Telstra Corporation Limited v Commonwealth of Australia & Ors

[2007] HCATrans 328

[2007] HCATrans 328

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S42 of 2007

B e t w e e n -

TELSTRA CORPORATION LIMITED

Plaintiff

and

COMMONWEALTH OF AUSTRALIA

First Defendant

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Second Defendant

PRIMUS TELECOMMUNICATIONS PTY LIMITED

Third Defendant

OPTUS NETWORKS PTY LIMITED

Fourth Defendant

CHIME COMMUNICATIONS PTY LIMITED

Fifth Defendant

XYZED PTY LIMITED

Sixth Defendant

POWERTEL LIMITED

Seventh Defendant

REQUEST BROADBAND PTY LIMITED

Eighth Defendant

NEC AUSTRALIA PTY LIMITED

Ninth Defendant

MACQUARIE TELECOM PTY LIMITED

Tenth Defendant

AMCOM PTY LIMITED

Eleventh Defendant

ADAM INTERNET PTY LIMITED

Twelfth Defendant

AGILE PTY LIMITED

Thirteenth Defendant

Summons for directions

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 22 JUNE 2007, AT 9.40 AM

Copyright in the High Court of Australia

MR A. ROBERTSON, SC:   May it please the Court, I appear with my learned friend, MR J.K. KIRK, for the plaintiff.  (instructed by Mallesons Stephen Jaques)

MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth of Australia:   May it please the Court, I appear for the first defendant and for the Attorney‑General for South Australia intervening.  I think this is the first time since Federation that that has occurred.  (instructed by Australian Government Solicitor)

MR N.J. YOUNG, QC:   If your Honour please, I appear for the second defendant.  (instructed by Australian Government Solicitor)

MR N.J. O’BRYAN, SC:   If the Court pleases, I appear for the third, fifth, seventh, eighth, eleventh, twelfth and thirteenth defendants.  (instructed by Herbert Geer & Rundle)

MR S.J. GAGELER, SC:   If your Honour pleases, I appear with MR S.J. FREE for the fourth and sixth defendants.  (instructed by Clayton Utz)

MS M. SLOSS, SC:   If it please the Court, I appear for the ninth and tenth defendants.  (instructed by Nicholls Legal)

HIS HONOUR:   Has there been some change in representation amongst the parties?

MR O’BRYAN:   There has, your Honour.  The seventh and the eighth have changed practitioners and at some convenient point I might mention to your Honour that consequential amendments have been made to the defences of the seventh and eighth by consent, and we can deal with that matter if that is convenient, your Honour, or, alternatively, just file the orders and the proposed amended defence if that is convenient.

HIS HONOUR:   Is there any disagreement with what has been done?

MR O’BRYAN:   No, your Honour.

HIS HONOUR:   It can be done now if you wish.

MR O’BRYAN:   If your Honour pleases.  I have two copies of the signed consent orders.  Is that convenient to hand up?

HIS HONOUR:   Yes, they can be filed in Court.

MR O’BRYAN:   Thank you, your Honour.

MS SLOSS:   If your Honour pleases, that would necessitate an amendment to the defence that was filed by the ninth and tenth defendants and we will attend to that in due course.

HIS HONOUR:   Thank you, Ms Sloss.  They will not be complex amendments, I suppose, will they?

MS SLOSS:   No, they will not, your Honour, simply removing the references to – and the LSS section mostly.

HIS HONOUR:   That will not be opposed, so that can be attended to just through the Registry.

MS SLOSS:   Yes.

HIS HONOUR:   Yes, Mr Robertson.

MR ROBERTSON:   Your Honour made orders and directions in this matter on 20 March this year which set in train the process for a stated case.  There were directions ‑ ‑ ‑

HIS HONOUR:   “Progress” is the word.

MR ROBERTSON:   Well, there has been progress, your Honour.  What I will do is shortly indicate the limited areas of the draft document in which ‑ ‑ ‑

HIS HONOUR:   Have you seen a document emanating from Mr Bennett and Mr Young of two pages?

MR ROBERTSON:   Yes, I have.

HIS HONOUR:   Does that crystallise the area of dispute or not?

