FEDERAL COURT OF AUSTRALIA

Port of Newcastle Operations Pty Ltd v Australian Competition and Consumer Commission [2017] FCA 1330

File number(s):

NSD 1767 of 2017

Judge(s):

JAGOT J

Date of judgment:

9 November 2017

Catchwords:

PRACTICE AND PROCEDUREapplication for extension of time to apply for judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) – consideration of prejudice to other parties in exercise of discretion – no relevant prejudice in allowing extension of time– extension of time granted

ADMINISTRATIVE LAWapplication for judicial review – challenge to decision of the ACCC that it was satisfied of the existence and notification of an access dispute as per s 44S of the Competition and Consumer Act 2010 (Cth) (the Act) whether arbitration process validly commenced and should be permitted to proceed in circumstances where applicant claims statutory preconditions contained in in the Act have not been met – whether issues raised by applicant ripe for judicial determination – no final determinations yet made by the ACCC in arbitration process – applicant’s claims fail as a matter of lawrelief denied on discretionary grounds considering statutory scheme under which arbitration is being conducted – originating application dismissed

Legislation:

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 11

Competition and Consumer Act 2010 (Cth) ss 44B, 44K, 44R, 44S, 44T, 44U, 44V, 44W, 44X, 44XA, 44Y, 44YA, 44Z, 44ZF, 44ZG, 44ZNB, 44ZO, 44ZP

Judiciary Act 1903 (Cth) s 39B

Ports and Maritime Administration Act 1995 (NSW) ss 48, 50, 67

Cases cited:

BHP Billiton Iron Ore Pty Ltd v National Competition Council [2008] HCA 45; (2008) 236 CLR 145

Port of Newcastle Operations Pty Ltd v Australian Competition Tribunal [2017] FCAFC 124; (2017) 346 ALR 669

Date of hearing:

9 November 2017

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Economic Regulator, Competition and Access

Category:

Catchwords

Number of paragraphs:

79

Counsel for the Applicant:

S Free and B Lim

Solicitor for the Applicant:

Webb Henderson

Counsel for the First, Second, Third and Fourth Respondents:

P Gray QC and F Gordon

Solicitor for the First, Second, Third and Fourth Respondents:

DLA Piper Australia

Counsel for the Fifth Respondent:

A Archibald QC, N De Young and C Henderson

Solicitor for the Fifth Respondent:

Clifford Chance

ORDERS

NSD 1767 of 2017

BETWEEN:

PORT OF NEWCASTLE OPERATIONS PTY LTD (ACN 165 332 990)

Applicant

AND:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

First Respondent

CHAIRPERSON ROD SIMS

Second Respondent

COMMISSIONER CRISTINA CIFUENTES (and others named in the Schedule)

Third Respondent

JUDGE:

JAGOT J

DATE OF ORDER:

9 NOVEMBER 2017

THE COURT ORDERS THAT:

1.    The time for the making of an application for review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) be extended as necessary to permit the applicant to apply for review as set out in in the proposed originating application for judicial review annexed to the application for an extension of time filed on 9 October 2017.

2.    The proposed originating application be taken to be filed on 9 November 2017.

3.    The originating application be dismissed.

4.    The applicant pay the respondents’ costs of the application for the extension of time and the originating application as agreed or taxed.

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

REASONS FOR JUDGMENT

JAGOT J:

Summary

1    Port of Newcastle Operations Pty Ltd (PNO) contends that the Australian Competition and Consumer Commission (the ACCC) is acting in contravention of the requirements of the Competition and Consumer Act 2010 (Cth) in notifying the existence of an access dispute and proceeding to arbitrate between PNO and Glencore Coal Assets Australia Pty Ltd.

2    Given that the arbitration is continuing this proceeding was expedited. These reasons for judgment have been given on an ex tempore basis reflecting the fact that the arbitration is continuing despite PNO’s claims that the arbitration is beyond power and the claimed prejudice to it as a result.

3    I consider that PNO’s claims fail as a matter of law and that, in any event, the relief it seeks would not be granted as a matter of discretion given the statutory scheme under which the arbitration is being conducted, including the fact that the ACCC has made no determination as a result of the arbitration, and if and when the ACCC does so, there is a right of review to the Australian Competition Tribunal, which it itself subject to an appeal to this Court on a question of law. As explained below, the ACCC should be permitted to complete the process which it has begun without interference by a grant of relief in a proceeding of this nature.

The proceeding

4    PNO’s claims are brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) and s 39B of the Judiciary Act 1903 (Cth).

