Telstra Corporation Ltd v Australian Telecommunications Authority
[1995] FCA 998
•12 DECEMBER 1995
CATCHWORDS
COURTS - practice - exercise of discretion - declaratory orders - whether Telstra in position to dominate market in Australia for the supply of international telecommunication services, contrary to report of statutory regulator, Austel - extent of jurisdiction - whether jurisdiction to grant declaration excluded by regulatory statute - Telecommunications Act 1991, ss. 181, 182, 183, 187, 198, 238A - whether proceedings ought be dismissed as premature, or concerning hypothetical or abstract questions
Federal Court of Australia Act 1976: s. 21
Telecommunications Act 1991: ss. 181, 182, 183, 187, 197, 198, 238A
TELSTRA CORPORATION LIMITED v AUSTRALIAN TELECOMMUNICATIONS AUTHORITY and OPTUS NETWORKS PTY LIMITED
G 731 of 1995
LOCKHART J.
12 DECEMBER 1995
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G731 of 1995
)
GENERAL DIVISION )
BETWEEN:TELSTRA CORPORATION LIMITED
Applicant
AND:AUSTRALIAN TELECOMMUNICATIONS AUTHORITY
First Respondent
OPTUS NETWORKS PTY LIMITED
Second Respondent
JUDGE MAKING ORDER: LOCKHART J.
WHERE ORDER MADE: SYDNEY
DATE ORDER MADE: 12 DECEMBER 1995
MINUTE OF ORDER
THE COURT ORDERS THAT:
The summons by the first respondent for a stay of proceedings or for an order setting aside the writ of summons is dismissed.
The motion of the second respondent for an order that before trial the question whether the Court should refuse to entertain the proceeding be determined be dismissed.
The first respondent and the second respondent pay the costs of the applicant of the said summons and motion.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. G731 of 1995
)
GENERAL DIVISION )
BETWEEN:TELSTRA CORPORATION LIMITED
Applicant
AND:AUSTRALIAN TELECOMMUNICATIONS AUTHORITY
First Respondent
OPTUS NETWORKS PTY LIMITED
Second Respondent
12 December 1995
REASONS FOR JUDGMENT
LOCKHART J.
This proceeding was commenced in the High Court and remitted by it to this Court. It involved the hearing of two applications. One is a summons by the first respondent, the Australian Telecommunications Authority ('Austel'), for a stay of the proceeding on the ground that there is no reasonable or probable cause of action, or, in the alternative, for an order setting aside the writ of summons which commenced the proceeding in the High Court on the ground that no justiciable issue exists between the parties. The other is a motion by the second respondent, Optus Networks Pty Limited ('Optus'), for an order that before trial the question whether the Court in its discretion should refuse to entertain the proceeding be determined separately. Both the summons and the motion were heard together by consent.
The central question is whether there is a justiciable issue between the parties or only an hypothetical question in the resolution of which Telstra, as the applicant, has no real interest; hence leaving no matter for the Court's adjudication, and meaning the Court is being asked to provide an advisory opinion.
In its amended writ of summons, amplified by the statement of claim, Telstra seeks declaratory, and no other, relief in these terms:
'1.A declaration that Telstra Corporation Limited is not, within the meaning of the Telecommunications Act 1991 (as amended), in a position to dominate the market in Australia for the supply of international telecommunications services for the purposes of communications from Australia to places outside Australia.
2.In the alternative, a declaration that Telstra Corporation Limited is not, within the meaning of the Telecommunications Act 1991 (as amended), in a position to dominate all or any of the markets in Australia for the supply of international telecommunications services for the purposes of communications between places within Australia and places within each of the countries outside Australia set out in annexure A.'
Annexure A to the statement of claim is a list of many countries.
I shall summarize the principal allegations made in the statement of claim (noting no defences have yet been filed):
.Austel is a body corporate, constituted under the Telecommunications Act 1989 (Cth), and continued in existence by operation of s. 34 of the Telecommunications Act 1991 ('the Act') (paragraph 2).
.Since 26 November 1991, Telstra has been the holder of a general telecommunications licence under Part 5 of the Act (paragraph 4).
.Since 22 December 1991, Optus has been the holder of a general telecommunications licence under Part 5 of the Act (paragraph 5).