MR ROBERTSON:   What I am about to say will cover that if I can come to it, your Honour.  Does your Honour have a draft stated case with a date at the bottom of June 2007?

HIS HONOUR:   Yes, I have – special case, I am afraid.

MR ROBERTSON:   Stated case, your Honour?  The areas that I wanted to indicate to your Honour that are still the subject of discussion, some minor, some more substantial, if your Honour were to turn to page 6, there is correspondence about some of the facts in 18 and 19.  My solicitors are checking the wording.  There is a reference in the third line of 18 to disclosure documents and that is just a mechanical task of seeing which disclosure document said what.  I think there is some discussion about the numbers in paragraph 19.  That need not detain your Honour at all.

Then the next paragraph is 48 in the document that your Honour has and there were proposed amendments to that paragraph exchanged overnight I think between my instructing solicitors and the Australian Government Solicitor.  Again, I do not think it is a matter that your Honour should be detained with.  I think it is some relatively minor wording that is in issue there in paragraph 48, which then brings me to the first of the matters that your Honour mentioned, which is the subject of the submission document filed with the Court yesterday.  That is paragraph 65.

There is one thing I wanted to comment on in relation to that joint submission, and that is that the proposition at the end of paragraph 4 of that joint submission that Telstra’s solicitors had acknowledged the irrelevance of paragraph 65 is disputed.

HIS HONOUR:   It does not matter whether they have or have not.

MR ROBERTSON:   Your Honour, again, overnight there has been – and it is not complete yet – a proposed substantial revision of 65 has been put forward involving ‑ ‑ ‑

HIS HONOUR:   It does seem very loose at the moment, Mr Robertson.

MR ROBERTSON:   Yes, we accept that.  I will not bore your Honour with how it came to be in that form or what it was in answer to, but we accept that the breadth of the proposition about economic advantages is unhelpful and we propose to remove 65(a), substitute a new and more definite 65(a) and (b) and that is, as I said, the subject of an exchange of correspondence overnight.

HIS HONOUR:   That is replicated in 94.

MR ROBERTSON:   There is a corresponding change in 94, so that is being dealt with in a similar way.  Then I think the last matter that is mentioned in that joint submission and which is still a live issue, at least of any substance, is on page 43 of the document, that is paragraph 114(a).  The parties are I think in disagreement about whether that should be a question.  When I say the parties, the plaintiff on one hand and the defendants on the other.  I would only wish to say ‑ ‑ ‑

HIS HONOUR:   Could I just ask you about that, Mr Robertson.  Are you being led by Mr Archibald?

MR ROBERTSON:   I do not think so, your Honour.  I think Mr Archibald is temporarily absent but will return.

HIS HONOUR:   I mention that because when the matter was before me on 8 February and he was explaining the case to me, one question that arose was what is wrong with 152EB compensation, that structure of compensation?  He said, “No, what we complain of is an acquisition that happens at an earlier stage”.

MR ROBERTSON:   Under AR, I think.

HIS HONOUR:   Yes, that is right.  The questions that are presented at the moment in the draft stated case do not focus on AR, do they?

MR ROBERTSON:   In terms they go to whether or not – I am looking at 114(b) and (c) for the moment, which is whether ‑ ‑ ‑

HIS HONOUR:   That is the objective there, is it, to pick up 152AR, that complaint?

MR ROBERTSON:   It is really a consequence, if I could put it this way, your Honour, that certainly the complaint centres upon the effect of AR in the facts that are ‑ ‑ ‑

HIS HONOUR:   What I am saying, I suppose, is that those facts are very well fleshed out for ULLS and LSS, so one asks oneself, “What is the property; what amounts to the acquisition; and when does it occur?”

MR ROBERTSON:   And is it or is it not and at what stage caught by what is being referred to as the safety net?

HIS HONOUR:   Yes.

MR ROBERTSON:   What I wanted to say about 114(a) is this really – and perhaps the same applies for (b) and (c) – that it is really a question of the form of relief.  If the Court found that there was ‑ ‑ ‑

HIS HONOUR:   Can you just explain to me what is the relevant distinction, if I can put it that way, between hitting on 152AL and hitting on 152AR?