5    There is a time limit on claims under the ADJR Act which applies to PNO’s challenge to the validity of the ACCC’s decision of 22 December 2016 that an access dispute existed (if it be a decision under the ADJR Act, an issue which need not be resolved). As Glencore submitted, the parties received notice of this decision by 16 January 2017 at the latest, so that the period for challenge of 28 days under s 11(1)(c) expired on or about 13 February 2017. PNO filed its judicial review application on 9 October 2017. Given that PNO’s claim is also brought under s 39B of the Judiciary Act and extends to conduct subsequent to the decision of 22 December 2016, little purpose is served by attempting to exclude from the dispute the ACCC’s conduct on 22 December 2016 of determining that the arbitration should proceed.

6    As will be apparent from the facts discussed below, PNO’s reasons for not bringing the proceeding at an earlier time are reasonable. Prejudice to the other parties must be taken into account in the exercise of discretion, but I am not satisfied that there is relevant prejudice as Glencore contends. To the contrary I consider that no purpose would be served by denying the extension of time, given the nature of the dispute.

The facts and statutory context

7    Part IIIA of the Competition and Consumer Act is concerned with access to services. Division 1 of Pt IIIA deals with preliminary matters. Division 2 deals with the declaration of services. Division 2AA concerns services that are ineligible to be declared. Division 2A concerns effective access regimes. Division 2B establishes a competitive tender process for government owned facilities. Division 2C establishes a register of decisions, declarations and ineligibility decisions. Division 3, with which the proceeding is concerned, deals with access to declared services.

8    The objects of Pt IIIA are identified in s 44AA as follows:

The objects of this Part are to:

(a)    promote the economically efficient operation of, use of and investment in the infrastructure by which services are provided, thereby promoting effective competition in upstream and downstream markets; and

(b)    provide a framework and guiding principles to encourage a consistent approach to access regulation in each industry.

9    Section 44B contains definitions including:

"constitutional trade or commerce " means any of the following:

(a)    trade or commerce among the States;

(b)    trade or commerce between Australia and places outside Australia;

(c)    trade or commerce between a State and a Territory, or between 2 Territories.

"declared service" means a service for which a declaration is in operation.

"determination" means a determination made by the Commission under Division 3.

"final determination" means a determination other than an interim determination.

"interim determination" means a determination that is expressed to be an interim determination.

"party" means:

(a)    in relation to an arbitration of an access dispute--a party to the arbitration, as mentioned in section 44U;

(b)    in relation to a determination--a party to the arbitration in which the Commission made the determination.

"provider ", in relation to a service, means the entity that is the owner or operator of the facility that is used (or is to be used) to provide the service.

"service" means a service provided by means of a facility and includes:

(a)    the use of an infrastructure facility such as a road or railway line;

(b)    handling or transporting things such as goods or people;

(c)    a communications service or similar service;

but does not include:

(d)    the supply of goods; or

(e)    the use of intellectual property; or

(f)    the use of a production process;

except to the extent that it is an integral but subsidiary part of the service.

"third party", in relation to a service, means a person who wants access to the service or wants a change to some aspect of the person’s existing access to the service.

10    Section 44R, which is in Division 3, provides that the Division does not apply in relation to a third party’s access to a service unless:

(a)    the provider is a corporation (or a partnership or joint venture consisting wholly of corporations); or

(b)    the third party is a corporation; or

(c)    the access is (or would be) in the course of, or for the purposes of, constitutional trade or commerce.

11    There is no issue about s 44R given that PNO and Glencore are corporations and the access is for the purpose of constitutional trade and commerce.

12    Section 44S, also in Division 3, is in these terms:

(1)    If a third party is unable to agree with the provider on one or more aspects of access to a declared service, either the provider or the third party may notify the Commission in writing that an access dispute exists, but only to the extent that those aspects of access are not the subject of an access undertaking that is in operation in relation to the service.

(2)    On receiving the notification, the Commission must give notice in writing of the access dispute to:

(a)    the provider, if the third party notified the access dispute;

(b)    the third party, if the provider notified the access dispute;

(c)    any other person whom the Commission thinks might want to become a party to the arbitration.

13    Section 44T identifies the circumstances in which a notification may be withdrawn.

14    Section 44U provides that:

The parties to the arbitration of an access dispute are:

(a)    the provider;

(b)    the third party;

(c)    any other person who applies in writing to be made a party and is accepted by the Commission as having a sufficient interest.

15    Under s 44V(1):

(1)    Unless it terminates the arbitration under section 44Y, 44YA, 44ZZCB or 44ZZCBA, the Commission:

(a)    must make a written final determination; and

(b)    may make a written interim determination;

on access by the third party to the service.

16    By s 44V(2):

A determination may deal with any matter relating to access by the third party to the service, including matters that were not the basis for notification of the dispute.

17    Section 44W identifies certain restrictions on access determinations.

18    Section 44X prescribes the matters the ACCC must and may take into account in making a final determination including, in the latter category, “any other matters that it thinks are relevant”.

19    Section 44XA establishes a time limit for the ACCC to make a final determination, subject to the capacity to “stop the clock”.

