Village Building Company Limited v Canberra International Airport Pty Limited (No 2) [2004] FCA 133 (25 February 2004)

Last Updated: 25 February 2004

FEDERAL COURT OF AUSTRALIA

Village Building Company Limited v Canberra International

Airport Pty Limited (No 2) [2004] FCA 133

TRADE PRACTICES – whether conduct in trade or commerce – statements made in the context of public and political debate – representations made for the purpose of securing the performance of statutory duties – representations designed to advance, maintain or protect commercial interests – representations made to persons with whom there is no commercial relationship

TRADE PRACTICES – whether conduct of an authority of the Commonwealth was engaged in as part of carrying on a business – conduct pursuant to a ministerial direction – no fee charged for the function performed – that function a distinctly governmental activity

Trade Practices Act 1974 (Cth) ss 2A, 52
Airports Act 1996 (Cth) ss 70, 71, 72, 77, 79, 83, 84
Air Services Act 1995 (Cth) ss 7, 13, 16, 45, 46, 53

Australian Associated Motor Insurers Ltd v NRMA Insurance Ltd [2002] FCA 1061; (2002) 124 FCR 518 cited
Brown v Riverstone Meat Co Pty Ltd (1985) 60 ALR 595 cited
Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 applied
Corrections Corporation of Australia Pty Ltd v Commonwealth [2000] FCA 1280; (2000) 104 FCR 448 applied
Fasold v Roberts (1996) 70 FCR 489 cited
Glorie v WA Chip & Pulp Co Pty Ltd (1981) 39 ALR 67 cited
Hearn v O’Rourke [2003] FCAFC 78 considered
Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 cited
J S McMillan Pty Ltd v The Commonwealth (1997) 77 FCR 337 applied
Merman Pty Ltd v Cockburn Cement Ltd (1988) 84 ALR 521 cited
Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579 cited
NT Power Generation v Power and Water Authority [2002] FCAFC 302; (2002) 122 FCR 399 applied
Paramedical Services Pty Ltd v Ambulance Service (NSW) [1999] FCA 548 cited
Plimer v Roberts (1997) 80 FCR 303 cited

Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 followed

Saitta Pty Ltd v Commonwealth [2001] VSC 170; (2001) 162 FLR 35 cited
Sirway Asia Pacific Pty Ltd v Commonwealth of Australia [2002] FCA 1152 cited
State of New South Wales v R T & Y E Falls Investments Pty Ltd [2003] NSWCA 54; (2003) 57 NSWLR 1 applied
Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 cited

THE VILLAGE BUILDING COMPANY LIMITED ACN 056 509 025 v CANBERRA INTERNATIONAL AIRPORT PTY LIMITED ABN 14 080 361548, AIRSERVICES AUSTRALIA

No A59 of 2002


FINN J
25 FEBRUARY 2004
ADELAIDE (HEARD IN CANBERRA)

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY		A59 OF 2002

BETWEEN:	THE VILLAGE BUILDING COMPANY LIMITED ACN 056 509 025 APPLICANT
AND:	CANBERRA INTERNATIONAL AIRPORT PTY LIMITED ABN 14 080 361548 FIRST RESPONDENT AIRSERVICES AUSTRALIA SECOND RESPONDENT
JUDGE:	FINN J
DATE OF ORDER:	25 FEBRUARY 2004
WHERE MADE:	ADELAIDE (HEARD IN CANBERRA)

THE COURT ORDERS THAT:

1. The question:

"whether the conduct of the first respondent complained of in paragraphs 13, 15, 17A and 18 of the further amended statement of claim was in trade or commerce"

be decided "No".

2. The question:

"whether the conduct of the second respondent in endorsing the Australian Noise Exposure Forecast 2050 for the Canberra International Airport (as alleged in paragraph 6 of the further amended statement of claim) was engaged in as part of carrying on of a business by it (as alleged in paragraph 21A of the further amended statement of claim), for the purposes of Section 2A of the Trade Practices Act 1974"

be decided "No".

3. The question:

"whether the conduct of the second respondent complained of in paragraph 21 of the further amended statement of claim was in trade or commerce"

does not need to be answered.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY		A59 OF 2002

BETWEEN:	THE VILLAGE BUILDING COMPANY LIMITED ACN 056 509 025 APPLICANT
AND:	CANBERRA INTERNATIONAL AIRPORT PTY LIMITED ABN 14 080 361548 FIRST RESPONDENT AIRSERVICES AUSTRALIA SECOND RESPONDENT

JUDGE:	FINN J
DATE:	25 FEBRUARY 2004
PLACE:	ADELAIDE (HEARD IN CANBERRA)

REASONS FOR JUDGMENT

1 The applicant – property developer, The Village Building Company Ltd ("Village") – has alleged that each of the respondents contravened s 52 of the Trade Practices Act 1974 (Cth) in representations made concerning noise forecasts or projected flight-paths for the Canberra Airport. The questions presently before me are whether those representations were made "in trade or commerce" or as well, in the case of Airservices Australia ("AsA") which is an authority of the Commonwealth, whether it was carrying on a business when making the representations alleged. I have previously ordered that these questions be determined before any full hearing of the application as negative answers to either or both of them would be fatal to claims made against either or both of the respondents: Village Building Company Limited v Canberra International Airport [2003] FCA 1195.

2 The questions themselves focus upon particular requirements of the Trade Practices Act. For conduct to contravene s 52 of the Act, it must be engaged in "in trade or commerce". Distinctly, the Act only binds the Commonwealth "insofar as [it] carries on a business – either, directly or by an authority of the Commonwealth": s 2A. In the event I have answered both questions adversely to the applicant.

THE FIRST PRELIMINARY QUESTION: CIA’S CONDUCT

(a) The Parties

3 Village is a land development company which owns land in New South Wales near Queanbeyan known as "Tralee North" and "Tralee South". The land is located in the southern part of what has been described as a north/south "corridor" between Canberra and Queanbeyan in which aircraft movements are concentrated apparently in consequence of AsA implementing Noise Abatement Areas in the two cities. The land is presently zoned for rural and environmental uses. Village has applied to the relevant New South Wales authority to have the land re-zoned for use for residential purposes.

4 The first respondent, Canberra International Airport Pty Ltd ("CIA"), has opposed residential development of land in the southern corridor. CIA is the lessee of Canberra International Airport and is responsible for conducting the business of the airport in accordance with the statutory requirements imposed by the Airports Act 1996 (Cth). It will be necessary to refer to that Act in some detail. It is sufficient presently to note that CIA was required by s 70 of the Act to have a "master-plan" for the airport which specified (amongst other things) (i) "forecasts relating to noise exposure levels": s 70(2)(d); and (ii) the company’s plans for managing aircraft noise intrusion in areas forecast to be subject to exposure above "the significant ANEF levels".

5 An ANEF is a contour map joining points of equal noise exposure in the vicinity of an airport, the contours being graded in units of five from 20 to 40 with the higher the unit number indicating the greater the noise exposure. Much of Village’s case against CIA and AsA relates to representations in and about an ANEF prepared by CIA which is known as "ANEF 2050". That ANEF replaced ANEF 2020 (the numerical reference in each instance is to the outer year of the forecast).

6 AsA, the second respondent, is a body corporate established by s 7 of the Air Services Act 1995 (Cth). One of its functions undertaken pursuant to a direction of 3 May 1999 of the then Minister for Transport and Regional Services was to endorse (inter alia) ANEFs for all Australian airports. In January 2002 AsA endorsed "for technical accuracy" CIA’s ANEF 2050.

(b) The ANEF System

7 The following description is drawn from two publications of AsA – "The Australian Noise Exposure Forecast System and Associated Land Use Compatibility Advice for Areas in the Vicinity of Airports" and "Guidelines for the Production of Noise Contours for Australian Airports" – and from Standards Australia standard AS2021-2000.

8 It is Australian Government policy that ANEF contours be used as land use planning criteria around Australian Airports. The ANEF system provides the basis of Australian Standard AS2021-2000 (Acoustics – Aircraft noise intrusion – Building siting and construction).

9 As noted above, an ANEF is a contour map showing the forecast of aircraft noise levels that is expected to exist in the future. The contour set may relate to a "particular year" (as was the case with ANEF2020) in which case it is based on a forecast of aircraft movement numbers, aircraft types, destinations and a given set of runways for a particular year. Alternatively the ANEF may be an "ultimate capacity" forecast (as is the case with ANEF2050) in which case it may incorporate several sets of "particular year" forecasts that relate to progressive stages in the development of an airport within a definite time horizon.

