FEDERAL COURT OF AUSTRALIA

PIPE Networks Pty Ltd v Commonwealth Superannuation Corporation [2013] FCA 444

THE COURT ORDERS THAT:

1.    The parties confer and, if agreement is reached, file a minute of proposed orders to give effect to the following reasons on or before 24 May 2013.

2.    If the parties are unable to agree each party file and serve minutes of orders which it proposes should be made on or before 24 May 2013, accompanied, if need be, with short submissions of no more than two pages.

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

REASONS FOR JUDGMENT

1    Most businesses depend heavily on the availability of modern and efficient telecommunication services. Those services, which were once provided by the government, are now provided by private enterprise. Competition between multiple service providers is encouraged. In order to reduce inefficiencies, service provision is regulated with a view to the avoidance of unnecessary duplication of infrastructure.

2    Problems of duplication usually arise in relation to cabling and other equipment that links towns and cities and areas within them. A variant of the problem is also to be found in high rise office buildings which have large numbers of business tenants. The cabling which facilitates communication typically enters these buildings from underground conduits. The cables enter a room reserved for communications equipment. From these rooms the cables are distributed through voids called communications risers which pass vertically up the core of the building and enter the various floors. The businesses on those floors have server rooms into which their dedicated cabling passes. The spaces within the buildings through which the cabling passes are owned by the proprietor of the building. The spaces have limited capacity. Problems may arise where different tenants engage different service providers (known as “carriers”) to provide their telecommunications services. This gives rise to the possibility that many different service providers will wish to introduce their cabling and other equipment into the limited spaces allocated for these purposes within the building.

3    This proceeding is concerned with the regulatory regime which has been put in place by the Commonwealth Parliament to deal with this potential problem. That regime is to be found in the Telecommunications Act 1997 (Cth) (“the Act”) and a Determination and a Code of Practice made thereunder. The Determination and the Code of Practice both commenced at the same time as the Act. They are respectively the Telecommunications Code of Practice 1997 (Cth) (“the Code”) and the Telecommunications (Low-impact Facilities) Determination 1997 (Cth) (“the Determination”). Both of these subordinate instruments have been relevantly amended since 1997.

4    The applicant (“PIPE”) is a service provider or carrier. In 2010 it was engaged by a company which supplied access to financial services software to various companies to migrate those companies on to an optic fibre network. One of the companies was Macquarie Bank Limited (“Macquarie”). Macquarie was a tenant of an office building at 101 Collins Street Melbourne. The first respondent (“CSC”) is the owner of this building (“the building”). The second respondent (“101”) is the company, engaged by CSC, to manage the building. In September 2011 CSC appointed the third respondent (“PropertyComm”) to exercise “operational control” over the communications facilities in the building.

5    The issues which arise relate to the rights and duties of the parties under the statutory regime and certain commercial arrangements into which some of them have entered. Particular attention focuses on the questions of whether and, if so, in what way Schedules 1 and 3 to the Act apply to PIPE’s attempts to have access to the building in order to install the fibre optic cabling which it was contracted to provide. There is an underlying dispute between the parties as to whether PIPE can be required to pay to obtain access to the building for the purpose of installing and maintaining its cabling and other equipment.

THE FACTUAL BACKGROUND

6    The circumstances which give rise to the present dispute are for the most part, not in contention. The following account is drawn from the parties’ statement of agreed facts.

7    PIPE owns and operates fibre networks in capital cities of each Australian State. These optic fibre networks are “network units” within the meaning of s 25 of the Act. PIPE is required by s 42 of the Act to hold a carrier licence.

8    PIPE is the holder of a carrier licence under s 56 of the Act. The licence was granted in July 2002.

9    PropertyComm is also the holder of a telecommunications carrier licence. The licence was granted in July 2010.

The Building

10    The building was completed in February 1991. The rapid changes in communications technology which have subsequently occurred have necessitated regular upgrading of the telecommunications equipment in the building.

11    Fixed line telecommunication services are generally provided to occupants of the building by telecommunications networks which run in conduits installed in ducts under the streets surrounding the building. External service provider cables that connect to a telecommunications network run into the building through several underground conduits and travel in to the main distribution frame (“MDF”) room.

12    If the lines are copper cables, they are terminated at the MDF room. On the other side of the room a line or lines are connected which run from the room on the building’s block cabling or specific service provider cables to the building’s communications riser (“the communications riser”) to the occupant’s tenancy.

13    If the lines are optic fibre, they are terminated at a rack or wall box in the MDF room or other tele-house facilities and, where necessary, the communications riser. An optic fibre line or lines are then connected to the wall box and run from the wall box into the communications riser (if the wall box is located in the MDF room or other location depending on the service provider cable route design) to the occupant’s tenancy, or from the wall box in the communications riser to the occupant’s tenancy. An optic fibre cable is typically 10-15 mm in diameter depending on the service provider cable route design. A wall box used by PIPE in the building is typically 300 mm by 200 mm by 100 mm up to 360 mm by 300 mm by 110 mm. Cabling to and from the wall box requires additional space due to the limitations of bending fibre cables and routing to the communications riser and/or rack facilities into which they also connect.

Installation by PIPE

14    Between June 2008 and July 2011, PIPE installed in-building subscriber connection equipment (“IBSCE”) within the building on seven occasions. On each occasion before installing the IBSCE, PIPE gave CSC and 101 written notice of its intention to install the IBSCE, which notice stated that the notice was given pursuant to Schedule 3 of the Act. PIPE did not enter into any licensing agreement or other form of agreement with CSC or 101 in relation to the installation of this IBSCE, nor has PIPE since the installation of this IBSCE entered into any licensing agreement or other form of agreement with CSC or 101 in relation to the continued occupancy of this IBSCE in the building.

15    Prior to May 2011 PIPE had installed three fibre optic cables in the building. These cables provided communication services to various tenants.

16    Each cable used by PIPE was labelled with information identifying PIPE as the installer of the cable, the number of optic fibre cores in the cable, the order the cable was installed in the wall box, the numerical identification assigned to the building and the locations where the cable started and finished including associated wall box numbers.

17    A wall box is used to reduce the amount of cabling which a communications provider is required to install to provide services to multiple tenants in a multi storey building. An optic fibre cable can run from a communications provider’s network to a wall box at a particular level in the communications riser of a building. Cables can then run from the wall box to multiple tenancies on the one floor or other floors. This avoids the necessity of installing separate cables from the communications provider’s network to each tenancy, thereby reducing the amount of cabling in the riser.

PIPE’s Land Access Notices

18    In order to provide the communication facilities sought by Macquarie it was necessary for PIPE to install two optic fibre cables (the “Primary IRESS Cable” and the “Secondary IRESS Cable”) in the building to connect the new network switches and the rack in the server room in Macquarie’s office to PIPE’s optic fibre network.

19    On 17 May 2011 PIPE gave a written Land Access and Activity Notice (“the May LAAN”) to CSC and 101 which stated that:

    PIPE intended to install the Primary IRESS Cable and the Secondary IRESS Cable in the Building; and

    the May LAAN was for A Low-Impact Facility (In-building subscriber connection) Telecommunications Act 1997 (Schedule 3 Clause 17) Telecommunications Code of Practice 1997 (clause 4.27).