20    By s 44Y:

(1)    The Commission may at any time terminate an arbitration (without making a final determination) if it thinks that:

(a)    the notification of the dispute was vexatious; or

(b)    the subject matter of the dispute is trivial, misconceived or lacking in substance; or

(c)    the party who notified the dispute has not engaged in negotiations in good faith; or

(d)    access to the service should continue to be governed by an existing contract between the provider and the third party.

21    By s 44YA:

If the Commission is arbitrating a dispute in relation to a declared service and the Tribunal sets aside or varies the declaration in relation to the service under section 44K, the Commission must terminate the arbitration.

22    Subdivision D of Division 3 of Pt IIIA of the Competition and Consumer Act concerns the procedure in arbitrations.

23    By s 44Z (in Subdivision D):

For the purposes of a particular arbitration, the Commission is to be constituted by 2 or more members of the Commission nominated in writing by the Chairperson.

24    By s 44ZF (in Subdivision D):

(1)    In an arbitration hearing about an access dispute, the Commission:

(a)    is not bound by technicalities, legal forms or rules of evidence; and

(b)    must act as speedily as a proper consideration of the dispute allows, having regard to the need to carefully and quickly inquire into and investigate the dispute and all matters affecting the merits, and fair settlement, of the dispute; and

(c)    may inform itself of any matter relevant to the dispute in any way it thinks appropriate.

(2)    The Commission may determine the periods that are reasonably necessary for the fair and adequate presentation of the respective cases of the parties to an access dispute, and may require that the cases be presented within those periods.

(3)    The Commission may require evidence or argument to be presented in writing, and may decide the matters on which it will hear oral evidence or argument.

(4)    The Commission may determine that an arbitration hearing is to be conducted by:

(a)    telephone; or

(b)    closed circuit television; or

(c)    any other means of communication.

25    By s 44ZG (in Subdivision D):

(1)    The Commission may do any of the following things for the purpose of arbitrating an access dispute:

(a)    give a direction in the course of, or for the purposes of, an arbitration hearing;

(b)    hear and determine the arbitration in the absence of a person who has been summoned or served with a notice to appear;

(c)    sit at any place;

(d)    adjourn to any time and place;

(e)    refer any matter to an expert and accept the expert's report as evidence;

(f)    generally give all such directions, and do all such things, as are necessary or expedient for the speedy hearing and determination of the access dispute.

26    By s 44ZNB:

(1)    The Commission must prepare a written report about a final determination it makes. It must publish, by electronic or other means, the report.

(2)    The report may include the whole or a part of the determination and the reasons for the determination or the part of the determination.

(3)    The report must set out the following matters:

(a)    the principles the Commission applied in making the determination;

(b)    the methodologies the Commission applied in making the determination and the reasons for the choice of the asset valuation methodology;

(c)    how the Commission took into account the matters mentioned in subsection 44X(1) in making the determination;

(d)    any matter the Commission took into account under subsection 44X(2) in making the determination and the reasons for doing so;

(e)    any information provided by the parties to the arbitration that was relevant to those principles or methodologies;

(f)    any implications the Commission considers the determination has for persons seeking access to the service or to similar services in the future;

(g)    if applicable -- the reasons for the determination dealing with matters that were already agreed between the parties to the arbitration at the time the access dispute was notified;

(h)    if applicable -- the reasons for the access dispute being the subject of a joint arbitration hearing under section 44ZNA despite the objection of a party to the arbitration.

27    By s 44ZO:

(1)    If none of the parties to the arbitration applies to the Tribunal under section 44ZP for a review of the Commission's final determination, the determination has effect 21 days after the determination is made.

(2)    If a party to the arbitration applies to the Tribunal under section 44ZP for a review of the Commission's final determination, the determination is of no effect until the Tribunal makes its determination on the review.

The facts

28    On 16 June 2016 the Australian Competition Tribunal declared the following service under s 44K(8) of the Competition and Consumer Act (Re Application by Glencore Coal Pty Ltd [2016] ACompT 6):

the provision of the right to access and use the shipping channels (including berths next to wharves as part of the channels) at the Port of Newcastle (Port), by virtue of which vessels may enter a Port precinct and load and unload at relevant terminals located within the Port precinct and then depart the Port precinct.

29    PNO operates the Port of Newcastle. The Ports and Maritime Administration Act 1995 (NSW) applies to both the Port of Newcastle and PNO. The Port of Newcastle is a “private port” and PNO is the “port operator” of the Port of Newcastle under that Act. Under Pt 5 of that Act, PNO is the “relevant port authority” for certain charges. In particular, by s 50(1) a “navigation service charge is payable in respect of the general use by a vessel of a designated port and its infrastructure”. Under s 50(4) this charge is payable by the owner of the vessel concerned. By s 48 the owner of a vessel means the person who owns the vessel and includes a person who has chartered the vessel and “any person who, whether on the person’s own behalf or on behalf of anotherexercises any of the functions of the owner of the vessel or represents to the relevant port authority that the person has those functions or accepts the obligation to exercise those functions. By s 67 a port authority may agree on charges payable with a person liable to pay the charges, in which event the agreement displaces any determinations of such charges.