10 In general, the onus to initiate the process for the production of an ANEF rests with the airport owner. While AsA may in some instances actually undertake the work of producing noise contours, it is common (as in the present case) for this to be done by the airport owner or its consultants. Before a set of contours can become an ANEF it is required to be endorsed for technical accuracy by AsA following a review procedure overseen by AsA.

11 Only one ANEF map can be current at any one time. A more recently endorsed map supersedes an earlier map.

12 For the purposes of the Airports Act, "significant ANEF levels" are defined to mean "a noise above 30 ANEF levels". The Australia Standard also indicates that "[e]xposure prediction below 25 ANEF may be significantly inaccurate, and therefore caution should be exercised in the evaluation of locations outside the 25 ANEF contour".

(c) The Airports Act 1996 and CIA

13 When CIA became lessee of Canberra Airport in 1998 it became subject to the provisions of the Airports Act 1996. The objects of that Act included the following:

"s 3(b) to establish a system for the regulation of airports that has due regard to the interests of airport users and the general community;

(c) to promote the efficient and economic development and operation of airports;

...

(h) to implement international obligations relating to airports."

I would note in passing that Australia is a party to the Convention on International Civil Aviation done at Chicago in 1947. The International Civil Aviation Organisation ("ICAO"), which was formed by the Convention, has produced a consolidated statement of continuing ICAO policies and practices related to environmental protection that have been adopted by the ICAO Assembly. These include a policy in relation to the use of land use planning and management as a preventative measure to minimise aircraft noise problems.

14 The Act requires there to be a final master plan for each airport: s 70; that final plan being a draft master plan that has been approved by the Minister: s 83. The planning period for both a draft and final master plan is prescribed to be 20 years: s 72; though (subject to proviso) a final master plan only remains in force for 5 years: s 77(1). Section s 71 of the Act stipulates the matters to be specified in both a draft and a final master plan. These include:

"(d) forecasts relating to noise exposure levels; and

(e) the airport-lessee company’s plans, developed following consultations with the airlines that use the airport and local government bodies in the vicinity of the airport, for managing aircraft noise intrusion in areas forecast to be subject to exposure above the significant ANEF levels; and

(f) the airport-lessee company’s assessment of environmental issues that might reasonably be expected to be associated with the implementation of the plan; and

(g) the airport-lessee company’s plans for dealing with the environmental issues mentioned in paragraph (f) (including plans for ameliorating or preventing environmental impacts)."

15 I would note in passing that (d) above does not in terms require the noise forecasts to take the form of an ANEF. As will later become apparent, while ANEF2020 was included in CIA’s master plan, its successor (ANEF2050) was not.

16 Before a draft master plan is submitted to the Minister, it must be exposed for public comment: s 79. In deciding whether to approve a draft master plan the Minister is obliged by s 81(3) to have regard to certain matters including:

"(a) the extent to which carrying out the plan would meet present and future requirements of civil aviation users of the airport, and other uses of the airport, for services and facilities relating to the airport concerned;

(b) the effect that carrying out the plan would be likely to have on the use of land:

(i) within the airport site concerned; and
(ii) in areas surrounding the airport."

17 A minor variation to a final master plan can be made through a like process of public comment and then ministerial approval: ss 84, 84A.

18 On approval being given to a draft master plan or to a draft variation, the airport-lessee company concerned is required to comply with the publication regime imposed by s 86 of the Act.

(d) CIA’s ANEFs

19 CIA purchased its lease in May 1998. Later in that year it began the process of public consultation leading to the development of a draft master plan. It commissioned the preparation of an ANEF (ANEF2020) which was endorsed by AsA for technical accuracy on 2 October 1998. It is the evidence of Mr Stephen Byron, the managing director of CIA, that this ANEF was included in the draft master plan then in preparation so as to satisfy the noise forecast requirement of s 71(2) of the Airports Act. The draft master plan received ministerial approval on 23 August 1999.

20 Later in 1999 CIA commissioned advice from Aerodrome Operation Support Pty Ltd ("AOS") on "the ultimate practical capacity" of the airport’s runway and air space management systems. Mr Byron’s explanation of this decision was that he had become aware that other Australian airports, including Brisbane, Perth and Melbourne, had prepared ultimate capacity ANEFs. He considered such a move to be sensible for CIA having regard to CIA’s desire to be able to inform relevant authorities, the community and other interested parties about the forecast growth of the airport and the resulting likely long-term impact of aircraft noise within the region.

21 OAS’s advice provided the basis for the modelling of a new ANEF. It was assessed by AsA and received AsA’s endorsement for technical accuracy on 11 January 2002. The need for an outer year to be specified for the ANEF resulted in the selection of year 2050.

(e) Flight Paths, Land Use, Aircraft Noise and Airport Operations

22 AsA controls flight paths for aircraft flying into and out of Canberra airport. Since 1995 AsA has implemented Noise Abatement Areas in Canberra and Queanbeyan which has protected over 99 percent of the homes in the Canberra, Queanbeyan and Jerrabomberra areas from aircraft noise through the creation of the north-south corridor in which aircraft movements are concentrated.

23 Mr Byron’s evidence is that CIA and AsA are currently investigating the possibility of there being approved a new "off-set landing" flight path. Its purpose would be to move aircraft and aircraft noise further west in respect of 700 households located at Jerrabomberra and Fernleigh Park. It is said that if the proposal is approved by AsA, there will be less aircraft noise over Jerrabomberra and more over Tralee (the site of the applicant’s land).

24 The very obvious interrelationship of noise exposure and land use is reflected in much of the evidence before me, be this in official publications (such as Australian Standard AS2021-2000, AsA’s own publications on the ANEF system and ICAO’s statement of policies and practices) or in CIA’s own documents. Illustrative of the latter are the following comments on aircraft noise in CIA’s Year 2020 Master Plan:

"2.1 Introduction

The issue of aircraft noise was consistently raised during consultation on the development of the draft Master Plan. Clearly this is an issue of significant interest to the community in general.

CIA believes the most effective means to reduce the impact of aircraft noise is the proper planning of land use of areas in the general vicinity of the airport, together with aircraft operational procedures directed at achieving appropriate noise abatement objectives.

As noted in Section 5.3 of the draft Master Plan previous planning decisions have conveniently located the airport in close proximity to the city centre and parliamentary triangle but well away from residential areas. It is important for the long term sustainability of the airport that these planning principles continue and that future aircraft operations take account of the increasing community sensitivity about aircraft noise." Emphasis added.

25 CIA has engaged in a range of activities to obtain and disseminate information regarding aircraft noise. Mr Byron’s affidavit lists the following by way of illustration:

(a) establishment of a noise reference group with representatives from the community and government authorities which has held a number of meetings since December 1998;
(b) attending public, community and other meetings including of the Queanbeyan City Council and Jerrabomberra Residents’ Association;
(c) distributing letters to members of ACT, NSW and Federal parliaments;
(d) commissioning of market research surveys regarding aircraft noise;
(e) organising community consultations on planning and development proposals at the airport; and
(f) arranging media advertisements in Canberra and Queanbeyan newspapers.

26 In oral evidence Mr Byron emphasised the importance to CIA of its relationship with the community and he indicated that airport noise was important in that. He acknowledged that consultants were engaged to assist in the use of the media.

27 Distinctly, CIA has sought positively to influence public opinion and political and governmental decision-making in matters of land use and planning, particularly in relation to development in the north/south corridor. And it has sought to inform itself (through consultants and otherwise) for these purposes. There are in evidence, for example, some number of letters to politicians and public officials at all three tiers of government; overheads for public briefing sessions; a consultant’s report to CIA that "provides a NSW context for debate about a NSW housing development that would have an averse impact on the airport"; and a CIA public consultation document entitled "Minimising the Impact of Aircraft Noise – A Proposal by Canberra International Airport to Quarantine Excessive Aircraft Noise from Canberra and Queanbeyan Residential Areas".

28 I refer to the following three documents simply by way of illustration. The first is a letter of 11 October 2002 from CIA to a Ms Holmesby of the Commonwealth’s Department of Transport and Regional Services. It stated (omitting formal parts):

"Federal Government Protection of High Noise Corridors Surrounding Airports

I refer to our discussions with yourself, Ken Matthews and Christine Dacey in relation to the proposed rezoning for residential use of the Tralee property which lies directly under the Southern Jet Departure Flight Path.