20    PIPE did not give the May LAAN to Macquarie.

21    By letter dated 31 May 2011, 101 objected to the installation of the Primary and Secondary IRESS Cables stating that its objection was “based on the incorrect nature and brevity of detail provided in the LAAN …”. CSC did not object to those installation works.

22    PIPE consulted with 101 in response to its objection. In June 2011 it was agreed that PIPE would amend the May LAAN by submitting an amended plan for the route of the Primary IRESS Cables. The amendment corrected an error in the plan attached to the May LAAN and submitted a separate LAAN which proposed an alternate route for the Secondary IRESS Cable running along the south wall of the communications riser. PIPE maintains that a representative of 101 told one of its managers that the amended May LAAN and the separate LAAN would receive “swift approval”. The Respondents maintain that the representative did not make that statement, did not have authority to approve the LAAN and discussed with PIPE’s representative possible alternative routes for the Secondary IRESS Cable.

23    By letter dated 29 June 2011 PIPE provided its decision on 101’s objection to the May LAAN. It determined to vary the activity in the May LAAN by removal of the Secondary IRESS Cable and otherwise to install the Primary IRESS Cable in accordance with amended plan prepared by PIPE.

24    On 7 July 2011 PIPE provided a written Land Access and Activity Notice (“the July LAAN”) to CSC and 101 which stated that PIPE intended to install the Secondary IRESS Cable in the building as follows:

“Primary installation: Pipe Networks will install a new optical fibre cable from the existing Pipe Networks fibre wall box in the MDF Room and haul along the existing overhead cable tray and into the communications riser. Once in the communications riser the new optical fibre cable will be hauled up the south wall and will be held in place with saddle’s (sic) on every floor (as discussed during our site visit on the 14th June 2011) to Level 13 where the now (sic) optical fibre cable will be inserted into a new Pipe Networks wall box. (See plan attached).

Secondary installation: Pipe Networks will install a new optical fibre cable from the new wall box on Level 13 up the south wall of the communications riser and will be held in place with saddle’s (sic) on every floor. Once at Level 24, Pipe Networks will continue to haul the new Optical fibre cable through the existing penetration into the Macquarie Equities server room where the optical fibre will be terminated into the customers rack (See plan attached).”

25    PIPE did not give the July LAAN to Macquarie.

26    The “existing penetration” in the communications riser referred to in the July LAAN opened directly into Macquarie’s server room, about eight feet above the floor of that room. A cable tray runs from the penetration to the racks the room. The proposed route for the Secondary IRESS Cable after it left the penetration in the communications riser was along the cable tray to the rack used by IRESS.

27    By letter dated 15 July 2011 to PIPE, 101 objected to the works outlined in the July LAAN (“101’s Objection”), on the basis that:

    as the proposed installation of the Secondary IRESS Cable “impacts already limited riser space on the south side of the riser” its installation was not agreed;

    “this is very limited space and of necessity is tightly managed as a reserve for existing 101 Collins Street telecommunications licensees and their customers”;

    based on the previous two points, “as [PIPE] is not a licensee or a legally constituted tenant of [CSC ] there is no agreement to the mounting of the [wall box] on Level 13 south wall” as described in the July LAAN; and

    as a compromise 101 would accept the installation of a single cable running from Level B1 directly to the tenancy on Level 24.

28    PIPE did not receive an objection from CSC.

29    PIPE responded to 101’s Objection by way of a letter dated 22 July 2011. The dispute was not resolved. By letter, dated 12 August 2011, PIPE advised 101 of its decision not to change the installation activity described in the July LAAN.

30    Thereafter 101 did not request PIPE to refer its objection to the Telecommunications Industry Ombudsman (“the TIO”).

31    On 29 August 2011, PIPE’s contractors attended at the building and installed the Primary IRESS Cable, including in Macquarie’s server room.

32    By letter dated 23 September 2011 CSC and 101’s solicitors advised PIPE that:

    “operational control over the Building has been granted to [PropertyComm] which is a licensed telecommunications carrier under the Telecommunications Act 1997 (Cth)”;

    “PropertyComm has been granted sole authority to exercise operational control over the Building for all purposes in connection with the installation, operation and maintenance of communications facilities in the Building”;

    “the rights of [PIPE] to access the Building under Schedule 3 of the Telecommunications Act for the purpose of installing low impact facilities in connection with the occupation of [Macquarie] in the Building” were “subject to the rights granted to PropertyComm to exercise operational control over the Building in accordance with Schedule 1 of the Act”; and

    “all queries regarding access to the Building should be directed to ... PropertyComm to make the necessary arrangements to obtain access to the Building.”

33    On 4 October 2011 PIPE advised 101 that it proposed to enter the building to install the Secondary IRESS Customer Cable on 10 October 2011.

34    101 responded by letter dated 5 October 2011, in which 101 advised PIPE that:

    operational control over the Building had been granted to PropertyComm;

    “the rights of [PIPE] to access the Building under Schedule 3 of the Telecommunications Act for the purpose of installing its proposed facilities for Macquarie Equities are subject to the rights granted to [PropertyComm] to exercise operational control over the Building in accordance with Schedule 1 of the Telecommunications Act”;

    “PropertyComm has been granted sole authority to exercise operational control over the Building for all purposes in connection with the installation, operation and maintenance of communications facilities by” PIPE;

    it “did not object to the exercise by PIPE of its rights under Schedule 3 of the Telecommunications Act to access the Building to install” the Secondary IRESS Customer Cable;

    it required PIPE not to “seek to exercise such rights under Schedule 3 in a manner which is contrary to the rights which have been granted to PropertyComm to exercise operational control over the Building in accordance with Schedule 1 of the Telecommunications Act”;

    “Clause 52 of Schedule 3 of the Telecommunications Act expressly provides that Division 3 (Installation of facilities) of Schedule 3 does not authorise a carrier to engage in an activity contrary to the requirements of another law of the Commonwealth (which includes Schedule 1)”; and

    it would need to contact PropertyComm “to make the necessary arrangements for [PIPE] to obtain access to the Building for its purposes pursuant to Schedule 1 of the Telecommunications Act”.

35    In a letter from PropertyComm to PIPE dated 5 October 2011, PropertyComm reiterated the substance of 101’s letter of the same date (as set out at paragraph 34 above) and continued:

    that “[i]n the circumstances specified in clauses 17 and 18 of Schedule 1 of the Telecommunications Act PropertyComm is required to give [PIPE] access to the Building for the purpose of installing its communications facilities for Macquarie Equities on terms and conditions which are agreed between PropertyComm and Pipe Networks or, failing agreement, determined by an arbitrator…”;

    that “[i]n accordance with written advice received from the ACMA, PropertyComm nominates ... three persons for consideration by [PIPE] for appointment as the arbitrator to determine the terms and conditions upon which PropertyComm is required to give [PIPE] access to the Building to install its proposed facilities for Macquarie ...”; and

    PropertyComm requested that PIPE respond by 5:00 pm, 7 October 2011 whether it would agree to the appointment of one of the three persons nominated as the arbitrator.

