FEDERAL COURT OF AUSTRALIA

Sino Iron Pty Ltd v Secretary, Department of Infrastructure and Transport [2014] FCA 547

THE COURT ORDERS THAT:

1.    Subject to order 2, leave be granted to the appellants to amend the notice of appeal in the terms proposed in the draft amended notice of appeal dated 23 May 2014, save that leave is not granted to insert the following:

a)    proposed subparagraphs 2(b)(iii) and (iv); and

b)    proposed subparagraphs 4(iii) and (iv).

2.    On or before 4.00 PM on 6 June 2014, the appellants file and serve their written submissions on the appeal.

3.    Subject to order 4, the appellants pay the costs of the second respondent thrown away by reason of the amendments.

4.    The costs of the hearing on 23 May 2014 be reserved.

5.    On or before 4 June 2014, the appellants have leave to file and serve short written submissions on the question of costs of the hearing on 23 May 2014.

6.    On or before 11 June 2014, the second respondent have leave to file and serve short written submissions in response.

7.    On or before 14 June 2014, the appellants have leave to file and serve short written submissions in reply.

8.    There be liberty to apply on 48 hours’ notice.

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

REASONS FOR JUDGMENT (REVISED FROM TRANSCRIPT)

1.    THE ISSUE

1    This is an application by the appellants for leave to file an amended notice of appeal dated 8 May 2014. The appeal is from the decision of a single judge of this Court in Sino Iron Pty Ltd v Secretary, Department of Infrastructure and Transport [2014] FCA 28. In that decision, the primary judge dismissed an application under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) to set aside a decision by a delegate of the first respondent (the Secretary) made on 31 January 2013 designating the second respondent, Mineralogy Pty Ltd, as the port operator for the security regulated Port of Cape Preston in north-west Western Australia pursuant to s 14(1) of the Maritime Transport and Offshore Facilities Security Act 2003 (Cth) (the MTOFSA).

2    In so holding, the primary judge rejected the challenge brought by Sino Iron Pty Ltd, Korean Steel Pty Ltd, Citic Pacific Mining Management Pty Ltd and Cape Preston Port Company Pty Ltd (collectively, the CITIC Parties). The CITIC Parties objected to the designation of Mineralogy as the ‘port operator’ on various grounds which included an alleged breach of procedural fairness by reason of the CITIC Parties not having been heard before the designation was made and a failure to have regard to relevant considerations prescribed by s 14 of the MTOFSA. Section 14 relevantly provides that:

(1)    The Secretary may, by notice published in the Gazette, designate a person as the port operator for a security regulated port.

(2)    In designating a person as a port operator, the Secretary must take into account:

(a)    the ability of the person to undertake the functions of a port operator; and

(b)    the physical and operational features of the port; and

(c)    the views of the person, or persons, responsible for managing the operations of the port.

3    The appeal is currently listed to be heard on an expedited basis on 23 July 2014 before a Full Court. However, a single judge may hear and determine an interlocutory application such as the application before me for leave to amend the grounds of appeal: see s 25(2B) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and r 36.11(1) and (2)(b) of the Federal Court Rules 2011 (Cth) (FCA Rules).

4    Mineralogy did not oppose certain of the proposed amendments to the notice of appeal, namely: a typographical amendment to paragraph 1 of the grounds of appeal; the addition contained in paragraph 2(c); and amendments to paragraph 3. Accordingly, orders were made at the hearing of the interlocutory application granting leave to make those amendments.

5    The remaining amendments are opposed by Mineralogy on the ground that they seek to raise new arguments not raised before the primary judge, save for certain additional amendments to which Mineralogy indicated its consent during the course of oral argument. It is also said that Mineralogy would be prejudiced by the amendments in that it may have conducted its case differently at trial and led further evidence if at least certain of the issues sought to be raised by the proposed amendments had been live at trial.