I note that Minister Anderson has written to the NSW Deputy Premier and Minister for Planning, Dr Andrew Refshauge, to express his concerns and to reinforce the need to ensure that new residential homes are not built directly under flight paths. We are most grateful for your Minister’s support in relation to this issue and for taking the time to write to Dr Andrew Refshauge.

As we have discussed, this issue will inevitably crop up from time to time as individual developers seek to exploit the cheap availability of land which has previously been reserved for the loud over-flight of aircraft landing at airports. Given that generally the control of this land is with local councils who often have limited vision and a short-term mentality there continues to be a substantial risk of the construction of houses directly under flight paths which will inevitably lead to noise complaints and conflicts between airports and communities.

Accordingly, we raised with you the opportunity of the Federal Government pursuing some form of regulation that would identify and protect the main high noise corridors into and out of airports around Australia. Whilst we jointly acknowledge that this was generally considered a State Government planning matter, it was agreed that a mechanism should be pursued to achieve Federal Government action because inevitably the Federal Government is left to manage both the problems of disaffected communities and ensuring the continued viability of the aviation industry.

The Hon Martin Ferguson, Federal ALP Spokesman for Transport, has expressed the view to us that the Commonwealth Government must become involved in land use issues around our Airports as inappropriately sited residents require the Commonwealth Government to provide aircraft noise respite. Respite measures include noise abatement procedures and noise sharing which all lead to constraints on aircraft operations, increase costs to the public and increase emissions due to additional track miles. Further, the respite measures do not necessarily solve the issues for the community.

As aircraft movements grow in response to demand, the community outcry will also grow unless land use strategies and policies within the arrival and departure flight path corridors acknowledge the conflict and address compatible land uses.

I would be grateful if you and appropriate members of your Department were available for a brief meeting to discuss what progress there may have been in relation to this issue."

29 In cross-examination Mr Byron described the letter as being written to Ms Holmesby "as part of a public debate, trying to harness all the skills of advocacy and argument, to get an outcome that included the protection of high noise corridors around airports".

30 The second illustrative document, prepared by the consultant ACIL Tasman for CIA, is a report that is related directly to the Tralee re-zoning proposal. It states its purpose as follows:

"This report assesses the importance of Canberra Airport to Queanbeyan and other nearby parts of New South Wales – both the direct impact from travel and employment, and the impact it has indirectly through enabling activity in the ACT (in turn generating employment and incomes in nearby parts of NSW). It provides a NSW context for debate about a NSW housing development that would have an adverse impact on the airport.

The section of the report dealing directly with Tralee appears under the heading "Implications for the proposal to construct houses at Tralee". It states (in part):

"4.1 Impacts on the airport and Queanbeyan

There is a proposal for rural zoned land at Tralee (in NSW just across the ACT border from Hume) to be rezoned for residential development (which we understand would increase the value of the land, in undeveloped state, several-fold). This land will be directly under the southern departure path for the airport.

ACIL Tasman makes the following observations in relation to airport activity and to wider capital area economic development:

•	Experience in Sydney, Coolangatta, US (eg the Orange County Airport) and Europe indicates that potential residents in such a development would lobby energetically to have airport activity (and hence noise) curtailed, even if the noise is technically just within the limit. Experience suggests they would press not only for a closure of the airport at night but also a limitation on the number of flights during the day. Airport noise is a political issue and it is likely that such pressure would succeed: emphasis added.
•	Growth of activity at the airport has a trend increase which is substantially higher than growth in the economy of the region. We expect this trend to continue as Australian incomes continue to grow and as low cost airlines create downward pressure on fares.
•	Airport activity is an important part of the Queanbeyan and Yarrowlumla economy – not only for the income generated but also because of the wide range of business and leisure activities that air travel [facilitates]. The expected developments in the region – eg growth in higher grade residential accommodation in Queanbeyan, growth in high-technology industries, the new defence theatre – will generate air traffic and add to the need for efficient airport services.
•	A cap on flight numbers would increasingly impede the ability of the airport to service Queanbeyan/Yarrowlumla, the wider Capital Region, and to service Australia. Likely consequences are some or all of:

- Substitution of smaller aircraft by larger aircraft with less frequent and convenient flight schedules than would otherwise occur.

- Increased fares as capacity becomes scarce.

- Difficulties allocating increasingly scarce flight slots between competing airlines; in particular this could impede new entrants who might offer new routes or new types of service including low cost service.

- Flight delays as flights are held back until a slot becomes available (as in Sydney).

- Increasing reluctance to do business in Canberra and Queanbeyan because of difficulties in getting there.

- Reduced or zero growth in airport related employment opportunities.

- Impeded growth in the local economy, especially in those businesses reliant on air traffic (eg tourism and conventions, and in those leisure activities also reliant on air traffic such as sports fixtures).

•	The business impacts would fall mainly on the ACT area and Queanbeyan high-technology industries, and the employment impacts would fall disproportionately on Queanbeyan.
•	The alternative of having aircraft divert away from the proposed Tralee development would put flights over Jerrabomberra, adding noise to a housing area that already exists.

4.2	Premature construction of a new airport

Eventually the clash between airport restrictions and increasing demand for air travel would result in pressures for the construction of a new airport further away. Ultimately these pressures would be successful."

31 The third document is CIA’s own public consultation paper "Minimising the Impact of Aircraft Noise". It is sufficient for present purposes to quote briefly from the managing director’s covering message:

"When we were preparing our Year 2020 Master Plan, the potential for an increase in aircraft noise in residential areas as the airport grew was a significant concern of most of the 44 organisations and local communities that responded to it. That’s why we included in it a promise to develop Canberra International Airport sympathetically with the surrounding community and within a framework of responsible environmental planning. This commitment included minimising the impact of aircraft noise in consultation with our key stakeholders.

We are keeping that promise.

...

So, the purpose of this document is two-fold:

•	Better inform the community about aircraft flight paths to and from Canberra International Airport now and in the future; and
•	Work cooperatively with governments and the community to ensure that future rezoning of farmland in NSW and the ACT is for land uses compatible with low flying aircraft. We do not believe housing estates now or in the future should be situated under the airport’s critical final approach and immediate departure aircraft flight paths.

So, what are we proposing?

We want the Commonwealth, ACT and NSW governments to agree to a Regional Plan that has three zones. Using a traffic light analogy – green, amber and red – these three zones are designed to make it easier for the community to understand the likely impact of aircraft noise at terrain level under aircraft flight paths. For example:

•	Green Zone – Located within the Canberra and Queanbeyan noise abatement areas, land in this zone is protected from excessive aircraft noise. This zone is suitable for the development of housing estates.
•	Amber Zone – Land within this zone is overflown by aircraft on approach or departure from Canberra International Airport. However, these aircraft operate at altitudes that are unlikely to produce excessive noise although some people will be disturbed by aircraft noise. The Amber Zone is meant to caution residents on rural estates and village communities within the shires of Yarrowlumla, Gunning, Yass, Mulwaree and the ACT of aircraft movements.
•	Red Zone – Land within this zone is subject to aircraft noise because of its proximity under existing and future aircraft movements. Because aircraft fly low on approach or departure over this farmland it should not be rezoned for housing estate purposes.

Put simply, we do not support the development of housing estates under aircraft low flying flight paths. We want to avoid the mistakes of Sydney’s Kingsford Smith Airport. So, are we heading in the right direction? Your responses are important to us."

32 In cross-examination Mr Byron (i) accepted that CIA had sought to ensure that on the southern approaches to the airport land remained zoned rural or commercial; (ii) disclaimed that ANEF2050 was produced to influence land use planning decisions though he accepted that via the Australian Standard AS2020-2000 the ANEF would have an impact on land use planning; and (iii) indicated that he did not consider either that community hostility to CIA on account of aircraft noise would affect the commerciality of the airport or that further restrictions resulting from moving flight paths, noise sharing or curfews would affect the long-term value of the airport (seemingly because of the manner in which airports are regulated as businesses).

(f) Village’s Allegations against CIA

33 Village has in four distinct respects pleaded that CIA has engaged in conduct contravening s 52. It is necessary to set out part of the relevant paragraphs of the pleading in detail.

34 First, par 13 of the Further Amended Statement of Claim is in the following terms:

"The First Respondent has engaged in misleading and deceptive conduct or conduct which is likely to mislead or deceive by publicly claiming that the ANEF contours which are applicable and are "in force" at Canberra Airport are the ANEF 2050 when those ANEF contours are not properly or validly applicable to the Canberra Airport in accordance with AS 2021."