36    The position then was that the respondents would not allow PIPE to enter the building to install the Secondary IRESS Customer Cable unless and until PIPE entered into an agreement with PropertyComm under Schedule 1 of the Act. PIPE maintained that it was not required to enter into an agreement with PropertyComm under Schedule 1 and has not done so.

37    PIPE has not installed the Secondary IRESS cable and it seeks orders in this proceeding that it is authorised by Schedule 3 to do so.

38    PIPE applied for interlocutory relief. On 26 October 2011, the respondents and PIPE agreed that PIPE would be granted entry to the building in order to connect a secondary dark fibre as part of a “dual tube” solution to enable PIPE to provide partial service redundancy to Macquarie’s office on an interim basis until the determination of these proceedings. PIPE was permitted to enter the building to perform this work on 27 October 2011. This “dual tube” solution does not provide a redundant optic fibre cable within the building or for a distance outside the building. As a result of this agreement PIPE’s interlocutory application was dismissed: see PIPE Networks Pty Ltd v Commonwealth Superannuation Corporation [2011] FCA 1288.

THE DISPUTE

39    PIPE contended that, by 22 August 2011, it had satisfied the requirements of Schedule 3 and the Code of Practice in relation to the installation of the secondary IRESS cable and was empowered, by Schedule 3, to install the cable.

40    The respondents contested PIPE’s right to do so. They contended that Schedule 3 does not empower PIPE to install the cable because Schedule 3 only confers authority to enter “land” and that the building is not “land” for relevant purposes and because PIPE did not provide to Macquarie notice of its intention to install the cable as required by Clause 17(1) of Schedule 3.

41    The respondents further contended that PIPE was required to enter into an agreement with PropertyComm under Part 3 of Schedule 1 before it could install the cable.

42    PIPE applied to the Court for declarations that it was entitled to carry out the installation of the optical fibre cables and associated equipment at 101 and that, for that purpose, its employees and contractors were entitled to enter and occupy 101. It also sought orders restraining the respondents from refusing or preventing such access.

43    PropertyComm cross-claimed seeking declarations that:

    The building, including the riser and the MDF room, were facilities within the meaning of clause 17(5) of Schedule 1.

    These facilities were operated by it as a “first carrier” within the meaning of clause 17(1) of Schedule 1.

    The installation by PIPE of its proposed facilities in the building is subject to Part 3 of Schedule 1.

    It is entitled, pursuant to clause 18(1) of Schedule 1, to require PIPE to enter into terms and conditions in order for PIPE to install its proposed facilities in the building or, failing agreement, upon terms and conditions determined by an arbitrator or the Australian Competition and Consumer Commission.

THE ISSUES

44    Broadly stated the dispute between PIPE and the respondents relates to the construction and application of two Schedules to the Act. The central question is whether PIPE is authorised by Schedule 3 to the Act to install the facilities in the building on behalf of Macquarie and, if so, whether it must, nonetheless, comply with Part 3 of Schedule 1 of the Act.

45    More specifically the issues can be stated as follows:

(a)    Whether the authority, conferred on a carrier by Schedule 3 to enter “land”, applies to a carrier wishing to have access to a multi-storey office building.

(b)    If so, whether PIPE has complied with all of the notification requirements prescribed by Schedule 3.

(c)    Whether the communications riser and the MDF room in the building are “facilities” within the meaning of Part 3 of the Schedule 1.

(d)    Whether any right to install facilities under Schedule 3 is subject to the requirements of Part 3 of Schedule 1.

THE LEGISLATION

46    The legislative regime which gives rise to the present dispute is extremely complex. It has been enacted to regulate the transition from monopoly to competitive service provision. Telstra’s predecessor had enjoyed monopoly rights. It had ownership and control of the infrastructure which provided communications services throughout Australia. The advent of competitors required that that new entrants should have access to some of Telstra’s infrastructure in order to provide their services.

47    To this end the Telecommunications Act 1991 (Cth) (“the 1991 Act”) provided for rules to be made granting conditional access of the new carriers to Telstra’s networks and services. It contained a licensing regime for carriers and prescribed their obligations, rights and immunities. It restricted competition to two licensees: Telstra and Optus. They were the only entities permitted to own and operate fixed line telecommunications networks.

The Telecommunications Act

48    In 1997 the present Act replaced the 1991 Act. At that time, Telstra Corporation Ltd (“Telstra”) owned and operated a public switched telephone network (“PSTN”) over which fixed line telecommunications services were provided throughout Australia. Telstra, Optus, Vodafone, AAPT and Primus held carrier licences under the Act.

49    In general terms, according to the parties’ statement of agreed facts, the PSTN comprised (and continues to comprise):

“a.    a copper wire pair (‘Local Loop’) which connected an end-user’s premises to a telephone exchange. Alternatively the connection between an end-user’s premises and a telephone exchange was sometime (sic) provided by radiocommunications facilities;

b.    telecommunications lines (‘Telecommunications Network Lines’) which connected various telephone exchanges to create a telecommunications network. Telecommunications Network Lines connected exchanges in different suburbs and different capital cities. Telstra owned and operated approximately 5,300 telephone exchanges. Alternatively the connections between exchanges was sometimes provided by radiocommunications facilities;

c.    other facilities which formed part of the PSTN.”

50    Virtually every house and building in Australia, whether it be residential or commercial, was connected to the PSTN by a local loop or local loops. The local loop was installed beneath, and sometimes above, private land and public land, including under most roads and footpaths or alongside railway lines, and to or within the end-user’s house or building.

51    In the case of multi-storey commercial or residential buildings, the copper cables which comprised the local loop for the occupants of the building were typically terminated to one side of a MDF in the building. On the other side of the MDF, copper cables ran from the MDF to the buildings communications riser to the occupant’s tenancy.

52    Telecommunications network lines were installed beneath, and sometimes above, private land and public land, including farm land, alongside railway lines and many roads and footpaths.

53    Other facilities which formed part of the PSTN, such as pillars, roadside cabinets, pedestals, equipment shelters and telecommunications transmission towers were installed on public and private land, including on farm land, alongside railway lines and on many roads and footpaths. Often these facilities were fenced off to protect the facility.

54    Telephone exchanges varied in size from huts in country areas to large multistorey buildings which housed multiple MDFs and included car parking for staff in city and metropolitan areas.

55    The Act ushered in an era of full competition in the telecommunications market in Australia. It removed restrictions of the number of carriers which could own or operate a fixed line telecommunications network. Like its predecessor the Act emphasised the importance of competitive delivery of communication services for the benefit of the community. As will be seen the Act provided for the making of subordinate instruments. They were Ministerial Determinations and a Code of Practice. The Act commenced operation on 1 July 1997. A Determination and a Code made under the Act commenced operation on the same day.

56    Section 3(1) of the Act identifies its main object, when read together with Parts XIB and XIC of the Competition and Consumer Act 2010 (Cth) (“the CC Act”), as being to provide a regulatory framework that promotes:

“(a)    the long-term interests of end-users of carriage services or of services provided by means of carriage services; and

(b)    the efficiency and international competitiveness of the Australian telecommunications industry; and

(c)    the availability of accessible and affordable carriage services that enhance the welfare of Australians.”

57    Part XIB of the CC Act contains a dedicated regime which is designed to regulate anti-competitive conduct in the telecommunications industry. It is supplementary to the provisions of Part IV of the CC Act: see s 151AA.

