Re Dr Ken Michael AM
[2002] WASCA 231 (S)
•23 AUGUST 2002
RE DR KEN MICHAEL AM; EX PARTE EPIC ENERGY (WA) NOMINEES PTY LTD & ANOR [2002] WASCA 231 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASCA 231 (S) | |
| THE FULL COURT (WA) | |||
| Case No: | CIV:2166/2001 | 21-28 NOVEMBER 2001,& 28 NOVEMBER 2002 | |
| Coram: | MALCOLM CJ ANDERSON J PARKER J | 23/08/02 | |
| 20/12/02 | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Declarations granted Costs orders made | ||
| A | |||
| PDF Version |
| Parties: | EPIC ENERGY (WA) NOMINEES PTY LTD (ACN 081 609 289) EPIC ENERGY (WA) TRANSMISSION PTY LTD (ACN 081 609 190) THE INDEPENDENT GAS PIPELINES ACCESS REGULATOR ALINTAGAS LIMITED AND ALINTA GAS SALES PTY LTD |
Catchwords: | Administrative law Declaratory relief Form of orders Costs |
Legislation: | Nil |
Case References: | BTR Plc v Westinghouse Brake and Signal Co (Aust) Ltd (1992) 34 FCR 246 Otter Gold Mines Ltd v Australian Securities Commission & Beaconsfield Gold NL (1997) 25 ACSR 382 Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 R v Australian Broadcasting Tribunal; Ex Parte Hardiman (1980) 144 CLR 13 Australian Competition & Consumer Commission v Goldy Motors Pty Ltd (2001) ATPR 41-801 Du Toit v Vale & Anor (1993) 9 WAR 138 Fagan v Crimes Compensation Tribunal (1982) 150 CLR 666 Geographical Indications Committee v O'Connor (2000) 32 AAR 169 Moore's (Wallisdown) Ltd Pensions Ombudsman [2002] 1 All ER 737 National Competition Council v Hammersley Iron Pty Ltd (1999) 167 ALR 109 O'Toole v Charles David Pty Ltd (1990) 171 CLR 232 P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 R v Board of Visitors of Dartmoor Prison; Ex Parte Smith [1987] QB 106 R v Inner London North Coroner; Ex parte Touche [2001] 2 All ER 752 Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813 Ruddock v Vardarlis (2001) 115 FCR 229 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : RE DR KEN MICHAEL AM; EX PARTE EPIC ENERGY (WA) NOMINEES PTY LTD & ANOR [2002] WASCA 231 (S) CORAM : MALCOLM CJ
- ANDERSON J
PARKER J
DECISION : 20 DECEMBER 2002 FILE NO/S : CIV 2166 of 2001 MATTER : An application for a writ of certiorari, a writ of prohibition and a writ of mandamus against Dr Ken Michael AM, the Independent Gas Pipelines Access Regulator in Western Australia EX PARTE
EPIC ENERGY (WA) NOMINEES PTY LTD (ACN 081 609 289)
First Applicant
EPIC ENERGY (WA) TRANSMISSION PTY LTD (ACN 081 609 190)
Second Applicant
(Page 2)
Catchwords:
Administrative law - Declaratory relief - Form of orders - Costs
Legislation:
Nil
Result:
Declarations granted
Costs orders made
Category: A
Representation:
Counsel:
First Applicant : Mr C L Zelestis QC & Mr J A Thompson
Second Applicant : Mr C L Zelestis QC & Mr J A Thompson
The Independent Gas Pipelines
Access Regulator : Mr C G Colvin SC & Mr S R Adams
AlintaGas Limited and
AlintaGas Sales Pty Ltd : Mr A C Willinge
Solicitors:
First Applicant : Mallesons Stephen Jaques
Second Applicant : Mallesons Stephen Jaques
The Independent Gas Pipelines
Access Regulator : Corrs Chambers Westgarth
AlintaGas Limited and
AlintaGas Sales Pty Ltd : Blake Dawson Waldron
Case(s) referred to in judgment(s):
BTR Plc v Westinghouse Brake and Signal Co (Aust) Ltd (1992) 34 FCR 246
(Page 3)
Otter Gold Mines Ltd v Australian Securities Commission & Beaconsfield Gold NL (1997) 25 ACSR 382
Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609
R v Australian Broadcasting Tribunal; Ex Parte Hardiman (1980) 144 CLR 13
Case(s) also cited:
Australian Competition & Consumer Commission v Goldy Motors Pty Ltd (2001) ATPR 41-801
Du Toit v Vale & Anor (1993) 9 WAR 138
Fagan v Crimes Compensation Tribunal (1982) 150 CLR 666