30    Glencore is a producer of coal. Its exports coal to international markets via the Port of Newcastle. In some cases Glencore has exported its coal as the charterer of a vessel. In most cases Glencore’s coal has been exported via the Port in vessels chartered by the purchaser of the coal from Glencore.

31    PNO challenged the declaration of the service by a proceeding commenced on 13 July 2016.

32    Glencore sent a letter to PNO, on a “without prejudice basis, dated 17 June 2016 which referred to Glencore’s wish to negotiate the “terms and conditions of Glencore’s access to the Port of Newcastle”. Subsequently, on an open basis, in a letter dated 5 August 2016 Glencore said to PNO that it wished to negotiate access to the declared services to be made available to vessels which are chartered by Glencore customers. As discussed below, to construe this as excluding access by Glencore itself, in the context of the earlier letter, is untenable. In any event, PNO asked for clarification of the persons on whose behalf access was sought and Glencore’s authority on behalf of those persons. Glencore notified PNO on 23 September 2016 that access was sought by Glencore and by “those vessels which we nominate as belonging to our customers, noting that precedent existed for access arrangements to be held by one party and for access to be used by another party. PNO indicated its continued dissatisfaction with this description. Glencore notified PNO on 3 November 2016 that it intended that “the prices we negotiate with you would apply to all vessels onto which coal is loaded from mines that are owned and/or operated by Glencore”.

33    On 4 November 2016 Glencore notified the ACCC of an access dispute under 44S(1). In the notification Glencore sought arbitration by the ACCC on the reasonable level of navigation service charges, and access terms, to be imposed by PNO on coal vessel users of the Service [being the declared service]. The notification identified Glencore’s attempts to negotiate access from 16 [sic] June 2016 to 3 November 2016, albeit that the “without prejudice” letter dated 17 June 2016 was not included as one of the annexed documents.

34    The ACCC gave PNO notice of this on 8 November 2016 on the basis that the ACCC needed to “confirm that the pre-conditions for notification have been satisfied”. On 11 November 2016 PNO contended to the ACCC that the pre-conditions were not satisfied as Glencore is not a “third party” permitted to notify the access dispute and Glencore and PNO had not been “unable to agree … on one or more aspects of access to a declared service” as required by 44S(1) of the Competition and Consumer Act.

35    Glencore responded on 18 November 2016 to the effect that it was a third party as required by reason of “situations … where Glencore is responsible for chartering the vessels” in which “it arranges and pays the costs of using the shipping channel directly (via its charter party agreement)”. PNO pointed out this was a new proposition (a fact in dispute), there had been no negotiations about such terms of access (a fact also in dispute), and indicated that PNO was willing to negotiate with Glencore if such terms were sought. PNO has repeated this offer subsequently to negotiate access by vessels chartered by Glencore.

36    On 22 December 2016, the ACCC wrote to Glencore and PNO saying that it was “satisfied” that the pre-conditions in 44S of the Competition and Consumer Act had been met and, accordingly, that an access dispute exists and has been validly notified by Glencore.

37    PNO requested reasons for this decision, which were provided on 16 January 2017. As summarised by PNO, these reasons were as follows:

(a)    the Ports and Maritime Administration Act 1995 (NSW) (PMAA) “is useful and relevant for identifying which entities may be regarded as access seekers to the declared service by identifying the entities that may be made liable to pay for that service”;

(b)    under s 50 of the PMAA, the liability to pay the navigation service charge falls on the “owner of the vessel” (including within the extended meaning under s 48);

(c)    Glencore is a third party for the purposes of Pt IIIA of the CCA [Competition and Consumer Act] “in all instances where Glencore (either directly or through an agent) proposes to use the shipping channel service in relation to vessels it charters to use the port, or otherwise makes a representation to PNO of the kind referred to in section 48(4)(b) of the PMAA (thereby becoming liable to pay the navigation service charge);

(d)    in relation to the “unable to agree” precondition, it was met “taking in account the history of negotiations between the parties, and the lack of progress in those negotiations in any meaningful manner, including the apparent inability of the parties to agree on the matters to form the substance of negotiations”.

38    By February 2017 the parties had agreed that the arbitration process should be suspended until PNO’s challenge to the declaration of the service had been determined. PNO’s application challenging the declaration was dismissed on 16 August 2017 (Port of Newcastle Operations Pty Ltd v Australian Competition Tribunal [2017] FCAFC 124; (2017) 346 ALR 669).