.In about August 1994, Austel published a draft document titled 'Decision Making Framework' ('the August 1994 report'), in which Austel indicated that it would presume Telstra was in a position to dominate, inter alia, the market for long distance (international) calls ('the relevant market'); and consequently, the majority of Telstra's tariffs would be liable to scrutiny by Austel under s. 238A of the Act, and under ss. 193 and 184 where relevant (paragraph 7).
.By letter dated 15 September 1994, Telstra informed Austel that it was of the view that it was not dominant in a number of markets and that Austel should not presume Telstra to be dominant in any market without due consideration of the evidence (paragraph 8).
.By letter dated 4 October 1994, Austel informed Telstra that Austel had decided to instigate an investigation and gather evidence to identify more precisely the markets in which long distance (international) call services are supplied and whether there were sufficient reasons for Austel to review its presumptive position of market dominance by Telstra (paragraph 9).
.Austel then carried out an investigation and invited and received submissions from interested persons including Telstra (paragraph 10).
.Austel recorded the outcome of its investigations in a final report dated August 1995 and titled 'Review of Telstra's Dominance in the International Telecommunications Services Market' ('the final report'), in which Austel concluded that (a) there is a distinct market for international telecommunication services; and (b) Telstra currently remains in a position to dominate it (paragraph 11).
.On 24 July 1995, Austel represented to Telstra that Austel expected Telstra to comply with Austel's findings in the final report, that Telstra was in a position to dominate the market for international telecommunication services as described by Austel, and that Austel could issue a direction under the Act if Telstra did not comply with Austel's findings (paragraph 12).
.There is a market in Australia for the supply of international telecommunication services for communications from Australia to places outside Australia ('the international market') (paragraph 13).
.Since the entry into the international market of alternative suppliers of international telecommunication services ('the suppliers') Telstra has lost and continues to lose market share (paragraphs 14 and 15).
.There are no significant barriers to entry into the international market for a variety of reasons which are specified (paragraph 16).
.Telstra does not derive any significant competitive advantage in the international market over the suppliers by reason of Telstra's ownership of its domestic fixed network (paragraph 18).
.The Act and regulations further constrain Telstra's ability to hinder suppliers or to prevent them from contesting the international market (paragraph 19).
.Telstra is not able to, and does not determine its pricing policies independently of suppliers and their conduct; and the pricing of Telstra's services in the international market has been, and is constrained by the presence and activities of the suppliers, and by the competition from them (paragraph 20).
.Telstra is not in a position to dominate the international market (paragraph 21).
.In the alternative to the assertion that the relevant market in Australia is the international market, that there are separate markets in Australia for the supply of international telecommunication services for the purposes of communications from Australia to places outside Australia with each of a large number of specified companies (paragraph 22).
.Similar allegations are then made on this alternative basis as were made with respect to the international market, concluding with the assertion that Telstra is not in a position to dominate all or any of these alternative markets described in the statement of claim as
'international stream markets' (paragraph 30).
.The statement of claim concludes with the declarations sought by Telstra.
Evidence was in the form of affidavits sworn by senior officers of each of the parties and by a solicitor acting in the proceeding on behalf of Optus. No deponents were cross-examined.
I summarize the relevant evidence as follows.
Austel's August 1994 report stated that Telstra was presumed by Austel to be 'dominant in all areas', including the international market. As a result of Austel's presumption of dominance, Telstra decided not to price 'off‑tariff' in relation to international direct dial ('IDD') rates, pending the inquiry by Austel which it had indicated it proposed to conduct. As a consequence of this decision of Telstra, it could not, amongst other things, engage in the conduct of offering at various times, and for various periods, off-tariff IDD rates on selected country streams. Nor could it do the following:
(a)offer more 'specials';
(b)immediately advertise new prices in response to movement of competitors' prices, until Austel 'not disallows'
Telstra's proposed new prices;(c)consider offering different prices to wholesale customers, as opposed to retail customers; or
(d)undertake to a large user to provide service at a particular price.
Austel began its inquiry into Telstra's presumed dominance in the international market when it released its discussion paper on 30 November 1994, seeking information and submissions from interested parties.