Geographical Indications Committee v O'Connor (2000) 32 AAR 169
Moore's (Wallisdown) Ltd Pensions Ombudsman [2002] 1 All ER 737
National Competition Council v Hammersley Iron Pty Ltd (1999) 167 ALR 109
O'Toole v Charles David Pty Ltd (1990) 171 CLR 232
P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366
R v Board of Visitors of Dartmoor Prison; Ex Parte Smith [1987] QB 106
R v Inner London North Coroner; Ex parte Touche [2001] 2 All ER 752
Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813
Ruddock v Vardarlis (2001) 115 FCR 229
(Page 4)
1 JUDGMENT OF THE COURT: Reasons for decision were delivered in this matter on 23 August 2002.
2 Supplementary submissions were heard on 28 November 2002 concerning the precise form of the declaratory relief which should be granted and the question of costs. These supplementary reasons deal with those issues.
Declaratory relief
3 At par 223 of the reasons for decision six declarations were proposed by the Court. Subject to minor drafting matters there is no issue raised by the parties about these six declarations.
4 The reasons foreshadowed, however, that the parties might identify further matters which were so critical in this case as to warrant a specific declaration.
5 The Independent Gas Pipelines Access Regulator in Western Australia ("the Regulator") has proposed that there should be three additional declarations. AlintaGas Limited and AlintaGas Sales Pty Ltd (the "Alinta parties") propose an additional declaration, substantially in similar terms to one of the three proposed by the Regulator. The applicants are opposed to each of these proposals.
6 The six declarations identified in the reasons dealt in various ways with actual errors of significance which had been identified in the draft decision of the Regulator.
7 The additional declaration which is proposed by both the Regulator and the Alinta parties concerns s 8.10 of the National Third Party Access Code for Natural Gas Pipeline Systems (the "Code") and would be to the effect that:
"The factors in s 8.10(a) to (k) are relevant to, and are to be given weight as fundamental elements in, the establishment of the initial Capital Base for the Pipeline."
8 Such a declaration is in accordance with the views of the Court and reflects the conclusion reached in the principal decision at par 56. It was a live issue between the parties whether on its true interpretation the factors in s 8.10(a) to (k) were required to be given weight as fundamental elements. Some of the six declarations proposed by the Court dealt with other aspects of the factors in s 8.10. Another of them deals with the
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- factors in s 2.24(a) to (g) of the Code. We accept that in the absence of this proposed further declaration there is some potential for confusion arising from the declaration with respect to the factors in s 2.24(a) to (g). There is sufficient justification, therefore, for a declaration as proposed by the Regulator and the Alinta parties.
9 The other two declarations sought by the Regulator each concern the interpretation of the Code. However, rather than being directed to an error of the Regulator in his draft decision, the object of these two further declarations appears essentially to provide additional and more specific guidance to the Regulator as he revisits his assessment of the applicants' proposed Access Arrangement, pursuant to the decision of this Court and the further requirements of the Code.
10 We accept that it would be open to the Court to make declarations dealing with the proposed two additional subject matters. The appropriateness of doing so at this stage of the process in which the Regulator is engaged is in issue.