39    The ACCC then notified Glencore and PNO that it was proceeding with the arbitration. PNO submitted that the arbitration should not proceed until the validity and scope of the arbitration had been resolved. The ACCC disagreed, its position being that the requirements of s 44S(1) had been met and the scope of the arbitration would be considered in the course of the arbitration. Communications continued to be exchanged from which it was apparent that Glencore wished for a determination applying “to coal mined and exported from Glencore’s coal mining operations or any joint ventures Glencore operates. PNO wished for the issues of validity and scope of the arbitration to be determined first, and the ACCC proposed to continue with the arbitration including the issue of its scope, as well as preliminary questions about pricing methodology. While this was occurring Glencore reformulated its position about the scope of the determination to include any charges imposed on vessels carrying any cargo for Glencore using the services, then confined its position to charges on vessels carrying coal, existing or in the future.

40    The ACCC has not yet informed the parties about its position on the scope of the arbitration, as this proceeding intervened. Specifically, and as PNO noted:

On 29 September 2017, PNO wrote to the ACCC seeking to persuade it to adopt a different procedure {Ex MD-1 Tab 43}.

On 3 October 2017, the ACCC wrote to PNO stating among other things that it “maintains its decision to proceed with a hearing” and that it “considers the arbitration is at the stage where a hearing on scope, together with preliminary questions concerning pricing methodology, is appropriate and necessary” {Ex MD-1 Tab 46}.

On 3 October 2017, PNO wrote to the ACCC requesting further information about the process adopted by the ACCC {Ex MD-1 Tab 47}.

On 4 October 2017, the ACCC wrote to PNO reiterating matters addressed in its previous correspondence {Ex MD-1 Tab 48}. The ACCC also advised that it proposed to hold a hearing on 16 October 2017 in relation to the scope of the arbitration and that it would take the opportunity at that hearing to ask the parties questions about appropriate pricing methodology. It repeated its view that it was appropriate to concurrently proceed with steps in the arbitration other than scope issues {Ex MD-1 Tab 48}.

On 16 October 2017, the ACCC held the foreshadowed hearing in relation to scope and other concurrent issues {Ex AP-1 Tab 16}.

….

On 19 October 2017, the ACCC wrote to PNO and Glencore indicating that it is minded to provide the parties with its views on the issue of scope, including which charges are to be covered in the Commission’s determination, ahead of making its final determination. {Ex AP-1 Tab 17}.

41    In its communication of 19 October 2017 the ACCC also issued directions that Glencore provide further information about the scope of the arbitration by 30 October 2017, with PNO to respond by 3 November 2017.

42    On 1 November 2017, following requests by both parties for extensions of time, the ACCC varied the 19 October directions. Glencore’s material and submissions are now due on 7 November 2017 and PNO’s submissions and material in reply are due on 16 November 2017. Time ceases to run for the purposes of the deadline imposed by s 44XA of the Competition and Consumer Act between 19 October 2017 and 16 November 2017, with the result that the date by which the ACCC is now required to make a final determination in the arbitration is 18 January 2018.

Validity and scope of arbitration

43    It is not in dispute that by 44S(1) of the Competition and Consumer Act the ACCC’s power to arbitrate depends on notification of an access dispute in accordance with that section. Such a dispute may be notified by a third party or a provider if “a third party is unable to agree with the provider on one or more aspects of access to a declared service”. As described by the High Court in BHP Billiton Iron Ore Pty Ltd v National Competition Council [2008] HCA 45; (2008) 236 CLR 145 at [17]:

The consequence of a declaration of a service is that a “third party” (which is defined in s 44B to include “a person who wants access to the service”) is given what may be described as an enforceable right to negotiate access to the service. The right to negotiate may be considered “enforceable” because, subject to constitutional limits (stated in s 44R), if a third party and a provider are unable to agree upon an arrangement for the third party to have access to the declared service, the third party may notify the ACCC of the dispute (s 44S). The ACCC then has the power to arbitrate such an access dispute and, in general, “must make a written determination on access by the third party to the service” (s 44V(1)).

44    PNO contends that the ACCC has power only to arbitrate the terms of access by the third party notifying the dispute and that the third party and provider must be unable to agree on one or more aspects of access to a declared service by that third party. According to PNO, neither condition is satisfied in the present case.

45    The ACCC’s reasons disclose why this aspect of PNO’s case is both misconceived and not ripe for judicial determination. It is apparent from the ACCC’s reasons that the ACCC accepted that Glencore is a third party within the meaning of the s 44S(1) of the Competition and Consumer Act at least to the extent that Glencore itself proposes to charter vessels or makes a representation to the effect set out in s 48(4)(b) of the Ports and Maritime Administration Act (that is, an owner liable to pay charges for the service includes a person who represents to the relevant port authority that the person has or accepts the obligation to exercise the functions of an owner, whether on the person’s own behalf or on behalf of another). PNO contends that the “difficulty is that the arbitration is not confined to dealing with an access dispute existing in respect of that scenario”, as is apparent from the fact that the ACCC is “proceeding to hear and consider matters of substance without having limited the scope of the arbitration”. According to PNO:

As a result, the necessary jurisdictional foundation for the purported arbitration — namely, the existence or notification of an access dispute about access by Glencore — does not exist.