58    Part XIC of the CC Act establishes a telecommunications access regime. Its object is “to promote the long-term interests of end-users of carriage services or of services provided by means of carriage services”: see s 152AB(1). In determining whether a particular thing promotes this object, s 152AB(2) provides that regard must be had to the extent to which the thing is likely to result in the achievement of certain subordinate objectives. These are:

“(c)    the objective of promoting competition in markets for listed services;

(d)     the objective of achieving any-to-any connectivity in relation to carriage services that involve communication between end-users; and

(e)    the objective of encouraging the economically efficient use of, and the economically efficient investment in:

(i)     the infrastructure by which listed services are supplied; and

(ii)    any other infrastructure by which listed services are, or are likely to become, capable of being supplied.”

59    The promotion of the long term interests of end users has been held, by the Australian Competition Tribunal, to be served by lower prices for services, improvement in the quality of service provision and by increased diversity and scope in product offerings: see Re Seven Network Limited (No 4) (2004) 187 FLR 373.

60    Part XIC furthers the objective of the Part by providing for an access regime under which carriers can be required to provide services to other providers and permit interconnection between their facilities: see ss 152AR(3) and (5).

61    By s 3(2) of the Act other objects are identified. They include ensuring “that standard telephone services, payphones and other carriage services of social importance are … reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business; and … are supplied as efficiently and economically as practicable …”

62    Telecommunication services are to be provided, under the Act, by licensed carriers: see ss 42 and 56.

63    The carriers are owners of “network unit[s]”. One of these units includes designated radio communications facilities and facilities specified in ministerial determinations.

64    By s 7 of the Act the word “facility” is defined to mean:

“(a)    any part of the infrastructure of a telecommunications network; or

(b)    any line, equipment, apparatus, tower, mast, antenna, tunnel, duct, hole, pit, pole or other structure or thing used, or for use, in or in connection with a telecommunications network.”

65    A “telecommunications network” is defined to mean “a system, or series of systems, that carries, or is capable of carrying, communications by means of guided and/or unguided electromagnetic energy.”

66    Part 3 of Schedule 1 to the Act dealt with access to what are described as “supplementary facilities”. Clause 17 relevantly provided:

“(1)    A carrier (the first carrier) must, if requested to do so by another carrier (the second carrier) give the second carrier access to facilities owned or operated by the first carrier.

(2)    The first carrier is not required to comply with subclause (1) unless:

(a)    the access is provided for the sole purpose of enabling the second carrier:

(i)    to provide competitive facilities and competitive carriage services; or

(ii)    to establish its own facilities; and

(b)    the second carrier’s request is reasonable; and

(c)    the second carrier gives the first carrier reasonable notice that the second carrier requires the access; and

(d)    in the case where the facilities do not consist of customer cabling or customer equipment – the facilities:

(i)    were in place on 30 June 1991; or

(ii)    were not in place on 30 June 1991, and were not obtained after that date by the first carrier solely by means of commercial negotiation.

(2A)    …

(2B)    …

(3)    For the purposes of this clause, in determining whether the second carrier’s request is reasonable, regard must be had to the question whether compliance with the request will promote the long-term interests of end-users of carriage services or of services supplied by means of carriage services. That question is to be determined in the same manner as it is determined for the purposes of Part XIC of the Competition and Consumer Act 2010.

(4)    Subclause (3) is intended to limit the matters to which regard may be had.

(4A)    …

(5)    A reference in this clause to a facility is a reference to:

(a)    a facility as defined by section 7; or

(b)    land on which a facility mentioned in paragraph (a) is located; or

(c)    a building or structure on land referred to in paragraph (b); or

(d)    customer equipment, or customer cabling, connected to a telecommunications network owned or operated by a carrier.

(6)    …”

67    By clause 18 it is provided that the first carrier must comply with subclause 17(1) on such terms and conditions as are agreed between the first and second carrier or, in the absence of agreement, as are determined by an arbitrator appointed by them. If they are unable to agree on an arbitrator the ACCC is to be the arbitrator.

68    Schedule 3 of the Act provides for carriers’ powers and immunities.

69    Clause 2 of Schedule 3 provides that “installation”, in relation to a facility, includes “the construction of the facility on, over or under any land” and “the attachment of the facility to any building or other structure”. The same clause defines “land” to include submerged land.

70    The terms of clause 6 of this Schedule are at the heart of the present dispute. Clause 6 relevantly provides:

“(1)    A carrier may, for the purposes connected with the supply of a carriage service, carry out the installation of a facility if:

(a)    …

(b)    the facility is a low-impact facility (as defined by subclause (3)); or

(c)    …

(d)    …

(2)    If subclause (1) authorises a carrier to carry out a particular activity, the carrier may, for purposes in connection with the carrying out of that activity:

(a)    enter on, and occupy, any land; and

(b)    on, over or under the land, do anything necessary or desirable for those purposes, including, for example:

(i)    constructing, erecting and placing any plant, machinery, equipment and goods; and

(ii)    felling and lopping trees clearing and removing other vegetation and undergrowth; and

(iii)    making cuttings and excavations; and

(iv)    restoring the surface of the land and, for that purpose, removing and disposing of soil, vegetation and other material; and

(v)    erecting temporary workshops, sheds and other buildings; and

(vi)    levelling the surface of the land and making roads.”

(3)    The Minister may, by written instrument, determine that a specified facility is a low-impact facility for the purposes of this clause. The determination has effect accordingly.

…”

71    A ‘facility’ is to be distinguished from the structure in or upon which it is installed. In Hutchison 3G Australia Pty Ltd v City of Mitcham (2006) 225 ALR 615 at 635-6 the High Court held that poles upon which telecommunications equipment was installed were, unlike the equipment, not “facilities”. Whilst the parties accept, for the purposes of Schedule 3 and consistently with this decision, that the building is not a “facility”, they have put in issue the question of whether the MDF room and the communications riser are to be treated as facilities within the meaning of s 7 of the Act.

72    By clause 7(1) “[a] carrier may, at any time, maintain a facility”. Clause 7(2) empowers a carrier to enter on land and occupy land to maintain a facility. The maintenance of a facility includes work to replace the whole or part of an original facility (clause 7(3)(d)) and to install an additional facility in the same location as the original facility (clause 7(3)(e)). Clause 7(5) provides that:

“For the purposes of paragraph (3)(d), the following conditions are specified:

(a)    …

(b)    …

(c)    in a case where the facility is not a tower:

(i)    …

(ii)    the replacement facility is located inside a fully-enclosed building, the original facility was located inside the building and the building is not modified externally as a result of the replacement of the original facility;

(iii)    the replacement facility is located inside a duct, pit, hole, tunnel or underground conduit;

(d)    …”

Similar conditions are imposed in respect of installation work performed under clause 7(3)(e).

73    Clause 17 imposed a notice requirement on carriers who wished to undertake work on land under clause 6. Relevantly clause 17 provided that:

“(1)    Before engaging in an activity under Division 2, 3 or 4 in relation to any land, a carrier must give written notice of its intention to do so to:

(a)    the owner of the land; and

(b)    if the land is occupied by a person other than the owner – the occupier.