11 The first of these two proposed additional declarations would declare that the Regulator should be guided by the objectives in s 8.1(a) to (f), rather than the factors in s 2.2(a) to (g), insofar as s 8.10 and s 8.11 require the exercise of discretion by the Regulator. It was not the case, however, that the draft decision revealed any error on the part of the Regulator by virtue of an application of s 2.24(a) to (g) in the exercise of discretions arising under s 8.10 and s 8.11. Indeed, as the principal reasons have made clear the core submission of the applicants that the Regulator was in error in failing to have resort to the factors in s 2.24(a) to (g) to guide the exercise of discretion pursuant to s 8.10 and s 8.11 was rejected.
12 The proposed declaration accords with the view expressed in the reasons for decision at par 84. It was there expressed tentatively, and subject to an exception which forms the basis of one of the declarations proposed by the Court. The reason for the tentative expression was the need, at that point of the reasons, to consider further issues. This was done, and nothing in that further consideration provided a basis for questioning the correctness of the view expressed at par 84. Nevertheless, this issue is one which the Regulator did not directly deal with in the draft decision as the view he took of s 2.24 led him along a quite different line of reasoning.
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13 Given the detailed and complex process of decision-making which the Regulator must follow by virtue of the requirements of s 2 of the Code, of which the draft decision is but the first stage, it appears to us that it would be undesirable in the present case to seek to anticipate the Regulator's consideration of this aspect of his eventual decision-making. The reasons of this Court will be available to the Regulator and in our view this aspect of the case is best left without express declaration at this point.
14 It should be noted that in support of this proposed declaration it was contended by the Regulator that a declaration was desirable because it appeared that there was some potential difference between the applicants and the Regulator which might usefully be quieted before it became a real issue. The submissions we heard in this respect did not sufficiently disclose the true nature of any apprehended difference and it appeared to us that it was clearly preferable that, rather than seeking to anticipate differences that need not necessarily become material, the Regulator should be left to reconsider his draft decision in light of our reasons for decision and the further submissions he will receive from the parties before him.
15 The third declaration proposed by the Regulator appears to be an attempt to bring together a number of passages of the principal reasons to comprehend in one declaration the overall nature of the process contemplated and required by the Code which leads to the establishment of the initial Capital Base. The declaration does not deal with any directly identified error on the part of the Regulator in his draft decision. It is thus, in our view, a matter in respect of which there is no demonstrated need for a declaration. The discussion of this general issue in the principal reasons of this Court will be available to the Regulator. Further, the draft declaration may well suffer from a tendency to focus too narrowly, so as to create the impression that it is solely for the Regulator to establish the initial Capital Base. It is to be borne in mind that s 8 of the Code, in particular, is setting out principles which inter alia are to guide the applicants when they first seek to establish an Access Arrangement, as well as the Regulator when he comes to assess the Access Arrangement proposed by the applicants. The initial Capital Base is but one element relevant to an Access Arrangement.
16 In these circumstances we are of the view that it would be preferable not to make the proposed declaration.
(Page 7)
Costs
17 The applicants seek an order for their costs to be paid by both of the Alinta parties and by the Regulator. The Alinta parties submit that they were necessary and proper contradictors and that the position and arguments which they raised were reasonable, with the consequence that they should not be ordered to pay any costs. Alternatively, the Alinta parties submit that they should bear a significantly lower proportion of any costs awarded, especially because they were not originally parties and only became parties on 12 September 2001. They also submit that there is no reason why the Regulator should not be ordered to pay at least some of the costs of the applicants. It is the submission of the Regulator that he ought not to be required to pay any of the costs of the applicants, but that the Alinta parties might properly be ordered to pay some or all of the costs of the applicants.