35 The particulars later provided of the occasions on which these "public claims" were made specified (i) a statement in the Preliminary Version Draft Minor Variation Canberra International Airport Year 2020 Master Plan which was communicated by CIA to AsA; (ii) the ANEF2050 published on CIA’s website; (iii) a letter to the Minister, John Anderson MP, of 30 August 2002; (iv) a letter from Mr Byron to Mr Winnel of Village – a letter which, on its face, is part of a chain of communications between the two parties; and (v) an oral claim made by Mr Byron at a residents meeting convened by the Jerrabomberra Residents Association in December 2002.

36 Secondly, par 15 of the Further Amended Statement of Claim was in the terms that:

"In July 2002, the First respondent circulated a letter to members of the public, members of the Queanbeyan City Council and to members of Parliament:-

a) stating, "AirServices Australia has now advised us that ICAO (the International Civil Aviation Organisation) will be approving procedures facilitating the use of GPS precision approach paths into airports within the next three years".

b) stating, "We believe this would see landing aircraft fly over the rural properties of Tralee and Environa before joining the runway centre line at approximately 3.5 nautical miles from the airport" and

c) attaching a map showing an offset approach flight path intercepting the runway centreline at a point one nautical mile out from the airport."

37 Thirdly, it is pleaded in par 17A that:

"On 9 October 2002, the First Respondent, its servants or agents displayed overhead projections and circulated charts to people at a public meeting, which indicates that Brisbane, Melbourne and Adelaide flights landing at Canberra Airport from the south could join the runway centreline at 2.5 to 4 miles from Canberra Airport."

38 Fourthly, par 18 alleges that:

"On or about 27 September 2002, the First Respondent, its servants or agents informed relevant members of staff of Queanbeyan Age newspaper or caused to be published in the Queanbeyan Age newspaper matter, the import of which was that the Federal Minister for Transport agreed that complaints from future residents of Tralee would mean a redistribution of aircraft flight paths and that there was Federal bi-partisan support that Tralee should not be re-zoned."

I should note that the newspaper publication referred to was an article that (a) described a call by Village on the Queanbeyan Council to reject CIA’s "land grab" in its proposed airport "red zone" and (b) contained a response by Mr McCann of CIA in which the representation appears.

39 As I am not concerned for present purposes with whether or not any of the pleaded representations were misleading or deceptive, it is unnecessary to refer to the various respects in which Village claims they offend.

(g) The Parties’ Contentions

40 The short question raised by this separate question is whether the four matters relied upon above can properly be characterised for the purposes of s 52 of the Trade Practices Act as constituting conduct "in trade or commerce". It is accepted by the relevant parties for present purposes that the impugned conduct can be established to have occurred.

41 Village’s case can be put shortly. It is that the conduct so engaged in by CIA was designed to protect and maintain its business. It was not mere participation in public debate. It was conduct aimed at protecting "the ongoing operational integrity of the airport" and "the long-term sustainability of the airport". Such conduct can on the authorities, it is said, properly be found to be in trade or commerce notwithstanding that the representations were not made to a person or persons in relation to whom CIA was in a commercial relationship. To the extent that the decision in Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 would suggest a contrary conclusion it should not be followed because it is clearly wrong. Insofar as the representations related to ANEF2050, as the ANEF was so inextricably linked with CIA’s business, statements made about it were made in trade or commerce.

42 In CIA’s submission Village has simply focussed on CIA’s business activities in broad terms and has disregarded the actual context in which the particular conduct complained of took place. The statements as to the applicability of ANEF2050 were, in the main, made in exchanges with the Minister who administered the Airports Act 1996 or with his department. They were not elements or aspects of an activity or transaction which bore a trading or commercial character. CIA accepts more generally that its actions in relation to noise and residential development was consistent with its own business interests. But what it has done has been to engage in public and political debate. To this extent its conduct was indistinguishable from that found in Robin to be not in trade or commerce. Additionally, it is said that the court should be slow to construe s 52 in a way which would interfere with the freedom of officers of CIA to communicate publicly on political matters.

(h) The Authorities

43 The parties accept that the principles to be applied are those stated in the joint judgment in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594. They can be stated as follows:

(1) Though the prohibition contained in s 52 of the Trade Practices Act is not confined to cases involving the protection of consumers alone, consumer protection lies at the heart of the legislative purpose of s 52. The heading of Part V of the Act, "Consumer Protection", is of importance in determining the effect of the words "in trade or commerce" in s 52: Nelson, 601 – 602.
(2) The phrase "in trade or commerce" in s 52 has a restrictive operation. It refers only to conduct "which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character". As such, it refers to the central conception of trade or commerce and not to the immense field of activities in which corporations may engage in the course of, or for the purpose of, carrying on some overall trading or commercial business: at 603.
(3) The section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public. In some areas, the dividing line between what is and what is not conduct "in trade or commerce" may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character: at 604.

44 I have been referred by Village to cases decided both before and after Concrete Constructions to illustrate situations falling on either side of the line and to indicate suggested "refinements" to the principles of Concrete Constructions.

45 The first proposed refinement builds on the reference in the above quotation to "promotional activities". It is said that the authorities justify the proposition that a corporation making public representations engages in trade or commerce if the representations are designed to advance, maintain, or protect its commercial interests: Glorie v WA Chip & Pulp Co Pty Ltd (1981) 39 ALR 67 at 75; Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 16, 25 and 44; Fasold v Roberts (1996) 70 FCR 489 at 531; Australian Associated Motor Insurers Ltd v NRMA Insurance Ltd [2002] FCA 1061; (2002) 124 FCR 518 at [112]. As I have indicated the burden of Village’s submission is that CIA’s representations had such a design.

46 At the core of this submission is the decision of Morling J in Glorie v WA Chip & Pulp Co Pty Ltd (1981) 39 ALR 67. In question there was whether the exhibition of a documentary film produced conjointly by an association of companies engaged in the timber and woodchipping industries and the Western Australian Forests Department was conduct in trade or commerce. His Honour made the following findings (at 75):

"[Counsel for the respondent] contended that the film was not exhibited in trade or commerce. He described the film as being in the nature of a political exercise. He argued that viewers of the film were addressed as members of the electorate with the object of educating them in matters of forest management so that they would become sympathetic to the industry. However, this submission does not take sufficient account of all the circumstances in which the film came to be made. The film was produced as part of the activities of the trade association of which the first respondent was a member. The impetus for its production came, in part, from the desire to answer criticism of the industry. It was prudent, if not necessary, that such criticism be answered in order that the commercial interests of members of the Association might be protected. The evidence clearly shows that the production of the film was seen as a public-relations exercise, which plainly it was. The involvement of the Forests Department in the production of the film did not make it any the less a trade or commercial activity of the Association. The first respondent carries on substantial woodchipping operations in Western Australia. The viability of those operations is almost totally dependent upon the supply of timber from the South West Forest. Public antipathy to the use of the forest as a source of supply of that timber could impose a serious threat to the company’s future activities if it were to find expression in political or other pressure upon the government to change existing forestry management practices. Having regard to these considerations I am of the opinion that the film has been, and is intended to be exhibited in trade or commerce.

Different views have been expressed by text writers as to whether, in s 52(1), "in" means "within, as part of" or "in connection with" or "in relation to": see Donald & Heydon: Trade Practices Law, vol 2, p 520. But whatever meaning is attributed to "in" in this context, I think that the exhibition of the film is "in trade or commerce" within the meaning of that expression in s 52. It may be the case that not everything done by a corporation that is engaged in trade or commerce is done "in" trade or commerce. It was argued, for instance, that the mere doing of something to improve public knowledge of an industry’s activities would not be conduct in trade or commerce. I doubt whether it is useful to generalize on this matter without reference to specific facts. In the present case, a real reason for exhibiting the film was to protect indirectly the commercial interests of the members of the Association, including the first respondent. In these circumstances, I think it is correct to characterize the exhibition of the film as being in trade or commerce."

47 It is unnecessary for me to analyse this decision further, notwithstanding its apparent relevance to the present proceedings. Glorie was decided prior to Concrete Constructions as the second of the above quoted paragraphs makes plain. It was examined in detail by Gyles J in Robin’s case which is indistinguishable from the present case insofar as concerns some of the representations impugned in this proceeding.