(2)    …

(3)    …

(4)    The notice must be given at least 10 business days before the carrier begins to engage in the activity.

(4A)    …

(5)    A person may waive the person’s right to be given a notice under subclause (1).

…”

74    Clause 52 of Schedule 3 provides that Division 3 (relating to the installation of facilities) does not “authorise a carrier to engage in an activity contrary to the requirements of another law of the Commonwealth.”

The Ministerial Determination

75    The first Ministerial Determination made under the Act was promulgated in 1997. It was entitled the Telecommunications (Low-Impact Facilities) Determination 1997. It was subsequently amended in 1999 and 2011.

76    It was common ground that the cabling facilities which PIPE wished to install were low-impact facilities for the purposes of clause 6 of Schedule 3. This was because, in 1999, the original Ministerial Determination was varied to prescribe IBSCE as a low-impact facility: see Telecommunications (Low-Impact Facilities) Determination 1997 (Amendment No. 1 of 1999).

The Code of Practice

77    Clause 15 of Schedule 3 empowers the Minister, by written instrument, to make a code of practice setting out conditions that are to be complied with by carriers in relation to any or all of the activities covered by Divisions 2, 3 or 4 of Part 1 of the Schedule. Relevantly, the activities comprehended by this provision include the installation of low-impact facilities.

78    The Code is made pursuant to this power.

79    The Code makes provision for the expression and resolution of objections to the exercise of a carrier’s power “to engage in a low-impact facility activity.” Such an activity is defined, in section 4.2 of the Code, to include the installation of a low-impact facility or the carrying out of an activity for purposes in connection with such installation.

80    Division 2 of Part 5 of Chapter 4 of the Code requires a carrier, who is proposing to engage in a low-impact facility activity to notify its intention to do so to the owner of the land on which the activity is to take place. Division 4 provides a process pursuant to which the owner or occupier of the land may register an objection to the proposed work. By section 4.30 the owner or occupier can give written notice of its objection to the carrier and provide reasons for the objection. The scope for objection is limited. Section 4.31 provides:

“The reasons for the objection may relate only to all or any of the following matters:

(a)    using the objector’s land to engage in the activity;

(b)    the location of a facility on the objector’s land;

(c)    the date when the carrier proposes to start the activity, engage in it or stop it;

(d)    the likely effect of the activity on the objector’s land;

(e)    the carrier’s proposals to minimise detriment and inconvenience, and to do as little damage as practicable, to the objector’s land.”

81    By section 4.34 the carrier must consult with the objector within five business days after receiving the objection with a view to resolving the differences between them. If agreement is reached the carrier is obliged to comply with that agreement: see section 4.34(3). If agreement is not reached the objector may invite the carrier, in writing, to refer the objection to the TIO. If such a request is made the carrier is bound to comply with it: see section 4.37. The TIO is empowered, by section 4.38, to direct the carrier as to the manner in which it may proceed to undertake installation work. Unless and until one of these processes has been completed the carrier may not proceed with installation work: see section 4.33.

82    When the work does commence the carrier is required to take all reasonable steps to ensure that it causes as little detriment and inconvenience, and does as little damage, as practicable in engaging in the activity: see clause 8, Schedule 3 of the Act.

GENERAL ISSUES OF STATUTORY CONSTRUCTION

83    The legislative arrangements which have given rise to the present proceeding are, as has already been observed, complex. They are also confusing and inherently inconsistent. Despite this, it remains the task of the Court to determine and propound the true construction of the various provisions upon which the parties seek to place competing constructions.

84    The many problems inherent in the legislative scheme include the interaction between Schedules 1 and 3 of the Act and the determination of which construction of potentially conflicting provisions will best promote the objects of the Act.

85    Subsidiary issues arise which include the extent to which the provisions of subordinate instruments, made under the Act, may be drawn on to assist in the construction of provisions of the Act and the extent to which reliance may be placed on explanatory memoranda to assist in construing the provisions of the various instruments.

86    In undertaking this task the Court is bound to comply with the requirements of the Acts Interpretation Act 1901 (Cth). Section 15AA of that Act provides that:

“In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.”

87    The Act thereby recognises the possibility that there may be competing constructions which each promote the purpose or object of an Act. In such cases the Court is to prefer the construction which best promotes the purpose or object of the Act.

88    This is not to undermine the primacy of the text. As Mason and Wilson JJ observed in Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 321:

“Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended.”

89    The starting point for any construction exercise must be an examination of the statutory text and the context in which those words appear. As McHugh, Gummow, Kirby and Hayne JJ said in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384:

“…the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”

90    The Court is required to strive to reconcile potentially conflicting provisions in a way that will, if possible, facilitate their harmonious operation. This principle applies where conflicting provisions appear in the same statute:

“Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions”: see Project Blue Sky at 382.

In making the adjustment “such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”: see The Commonwealth v Baume (1905) 2 CLR 405 at 414 per Griffith CJ.

91    The provisions of any Ministerial Determination or Code of Practice, made under the Act, will be of very limited assistance in construing the provisions of the Act. In Webster v McIntosh (1980) 32 ALR 603 at 606 Brennan J (with whom Deane and Kelly JJ agreed) held that “the intention of Parliament in enacting an Act is not to be ascertained by reference to the terms in which a delegated power to legislate has been exercised.”

92    The general rule is that “it is impermissible to call in aid in the construction of an Act delegated legislation made under that Act”: see Mine Subsidence Board v Wambo Coal Pty Ltd (2007) 154 LGERA 60 at 69-70.

93    It is, however, permissible to have regard to subordinate legislation to assist in properly construing any ambiguity in an Act when the subordinate legislation has been promulgated at the same time as the Act and forms part of a statutory scheme: see Elazac Pty Ltd v Commissioner of Patents (1994) 53 FCR 86 at 90.

94    It is also permissible to have regard to subordinate legislation “not to construe an overall scheme or to throw light on ambiguity in a statutory provision, but to ascertain what the scheme is”: see Brayson Motors Pty Ltd (in liq) v Commissioner of Taxation (1985) 156 CLR 651 at 652 (per Mason J).

CLAUSE 6 AND “LAND”

95    PIPE contended that clause 6(1) of Schedule 3 provided it with authority, limited only by the description of the types of facility which a carrier is entitled to install, to enter buildings in order to install a low-impact facility. It further contended that clause 6(2) “should be interpreted as accommodating the installation of any facility which a carrier is authorised to install pursuant to the authority granted by clause 6(1), wherever that facility is to be installed”, including in high rise office buildings. Such buildings, it was submitted in the alternative, were comprehended by the word “land” in clause 6(2).

96    The respondents countered that no such authority was conferred by clause 6. Any entitlement conferred by clause 6 was said to be limited to entry by PIPE on and occupation of “land” and then only for the purpose of installing the facility on over or under that land. As neither the building, the MDF room or the communications riser were “land” within the meaning of clause 6(2) PIPE had no right to enter and occupy the building without the consent of one or more of the respondents.

97    In my view clause 6(1)(b) authorised PIPE to carry out the installation of the IBSCE system whether or not the building, the MDF room or the communications riser constituted “land” within the meaning of clause 6(2).