18 Obviously, there are a number of competing issues relevant to costs which require to be weighed in the present case. In particular, it is to be borne in mind that the Regulator is performing a statutory function in the public interest and, as was noted at par 8 of the principal reasons, the Regulator limited his role before the Court to adducing evidence and making submissions confined to the proper construction of the Code and the procedures of the Regulator. This was in accordance with the principle identified in R v Australian Broadcasting Tribunal; Ex Parte Hardiman (1980) 144 CLR 13 at 35-36. In such circumstances it has been held in a number of cases that no order should be made as to costs against the statutory functionary; BTR Plc v Westinghouse Brake and Signal Co (Aust) Ltd (1992) 34 FCR 246 at 265-6 and 279, Otter Gold Mines Ltd v Australian Securities Commission & Beaconsfield Gold NL (1997) 25 ACSR 382 at 393 and Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 at 612. In this respect we are not persuaded that the decisions in these cases should properly be regarded as reflecting settled principle. Rather they are examples of the exercise of the general discretion as to costs in the particular circumstances of each of those cases. Nevertheless, it appears that in each case the statutory function of the party, and the limited role played by the party in the proceedings, was seen to be of determinative significance in the exercise of discretion.
19 It is submitted in this case that the Regulator went beyond merely dealing with the proper construction of the Code and procedures, in that he sought to adduce evidence of an expert, and may be said by this and by the nature of some of the submissions he advanced to have in truth
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- contested the case of the applicants. The Regulator did tender expert evidence, and make submissions in furtherance of this evidence, but this was essentially directed to a variety of issues relevant to the construction of the Code. Part of this evidence was held inadmissible, but that did not alter the purpose for which the evidence was sought to be adduced. On balance we are not persuaded that the manner in which the Regulator conducted its case before the Court caused it to stray outside the limited role that was appropriate to its statutory function in accordance with the principle enunciated by the High Court in the Hardiman decision.
20 It is true that the Regulator has an ongoing interest, both in this case and more generally, in securing the decision of the Court as to a number of very difficult questions of interpretation of the Code which were ventilated in this case. That is a consideration likely to be true of many bodies charged with the performance of statutory regulatory functions of this nature. We are not persuaded that this consideration is of compelling force in the present case.
21 In our view, this is a case in which the course taken by the Regulator in limiting his role in the proceedings in accordance with the Hardiman principle ought to be accorded significant weight, to the extent that it would be inappropriate in our view to make an order for costs against the Regulator.
22 The applicants were formally successful in their application for relief. It is not the case, however, that they succeeded on every point. Indeed, substantial and significant aspects of the case they presented before us were unsuccessful. Further, in part, the applicants succeeded on bases they did not advance.
23 Although not parties at the commencement of these proceedings, both the Alinta parties filed a notice of intention to appear on 12 September 2001. Thereafter, their role was that of a true opponent of the applicants, both Alinta parties having a clear and significant commercial interest in the success of the case which they presented and in the failure of the case which the applicants presented. While the Alinta parties were successful in some of their arguments they too failed in a number of respects.
24 In the course of submissions as to costs some stress was placed on the question of expert evidence. It was contended by the Alinta parties that the applicants were unreasonable in their approach to the efforts of the Regulator and the Alinta parties to adduce expert evidence, with the
(Page 9)
- consequence that a considerable time was devoted to that issue. In our view, the expert evidence which was in the end admitted from all three parties was of assistance in the determination of the issues for decision. It is true that, in part, the evidence which the Regulator and the Alinta parties sought to adduce was not admitted and other parts were admitted only on a limited basis. It cannot reasonably be said, however, that the position taken by the applicants was unreasonable, given the basis of the objection taken and the success which the applicants had in securing the rejection of significant portions of the evidence of the Alinta parties and the Regulator, and the limited basis upon which other parts of that evidence was admitted. We would not treat the matter of expert evidence as material to the determination of costs in this case.
25 For these reasons we have concluded that the Regulator ought not to be ordered to pay the costs of the other parties in any respect. The two Alinta parties jointly should meet two-thirds of the costs of the applicants incurred by the applicants from 12 September 2001, including any reserved costs. Otherwise, the parties should bear their own costs.
26 The applicants' costs for these purposes should be taxed as upon a trial of an action, there being a certificate for second counsel, but not for a third, and such costs should be taxed without regard to the limits that would otherwise be applicable upon taxation. In our view, these orders are appropriate having regard to the extent and complexity of the issues involved.