MR ROBERTSON:   Because 152AR imposes obligations.  One then assumes for the purpose of this argument that there is an acquisition on other than just terms.  One then asks what should be the form of any relief; how should Part XIC be read down?  One way – and this is what 114(a) is directed to – is to say these two services, ULLS and LLS, are services within 152AL(1)(b) but not all the services that are within (1)(b) but they are within there, and one way of reading down XIC so as to preserve validity to the extent that it could be is to say the order should, as 114(a) says, reflect the result and say 152AL(1)(b) should be read down or severed with a balance of the part operating.  So what I am putting, your Honour ‑ ‑ ‑

HIS HONOUR:   I can see that.  So it is a question of severance.

MR ROBERTSON:   It is a reading down or severance proposition.  It goes to the form of ultimate relief.  My client is just keen not to be shut out at this stage of being able to put submissions as to what the form of ultimate relief should be.  So that is ‑ ‑ ‑

HIS HONOUR:   There is a further question about whether that contingency should be put up to the Full Court at this time.  You do not know the answer yet to ULLS and LLS.

MR ROBERTSON:   Quite so.  What we wish to avoid is, as I put it before, being shut out from that ultimate relief.  If the question is not put up in that form but we are not prejudiced by being shut out from arguing that as an ultimate form of relief, then we do not really mind one way or the other, but we would not want it to be taken out, as it were, summarily and then the defendants say that you cannot get that form of relief any more because it has been taken out as a question.

HIS HONOUR:   That will not happen.  At the moment it is up front but maybe it should be down the back, apart from anything else.

MR ROBERTSON:   Maybe, your Honour.

HIS HONOUR:   It is not clear at the moment that its relevance is consequential upon particular answers to 114(b) and (c).

MR ROBERTSON:   That must be so, yes.  So that is where the issue is in relation to 114.

HIS HONOUR:   The answer to (a) maybe does not arise.

MR ROBERTSON:   It could be, yes, or no or any other sort of answer.

HIS HONOUR:   I do think those questions in 114 need to be reframed, whatever happens.

MR ROBERTSON:   We can certainly ‑ ‑ ‑

HIS HONOUR:   When that is done there is the further question about whether the severance question should go up at this stage to the Full Court or simply be held back.  I have no view on that.

MR ROBERTSON:   I think we would wish to contend that how the assumed invalidity works itself out should be something that probably a Full Court would deal with.

HIS HONOUR:   Yes, the question is when though.  On the other hand, it concentrates the mind to have to think about consequences of invalidity when you are thinking of the invalidity in the first place.

MR ROBERTSON:   And if left in, allows the Full Court the flexibility, we would submit, of saying, “We don’t need to answer that” or “We can’t answer it” or “We don’t want to answer it”, or whatever it might be.

HIS HONOUR:   What is going to happen about that at the moment as you understand it between the parties?

MR ROBERTSON:   At the moment in discussions between the parties it has been a yes or no proposition, that is, should it stay in or should it go out at this point?  Your Honour has suggested that the question should be reframed in any event.  If that is the course that commends itself to your Honour, then that is what we will do.

HIS HONOUR:   Can you just look at paragraph 7 of the Bennett/Young document.

MR ROBERTSON:   Of the submission, yes, your Honour.  In a sense, that is right but not to the point.  As I indicated, your Honour, certainly there is at least one other, as I understand it, service within 152AL(1)(b), which is not the ULLS or the LLS, which is the point being made in paragraph 7, but, as I was submitting earlier, what paragraph 7 does not seem to direct itself to is why we need 114(a), which is this reading down/severance proposition.

HIS HONOUR:   Severance on the basis that you win on either or both ULLS or LLS and putting to one side for that purpose other services.

MR ROBERTSON:   Yes, because there is no direct challenge made to the acquisition of property aspects of other services.

HIS HONOUR:   That is right.  There is a large amount of material developing the basis for the attack on ULLS and LLS.

MR ROBERTSON:   Quite so.  So, your Honour, in light of what I have indicated about the areas of dispute on the exchange of correspondence which is still taking place, my submission would be that if your Honour gave the parties a strictly limited time of, say, in the order of 7 to 10 days or whatever time was convenient to your Honour to bring it back, hopefully by that stage we would be in the position of either saying we have closed the gap and we are now agreed and we have altered the form of the words in those paragraphs that I have indicated.  That, one would hope, would be the position, and then ‑ ‑ ‑

HIS HONOUR:   None of you want to be sent off to the Federal Court, from what I can gather, and have a trial.