98    The language of clause 6(1)(b) is clear and unambiguous. It empowers a carrier to “carry out” the installation of such a facility. This power is unconfined as to time and place. It is available if the facility is one which (as here) falls within the meaning of a “low-impact facility”. Certain of the facilities, including IBSCE, which the carrier is empowered to install and maintain, are facilities which can only be installed within buildings.

99    The carrier’s purposes must, however, be connected (as is presently the case) with the supply of a carriage service.

100    As the prefatory words of clause 6(2) make clear the authority to perform a particular activity (in this case the carrying out of installation of the low-impact facility) is to be found in clause 6(1). It does not depend on clause 6(2).

101    The power to carry out the installation of a facility assumes that such installation may involve the attachment of the facility to a building: see clause 2. The attachment of a facility “to” a building is not, as the respondents rightly submitted, the same thing as an invasive installation “within” a building. Nonetheless, in order to attach the facility it would be necessary for the carrier to have access to the relevant part of the building which may or may not be an external part. Notwithstanding the general presumption that, in the absence of express provision, legislation will not be taken to authorise interference with vested property interests (see Clissold v Perry (1904) 1 CLR 363 at 373), the work involved in attaching a facility to a building must necessarily interfere with the proprietary interests of the owner of the building.

102    Once installation has occurred a carrier has authority, pursuant to clause 7(1), to maintain and replace the facility. Specific conditions are imposed on the exercise of the power. Those conditions proceed on the statutory assumption that installation may have occurred in a building. Thus, conditions are prescribed when the replacement facility is located inside a fully enclosed building and the facility which is being replaced was also located in such a building: see clause 7(5)(c)(ii).

103    The construction which I have placed on clause 6(1) serves to promote the objects of the Act. The Act seeks to promote the long term interests of the end-users of telecommunications services. This is to be achieved, in part, by promoting competition between carriers in order to secure higher quality services at less cost to the consumer.

104    End-users include those engaged in commercial activity. Such activity includes the provision of private banking services of the kind undertaken by Macquarie. Businesses engaged in commercial activities are often owners of, or tenants in, high rise office buildings such as 101 Collins Street. The objects of the Act would not be promoted by restricting the range of licensed carriers who could perform services for clients within such buildings.

105    This was an issue which was identified when the Ministerial Determination was amended, in 1999, to prescribe IBSCE as a low-impact facility. The explanatory statement which accompanied the amending instrument recorded (at 10) that:

“Under the current Determination, it has been suggested that in-building consumers experience a restriction of access to alternative services because carriers have a limited ability to enter buildings and install new infrastructure. Building owners currently retain unregulated control of carrier entry to install competitive infrastructure. There is the potential for building owners to engage in conduct which unreasonably exploits this control, and there is some suggestion that this may have already taken place. Such conduct can have a negative impact on the over-arching Commonwealth policy framework that aims to promote the efficiency and competitiveness of the telecommunications industry while benefiting the end-user.”

It is also notable that, elsewhere in the explanatory statement, reference was made to the addition of IBSCE as a facility being necessary in order to ensure that carriers, including newly licensed carriers, have access to “multi-tenant buildings” in order to connect “residents and businesses” to their networks: see at 4, 7. The residents and businesses were to be given “greater access to the carrier of their choice and to the full range of information and telecommunications services available …”: see at 10.

106    Clause 6(2) is facilitative. It is not engaged unless a carrier is authorised by clause 6(1) to carry out installation work. If it is the carrier may deal with “land” in any of the ways provided for in this sub-clause.

107    PIPE’s alternative submission, that the word “land” in clause 6(2) comprehends high rise buildings and facilities within them such as the MDF room and the communications riser, was advanced relying on a combination of statutory provision, common law doctrine and principles of statutory construction. This aspect of the dispute between the parties was fully argued. Although, having regard to the view I have formed as to the operation of clause 6(1), it is not strictly necessary to do so, I am prepared to deal with those submissions.

108    PIPE first drew attention to the provisions of s 2B of the Acts Interpretation Act 1901 (Cth) which provides that any reference to “land” appearing in a Commonwealth Act includes: “messuages [that is houses], tenements and hereditaments, corporeal and incorporeal, of any tenure or description.” This provision also applies to legislative instruments made under an Act: see s 13(1) of the Legislative Instruments Act 2003 (Cth). This, and other definitions, is subject to any contrary intention appearing in another Act or statutory instrument: see s 2(2) of the Acts Interpretation Act 1901 (Cth).

109    Reference was made to the definition of “tenement” in Butterworths Australian Legal Dictionary 1997 where a tenement was said “formerly [to be] any property that could be the subject of tenure” but is now understood usually to refer “to a property holding of a permanent nature.”

110    PIPE next called in aid the common law understanding of “land” as defined in the Butterworths Legal Dictionary 1997 as including “all things growing on or affixed to the soil including buildings”.

111    PIPE relied on the decision of the New South Wales Supreme Court in The Boy Scouts’ Association (New South Wales Branch) v Sydney City Council (1959) 4 LGRA 260 in which the question was whether a four storey building, owned by the Association, was “land” for the purposes of s 132 of the Local Government Act 1919 (NSW). This section provided that land was exempt from local government rating if it was owned by a public charity (of which the Association was one). Hardie J held that the Association was entitled to the benefit of s 132. He did so by applying s 21(e) of the Interpretation Act 1897 (NSW) which defined “land” in any Act in the same terms as are employed in s 2B of the Commonwealth Act. His Honour said (at 268) that:

“The language of the statutory definition contained in the Interpretation Act is clearly wide enough to include buildings and other structures on land … It is apparent, in my view, having regard to the statutory definition and the generally accepted meaning of the word, that ‘land’ in s 132 means the land and any building or other structure on it.”

112    PIPE also referred to a second decision of the New South Wales Supreme Court which dealt with the common law definition of “land” and the expansion of that concept effected by s 21(e) of the Interpretation Act 1897 (NSW). That case was Re Lehrer and Real Property Act 1900 [1960] NSWR 570. It dealt with the meaning of the word “land” in another provision of the Local Government Act 1919 (NSW) which regulated the sub-division of land. The question which fell to be determined was “whether a part of a building or the air space taken up by that part of a building is, distinctly from the soil upon which the building rests, ‘land’ within the meaning of the Local Government Act …” (at 573). Jacobs J held that a lease for more than five years of part of a building, as distinct from the soil on which the building rested, was not an interest in “land” within the meaning of the Act. In the course of his reasons his Honour (at 574) explained the common law meaning of land as follows:

“The word “land” comprehends in law any ground, soil or earth whatsoever: Coke on Littleton, 4a: even though it originally meant only arable land: Sheppard’s Touchstone, 92. Coke further says that land “legally includeth also all castles, houses and other buildings for castles, houses, etc., consist upon two things, viz. land or ground, as the foundation or structure thereupon … passeth there with” (4a). Thus, primarily, the ownership of land carries with it everything both above and below the surface, the maxim being “cujus est solum, ejus est usque ad coelum et ad inferos”. This maxim, however, is not a presumption of law applicable in all cases and under all circumstances; hence the possibility of a freehold in an upper chamber; but at common law it is the presumption. If there is found the word “land” and no statutory definition governs the context, the word “land” includes all buildings on the land and the maxim applies. To say this, however, is different from saying that an upper floor of a building, even though capable of being the subject of an estate in fee and the subject of separate holding as realty, can be properly described as “land”. To describe the upper floor as “land” would be to deny the application of the presumption that prima facie land includes buildings. My conclusion is that the word “land” at common law prima facie includes buildings on the soil, but is not appropriate to describe the building alone or any part thereof, even if it be the subject of an interest in realty separate from the soil itself.” (Emphasis added).