27 One further issue is raised by the applicants. An order is sought, it is said pursuant to s 37(1) of the Supreme Court Act 1935, that the costs to be paid by the Alinta parties should be borne by the those parties and not by the applicants. At first sight, the purpose and meaning of such an order is not clear. In support of the submission it was contended that there may be scope, by virtue of charges that might be levied on the applicants under The Gas Pipelines Access (Western Australia) (Funding) Regulations 1999, for the burden of costs ordered to be paid by the Alinta parties in some way to find their way back to the applicants. Those regulations entitle the Regulator to recover certain costs. It should be noted that the submission was directed both to any costs that were ordered to be paid by the Regulator as well as by the Alinta parties. We are told that separate proceedings are already under foot challenging the validity of charges which have been purportedly levied by the Regulator against the applicants in this matter.
(Page 10)
28 In our view, it would be inappropriate to make any such order. The order determines, as between Alinta and the applicants, the obligation of Alinta to meet a proportion of some of the costs of the applicants. If there is a statutory scheme pursuant to which the burden of the costs so ordered to be paid by Alinta might come to be reflected in whole or part in charges levied under the regulations, it appears to us, that is a matter for the operation of those regulations. Should they have the effect that is suggested, it would not be appropriate for this Court to seek to frustrate their operation. We should make it clear that we have not sought to determine whether the regulations have that effect nor, if that be so, whether in this respect the regulations are valid. They are not issues for determination at this time.
Orders
29 For these reasons there should be declaratory relief in the following terms:
1. The determinations of Reference Tariffs and of the initial Capital Base of the Dampier to Bunbury natural gas pipeline ("Pipeline") made by the Independent Gas Pipelines Access Regulator ("Regulator") in his draft decision ("Draft Decision ") issued on 21 June 2001 are affected by errors of law and require reconsideration by the Regulator according to law.
2. The factors in s 2.24(a) to (g) of the National Third Party Access Code for Natural Gas Pipeline Systems ("Code"), as applied in Western Australia by s 9 of the Gas Pipelines Access (Western Australia) Act 1988 ("Act"), are relevant to, and are to be given weight as fundamental elements in, the Regulator's assessment of the proposed Access Arrangement, including the issue whether the Regulator is satisfied that the proposed Access Arrangement contains the elements and satisfies the principles set out in s 3.1 to s 3.20.
3. The factors in s 2.24(a) to (g) should guide the Regulator in determining, if necessary, the manner in which the objectives in s 8.1(a) to (f) can best be reconciled or which of them should prevail.
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- 4. The factors in s 8.10(a) to (k) are relevant to, and are to be given weight as fundamental elements in, the establishment of the initial Capital Base of the pipeline.
5. It is open to the Regulator, pursuant to the objective provided by s 8.1(d), to take into account the actual investment of the first applicant in the pipeline when designing a Reference Tariff and a Reference Tariff Policy, including in that context the establishment of the initial Capital Base of the pipeline.
6. The purchase of the pipeline by the first applicant on 25 March 1998, the circumstances of that purchase including the price paid, and any value according to a recognised asset valuation methodology which may be revealed by the price paid in those circumstances, are matters which the Regulator may properly take into account in determining, for the purposes of s 8.11, whether the initial Capital base for the pipeline should fall outside the range of values determined under s 8.10(a) and (b).
7. For the purposes of s 8.10 and s 8.11, and in particular s 8.10(c), (d) and (j), it is not the meaning and effect of the Code that only "efficient" capital investment, or that only "regulated revenues", are to be taken into account; nor that the initial Capital Base should represent a value "that is consistent with future regulated revenues and efficient capital investment".
30 We further order that:
8. AlintaGas Ltd and AlintaGas Sales Pty Ltd do jointly pay two-thirds the applicants' taxed costs of these proceedings which were incurred after 12 September 2001, including any reserved costs.
9. In relation to the taxation of the applicants' costs:
(a) the applicants be allowed the costs of 2 counsel;
(b) the applicants' costs shall be taxed as upon a trial of an action;
(c) the limits that would otherwise be applicable upon the taxation shall not apply.
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