Mr Young.

MR YOUNG:   As to the NCC’s position, we do not oppose the intervention of the NCC.  We do submit that that is its proper role as intervener, not as a party seeking to appeal.  Within the cases it does not have a relevant interest and it is not aggrieved or affected by the order.  It has got the same interest as any regulator in the proper construction of its relevant legislation.  It chose not to intervene below.  There is no necessity or utility where ‑ ‑ ‑

HAYNE J:   Sorry, I thought it had intervened in the Full Court.

MR YOUNG:   Sorry.  It chose to intervene, not to become a party.

HAYNE J:   Not to become a party, yes.

MR YOUNG:   Fortescue was raising the same point and broader points and, in our submission, there is no utility or reason to accede to its claim to be a party.  We certainly do not oppose its intervention and it can put whatever arguments it wants as to the proper construction of the relevant provisions.

FRENCH CJ:   Thank you, Mr Young.  Mr Archibald.

MR ARCHIBALD:    We have nothing to add on this point.

FRENCH CJ:   Do you want to say anything about that, Mr Gleeson?

MR GLEESON:   No, your Honour.  Our position is simply, if leave were granted, we do not oppose any intervention by the NCC.

FRENCH CJ:   Yes.  The Court will adjourn briefly to consider what course it should take.

AT 10.23 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.27 AM:

FRENCH CJ:   There will be a grant of special leave in matters M42 to M44 inclusive.  The applications of the National Competition Council in M45 and M46 will be referred to an enlarged Bench and, of course, Mr Hanks, you may find it necessary to change your status, depending on the outcome of that. 

Can I make an observation about the filing of written submissions for those matters on which special leave has been granted, and this will apply also I think to you, Mr Hanks, in relation to your application.  So appellants’ and applicants’ submissions will have to be filed and served by 25 November.  Respondents’ submissions will be filed and served by 15 December and appellants’ and applicants’ replies to be filed and served by 22 December. 

The Court regards compliance with this timetable as extremely important and that variations to it will only be made in limited circumstances.  Applications for extensions of time or to increase page limits should only be made in exceptional circumstances.  Such applications will be considered by the Court or a Justice and may be listed in open Court.  Applications for an extension of time or to increase the page limit should be supported by an affidavit setting out the grounds for the extension and the reason, if any, why the costs of the application should not be borne by the party seeking the variation. 

The Court will now adjourn to reconstitute.

AT 10.29 AM THE MATTERS WERE CONCLUDED