6    The appellants accept that some, but not all, of the amendments raise new issues. However, they dispute that Mineralogy has established that it would have run its case differently below if the issues had been raised. It submits that any lack of clarity in the new amendments or prejudice by reason of them being raised at this stage could therefore be met by bringing forward the date on which the appellants’ submissions are due to be filed and served to 5 June 2014 together with an order for costs thrown away by reason of the amendments, save for the costs of the hearing of the interlocutory application. With respect to the latter, the parties were agreed that they should be afforded the opportunity to make short written submissions after I had ruled on the proposed amendments.

7    For the reasons given herein, I consider that leave to amend should be granted save for certain amendments which in my opinion would depart substantially from the case below for the reasons given in this judgment, namely, to insert proposed subparagraphs 2(b)(iii) and (iv) and 4(iii) and (iv).

2.    CONSIDERATION

2.1    Relevant principles

8    Leave is required to amend the notice of appeal because the amendments are sought to be made more than 28 days after the notice of appeal was filed: see r 36.10, of the FCA Rules.

9    In determining whether or not to exercise the Court’s discretion to grant leave in the present case, relevant considerations include the reasons why any new arguments were not raised below and whether it is expedient in the interests of justice to allow the proposed amendments. For example, in Commissioner of the Australian Federal Police v Oke (2007) 159 FCR 441 at 444-445 [17]-[21], Branson and Lindgren JJ refused leave to amend a notice of appeal to allow the Commissioner to raise a new argument having regard, among other things, to the fact that no evidence was led to explain why the issue had not been raised before the primary judge, nor why it was expedient in the interests of justice to allow the new point to be argued. Nor did it appear that any evidence had been led by either party on the new issue sought to be raised: Oke at 445-446 [21].

10    Similarly in Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645, Mason P (with whom Gleeson CJ and Priestley JA agreed) stated that:

“A party seeking to advance for the first time on appeal a new ground not taken at trial will be precluded from doing so if the new ground could possibly have been met by calling evidence at the hearing or if, had the ground been raised below, the respondent might have conducted the case differently at trial. Multicon Engineering argues that these principles do not preclude it from raising the constitutional point on appeal, because all that is in issue is the proper approach to be followed in considering whether to adopt a report in a matter in the Federal jurisdiction. The evidence which each party wished to rely upon was before the judge.

However there is another principle of more direct relevance. A party does not have a right to insist that a new point be decided on appeal simply because all of the facts have been established beyond controversy or the point is one of construction or of law, even constitutional law. This is because it remains a question of whether the appellate court ‘may find it expedient and in the interests of justice to entertain the point’… The rule is not an absolute one… However:

‘…it is a sound general principle, leading not only to the maintenance of fair play, but also to the repression of unnecessary litigation, that parties must be bound by the course they deliberately adopted at the trial’: Rowe v Australian United Steam Navigation Co Ltd (1909) 9 CLR 1 at 24 per Isaacs J”.

11    This passage was approved by the Full Court of the Federal Court in Li Pei Ye v Crown Limited [2004] FCAFC 8 at [76] (Sackville, Selway and Lander JJ) and the principles which it sets out are well-established. There was no dispute between the parties before me that these are the principles that fall to be applied here to the extent that the proposed amendments do in fact raise new issues although it is perhaps fair to say that the appellants suggested that greater weight should be given to a lack of proven prejudice than the authorities indicate.

12    In short, while relevant, the question of whether a party ought to be permitted to raise a new argument on the appeal is not determined simply by the absence of specific prejudice to the other party. Rather, it is for the party seeking to argue a new point to establish that it is expedient in the interests of justice to permit that party to do so.

13    These considerations have increased force in light of the enactment of ss 37M and 37N of the FCA Act. Section 37M provides that the overarching purpose of (relevantly) the FCA Rules is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. In turn, parties to civil proceedings are required by s 37N to conduct them in a way that is consistent with the overarching purpose. Raising new arguments on appeal for the first time where there is no adequate explanation for the failure to raise them at trial will, in general, undermine the overarching purpose. A trial is not merely a ‘practice run’ before an appeal.