His Honour acknowledged that, if it was open to apply the definition of “land” in s 21(e) of the Interpretation Act 1897 (NSW) in the relevant parts of the Local Government Act 1919 (NSW), a separate estate in a part of a building would fall within that definition. Such a construction was not, however, open in the context of the Local Government Act 1919 (NSW) because there were numerous provisions which distinguished between land and the buildings thereon. For this, and other reasons, a contrary intention could be discerned.

113    These authorities establish that, if the definition of “land” which appears in s 2B of the Acts Interpretation Act 1901 (Cth) can be applied to the word “land” appearing in clause 6(2), the word must comprehend a building (including a high rise office building).

114    In the context of clause 6(2) and other provisions of Schedule 3, however, a narrower meaning is suggested.

115    Clause 6(2) empowers a carrier to do anything necessary or desirable for the purpose of installing a facility “on, over or under the land.” Various examples of such activities are then provided. They include erecting or placing any “plant, machinery, equipment and goods” on the land, “felling and lopping trees and clearing and removing other vegetation and undergrowth”, “making cuttings and excavations”, “restoring the surface of the land … removing and disposing of soil, vegetation and other material”, “erecting temporary workshops, sheds and other buildings” and “levelling the surface of the land and making roads.”

116    Collectively, these activities all involve work at ground level rather than in structures built on the ground.

117    Similarly, clause 5 empowers a carrier to undertake the inspection of land in order to determine whether such land is suitable for its purposes. To this end the carrier may, for example, fell and lop trees, close a road or a bridge, install a facility in, over or under a road or bridge and move water, sewerage or gas pipes. Similar activities are authorised to facilitate surveying of land: see clause 5(2). Again, the activities to which specific reference is made are all confined to intrusions on, under or immediately above ground level.

118    Reference has already been made to the provisions of clause 7. A distinction is there made between the maintenance of a facility on land (clause 7(2)) and maintenance of a facility inside a fully-enclosed building (clause 7(5)).

119    Further examples of the distinction between facilities, and the land or structures to which they are affixed appear, as was pointed out by Mason P in Hurstville City Council v Hutchison 3G Australia Pty Ltd (2003) 200 ALR 308 at 319, in the definition of “installation” in clause 2 and in clause 47 which provides that an installed facility remains the property of its owner whether or not it has become a fixture in the premises in which it is installed.

120    Mention should also be made of the provisions of clause 17(5) of Schedule 1. In the course of defining the word “facility” for the purposes of clause 17 this subclause draws clear distinctions between a building or structure and the land on which a “facility”, as defined in s 7 of the Act, is located.

121    For these reasons I do not consider that clause 6(2) provided authority for PIPE to undertake the installation work it wished to pursue in the building including in the MDF room and the communications riser within it.

CLAUSE 17 OF SCHEDULE 3

122    The respondents contended that, even if the provisions of clause 6(1) of Schedule 3 empowered PIPE to install the IBSCE in the building, it was not entitled to do so because it had failed to satisfy the precondition prescribed by clause 17(1)(b) of Schedule 3. That provision required that, before PIPE engaged in any installation work, it had to give written notice of its intention to do so to the occupier of the land on which it wished to carry out the work. It was tentatively suggested that Macquarie was that occupier. PIPE had not notified Macquarie of the proposed work.

123    PIPE was not required to give notice to Macquarie under clause 17(1)(b). That clause deals with entry on “land”. For reasons which I have already given the building and the part of it which was tenanted by Macquarie was not land within the meaning of Schedule 3.

124    There is an air of unreality about this submission. Macquarie had invited PIPE to perform the work. In order to do that work PIPE required access not just to that part of the building of which Macquarie was the tenant but also to the MDF room and the communications riser which were not owned or controlled by Macquarie. In any event, Macquarie had waived any right it may have had to be given notice under clause 17(1).

CLAUSE 17 OF SCHEDULE 1

125    The respondents’ potentially stronger point was that, even if Schedule 3 authorised the carrying out of the work which PIPE wished to undertake it was precluded from doing so by provisions of Schedule 1 which applied to the exclusion of Schedule 3 to the extent of any inconsistency between them.

126    The respondents contended that Schedule 1 applies to the exclusion of Schedule 3 in circumstances where the facilities to which access is sought are owned or operated by another carrier. PIPE, on the other hand, contended that the purpose or object underlying the Act favours Schedule 3 prevailing over Schedule 1.

127    As developed, the respondents’ argument was that the building, the MDF room and the communications riser were each facilities within the meaning of clause 17(1) of Schedule 1; that PropertyComm operates the building within the meaning of clause 17(1); that, as a result, PropertyComm is the first carrier in relation to the building; and that any authority, conferred on PIPE by Schedule 3 to install the cabling for Macquarie, was subject to the requirements of Part 3 of Schedule 1. That Part, so it was submitted, required PIPE to enter into an agreement with PropertyComm to install the cabling before that could occur. PropertyComm wished to make it a condition of giving PIPE access that PIPE pay PropertyComm a fee. Any rights conferred on PIPE by Schedule 3 were, it was contended, subject to its satisfying this requirement.

128    I have concluded that, whilst PropertyComm may be a “first carrier” for the purposes of clause 17(1) of Schedule 1, no relevant conflict exists between the provisions of Schedules 1 and 3.

129    Clause 17(1) of Schedule 1 requires the first carrier to give a second carrier access to “facilities owned or operated by the first carrier” if the second carrier so requests. This requirement is subject to there being compliance with the conditions prescribed in clause 17(2). The first carrier’s compliance with its obligations under clause 17(1) is also subject to the terms and conditions of any agreement negotiated between the first and second carriers or as are settled by arbitration: see clause 18(1).

130    The meaning of “facility” in clause 17 of Schedule 1 is wider than that accorded to the same term in Schedule 3. As has already been noted, the High Court held, in Hutchison, that the structures on which “facilities”, as defined in s 7 of the Act, are installed are not themselves facilities.

131    Clause 17(5) widens the meaning of “facilities” for the purpose of clause 17(1). For that limited purpose it extends not only to facilities as defined by s 7 of the Act but also to a building or structure which is on land on which such a facility is located.

132    The definition contained in clause 17(5) of Schedule 1 had no application to the provisions of Schedule 3 with which the courts in Hutchison and Hurstville were concerned.

133    The first issue to be determined is whether the building, the MDF room and the communications riser are facilities within the meaning of clause 17. The answer to this question will depend on whether or not one or more of the paragraphs of clause 17(5) are engaged. Clause (a) captures facilities as defined in s 7 of the Act. That definition does not refer to buildings. It does, however, in my view, pick up the MDF room and the communications riser. These may properly be understood to constitute one or more of “equipment”, “apparatus”, “tunnel”, “duct” or “other structure” used “in or in connection with a telecommunications network.”