MR ROBERTSON:   I think that is true, your Honour.  It is certainly true from the plaintiff’s perspective.

HIS HONOUR:   But no stated case.  That is the only other possibility that I see.

MR ROBERTSON:   Quite so, so it is a substantial incentive to agree.  Your Honour, those are the things that I would wish to draw your Honour’s attention to.

HIS HONOUR:   Thank you, Mr Robertson.  Mr Solicitor.

MR BENNETT:   Your Honour, the Attorney‑General for South Australia seeks that he be excused from further attendance until the hearing before the Full Court.

HIS HONOUR:   Yes, that is granted.  Any other Attorneys that you know of who are coming in?

MR BENNETT:   I do not know of any, your Honour.  The other matter is this.  We would endorse all that my learned friend has said except in relation to the issue about the orders.  Our concern is the concern expressed in paragraph 7, which is that the Court is being asked to speculate.  It is being asked (a) to deal with other possible matters falling within the section not covered by the stated case and also to speculate in a science fiction sense as to what future means of communication there might be and what laws there might be in relation to them to see whether they would be adversely affected by this section.  We submit it is just too wide.

My friend’s severance problem is solved by the form of (b) and (c).  In order to determine whether something is invalid in relation to a particular thing, the Court may have to determine whether that brings it all down or does not bring it all down, but that is an incident of the Court deciding any constitutional question.  It is not necessary, we would submit, to have the broader question and the broader question does not really assist.  It is hard to see how my friend could lose on the severance issue if he establishes ‑ ‑ ‑

HIS HONOUR:   He wants the chance to win on the severance issue and he does not want to be treated as having lost it because it has not at this stage gone up to the Full Court.  That is one of his positions.

MR BENNETT:   It is just that it seems to us, your Honour, that question (a) is not the minimalist way of achieving that objective.  If your Honour has a suggestion about some other way of achieving his objective without causing our problem, that of course would solve it.  We do not see that it is appropriate that the Court should speculate on what other matters might fall within the section.  I may say this, your Honour, that in relation ‑ ‑ ‑

HIS HONOUR:   Why would it have speculate?

MR BENNETT:   Your Honour, because one is being asked ‑ ‑ ‑

HIS HONOUR:   The words are there.

MR BENNETT:   Yes, but the words could cover any sort of future type of communication device and one just does not know how it would apply to them.  The stated case is predicated on a particular system in relation to ULLS and LLS.  That, we submit, is what the case is about and that either succeeds or fails.

The other matter is this.  Your Honour mentioned section 152AR.  We would be putting a Cooper Brookes submission in relation to that.  It is perfectly obvious what it means and if it refers to the wrong stage, that just does not matter.  You read it as if it referred to the right stage.

HIS HONOUR:   You had better tell me this.  How do you say 152AR – just put it shortly at this stage.  How would one read it?

MR BENNETT:   Your Honour, if the effect of the procedure is that the acquisition occurs at the initial moment rather than at the moment of the determination, if that is the effect, we would say that the true construction of – I think they have the wrong number, your Honour.  EB I am told is what I am referring to, not AR.  That is why I am having trouble.

HIS HONOUR:   Yes, 152EB.

MR BENNETT:   Yes.  If, as the plaintiff contends, the acquisition of property occurs prior to the determination, we say what it obviously means

is if the acquisition of property, combined with the subsequent determination, produces an acquisition that is not on just terms, then the section applies.  One might have to play with the drafting a little but it is well within Cooper Brookes, we would submit.  The fact that the draftsman may have got wrong the moment at which the determination occurs does not matter.  The substance of what is being said is so clear and the way the mistake arose is so clear that it is squarely within Cooper Brookes.  That would be our submission in relation to it.

HIS HONOUR:   Thank you.  Mr Young.