2.2    The proposed amendments

14    Mineralogy opposes the proposed amendments to subparagraphs 2(a) and (b) of the proposed amended notice of appeal, which I have set out below and are marked in underlining and bold:

“2.     The primary judge erred in finding that the CITIC Parties had no interest sufficient to attract the common law right to procedural fairness in circumstances where:

(a)    one of the CITIC Parties was or would be a port facility operator within the meaning of the MTOFSA and the CITIC Parties were the only users of the Port which they had constructed at their own cost;

(b)    the CITIC Parties have responsibilities for managing the operations of the port under the following instruments:

(i)    Service Level Agreement dated 11 September 2011;

(ii)    Project Management Agreement dated 27 February 2007;

(iii)    MTOFSA and MTOFSR; and

(iv)    the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA);”

(The reference above to the MTOFSR is a reference to the Maritime Transport and Offshore Facilities Security Regulations 2003 (Cth).)

15    Secondly, Mineralogy opposed the insertion of proposed new paragraph 4. Following the hearing, the proposed paragraph was substantially redrafted by the appellants so as to follow the same structure as that adopted in relation to paragraph 2, the difference being that paragraph 2 alleged a breach of procedural fairness whereas paragraph 4 alleged a failure to take account of the views of the CITIC Parties under s 14(2)(c) of the MTOFSA. The proposed paragraph 4 as reformulated provides that:

“4.     Further, or in the alternative to 3, the primary judge erred in failing to find that the CITIC Parties have responsibilities for managing the operations of the port under the following instruments:

(i)    Service Level Agreement dated 11 September 2011;

(ii)    Project Management Agreement dated 27 February 2007;

(iii)    MTOFSA and MTOFSR; and

(iv)    the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA); and

on that basis are persons whose views were required to be taken into account under s. 14(2)(c) of the MTOFSA.”

2.3    Proposed amendments to paragraph 2(a) of the notice of appeal

16    As earlier explained, by this amendment the appellants seek to argue that the CITIC Parties had a right to procedural fairness at common law contrary to the decision below because one of the CITIC Parties “was” a port facility operator within the meaning of the MTOFSA at the time that the delegate made his decision.

17    In support of their submission that this issue was live at trial, the appellants relied on three matters.

a)    First, the appellants referred to the reasons below at [29] where his Honour observed with respect to a port security risk assessment prepared by Risk Resolution Australia Pty Ltd on instructions from Mineralogy in 2011 that:

“Risk Resolution prepared the assessment after a site visit and consultation with, among others, senior personnel of the Citic parties. The assessment stated that the risk assessment had been undertaken by both Mineralogy and Citic, as the (then) first port facility operator. It is assumed that Mineralogy would be port operator and Citic, at that stage, would be a port facility operator.” (Emphasis added)

In my opinion, however, it is apparent that the statement in the present tense in the second sentence was understood by the primary judge as being an assumption made by Risk Resolution in preparing the risk assessment about a future state of affairs and, as such, falls short of establishing that the question of whether one of the CITIC Parties was a port facility operator at the time of the delegate’s decision was a live issue at trial.

b)    The second statement relied upon is at [85] of the reasons below where his Honour found that the CITIC Parties “were not persons responsible for managing the operations of the Port. Rather, they were persons responsible for managing some operations in certain areas of the Port.” Again, in my view, the statement fails to establish that the issue was live, particularly given that his Honour stated later in the same paragraph that “[t]he Citic parties… would have a role as a, or the only, port facility operator…” (Emphasis added).

c)    Thirdly, the appellants relied upon the pleading in their originating application that they were aggrieved by the delegate’s decision because:

“The Fourth Applicant [Cape Preston Port Company Pty Ltd (ACN 147 842 153)] is a maritime industry participant in relation to the Port of Cape Preston for the purposes of MTOFSA, the Port of Cape Preston being declared by the Respondent as a security regulated port under section 13(1) of MTOFSA.” (Emphasis added)