46    This proposition does not follow. It may be accepted that the notification of an access dispute under s 44S(1) is a pre-condition to the ACCC exercising its power to arbitrate. But the fact that the ACCC has chosen not to conduct the arbitration as PNO proposed does not mean that the ACCC has exceeded its power. The conduct of the arbitration is a matter for the ACCC. PNOs first proposition, that the ACCC has power only to arbitrate the terms of access by the third party notifying the dispute, goes nowhere because the basis for the ACCC’s exercise of power is the fact that Glencore has and, more importantly, wishes to continue to charter vessels and thus is a third party (and, for that matter, Glencore may also be a person making representations which, by operation of s 48(4)(b) of the Ports and Maritime Administration Act will be the owner of the vessel, and thus liable to pay the navigation service charge under s 50(4) of that Act).

47    PNO’s first proposition thus collapses into its second proposition that the ACCC did not have a lawful basis to conclude that Glencore and PNO have been “unable to agree on one or more aspects of access to the declared service” as required by s 44S(1). According to PNO:

(1)    this being a jurisdictional fact, the Court can determine for itself, as a fact, that when Glencore purported to notify the ACCC of the access dispute, it was not the case that Glencore and PNO had been unable to agree. This is because there had been no attempt on the part of Glencore to negotiate the terms of its own access”; and

(2)    the Court can determine that the ACCC has acted on a wrong construction of s 44S(1) in deciding that PNO and Glencore have been unable to agree on one or more aspects of access to the service. The misconstruction is implied from the fact that the ACCC did not reach any factual conclusion (and did not have material before it that could justify any such conclusion) that the parties had tried but failed to reach agreement on the terms of access to the Service by Glencore.

48    If the relevant fact (Glencore is unable to agree with PNO on one or more aspects of access to the declared service) is a jurisdictional fact (the common position of the parries and the position I prefer), then it is one I would determine against PNO.

49    For this purpose it does not matter if the statutory scheme is characterised as either “pro arbitration” or “arbitration as a last resort”. Given that a “third party” is “a person who wants access to the service”, it also does not matter whether PNO’s legal counsel knew or did not know that Glencore was or was not a person who had chartered vessels using the Port or might otherwise be taken to be the owner of a vessel under s 48(4) of the Ports and Maritime Administration Act. The question is whether Glencore wanted access to the declared service.

50    If PNO was in doubt as a result of the terms of the letters from Glencore of 17 June and 5 August 2016, it was reasonably clear from the letter of 23 September 2016 that Glencore wanted to negotiate terms of access for itself and for those customers it nominated to have access on the same terms. It was apparent from the 23 September 2016 letter that Glencore wanted access to the service. It wanted to negotiate terms for this access and it wanted those terms to apply to customers it nominated. PNO’s position was to reject any capacity for Glencore to negotiate terms which extended beyond Glencore as the charterer of a vessel carrying Glencore’s coal. This position fails to appreciate the capacity for a person in Glencore’s position who wants to use the service to want to negotiate access to the service on terms which might apply to its use of the service in a number of different ways. In the present case, those ways at the least include as an owner of a vessel in any manner contemplated by the Ports and Maritime Administration Act. That Glencore also wished to negotiate, as part of its terms and conditions, a capacity to nominate its customers as persons to whom the terms apply, did not mean that Glencore itself did not want access to the service.

51    Given that this was Glencore’s apparent position from no later than 23 September 2016, there was a sufficient factual foundation to satisfy the requirements of s 44S(1).

52    Despite this, on 24 October 2016 PNO expressed its view that Glencore did not have authority to negotiate on behalf of other parties.

53    On 3 November 2016 Glencore explained that it wished to negotiate terms that would apply to all vessels on which coal is loaded from mines owned or operated by Glencore. No response was received. Glencore then notified the dispute on 4 November 2016.

54    Faced with these facts, it is not the case that Glencore first notified PNO that it wished to negotiate access for itself on 18 November 2016, after the notification of the access dispute. Faced with these facts, it is also not the case that ACCC did not have a lawful basis to conclude that Glencore and PNO have been “unable to agree on one or more aspects of access to the declared service” as required by s 44S(1). Glencore and PNO had been unable to agree even the scope of any potential agreement. The jurisdictional pre-condition in s 44S(1) was satisfied. Further, there is no basis for the suggestion that the ACCC misunderstood the section. The ACCC was right. The parties had not been able to agree on anything, including the substance of what might be negotiated. This sufficed to satisfy the factual criterion of “unable to agree”.