During the period between November 1994 and the publication of the final report, Telstra made extensive submissions to Austel for the purpose of the inquiry, and to the effect that Telstra was not dominant in the international market. Nevertheless, when Austel released its preliminary findings on 8 June 1995, it found that Telstra was dominant in the international market.
And when Austel published its final report in August 1995, in summary, it found as follows:
(a)There is a distinct market for international telecommunication services, encompassing all international services supplied to Australian customers, other than certain services to which I need not refer.
(b)Telstra currently remains in a position to dominate the international telecommunication service market, but not certain markets to which I need not refer.
Austel has notified each of the parties to the proceeding that it proposes to re-examine the findings within 12 months, or earlier, in the event that it is satisfied that:
(a)There is a significant fall in Telstra's retail market share.
(b)Optus starts providing local telephone and access services to a substantial base of IDD customers.
(c)Telstra fully implements the recommendations in Austel's 'service provider study'.
(d)There is a material change in other circumstances.
It is asserted by Telstra that the findings contained in the final report have an immediate effect upon Telstra's operations, and that they are relevant in various respects. First, it prevents Telstra engaging in price discrimination between customers. Also, pursuant to s. 197 of the Act, as a dominant carrier, it must charge for its international telecommunication services in accordance with the filed tariff in force at the time a service is supplied; that is to say, it
must not charge above or below a filed tariff. Accordingly, for any price change relating to any of its international telecommunication services, whether the price change be discriminatory or not, a dominant carrier must file a new tariff with Austel.
Prices referred to in the tariff do not become operative until the expiration of 3 business days after the tariff is given to Austel. Pursuant to s. 191 of the Act, if Austel is of the opinion that the filed tariff is not in the appropriate form, it has the power to disallow the tariff.
Further, Austel has power, pursuant to s. 238A of the Act, to disallow tariffs filed by a dominant carrier if, in Austel's opinion, the operation of the tariff would be anti-competitive. A tariff of a dominant carrier does not come into force before the expiration of 15 business days after the tariff is filed unless Austel notifies the carrier in writing that the tariff may come into force on an earlier day. Austel may disallow a tariff at any time during the 15 business days, or after the tariff has come into force, even if Austel has previously notified the carrier that the tariff may come into force at an earlier time. In practise, to avoid disallowance and resubmission, the 15 day period is sometimes extended by mutual agreement whilst discussions continue. When a tariff is not disallowed by Austel, it becomes publicly available for inspection.
The practical effect of these matters for present purposes is that, because Austel regards Telstra as a dominant carrier and expects it to comply with the final report, for Telstra to make any price change, either as a price increase or reduction in relation to its international telecommunication services, it must file a new tariff with Austel. The prices referred to in the tariff may take up to 15 days before they are 'not disallowed' by Austel. Thus, Telstra cannot respond to competitors' market actions faster than approval is obtained from Austel. This can involve a delay of three weeks. In addition, Telstra is unable, generally, to finalize promotion and systems details until Austel has not disallowed a tariff; and at this point, the tariff becomes publicly available and prone to immediate response by competitors.
On the one hand, the opinion is expressed by Mr Lee, an officer of Telstra, that the impact of the final report of Austel upon Telstra will be felt by Telstra as continued erosion of market share by other carriers and resellers, and that it would result in a detrimental financial impact on Telstra which would be difficult to overcome. Market share once lost is not easy to regain.
On the other hand, Mr Tuckwell, the Chairman of Austel, has sworn that, if Austel is required in the proceeding to subpoena all persons who have provided information to it for the purpose of the preparation by it of the final report, Austel's capacity to perform its functions under the Act will be 'greatly undermined'; and that, if it is involved as a litigant against Telstra, actively propounding evidence in relation to dominance, he does not believe that Austel will be able to continue properly to perform the administrative function of review of Telstra's position without an appearance of bias. He said that the findings in the final report do not have any direct or immediate effect upon Telstra's operations; and that they would only become relevant in the event that Telstra sought to discriminate between customers, and was unable to persuade Austel that its findings should be reviewed.
Mr Lee, of Telstra, disputes this view, and says that the findings in the final report have an immediate effect upon Telstra's operations.