The difficulty with the submission, however, as counsel for the appellant acknowledged, is that the definition of “maritime industry participant” in s 10 of the MTOFSA is not limited to “(a) a port operator”. It also includes, relevantly, “(f) a contractor who provides services to a person mentioned in paragraphs (a) to (d).” As the Cape Preston Port Company provided services to Mineralogy under the Services Agreement, it would not have been clear from reading the pleadings whether the intention was to rely upon subparagraph (a) or (f) of the definition or both. It follows that the pleading again falls short of squarely contending that one of the CITIC Parties was, at the time of the delegate’s decision, a port operator. Furthermore, the pleading was concerned with setting out the basis on which the CITIC Parties had standing under the AD(JR) Act to institute the proceedings, as opposed to the substantive grounds of the application itself.

18    There were no further passages upon which the appellants relied in support of the submission that the issue had been raised before the primary judge. Furthermore, it was apparent from the appellants’ written submissions in support of the application for judicial review, esp at [60] and [70](b), that the procedural fairness grounds were put expressly on the basis that one of the CITIC Parties “would be” the port facility operator, as was the s 14(2)(c) argument. It follows that the question of leave to amend in relation to this proposed ground falls to be assessed on the basis that it would raise a new issue.

19    Mineralogy initially contended that this ground would have raised a new factual contention as to whether the loading or unloading of security regulated ships was in fact occurring as at the time of the delegate’s decision, which Mineralogy could have tested in evidence if it had been raised at trial. In this regard, a “port facility operator” is defined in s 10 of the MTOFSA as being a person who operates a port facility, while a “port facility” is defined as “an area of land or water, or land and water, within a security regulated port… used either wholly or partly in connection with the loading or unloading of security regulated ships”. In response, the appellants contended that any evidence on whether such loading or unloading was occurring would have been irrelevant as they did not intend to suggest by the amendment that the Port was operating as a port at the time of the delegate’s decision, but rather that there were port facilities in place which were being used for the purposes of construction of the port at the relevant time. That being so, I consider that Mineralogy’s submission that it would have sought to explore in evidence the extent, if any, to which the port was being used for shipping if the ground had been raised below, was based on a misunderstanding of the scope of the amendment. No other specific prejudice was identified and Mineralogy ultimately conceded in oral submissions that “the prejudice attached to that amendment is minimal, if it exists.”

20    In the circumstances, I am not therefore satisfied on the material before me that Mineralogy would be prejudiced by the appellants’ failure to raise the point at trial if the amendment is allowed. The question then becomes whether it is nonetheless expedient and in the interests of justice to allow the amendment.

21    No evidence was led as to why the issue was not raised at trial. The only explanation given for seeking to amend the notice of appeal was in oral submissions and to the effect that new counsel had been engaged since the notice of appeal was filed and that counsel had looked at the matters with ‘fresh eyes’. I do not consider that necessarily to be an adequate explanation. Nonetheless, while the matter is finely balanced, I consider that the interests of justice are best served by allowing the amendment having regard in particular to the following considerations:

a)    the amendment seeks to raise what appears to be a discreet point involving the legal characterisation of facts not in dispute;

b)    the absence of demonstrated prejudice given the limited scope of the amendment, as explained by the appellants’ counsel;

c)    the fact that it remains open to Mineralogy to maintain that the new ground of appeal should be dismissed on the basis that it was not pleaded below and that it is prejudiced by the issue being raised for the first time on appeal, bearing in mind that my ruling is interlocutory in nature and that the written submissions by the appellants may cast further light on the nature and scope of the amendment; and

d)    the fact that, notwithstanding that the listing of the appeal has been expedited and that the 28 day period within which a supplementary notice of appeal could have been filed as of right has expired, the timetable for the filing of the appellants’ submissions can and should be brought forward to 6 June 2014 thereby allowing the second respondent sufficient notice, in my opinion, of the detail of the way in which the new argument is put.