55    PNO’s submissions to the contrary are unpersuasive. PNO submitted that:

Given the “history of negotiations” that was disclosed in the material before the ACCC, the ACCC must have taken the approach that the precondition was satisfied because in response to Glencore’s demands PNO and Glencore had been unable to agree on the terms of access for all users of the Service who carried Glencore coal (or alternatively coal from any source). That is fundamentally different in character from being unable to agree on the terms on which Glencore itself might access the Service.

56    This depends on characterising Glencore’s communications as excluding itself from any future use of the service. The fact that PNO apparently did not understand Glencore to be seeking access to the Port other than on behalf of its customers seems to be the result of an unwillingness (which remains) to entertain the possibility that “access by Glencore” to the service might involve a range of possibilities having regard to s 48 of the Ports and Maritime Administration Act and that s 48 may not determine the extent of what might properly be the subject of arbitration.

57    My characterisation, consistent with that of the ACCC, is that Glencore and PNO had not been able to agree about anything at all. Given that, on any reasonable view, Glencore itself wanted and wants access to the service, this inability to agree satisfies the pre-conditions to the ACCC’s exercise of its arbitral power.

58    I thus accept Glencore’s submission as follows:

The material before the ACCC does disclose that Glencore and PNO could not agree on various in limine aspects of access to the Service by Glencore including: (a) whether Glencore's terms of access be also made available to its customers; (b) what information (if any) should be provided by PNO for the purposes of the negotiations; and (c) how to progress the negotiations.

59    It also follows from this that the ACCC did not misunderstand the statutory provisions.

60    The fact that the ACCC declined to conduct the arbitration as PNO proposed also does not involve jurisdictional error. According to its most recent communication, the ACCC proposes to determine the appropriate scope of the arbitration after it has received and reviewed all further material to be filed by Glencore and PNO.

61    Far from involving legal error, there are a range of possibilities.

62    First, it may be that the ACCC decides that the scope of the arbitration or the determination should be confined to access to the Port by vessels in respect of which Glencore is the “owner” within the meaning of s 48 of the Ports and Maritime Administration Act.

63    Second, if the ACCC decides that the scope of the arbitration or the determination should not be confined to access to the Port by vessels in respect of which Glencore is the “owner” within the meaning of s 48 of the Ports and Maritime Administration Act, the determination may nevertheless deal with any matter relating to access by the third party to the service, including matters that were not the basis for notification of the dispute” (s 44V(2)).

64    Third, PNO may apply to the Tribunal to review any determination (s 44ZP).

65    Fourth, a party may appeal to the Court, on a question of law, from any decision by the Tribunal on review.

66    These considerations indicate that the issue which PNO is seeking to raise is not currently ripe for judicial determination. PNO wishes to persuade the ACCC that it cannot make a determination which applies to any party other than Glencore as an “owner” within the meaning of s 48 of the Ports and Maritime Administration Act, but the capacities by which Glencore may wish to access the service now and in future may themselves be matters embraced by the arbitration. For example, the scope of s 48(4)(b) arguably may itself be amenable to arbitration; it is certainly not confined to cases in which Glencore actually owns or charters a vessel using the Port. Further, the definition of the “owner” of a vessel (or cargo) in s 48 of the Ports and Maritime Administration Act is not necessarily co-extensive with the extent of the terms on which a third party may seek access to a service. PNO, however, is seeking to confine in advance the conduct of the arbitration in a manner which may well be unduly restrictive having regard to:

(1)    the various capacities in which Glencore may become liable to make payments to PNO as the “owner” of a vessel (or of cargo) under s 48;

(2)    the fact that a determination is not confined to the basis for notification of the dispute (s 44V(2);

(3)    the possibility that the “terms and conditions of the third party’s access to the service” (s 44V(2)(c)) may extend to cover different kinds of capacities in which access is sought or proposed; and

(4)    the ACCC’s capacity to conduct the arbitration as it sees fit under Subdivision D of Division 3 of Pt IIIA of the Competition and Consumer Act.

67    The point is that it is for the ACCC to determine the appropriate scope of the arbitration, at least in the first instance and, in the present case, the ACCC has not yet done so.

68    To similar effect Glencore submitted that:

the ACCC’s view that the preconditions in s. 44S(1) have been met does not have the requisite qualities in order to be amenable to judicial review under the ADJR Act. The view is not final or operative or determinative of any issue. Rather, it is more properly described as a conclusion or step along the way in the course of reasoning to an ultimate decision under s. 44V of the Act which has not yet been made.

Also, the ACCC’s expression of its view is not a jurisdictional fact for the purposes of s. 39B of the Judiciary Act 1903 (Cth). The jurisdictional facts reside in an inability by a third party to agree with the service provider on one or more aspects of access to the Service and notification of an access dispute by the third party or the service provider under s. 44S(1). The Act does not require the ACCC to reach any state of satisfaction about these matters before commencing the arbitration, nor does it make the ACCC's view on these matters determinative.