Mr Bailey, an officer of Optus, has sworn amongst other things that, in essence, Telstra's market share in relation to long distance telecommunication services continues to be significantly higher than Optus's market share; that the Act provides for a number of restrictions to apply to a telecommunication carrier who is in a position to dominate a market for a particular kind of telecommunication service; and that those restrictions operate to the benefit of Optus for so long as Telstra is found to be a dominant carrier. The restrictions include the following:
(a)Under s. 197 of the Act, the dominant carrier must charge prices for its services in accordance with tariffs it lodges with Austel. This helps Optus to neutralize the advantage that Telstra would otherwise have by being able to change its prices rapidly and without warning.
(b)Under s. 183 of the Act, the dominant carrier must not, subject to certain exceptions, discriminate between its customers in relation to the charges, or other terms and conditions upon which it supplies its services. This is of assistance to Optus because it limits Telstra's ability to engage in deep price discounting for selected high-value customers.
(c)Under s. 238A of the Act Austel may reject the dominant carrier's tariff if, in Austel's opinion, the tariff is anti-competitive. This provision gives Optus protection against Telstra introducing anti-competitive price structures.
Mr Bailey also swore that, for so long as Telstra is 'a dominant carrier', the matters to which reference has just been made impose limitations on Telstra's ability to engage in certain pricing and other practices. If Telstra is 'the dominant carrier', Optus is, at least until mid-1997, the only carrier permitted under the regulatory regime to engage in these practices.
Telstra relies on all these matters to support its case that there is a real or justiciable issue between the parties of practical significance to Telstra. Mr Bailey also said in his affidavit that, if Telstra is found to be non-dominant in the market for international telecommunication services, it would no longer be bound by the restrictions and limitations to which reference was made earlier. Telstra would, for example, be entitled to make a direct approach to Optus's customers and offer them prices at a substantial discount to Telstra's tariff prices, without prior warning to Optus and without a review by Austel of the anti-competitive effect of those price offerings. In the result, he said, Optus's ability to gain or even retain market share and establish profitability in the international telecommunications market would be severely limited.
There are currently only two holders of general telecommunications licences granted under Part 5 of the Act: Telstra and Optus. Telstra and Optus are the primary providers of Australia's fixed telecommunications networks, and the primary suppliers of Australia's fixed telecommunication services.
I turn to the relevant provisions of the Act. The functions of Austel include responsibility for economic and technical regulation of the Australian telecommunications industry, including the promotion of fair and efficient market conduct within the industry (s. 36). Austel's functions also include the protection of persons who supply telecommunication services or supply facilities, from the practices of carriers that are damaging to competition (s. 37(a)); facilitation of entry into markets for such services and facilities of persons wishing to supply such services and facilities (s. 37(b)); promotion of competition among carriers (s. 37(c)); and protection of carriers from misuse of market power by other carriers (s. 37(d)).
Under s. 38 of the Act, Austel has the responsibility of ensuring that the provisions of the Act are carried out with due regard to the public interest, and that consumers are protected from unfair practices of carriers and others supplying telecommunication services.
The functions of Austel include issuing licences and permits (s. 41). Also, Austel is empowered to give written directions to a carrier in connection with any of Austel's functions under sections which include 37, 38 and 41 (s. 46).
A carrier who is in a position to dominate a market for a particular kind of telecommunication service is prohibited from discriminating between persons who acquire in that market telecommunication services of that kind, in relation to the charges for the services or the terms and conditions on which the services are supplied (s. 183(1)). Where a carrier contravenes or proposes to contravene s. 183, any person who is, or would be, subjected to discrimination, or any other aggrieved person, may apply to the Federal Court for relief which may include injunctions and damages (s. 186).
Where a carrier is in a position to dominate a market for a particular kind of basic carriage service; and a BCS tariff (a tariff given to Austel by a carrier under s. 90 and relevantly in force (see s. 5, the interpretation section)) was in force in the same form throughout a period during which the carrier supplied a basic carriage service of that kind, in that market, to a person; and that kind of basic carriage service was included in the tariff in force, the carrier must not demand or receive payment of a charge for the supply of that service to the person except if the charge attributable to that period is worked out in accordance with the tariff in force (ss. 197(1) and (2)).