48 Having considered the subsequent treatment of Glorie in the authorities, Gyles J said (at 459):

"In these circumstances, I am not relieved of the responsibility of deciding whether Glorie is consistent with Nelson. In my opinion, the better view is that it is not. A public relations exercise of the kind explained by Morling J cannot be categorised as the promotion of the sale of timber or as otherwise within the central conception of trade or commerce as explained by the High Court. It is not an aspect or element of transactions which of their nature bear a trading or commercial character. I cannot find the kind of indirect promotion of timber products in that case that was found about cigarettes in AFCO. That is certainly not the manner in which Morling J analysed the matter, as the passage cited above reveals.

Even if I be wrong about that, in my view the present conduct is one step removed from Glorie. In that case, it was the timber industry which was being promoted and explained. Here, the conduct is not directed to the trade or commerce associated with the airport at all – it is concerned with the potential subdivision of the applicant’s land. Even if it were possible to categorise the conduct in Glorie as being the indirect promotion of timber products, the conduct here cannot be seen as the indirect promotion of the services provided by Canberra Airport. It was political in purpose and effect, albeit with the aim of protecting the business from interference in the future. In my opinion, to hold otherwise would be to ignore the reality that the High Court in Nelson made a deliberate choice between a wide and narrow view of the phrase "in trade or commerce" in s 52 and chose the latter."

49 I am, with respect, in complete agreement with Gyles J’s conclusions concerning Glorie. I am in consequence unable to accept the first of the "refinements" advanced by Village in the broad terms in which it is cast. As put, it does not refine Concrete Constructions. It subverts it. A corporation may take many actions to protect or promote its business interests. Some may well constitute conduct for s 52 purposes. Others will not. One hesitates to give examples of the latter. But I would suggest public advocacy of legislative changes to taxation or tariff laws, or opposition to a land resumption for highway purposes would be unlikely to be characterised as conduct in trade or commerce. I will return below to the subject of public debate.

50 The general point to be made is that Village’s first refinement substitutes another and over-inclusive test for that mandated by Concrete Constructions.

51 The second refinement propounded by Village, as best I understand it given its mutations, is said to be based on the recent decision of the Full Court of this Court in Hearn v O’Rourke [2003] FCAFC 78. The proposition sought to be justified by it is that, because an ANEF is inextricably linked with CIA’s business (even if CIA is not legislatively required to have one), statements made about it are made in trade or commerce.

52 Hearn v O’Rourke, it must be emphasised, was a decision on a strike out application. The "in trade or commerce" question related to representations made to two young teenagers and their parents to solicit the former’s participation (without remuneration) in a documentary film being produced for commercial purposes. A majority of the court was unprepared to conclude that the case was so clear as to justify striking out the Statement of Claim. It reasoned thus:

"It needs to be said at the outset that the Statement of Claim borders on the unduly uninformative. Nonetheless, it could properly be inferred from the facts pleaded and agreed that the conduct engaged in by the first respondent was aimed at securing the participation for particular purposes of both applicants in interviews which would provide primary material for the proposed documentary. As we noted earlier, it was accepted by the parties that the first respondent’s conduct in the matter occurred in the course of the second respondent’s production of a film for profit.

Notwithstanding the silence of the Statement of Claim on the matter, it could again be proper to infer that the activity which the second respondent was undertaking when that conduct was engaged in was the identification of prospective participants in the projected documentary who would provide the material that was likely to be used by the respondents in the documentary they wished to make. There could be no documentary unless appropriate interviews were secured. Securing such interviews, in our view, could properly be said to be central to the trading or commercial activity in which the second respondent was engaged in producing a film for profit. Correspondingly, the conduct engaged in by the first respondent for that purpose could itself be found to be in trade or commerce.

In reaching this conclusion we are not suggesting that the relationship of the second respondent with the applicants was a commercial one. To this extent we agree with the conclusions of both the primary judge and Dowsett J. Nonetheless we are satisfied that the conduct impugned could possibly be found to have occurred in a dealing with the applicants which was integral to an activity of the second respondent which was itself of a commercial character.

For our own part we do not find the analogy between the making of a film and the construction of a building for the purposes of sale a helpful one. The particular surroundings to which the words "trade and commerce" have to adapt themselves: Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [1982] HCA 8; (1982) 150 CLR 355 at 378-379; are those of film production for profit. Considering the matter from the standpoint of the respondents, what they were asking the applicants to provide was the material (a) that would, potentially, furnish some of the visual images and stories of the film to be produced and (b) that would, potentially, give interest and value to the film. The applicants were not being asked to enter a commercial or, for that matter, an employment relationship with the respondents. Nonetheless, we consider it to be reasonably arguable that they were being asked to enter into a relationship which, for the respondents, actually effectuated part of their commercial purpose.

We acknowledge that there is an apparent curiosity in our conclusion though it is one countenanced by the majority judgment in Concrete Constructions. The activity in question may be able to be characterised as bearing a trading or commercial character although the particular dealing which carries the activity into effect and in which the impugned conduct occurs does not itself give rise to a commercial relationship."

53 I am, with respect, unable to see how this decision provides any support at all for the proposition advanced by Village. It may be accepted that, though not legislatively required, the ANEF’s were inextricably linked with CIA’s business in the same way that in Hearn having interviewees were indispensable to the film to be produced. But it is the next step that sets this matter apart from Hearn.

54 In Hearn there was no question of a representation being made about the interviewees. A dealing was carried on with the prospective interviewees and their parents in which the alleged misrepresentations were made. That dealing arguably carried into effect an activity which had a trading or commercial character. Hence, arguably, the representations were in trade or commerce. In the present matter there were merely representations about ANEF2050 being applicable and in force. The mere making of them no matter to whom or in what context cannot preordain that they were in trade or commerce simply because an ANEF is practically indispensable to CIA’s business. And so, despite the suggested "refinements", one is cast back to the Concrete Constructions principles as they apply to the conduct alleged in this case.

CONCLUSIONS ON THE FIRST PRELIMINARY QUESTION

55 As CIA has emphasised in submissions, it is essential to deal severally with the four species of conduct challenged and the respective settings or contexts in which that conduct took place. I will deal with these species in turn.

(i) Publicly claiming that the ANEF contours which are applicable and are "in force" at Canberra Airport are the ANEF2050

56 As I earlier indicated, this representation is said to have occurred on five separate occasions. Two of these occasions can be considered together. They relate (a) to a statement in a proposed draft minor variation to the Year 2020 Master Plan which was communicated to AsA and (b) to a letter to the Minister administering the Airports Act 1996. The draft minor variation had been submitted (apparently via AsA) for ministerial approval under the Airports Act. The letter in question sought to withdraw the draft minor variation.

57 If CIA wished to vary its Master Plan it had to do so in conformity with the provisions of the Act. Its communications with the Minister and his department have to be seen in that light. The representations concerning ANEF 2050 may be said to have been made in the course of carrying on CIA’s business (i.e. it was addressing the requirements of regulatory legislation that applied to it). This said, and having regard to the regulatory context that informed them, I do not consider that the representations were aspects or elements of activities or transactions which, of their nature, bore a trading or commercial character. I consider them to be indistinguishable, for example, from statements made in a business corporation’s income tax return which, in my view, cannot be said to be "in trade or commerce".

58 In reaching this conclusion I am not saying, because it is unnecessary so to do, that in no circumstances could representations made to a regulatory agency for the purpose of securing the performance of its statutory functions ever be found to be "in trade or commerce". There are decisions of this Court to the contrary and I would refer in particular to Brown v Riverstone Meat Co Pty Ltd (1985) 60 ALR 595 and Merman Pty Ltd v Cockburn Cement Ltd (1988) 84 ALR 521. Each is far removed in its essential facts from the present.

59 The third instance in which the ANEF representation was made resulted from the publishing of ANEF2050 on CIA’s website. By so doing CIA clearly engaged in conduct in the course of carrying on its business. But again in my view, it provided this information in an activity "which is divorced from any relevant actual or potential trading or commercial relationship or dealing": Concrete Constructions at 604. It was not in trade or commerce.

60 The remaining two instances in which the ANEF representations were made were, first, in a letter to Mr Winnel of Village as part of a chain of (apparently adversarial) communication between the two companies and, secondly, orally by Mr Byron at a residents’ meeting convened by the Jerrabomberra Residents Association. The former of these hardly qualifies as the making of a "public claim". I consider, though, that both should be regarded as communications made in the context of the debate and public manoeuvring about aircraft noise, airport operations and rezoning in which both companies were engaged. As such they can be dealt with conveniently with the remaining three species of conduct challenged, to which I now turn.

(ii) The July 2002 public letter referring to offset approach flight paths and landing aircraft flying over Tralee.