…relatedly, this is a case where the Court ought to decline to consider the grant of relief in its discretion, as the arbitration should not be fragmented or interrupted by tardy applications seeking to challenge intermediate views of the ACCC before the making of its decision under s. 44V of the Act.

69    I agree. Further, even if there is a matter currently ripe for judicial review, Glencore’s final proposition above is persuasive. The scheme of Pt IIIA of the Competition and Consumer Act indicates that if legal error on the part of the ACCC was established, careful consideration would be given to the grant of relief at this stage. The relief which PNO seeks is telling. The relief is to set aside the ACCC’s decision of 22 December 2016, to set aside the Chairperson’s decision to constitute the ACCC for the purpose of the arbitration under s 44Z, to require the termination of the arbitration, or to restrain the further conduct of the arbitration, or to declare that the ACCC has no power to make a determination other than for Glencore in circumstances where it is the “owner” of a vessel using the Port within the meaning of s 48 of the Ports and Maritime Administration Act.

70    As noted above, the circumstances which might engage s 48(4)(b) of the Ports and Maritime Administration Act may themselves be amenable to arbitration. Further, whether the terms and conditions of Glencore’s access to the Port are confined to circumstances by reason of which Glencore is liable for the particular charge as “owner” of a vessel or cargo may also be amenable to arbitration. If it ultimately is the case that, in making a determination, the ACCC exceeds its powers, PNO may apply to the Tribunal for review of the determination and the Tribunal’s decision it itself reviewable on questions of law. Any question of law, however, will depend on the precise terms of the determination, which also remain unknown.

71    For all these reasons, had I accepted PNO’s contentions (which I do not), I would not grant relief in the exercise of discretion.

72    Accordingly, grounds 6 to 9 and 15 do not succeed.

73    PNO submitted that:

An alternative route to the same result is PNO’s challenge to the decision of the Chairman under s 44Z of the CCA to constitute the Commission by the Commissioners {Ex MD-1 Tab 14}. The power conferred by s 44Z is exercisable “for the purposes of a particular arbitration”. If, as submitted above, there is no jurisdictional basis for the “particular arbitration”, then the power conferred by s 44Z cannot have been enlivened.

74    For the reasons already given, I do not accept this argument. Accordingly, grounds 10 and 11 are unsustainable.

75    Grounds 12 to 14 are also without merit. PNO submitted this:

…The only legally reasonable state of mind to form in those circumstances is that Glencore has not negotiated in good faith with PNO on access by it (as distinct from access by others). Indeed, it has expressly declined to do so. That is sufficient to engage the duty in s 44Y (para (1)(c)). But it must also follow that the only reasonable state of mind to form is that the subject matter of the dispute is misconceived or lacking in substance (para (1)(b)). Those states of mind also engage the duty in s 44Y.

The duty to terminate the arbitration has not been performed and the Commissioners are therefore amenable to mandatory relief to compel the performance of that duty.

76    These arguments assume the correctness of PNO’s earlier propositions which I have rejected. They also assume that such relief would be granted in the exercise of discretion when, for the reasons given, I would decline to do so.

77    Grounds 16 to 19 relate to the conduct of the arbitration. They are no longer pressed.

78    It will be apparent from this that I do not accept PNO’s submission that the prejudice to it from having to engage in the arbitral process and the prospect of any final determination is sufficient to justify an exercise of discretion in its favour. It may be accepted that PNO cannot recover the costs of the arbitration but, on the facts as I find them, the arbitration has been validly commenced and should be permitted to proceed in the ordinary course. Glencore itself is, as PNO would have it, a “true” access seeker. Glencore also wants its customers to obtain access on the same terms and conditions as it has access to the Port. It wants this as part of its own terms and conditions of access. All of its wants are amenable to the process of arbitration required by Pt IIIA of the Competition and Consumer Act including, as the ACCC proposes to do, a decision by it on the appropriate scope of the arbitration. To put it another way, the scope of the arbitration is part and parcel of the arbitral process which it is for the ACCC, in the first instance, to decide. The risk, and at this stage it is a mere risk, which would be inherent in any arbitration under Pt IIIA, is that the process or the determination might miscarry in some way but this is an insufficient basis upon which to found relief.

Conclusion

79    The application for the extension of time should be granted and the application for judicial review should be dismissed, with costs.

I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate:

Dated:    9 November 2017

SCHEDULE OF PARTIES

NSD 1767 of 2017

Respondents

Fourth Respondent:

COMMISSIONER SARAH COURT

Fifth Respondent:

GLENCORE COAL ASSETS AUSTRALIA PTY LTD (ACN 163 821 298)