Section 238A applies in relation to a tariff if a carrier is in a position to dominate a market for a particular kind of telecommunication service; and that kind of telecommunication service is included in a tariff of the carrier (s. 238A(1)). If in Austel's opinion the operation or continued operation of the tariff would be anti-competitive in any market for any telecommunication service, Austel must give the carrier written notice stating that Austel is disallowing all or any of the provisions of the tariff (s. 238A(2)). The notice must set out why Austel is of the opinion that the operation or continued operation of those provisions of the tariff would be anti-competitive in that market (s. 238A(3)). Austel's power to disallow provisions of a tariff under s. 238A may be exercised at any time during which the tariff is in force; and if the tariff is a BCS tariff, at any time after a carrier gives Austel a copy of the tariff, or a variation of the tariff, and before the tariff comes into force (s. 238A(4)). Subject to subsection (11) the disallowance takes effect on the day specified in the notice for that purpose, which must not be a day occurring more than 5 days after the day on which the notice was given (s. 238A(6) and (7). The carrier must not demand or receive payment of a charge for the supply of a telecommunication service to a person if the charge is worked out in accordance with the tariff or provisions of a tariff that have been disallowed under s. 238A, and the whole or a part of the charge is attributable to a period occurring after the tariff, or the provisions of the tariff, were disallowed (s. 238A(13)).
For the purposes of s. 238A, the operation or continued operation of a tariff is taken to be anti-competitive in a market if and only if the operation or continued operation of the tariff or provisions of the tariff, or the operation or continued operation of the tariff or provisions of the tariff in conjunction with other tariffs or commercial arrangements, has or is likely to have the effect of materially and adversely affecting the development and/or maintenance of commercially sustainable competition in that market (s. 238A(14)).
Austel is authorized to direct a carrier to remedy a breach of a condition of a licence (s. 343); and Austel is authorized to investigate contraventions of certain divisions and sections of the Act, or contraventions of a condition of a general telecommunications licence or of a public mobile licence (s. 333(a) and (b)).
Where a carrier has engaged or proposes to engage in conduct that involves or would involve a contravention of a direction by Austel, Austel may apply to the Federal Court for injunctions or declarations (s. 348). If the Federal Court is satisfied that a carrier has contravened a direction, the Court may order the carrier to pay to the Commonwealth a pecuniary penalty not exceeding $10m in respect of each contravention (s. 349(1)). Austel may also apply to the Federal Court to recover pecuniary penalties on behalf of the Commonwealth (s. 350).
Section 395 provides the Federal Court's powers relating to injunctions.
Certain decisions of Austel may be reviewed by the Administrative Appeals Tribunal pursuant to s. 397.
I now turn to the relevant legal principles. The principles governing the stay or dismissal of proceedings on the ground that they are premature or raise hypothetical issues, and effectively seek an advisory opinion from the Court, are well established.
This Court has undoubted power to grant declaratory relief, whether or not any consequential relief is or could be claimed (s. 21 of the Federal Court of Australia Act 1976). In Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, Mason C.J., Dawson, Toohey and Gaudron JJ. said at 581-582:
'It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which "[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise". However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have a "real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties.'
This passage was cited with approval by Dawson J. in Oil Basins Limited v The Commonwealth (1993) 178 CLR 643 at 649. See also Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited [1921] 2 AC 438 at 448 (also cited with approval by Dawson J. in Oil Basins at 649).
In The Commonwealth v Sterling Nicholas Duty Free Pty Limited (1972) 126 CLR 297, Barwick C.J. said at 305:
'The jurisdiction to make a declaratory order without consequential relief is a large and most useful jurisdiction. In my opinion, the present was an apt case for its exercise. The respondent undoubtedly desired and intended to do as he asked the Court to declare he lawfully could do. The matter, in my opinion, was in no sense hypothetical, but in any case not hypothetical in a sense relevant to the exercise of this jurisdiction. Of its nature, the jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law. Indeed, it is that capacity which contributes enormously to the utility of the jurisdiction.'
In Russian Commercial and Industrial Bank Lord Sumner said at 452:
'For many years it has been accepted practice in cases in the Commercial List to hear and determine claims for a declaration of right, when a real and not a fictitious or academic question is involved and is in being between two parties, in order that they may know what business course to take without having to run the risk of acting and finding themselves liable in damages, when at last the matter is brought before the Court.'
See also Young on Declaratory Orders, 2nd ed., at 74.