(iii) Charts and overheads shown at a public meeting indicating that certain flights landing at Canberra could join the runway centreline at 2.5 to 4 miles from the airport.

(iv) The response made in the "Queanbeyan Age" the import of which was that the Federal Minister for Transport agreed that complaints from future residents of Tralee would mean a redistribution of flight paths and that there was Federal bi-partisan support that Tralee should not be re-zoned.

61 The representations in question were all made in the context of a planning application having been made to re-zone Tralee – an application which CIA openly and repeatedly opposed. Its opposition was consistent with its own business interests and took the form of community consultation and representation for the purpose of informing and influencing public, political and governmental opinion. By virtue of the provisions of the Airports Act (and especially s 71), CIA had a necessary and ongoing interest in aircraft noise and its incidence. It sought to engage community interest not only in the subject of noise exposure as a matter of public concern but also in its specific opposition to the Tralee development. In both respects it was engaging in what properly should be described as political activity, but especially so in relation to the latter. The re-zoning application highlighted both conflicting private interests and conflicting public interests. Those conflicts could only be resolved by governmental action. In seeking, directly or indirectly, to contrive or influence outcomes by representations made in public debate, or in the processes of informing the public, CIA was engaging in activities of a political, not of a commercial or trading, character. And this was not the less so because its activities were informed by a degree of self-interest. Altruism is often a stranger to political action.

62 It is notable that the impugned representations were not made in circumstances in which it could properly be said that CIA was promoting, directly or indirectly, the services provided by the airport. It was, nonetheless, acting to protect its business. As I earlier indicated, action so taken is not for that reason alone in trade or commerce. It would be surprising if the legislature had intended the contrary to be the case in the Trade Practices Act. Corporations engage directly and indirectly in public and political debate on a myriad of matters that do or might impact actually or prospectively on their own interests. While all such debate will not be beyond the reach of s 52 of the Trade Practices Act: see e.g. Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1; much will be as it will not be directed at consumers (actual or potential), or will not be an incident of an activity which bears a trading or commercial character.

63 What Village is seeking to do in this proceeding is to have imposed on CIA "by a side-wind": cf Concrete Constructions; a form of legislative control in circumstances in which s 52 has no role to play. One may desire conduct in public and political debate to be not misleading or deceptive. Section 52 is not designed to secure that state of affairs. In saying this I express no view on whether or not CIA’s conduct was misleading or deceptive.

64 I find that the conduct impugned in pars 13, 15, 17A and 18 of the Further Amended Statement of Claim was not engaged in in trade or commerce.

THE SECOND PRELIMINARY QUESTIONS: ASA’S "BUSINESS" CONDUCT

65 As I earlier indicated, two preliminary questions arise in Village’s application against AsA. The first is whether AsA’s conduct in endorsing ANEF2050 for technical accuracy was engaged in as part of "the carrying on of a business" for the purposes of s 2A of the Trade Practices Act. The second question is whether that conduct was engaged in "in trade or commerce" for the purposes of s 52 of the Act. For the reasons I give below it is unnecessary to answer the second of these questions.

66 Before turning to Village’s allegations against AsA, it is necessary to refer to the setting in which AsA’s conduct occurred.

(a) Air Services Act 1995

67 AsA is a body corporate established by s 7 of this Act. Of the various functions AsA has prescribed for it in s 8, the following is of note:

"(d) carrying out activities to protect the environment from the effects of, and effects associated with, the operation of:

(i) Commonwealth jurisdiction aircraft, whether in or outside Australia; or

(ii) other aircraft outside Australia."

68 In performing its functions, AsA is to act in a manner that (inter alia) (i) ensures as far as is practicable that the environment is protected from the effects of the operation and use of aircraft; and (ii) is consistent with Australia’s obligations under the Chicago Convention: s 9.

69 AsA is a government business enterprise for the purposes of the Commonwealth Authorities and Companies Act 1997. In preparing its corporate plan the members of AsA’s board must consider (inter alia) any directions given by the Minister under s 16 of the Air Services Act; the expectation of the Commonwealth that AsA will pay a reasonable dividend; and any other commercial considerations the Board think is appropriate: s 13(c), (g) and (h).

70 Section 16 of the Act provides:

"(1) The Minister may give written directions to AA relating to the performance of its functions or the exercise of its powers.

...

(3) AA must comply with a direction given under subsection (1).

(4) If AA satisfies the Minister that AA has suffered financial detriment as a result of complying with a direction given by the Minister under subsection (1), AA is entitled to be reimbursed by the Commonwealth the amount that the Minister determines, in writing, to be the amount of that financial detriment. In this subsection, financial detriment includes:

(a) incurring costs that are greater than would otherwise have been incurred; and

(b) forgoing revenue that would otherwise have been received.

(5) Subsection (4) does not apply to a direction of the Minister requiring AA to perform a function mentioned in paragraph 8(1)(d) ..."

71 I would note in passing that a ministerial direction which falls within sub-section 5 above is central to Village’s case on the first of the two preliminary questions.

72 As part of the "Finance" provisions of the Act, AsA’s capital is repayable to the Commonwealth and a dividend payment procedure (subject to ministerial control) is specified: ss 45 and 46. Section 53 of the Act permits the board of AsA (subject to ministerial approval) to set both charges for services or facilities provided by AsA and penalties for late payment of service charges. However this power does not apply to services or facilities that AsA provides under contract: s 53(6).

(b) The Ministerial Direction

73 By letter of 3 May 1999 Minister Anderson communicated a direction under s 16 of the Air Services Act to the Chair of the board of AsA. Because of the significance attributed to it by Village it is necessary to refer to that letter at some length:

"As you are well aware, aviation environment issues are the subject of significant public debate and concern, particularly, but not solely, over aircraft noise around our major cities.

The Government places great importance on having the appropriate policy settings and measures in place to deal with such environment issues. The Air Services Act 1995 (the Act) explicitly places a responsibility on Airservices to ensure that as far as practicable the environment is protected from the environmental effects of the operation and use of aircraft.

I consider that it is essential that Airservices continues to meet its environmental obligations in the management of air traffic in Australian airspace, particularly in light of the current business restructuring program underway within the organisation.

The forecast improvements in financial performance and the drive to become a more customer focussed organisation under the Business Transformation program is in line with the Government’s reform agenda. However, the Government expects that Business Transformation does not affect Airservices ability to meet its responsibilities under the Act for environment matters; particularly implementing the Government’s policies such as LTOP in Sydney and working with the aviation industry and the community around Australia to develop aircraft operating procedures and noise abatement measures which minimise, while maintaining high safety standards, the adverse environmental impacts of aircraft operations.

Given this, I have reviewed the 1991 Ministerial Direction which set out particular areas of responsibility which Airservices has in relation to aviation environment functions.

In order to clarify the Government’s position, please find attached a Direction issued under subsection 16(1) of the Act specifying the particular environmental activities which Airservices is required to undertake.

This Direction requires Airservices to carry out activities which fall within its responsibilities to protect the environment from the effects of, and the effects associated with, the operation of Commonwealth jurisdiction aircraft, in accordance with paragraph 8(1)(d) of the Act. As specified in subsection 16(5) of the Act, Airservices is not entitled to reimbursement from the Government for any costs it incurs in carrying out such activities. Consistent with cost recovery and polluter pays principles, the costs of providing these services should be recovered from the aviation industry with the cost clearly identified for industry in the Airservices accounts and reports: emphasis added.

The Government will continue to take this view, regardless of the future corporate structure or ownership of Airservices. The entity responsible for performing air traffic services functions in Sydney and other locations across Australia will continue to have the obligation of meeting the expectations of the Commonwealth and the community for managing the effects of aircraft noise and emissions, including levying industry to pay for the costs of managing the environmental effects of aircraft operations.

I would expect Airservices to work very closely with my Department to determine and settle the scope and parameters of the activities it will perform under the Direction."

74 The actual direction of 3 May 1999 provided in part:

"I, JOHN DUNCAN ANDERSON, Minister of State for Transport and Regional Services, acting pursuant to subsection 16(1) of the Air Services Act 1995 (the Act) HEREBY DIRECT Airservices Australia, for the purposes of paragraph 8(1)(d) and subsection 9(2) of the Act, to undertake the activities specified in the Schedule."

75 Though one only of the scheduled activities is presently relevant I will refer, nonetheless, to the totality of them to illustrate their range and diversity. They were:

"(i) Develop, implement and promote high quality environment practices in relation to aircraft operations, provision of navigational aids and rescue and fire fighting activities at Australian airports.