2.4    Proposed amendments to insert subparagraphs 4(i) and (ii) of the amended notice of appeal

22    As earlier mentioned, following the hearing the appellants provided the Court with a reformulation of proposed paragraph 4. As a result, the factual allegations made in subparagraphs 4(i) and (ii) mirror those made in subparagraphs 2(b)(i) and (ii) to which Mineralogy consented because those grounds were raised below. The difference is that the allegation is said in the case of subparagraphs 4(i) and (ii) to have the consequence that the CITIC Parties are persons whose views were required to be taken into account under s 14(2)(c) of the MTOFSA.

23    It is apparent in my view from the reasons of the Court below at [84]-[85] that the CITIC Parties argued below that they were persons whose views had to be sought under s 14(2)(c) of the MTOFSA by reason of their agreements with Mineralogy. As a consequence, I would allow the proposed insertion of subparagraphs 4(i) and (ii).

2.5    Proposed amendments to insert subparagraphs 2(b)(iii) and (iv) and 4(iii) and (iv) of the amended notice of appeal

24    The contested amendments to subparagraphs 2(b)(iii) and (iv) and 4(iii) and (iv), however, fall into a different category. These paragraphs allege respectively that the CITIC Parties had a right to procedural fairness or to have their views taken into account under s 14(2)(c) by reason of their responsibilities for managing the operations of the Port under the MTOFSA, the MTOFSR and the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Act 2002 (WA) (the Agreement Act). However, the appellants accept that their arguments below on the procedural fairness and s 14(2)(c) points had focused not upon statutory responsibilities but only upon the CITIC Parties’ contractual responsibilities for managing port operations under the Service Level Agreement and the Project Management Agreement. As such, it appeared to be common ground that these proposed amendments would raise new issues.

25    The appellants nonetheless contend that the “substantial issues” on the appeal remain as they were at trial and that they do not seek to rely in the appeal on “any evidence” which was not before the trial judge, submitting that “[t]he amendments relate to the legal characterisation of the facts, having regard to the evidence that was before [the primary judge] and for the purposes of determining the same issues as were argued before his Honour.” The appellants also contended that, in so far as the s 14(2)(c) argument is concerned, the failure by the delegate to have regard to their views does not affect merely private rights but the public interest in ensuring that an important decision concerning matters of maritime security is made on a fully informed basis.

26    The amendments were, however, strongly opposed by Mineralogy. It contends that the dispute as to who is entitled to possession and control of the Port is not merely definitional but a wide ranging and complex one, pointing to the pleadings in proceeding WAD 110 of 2013, a separate action currently before this Court between Mineralogy and the first, second and third appellants. Depending, therefore, upon how the appellants ultimately put their case, Mineralogy contended that it would most likely be required to lead evidence and put submissions consistent with its position in the Western Australian proceedings if leave were granted. It may also necessitate Mineralogy filing a notice of contention.

27    I appreciate the force of the submission that the s 14(2)(c) argument raises a matter affecting the public interest, as well as the interests of the CITIC Parties. Nonetheless, in my opinion, leave should not be granted to allow the proposed amendments to include subparagraphs 2(b)(iii) and (iv) and 4(iii) and (iv). In contrast to the proposed amendments to subparagraphs 2(b)(i) and (ii) and 4(i) and (ii), in my opinion they would raise substantial new issues and involve a significant departure from the manner in which the appellants ran their case at trial. Furthermore, they would do so in circumstances where the appellants have already sought and been granted an expedited hearing for the appeal. In these circumstances, the failure to provide an adequate explanation for the failure to raise these issues at trial carries greater weight. Furthermore, and more fundamentally, I accept that there is considerable force in Mineralogy’s contention that it may well have run its case differently at trial if the issues had been raised. Indeed Mineralogy contended that if leave is granted it may now find it necessary to adduce further evidence and file a notice of contention. That being so, it is, in my view, no answer to contend, as did the appellants, that they consider that their arguments could be addressed within the parameters of the evidence before the trial judge. That ignores the prejudice raised by Mineralogy.

Associate:

Dated:    27 May 2014