Telstra seeks to conduct its business on the basis that it is not in a position to dominate the relevant market, and that therefore it ought not be subject to the constraints imposed by the Act on a dominant carrier. Austel has published and adhered to its opinion that Telstra cannot conduct its business without contravening the Act, as it is, in its view, in a position to dominate the relevant market.
In my opinion Telstra is entitled to be told by the Court whether its proposed conduct in business would be unlawful or not; that is to say whether it is in a position to dominate the relevant market for its services. There is nothing hypothetical or abstract in the questions which Telstra seeks to submit to the Court. Declaratory relief is sought to determine a legal controversy between Telstra, Austel and Optus. The affidavits of Mr Lee and Mr Hambleton demonstrate that the freedom of action of Telstra in conducting its business has been, and is being, constrained by the view formed by Austel that Telstra is in a dominant position. Austel's view governs Telstra's conduct of its business. Telstra has chosen to this point to act consistently with Austel's view. In the result, Telstra has accepted real constraints on its market behaviour. This is hardly surprising in view of the fact that Austel has, as mentioned previously, power to require compliance with the conditions of Telstra's licence, including a condition that the holder of the licence comply with any direction, determination, or order that the Act empowers Austel to give or make (s. 62(a) and (b)).
It is to be remembered that Telstra's general telecommunication licence is subject to the condition that Telstra complies with the Act (s. 62). If Telstra fails to comply with the Act and breaches the conditions of its licence, it may incur a pecuniary penalty of up to $10m for each contravention (ss. 355-357 of the Act). I agree with the submission of counsel for Telstra that it would be unreasonable for Telstra to be obliged to await a direction by Austel, or to continue to be subject to the increased risk (by reason of Austel's final report) of a proceeding being brought by any person aggrieved or otherwise entitled to commence proceedings pursuant to s. 186 of the Act.
The following passage from the speech of Lord Upjohn in the Pharmaceutical Society of Great Britain v Dickson [1970] AC 403 at 433 is apt:
"To contend that a trader subject to such pressures to restrict his trading cannot resort to law in an endeavour to prove if he can that such pressures ought not lawfully to be brought to bear upon him merely because they are said to be binding in honour only is quite untenable ...
Then, it was said that in any event the action was premature. The objecting member must wait, apparently, until the council think fit to bring him before the statutory committee, it may be years later, for it was said there was no immediate threat to do so. As a matter of common sense this is most unreasonable. Why should a trader be put into the position where he may expend large sums on expanding his trading activities in defiance of the code of ethics and then be compelled to wait until at some indefinite time in the future the council choose to bring him before the statutory committee for his alleged misconduct, and only then, possibly, he finds all his hard work and expenditure rendered useless. The law is full of examples to show that a person whose freedom of activity is challenged can in a proper case have the issue determined so that he knows where he stands.
Thus, a trader who is said to require some licence to trade may come to the court and ask for a declaration to the contrary and not wait until he is prosecuted ... This principle is not confined to trade. A person whose freedom of action is challenged can always come to the court to have his rights and position clarified, subject always, of course, to the right of the court in exercise of its judicial discretion to refuse relief in the circumstances of the case.'
The passage which I cited earlier from the judgment of Barwick C.J. in Sterling Nicholas is also in point here.
Incidentally, I am satisfied that Optus is a proper contradictor. The affidavit of Mr Bailey, the relevant parts of which I recited earlier, demonstrates this. Optus has a real interest in opposing the declarations sought by Telstra.
Counsel for Austel and for Optus submitted that the Act, in large measure, entrusts to Austel the function of determining whether a carrier is in a position to dominate a market for a particular kind of telecommunication service. Reliance was placed, in particular, on ss. 181, 182, 183, 187, 198 and 238A. This submission is not correct. The Act has not entrusted Austel with the function of determining dominance of a particular carrier. Section 183 does not refer to Austel or its opinion at all. It poses the objective question whether a carrier is in fact in a position to dominate a market for a particular kind of telecommunication service. The section does not provide that a carrier must not discriminate between persons if, in Austel's opinion, the carrier is in a position to dominate the relevant market. The question of dominance must be determined as an objective fact, not merely as a subjective view of Austel. The position is the same with respect to ss. 187 and 198. As for s. 238A, the position is relevantly the same. And the question of dominance is dealt with in s. 238A(1), again without reference to Austel. This is to be contrasted with later subsections, such as subsection (2) of s. 238A, which expressly refers to Austel and requires it to give a carrier written notice stating that Austel is disallowing all or any of the provisions of the relevant tariff, if, in Austel's opinion, the operation or continued operation of the tariff would be anti-competitive in a relevant market. But the Act does not entrust to Austel the determination of the question whether a carrier is, in Austel's opinion, in a position to dominate a market. It is a fact to be objectively ascertained.