(ii) Provide advice, information and data on environmental aspects of air traffic management including aircraft movements, aircraft noise, aircraft engine emissions and aircraft operations.

(iii) Initiate and participate in discussions, consultations, studies and research with the aviation industry and the community in relation to environmental aspects of air traffic management.

(iv) Undertake monitoring, testing and compliance activities associated with the Air Navigation (Aircraft Noise) Regulations and the Air Navigation (Aircraft Engine Emissions) Regulations.

(v) Develop and implement effective aircraft noise abatement procedures and monitor and report to the Secretary on compliance with those procedures at Australian airports.

(vi) Provide advice and information on aircraft environment related matters to, and participate in, airport consultative committees at those Australian airports that have such a committee.

(vii) Provide, maintain and enhance public response and reporting services through a dedicated Noise Enquiry Service at airports covered by the Airports Act 1996 and other major Australian airports.

(viii) Install, maintain and operate noise and flight path monitoring systems at major Australian airports.

(ix) Monitor, collate and report to the Secretary on aircraft movements during curfew houses at Sydney (Kingsford Smith), Adelaide and Coolangatta airports.

(x) Make available data for the development of aircraft noise exposure analyses and prediction and be responsible for endorsing Australian Noise Exposure Indices/Forecasts for all Australian airports.

(xi) Provide technical and specialist support for Australia’s representation on ICAO’s Committee on Aviation Environment Protection and associated fora.

(xii) Provide advice, information, guidance and assistance at locations outside controlled airspace on environmental aspects of aircraft operations, movements and procedures to the Department, the aviation industry and the community.

(xiii) Carry out the activities in this Schedule in accordance with government policy as determined from time to time."

76 Further to the ministerial letter (above) a senior officer of the Department of Transport and Regional Services and a senior officer of AsA had discussions to clarify "the scope and parameters" of the above activities. Their agreed understanding (which did not seek to restrict or override the Minister’s direction) was reduced to writing and stated in part:

"Make available data for the development of aircraft noise exposure analyses and prediction and be responsible for endorsing ANEF/ANEI for all Australian airports.

Agreed Interpretation
It is understood that this item refers to the provision of data to the Department. Airservices currently sells data and noise modelling services to the private sector and nothing in this item in the Direction is intended to restrict this. The intention is to ensure that the Minister and the Department have continued access to noise modelling data (e.g. INM input files) and that they can request services, such as those currently provided in relation to the Airports Act, on a no-charge basis. The formal endorsement of ANEF/ANEI for technical accuracy, a requirement of Australian Standard AS2021, will continue. However, it is noted that there may be a conflict of interest issue with respect to Airservices both endorsing and producing noise exposure charts." Emphasis added.

77 I should note in passing that it is the evidence of Mr Leigh Kenna, the manager of the Environment Monitoring Section in AsA and the AsA delegate responsible for endorsing ANEFs, that AsA does on occasion prepare ANEFs for applicants and where it does so it charges a fee. Importantly it does not charge a fee for endorsing ANEFs for technical accuracy.

(c) The Relevant AsA Activities

78 AsA describes itself on its website as "a business providing air traffic management, air navigation infrastructure services and aviation rescue and firefighting". Its "Statement of Financial Performance" for the year ended 30 June 2002 in its Annual Report 2001-2002 reveals it derived total revenues from ordinary activities of $511,397.000 of which only $7,000,000 came from Government subsidy. Its net profit after tax from ordinary activities was $24,849.000.

79 Note 2 to the same financial statements indicates in part that:

		2002 $’000	2001 $’000
2	PROFIT FROM ORDINARY ACTIVITIES continued
b	Community Service Activities The community service activities funded by Airservices Australia and charged to operations during the year to meet the specific requirements of the Government, considered by the Board to be non-commercial in nature, include: ...	...	...
	Provision for environmental information (reports, statistics and maps) by: - Environmental Services Branch - Noise and Flight Path Monitoring System ...	1,709 1,760 ...	1,686 1,159 ...
	Total community service activities	19,314	18,373
	Included in the Expenses from Ordinary activities is $19.314m in direct costs for Community Service Activities (2001 $18.373m) funded by Airservices Australia and charged to operations during the year to meet the specific requirements of the Government. If appropriate corporate overheads and profit margins were included, this would increase to $25.809m (2001 $23.277m). The Government contributed a subsidy of $7.000m (2001 $7.000m) towards the costs at general aviation and regional airports where price capping is maintained.

80 Mr Kenna of AsA to whom I referred above gave evidence on the ANEF system; on the historical basis for endorsement of ANEFs leading in 1994 to the process of review and endorsement of ANEFs by (for present purposes) AsA’s predecessor body; and on the development of the "Guidelines for the Production of Noise Contours for Australian Airports" so as to ensure ANEFs were produced in a systematic way. From the 1990’s ANEFs began to be produced by private consultants and the Guidelines were directed at them. AsA was not in a position to check all the data provided by private consultants so it checked ANEFs for "technical accuracy" conforming with the Guidelines’ procedure for producing ANEFs and the correct running of models. Mr Kenna also described the procedure for endorsement for technical accuracy.

81 He gave evidence of the Environmental Monitoring Section of AsA that he headed. Its main responsibilities relate to the operation of AsA noise and flight path monitoring systems (NFPMS) at major airports, the maintaining and checking of which constituted 50 percent of the activity of the section. The reports on aircraft noise and flight paths generated using the data collected are provided (without charge) to the Environmental Committee of each airport monitored. They are also available on AsA’s website without charge. The primary purpose of this data collection is to enable AsA to carry out its statutory functions and to ensure it can undertake the activities it has been directed to undertake in the May 1999 ministerial direction.

82 The tasks undertaken by Mr Kenna’s section are focussed on what he described as "community service activities". He indicated that these extended beyond endorsing ANEFs and operating the NFPMS and included, for example, producing curfew compliance reports, administering the Air Navigation (Aircraft Noise) Regulations 1984, and providing advice to Governmental agencies, the aviation industry and the public.

83 Of all the activities undertaken by the Monitoring Section, the only activity for which AsA seeks to charge a fee is the provision of data to airport owners and/or consultants who require specific data which can only be retrieved from the NFPMS system. The sale of that data returns approximately $70,000 per annum to Airservices, the charges being on an incremental cost recovery basis only. The basis of the charge is to recover the costs for labour input only in extracting data from the NFPMS system and preparing any reports. No attempt is made to recover the costs of the NFPMS system or its maintenance, or any other overheads of the Monitoring Section.

84 In answer to interrogatories, AsA stated that it did not impose any fee or charge in relation to its endorsement of ANEF2050. It did indicate, though, that it does obtain charges, fees or income from airports, airlines and airport users for (amongst other things) flight data provision, noise modelling, noise monitoring and the supply of noise data.

85 Finally I should again note that (i) the ANEF system is the basis of Australian Standard AS2021-2000; and (ii) it is Australian government policy that ANEF contours and the associated land use compatibility advice be used as the land use planning criteria around Australian airports.

(d) Village’s Allegation against AsA

86 The actual conduct of AsA which is said to be misleading or deceptive relates to its endorsement of ANEF2050. By way of underpinning to that claim, Village has pleaded in its Further Amended Statement of Claim that:

"21 The Second Respondent provides endorsements of Australian Noise Exposure Forecasts as part of its trade and commerce and in trade and commerce.

21.A The Second Respondent provides endorsements to Australian Noise Exposure Forecasts as part of its carrying on a business."

In its Defence AsA has denied both of the above.

87 The conduct of AsA that is pleaded to be misleading or deceptive was both its endorsement of ANEF2050 as a valid ANEF in accordance with AS2021-2000 and its claim that that ANEF was a valid and effective ANEF for Canberra Airport.

(e) The Parties’ Contentions

88 Village submits that AsA’s activity of technical endorsement of ANEFs itself involved carrying on a business. In note 2 to AsA’s Financial Statement for 2001-2002 (referred to above), this activity was treated as being part and parcel of the business activities of AsA. It was immaterial, it is said, that no charge was made for the endorsement. The cost of it was absorbed by AsA notwithstanding that under s 16(5) of the Air Services Act it could not obtain reimbursement from the Commonwealth for the cost it so incurred. It is further contended that s 16(5) leaves outside of the reimbursement regime directions such as that given by the minister in May 1999 because the functions directed to be performed were part of AsA’s business and the costs incurred in relation to them were to be recovered from its business operations. This, it is said, is consistent with the terms of the Minister’s letter accompanying the direction which indicated that the cost of providing the services specified in the direction should be recovered from the aviation industry and should be clearly identified in AsA’s accounts.