134    The building was picked up by clause 17(5)(c) because it was on land on which a s 7 facility is located.

135    All of the relevant structures are, therefore, facilities to which clause 17(1) applies.

136    The next issue which arises is whether PropertyComm is a “first carrier” which operates the three facilities (the respondents did not submit that PropertyComm was an owner in any relevant sense).

137    Before considering this issue it will be convenient to deal with the antecedent question of whether PropertyComm was, as the respondents contend and PIPE contests, a first carrier at relevant times.

138    PIPE gave notice of its intention to install both IRESS cables to CSC and 101 on 17 May 2011. The notice was given pursuant to Division 2 of Part 5 of Chapter 4 of the Code. 101 lodged the first of a series of objections on 31 May 2011. Consultation and further objections ensued. These disputes were not referred to the TIO. A second LAAN was given to CSC and 101 on 7 July 2011 in respect to the second cable. On 29 August 2011 contractors, engaged by PIPE, entered the building and installed the primary IRESS cable for Macquarie.

139    On 2 September 2011 CSC entered into a management agreement with PropertyComm pursuant to which it granted “operational control” over the building to PropertyComm. PropertyComm was itself a licensed telecommunications carrier under the Act.

140    PIPE submitted that its authority to install both the primary and secondary IRESS cables “accrued” before PropertyComm had been appointed by CSC to exercise operational control over the building. PropertyComm was not, therefore, so it was said, at relevant times a first carrier to which PIPE could be required by clause 17(1) to direct a request for access. The word “accrued” appears to be used to make the point that any authority which PIPE had to install the cabling was conferred on it by Schedule 3 of the Act before PropertyComm became a first carrier under Schedule 1.

141    The notices which PIPE gave to CSC and 101 on 17 May 2011 and 7 July 2011 were not given under clause 17(1) of Schedule 1. These notices were given under clause 17 of Schedule 3. Pursuant to those notices the first IRESS cable was installed before PropertyComm was granted “operational control” over the building.

142    The issues relating to the second IRESS cable, which were being dealt with under the Code, had not been resolved by 2 September 2011. The cable had not been installed. PIPE’s submission suggests that “accrued” may also be used in another sense, namely, a right to continue dealing with CSC and/or 101 to complete the statutory processes which were commenced by the giving of the notices on 17 May 2011 or 7 July 2011, to the exclusion of PropertyComm. The notices had been given to CSC and/or 101 as the owners and occupiers of the building under Schedule 3.

143    The legislative scheme contemplates that, once a request is made of the first carrier under clause 17(1) it is that first carrier which, it is contemplated, will have the right to participate in negotiations and arbitral proceedings with the requesting carrier. Thus the requirements of clause 17(1) are qualified by the following sub-clause which relieves “[t]he first carrier” of the obligation to comply in certain circumstances. By clause 18(1) “[t]he first carrier” must comply with clause 17(1) on such terms and conditions as are agreed between “the first carrier” and “the second carrier” or as are determined by an arbitrator appointed by “the parties”. Even if, therefore, the May and July notices could, somehow, be construed as requests by PIPE under clause 17(1) of Schedule 1, they could not be construed as a request directed to PropertyComm. I should add, lest there be any doubt, that I do not consider that the giving of a notice of intention to carry out installation work under clause 17(1) of Schedule 3 can be equated with a request for access to facilities within the meaning of clause 17(1) of Schedule 1.

144    There is, in any event, no evidence of any request having been made by PIPE under clause 17(1) of Schedule 1. No such request was made of CSC or 101 (assuming for the purposes of argument that one or both of them was a first carrier). There was no evidence that any such “request” had been directed by PIPE to PropertyComm on or after 2 September 2011. This is hardly surprising given PIPE’s view that it was under no obligation to enter into any agreement with CSC, 101, PropertyComm or any one else in order to pursue what it considered to be its rights under Schedule 3. The demands by the respondents that PIPE negotiate an agreement with PropertyComm as a precondition to PIPE exercising its acknowledged rights under Schedule 3 ignored the clear wording of clause 17(1) of Schedule 1 which established that the clause will only be engaged upon a request being made by a second carrier.

145    This does not, of course, mean that PropertyComm may not be a “first carrier” for the purposes of clause 17(1) of Schedule 1. PropertyComm is a licensed telecommunications carrier under the Act. The agreement between CSC and PropertyComm contained what was described as a grant of operational control. Clause 4.1 provided that, subject to certain qualifications, CSC granted PropertyComm sole authority to exercise control of the operation of what were described as “property facilities” owned by CSC. That term was defined, in clause 1 of the agreement, to mean any facility, within the meaning of clause 17(5) of Schedule 1 of the Act, which was installed on, over or under 101 and which was owned or operated by CSC or which CSC had the right to operate other than a facility owned or operated by a carrier other than PropertyComm or which another carrier had the right to operate.

146    The agreement conferred “sole authority” on PropertyComm to exercise control of the operation of property facilities owned by CSC. Such facilities were defined to include those owned or operated by CSC or which CSC had a right to operate. This suggests that the intention of the parties to the agreement was that PropertyComm would exercise operational control over the facilities on behalf of CSC and not to the exclusion of CSC which retained the right to operate the facilities. Put another way, PropertyComm was to exercise operational control on behalf of CSC to the exclusion of all entities other than CSC itself.

147    As a result of the agreement PropertyComm could be said to operate the facilities comprehended by clause 17(5) of Schedule 1 including the building, the MDF room and the communications riser.

148    It follows, in my opinion, that, whilst PropertyComm may, in appropriate circumstances be a “first carrier” for the purposes of clause 17(1) of Schedule 1, it was not a first carrier with which PIPE was required to deal under Schedule 1 because PIPE had made no relevant request of PropertyComm.

149    I am prepared to assume that it is, theoretically at least, possible for a conflict to arise between the provisions of Schedule 3 and those in Schedule 1. In such circumstances clause 52 of Schedule 3 provides that the relevant part of that Schedule does not authorise a carrier to engage in installation activities contrary to the requirements “of another law of the Commonwealth.” I accept the respondents’ submission that Schedule 1 is, relevantly, to be regarded as “another law of the Commonwealth”: cf Hutchison at 619 [14].

150    For the reasons which I have given, however, no conflict arose, in the presently relevant circumstances, between the requirements of Schedule 3 and those of Schedule 1. Clause 17(1) of Schedule 1 does not impose a requirement on a second carrier which must be satisfied before that second carrier may exercise power conferred on it by Schedule 3 to install low-impact facilities.

ORDERS

151    I will hear the parties on the orders which should be made to give effect to these reasons. My provisional view is that PIPE is entitled to the declarations which it seeks. If these declarations are made I would not expect that it would be necessary to make coercive orders against the respondents. This would only be necessary in the event that they determined, notwithstanding the declarations, to impede PIPE’s exercise of its powers under Schedule 3 of the Act. I doubt that any useful purpose would be served by making the declarations sought by PropertyComm that the building, including the riser and the MDF room, are facilities within the meaning of clause 17(5) of Schedule 1 or that it was a “first carrier” within the meaning of clause 17(1) of Schedule 1. I would anticipate that what I have said in relation to these matters in my reasons will be sufficient for PropertyComm’s purposes.

Associate:

Dated:    16 May 2013