MR YOUNG:   Your Honour, I adopt what Mr Bennett has said.  Leaving aside paragraph 114(a), we generally agree with Mr Robertson that with another 7 to 10 days we hope the parties will be able to finally agree the stated case.  Can I say two things, your Honour, additionally about paragraph 114(a).

The first is that the plaintiff is not confined in any arguments that it may wish to put on severance or reading down.  The parenthetical words in (b) and (c) leave the question of severance or reading down at large.  You therefore do not need paragraph (a).  We submit, your Honour, that the Court should not state a case in the form of paragraph (a) because the expression “service of a kind” is wholly undefined by any facts either in the pleading or in the stated case and it is undefined what other services now or in the future might fall within that expression.

We have raised this, your Honour, because it is our submission that it would not be appropriate to state a question in that form and it is not necessary to do so for the purposes of preserving the arguments about severance or reading down.  If your Honour pleases.

HIS HONOUR:   Mr Gageler.

MR GAGELER:   Your Honour, if I can add a couple of things about paragraph 114(a), it is really this.  Severance, at least in the sense in which it is sought to be raised in paragraph 114(a), is not an issue in the case.  Telstra’s complaint is about ULLS and about LSS and that complaint is answered by the answers to paragraphs (b) and (c).  Severance could be relevant only to other services that are not only not the subject of facts but not the subject of a complaint.

Your Honour might recall the form of the order that was actually made I think in the form of a declaration in Newcrest.  That was simply that the proclamation of the particular stage of Kakadu National Park was invalid in its application to the particular mining leases.  One would think

there is no difficulty about framing the appropriate ultimate order on the basis of paragraphs (b) and (c); paragraph (a) simply does not arise.

HIS HONOUR:   Mr O’Bryan.

MR O’BRYAN:   Your Honour, we adopt the submissions that have been made by the counsel for the other defendants.  We submit that the question in paragraph 114(a) simply does not arise on the facts of the case.  As your Honour will be aware, there is in fact a paragraph of the case which lists numerous other services ‑ ‑ ‑

HIS HONOUR:   Yes, I was looking at that.

MR O’BRYAN:   - - - in respect of which no complaint is made whatsoever.

HIS HONOUR:   At the moment.  Thank you.  Ms Sloss.

MS SLOSS:   Your Honour, we adopt those submissions on behalf of the defendants.  My learned friend, Mr Robertson, has already put on the record this morning that there is at least one other (1)(b) service and in those circumstances we would say the question is inappropriate to be asked in that form.

HIS HONOUR:   I am sure Mr Robertson will take all that on board, not necessarily right now.

MR ROBERTSON:   I think if we may, your Honour, we will just consider what has been said in the various ‑ ‑ ‑

HIS HONOUR:   Yes, and if you wish to recast 114, you might just circulate that proposed recasting, then it could be thrashed out at the next directions hearing one way or the other.

MR ROBERTSON:   If there is no agreement it can be thrashed out then.

HIS HONOUR:   How soon should that be?

MR ROBERTSON:   Depending on your Honour’s convenience, for our part we were looking at early July, round the 3rd or 4th.  That seems to be within the sort of 7 to 10 days that we have been talking about, but I do not know how your Honour is placed or my learned friends.

HIS HONOUR:   Wednesday the 4th?

MR ROBERTSON:   That is suitable to the plaintiff, your Honour.

HIS HONOUR:   The Solicitor looks perplexed.

MR BENNETT:   Your Honour, it is not necessary for me to attend.

HIS HONOUR:   All right, I will say 9.30 on Wednesday, 4 July.  Any proposed stated case with the amendments to the draft interline might be the best thing to do.  It can be filed at a suitable time before that, together with any proposed revised 114.

MR ROBERTSON:   Would your Honour order that costs be costs in the cause?

HIS HONOUR:   Let me see what I did in the past.

MR ROBERTSON:   I think that was what your Honour did on the last occasion.

HIS HONOUR:   Costs of today costs in the cause, yes.

MR ROBERTSON:   Would that be in Sydney, your Honour, on the 4th?

HIS HONOUR:   Yes, I should have indicated that. 

MR ROBERTSON:   If the Court pleases.

HIS HONOUR:   Very well, I will now adjourn.

AT 10.08 AM THE MATTER WAS ADJOURNED