It was also argued on behalf of Austel and Optus that, because Austel may, in performing its statutory functions, form the opinion that Telstra is in a position to dominate a relevant market, the Court is thereby precluded from granting declaratory relief in relation to that issue. This argument is misconceived. The jurisdiction of a superior court to grant declaratory relief certainly can be excluded by statute, but only by express language or by necessary implication from the words of the statute, where the words are clear: Forster v Jododex Australia Pty Limited (1972) 127 CLR 421 per Gibbs J. at 435-436; Oil Basins at 652-653 and Pyx Granite Co Limited v Minister of Housing and Local Government [1960] AC 260 at 286.
The Act does not exclude the jurisdiction of the Court to grant declaratory relief to the effect that Telstra is not in a position to dominate a relevant market for the purposes of the Act, either expressly or by necessary implication.
It was also argued on behalf of Austel and Optus that there is alternative relief available to Telstra if it wishes to test the issue of market dominance, and that declaratory relief should therefore be denied. The existence of an alternative remedy is a matter for the Court to take into account in exercising its discretion on the question whether it should grant or refuse relief. But it is not a bar to the grant of declaratory relief: Sankey v Whitlam (1978) 142 CLR 1 per Gibbs A.C.J. at 22; Forster v Jododex at 438; Delmore Pty Limited v The Commonwealth (1985) 2 NSWLR 179; Pyx Granite Case [1960] AC 260; Meagher Gummow & Lehane, Equity Doctrines and Remedies, 1992 ed., at 483-484; and Young, Declaratory Orders, 2nd ed., para. 1401.
In any case, I agree with the submission of counsel for Telstra that it is very doubtful that there is any alternative remedy for Telstra in the present circumstances. If the Court makes declarations as sought by Telstra, the Court's declarations will bind the parties to the proceeding and will create issue estoppel between them in respect of the matters the subject of the declarations and the essential steps involved in the course of the reasoning that leads to them, assuming for the purposes of discussion some are made. It is true that in this industry, change, especially technological change, occurs at a rapid rate; and the facts with respect to market dominance that exist today may be different in a year or two's time. But that is a commonplace in modern litigation, including litigation under the Trade Practices Act where issues of competition arise, especially under Part IV. If a declaration is made as sought by Telstra, but the circumstances change thereafter to the point where Telstra can be regarded as being in a dominant position, issue estoppel will not prevent Austel or Optus from maintaining the position that Telstra is dominant. Material facts will have changed. None of this is an argument against the Court's power to grant declaratory relief.
I was referred to many cases by counsel, including Baldry v Jackson [1976] 2 NSWLR 415; and Toowoomba Foundry Pty Limited v The Commonwealth (1945) 71 CLR 545. But in my opinion these cases do not support the arguments put forward by counsel for Austel and Optus.
Telstra is therefore entitled to pursue this claim for declaratory relief. The matters put forward by Austel and Optus do not call for the exercise of discretion against allowing the proceeding to continue.
The summons and motion are dismissed with costs.
I certify that this and the preceding twenty-six (26) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.
Associate
Dated: 12 December 1995
Counsel for Applicant : Mr R Macfarlan QC
Mr C Hodgekiss
Solicitors for Applicant : Mallesons Stephen Jaques
Counsel for First Respondent : Mr D Shavin QC
Ms P Tate
Solicitors for First Respondent: Australian Government Solicitor
Counsel for Second Respondent : Mr T Jucovic QC
Mr S Gageler
Mr M Leeming
Solicitors for Second Respondent: Gilbert & Tobin
Date of Hearing : 14, 15 November 1995
Date of Judgment : 12 December 1995
3
0
0