89 AsA’s submission is that, unless the precise activity of endorsing ANEFs was in the course of carrying on a business, the Trade Practices Act had no application to AsA in relation to that activity. The evidence clearly demonstrates that endorsing ANEFs was conduct which did not have the inherent character of being a trading or commercial activity. It was conduct done in the performance of a governmental and regulatory function to be performed under the Air Services Act. In financial terms it was cross-subsidised as a community service obligation. I would note in passing, but without quotation that, in support of the cross-subsidy submission, reference was made to the second reading speech on the Competition Policy Reform Bill 1995, House of Representatives 30 June 1995, at 2795. While accepting that a business need not be carried on for a profit to be a "business" under the Act: s 4(1) "business"; the total absence of any contract with, or payment by, an airport receiving the endorsement is relevant to the "business" question as also are the nature and purpose of the service itself.

(f) The Trade Practices Act and the Authorities

90 Section 2A of the Act and its parallel provision, s 2B, have been the subjects of considerable recent judicial exegesis. For present purposes I need only refer to the following well-established propositions.

(1) The Act applies to the Commonwealth only "insofar as" the Commonwealth carries on a business either directly or by an authority of the Commonwealth: s 2A. Where particular activities undertaken by the Commonwealth or an authority constitute the carrying on of a business, the ambit of those activities must be examined to see whether the impugned conduct was engaged in as part of, or in the course of, the carrying on of that business: J S McMillan Pty Ltd v The Commonwealth (1997) 77 FCR 337; NT Power Generation v Power and Water Authority [2002] FCAFC 302; (2002) 122 FCR 399. The business in question may relate to only a part, even a small part, of activities of the Commonwealth or the authority which, when considered as a whole, are plainly the provision of government services and not a business: State of New South Wales v R T & Y E Falls Investments Pty Ltd [2003] NSWCA 54; (2003) 57 NSWLR 1 at [130].
(2) The "carrying on of a business" that will bring the Commonwealth under the Act refers to activities undertaken in a commercial enterprise or as a going concern: Corrections Corporation of Australia Pty Ltd v Commonwealth [2000] FCA 1280; (2000) 104 FCR 448 at 451; NT Power Generation, at [85], [88].
(3) While the term "business" ordinarily connotes activities engaged in for the purpose of profit on a continuous and repetitive basis: Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 8; a "business" for the purposes of the Act includes a business not carried on for profit: the Act, s 4. However, this does not mean that all non-profit activities constitute a business or that the existence or absence of a profit-making purpose is not a relevant factor in determining whether there is a business activity: Plimer v Roberts (1997) 80 FCR 303 at 305. Equally, the provision of services for remuneration may constitute the carrying on of a business irrespective of the commercial adequacy of the remuneration: J S McMillan at 355.
(4) While repetition, systems and regularity are indicia of carrying on a business, they are not on their own sufficient to compel a conclusion that such is the case: Sirway Asia Pacific Pty Ltd v Commonwealth of Australia [2002] FCA 1152 at [60]. There must be present some element of commerce or trade such as a private citizen or trader might undertake: R T & Y E Falls Investments at [131].
(5) A business activity is an activity which takes place in a business context and which, of itself, bears a business character: Paramedical Services Pty Ltd v Ambulance Service (NSW) [1999] FCA 548 at [86], [88]; Plimer at 308. Where an activity is engaged in by the Commonwealth or a Commonwealth authority the purpose of the activity will be a relevant consideration: R T & Y E Falls at [129]. An activity is unlikely to be characterised as having a business character, or to take place in a commercial context, where it involves the carrying out of a regulatory or governmental function in the interests of the community or the performance of a statutory duty in respect of which fees are charged: Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579; Paramedical Services at [89]; J S McMillan at 355; Saitta Pty Ltd v Commonwealth [2001] VSC 170; (2001) 162 FLR 35 at 40; R T & Y E Falls at [134].

CONCLUSION

91 Having regard to the purpose and setting of AsA’s endorsement of ANEF’s, the conclusion is inevitable that AsA was not carrying on a business when providing endorsements. By virtue of s 16(3) of the Air Services Act, AsA was under a statutory duty to perform the ANEF endorsement function imposed by the ministerial direction of 3 May 1999. As the ministerial direction itself indicated, that obligation was related to the manner in which AsA carried its environmental protection function imposed by s 8(1)(d) of the Act.

92 If there is little in this to suggest an activity which bears a business character being undertaken in a business context, the possibility of characterising the ANEF endorsement activity as carrying on a business becomes even more remote once it is recognised, as the evidence establishes, that (i) the ANEF system is the basis of the Australian Standard AS2021-2000 ("Acoustics – Aircraft noise intrusion – Building siting and construction"); (ii) it is government policy the ANEF contours and associated land use compatibility advice be used as the land use planning criteria around Australian airports; and (iii) the review and endorsement of ANEFs for airports has been retained as a governmental function performed by AsA (or the Department of Defence for airports which are used principally for military purposes) notwithstanding that the actual production of ANEFs has been privatised.

93 The activity so performed by AsA was distinctively governmental and was partially regulatory in character. It is unsurprising that AsA characterised the activity as being in the nature of a community service activity engaged in to meet a specific requirement of the Government. What cannot be said of that activity is that it is "sufficiently similar to commercial activities that private persons might engage in": R T & Y E Falls Investments at [131].

94 I do not consider that the statement in the letter accompanying the 3 May direction concerning cost recovery alters in any way the character of the activity as I have described it. Under the Air Services Act it was for AsA’s board to set charges for services it provided (subject to ministerial approval). The board chose not to impose charges for a range of, but seemingly (in light of AsA’s answers to Village’s interrogatories noted earlier) not all of, the "services" encompassed by the direction. AsA in consequence cross-subsidised its ANEF endorsement activity. That decision was, in my view, consistent with the character of community service activity that AsA ascribed to endorsing ANEFs. However, whether or not AsA’s decision involved some departure from what the Minister expected of AsA – I make no finding on this, the more so given that the evidence is that the Minister’s department and AsA understood after the direction that the "services" were to continue to be supplied to the Minister and the Department "on a no-charge basis" – I am satisfied that, even if a charge had been imposed for endorsing ANEFs, that would not have transformed the performance of a statutory obligation involving a distinctly governmental function into a trading activity: Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579.

95 Finally, I should indicate that I do not consider that the reference to expenditure on community service activities in Note 2 to AsA’s Financial Statements for 2001-2002 under the heading of "Profit from Ordinary Activities" constituted a form of admission as to the character of those activities. Rather, it was an appropriate recognition in the Statements of the direct costs of those services. In any event, this accounting treatment of the costs throws little light on the actual character of the endorsement activity for the purposes of s 2A of the Trade Practices Act.

96 I find that AsA was not relevantly carrying on a business in endorsing ANEFs. As an authority of the Commonwealth and in consequence of s 2A, AsA is not subject to the provisions of the Trade Practices Act 1974.

97 This conclusion is sufficient to lead to the dismissal of the application against AsA. For this reason I consider it unnecessary to answer the second of the preliminary questions raised in the proceeding against AsA, i.e. whether, for the purposes of s 52 of the Trade Practices Act, the relevant conduct was "in trade or commerce".

ORDERS

98 I will make the following orders:

1. The question:

"whether the conduct of the first respondent complained of in paragraphs 13, 15, 17A and 18 of the further amended statement of claim was in trade or commerce"

be decided "No".

2. The question:

"whether the conduct of the second respondent in endorsing the Australian Noise Exposure Forecast 2050 for the Canberra International Airport (as alleged in paragraph 6 of the further amended statement of claim) was engaged in as part of carrying on of a business by it (as alleged in paragraph 21A of the further amended statement of claim), for the purposes of Section 2A of the Trade Practices Act 1974"

be decided "No".

3. The question:

"whether the conduct of the second respondent complained of in paragraph 21 of the further amended statement of claim was in trade or commerce"

does not need to be answered.

I certify that the preceding ninety-eight (98) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Associate:

Dated: 25 February 2004

Counsel for the Applicant:	C Hodgekiss SC with P Walker
Solicitor for the Applicant:	O’Connor Harris
Counsel for the First Respondent:	L McCallum
Solicitor for the First Respondent:	Mallesons Stephen Jacques
Counsel for the Second Respondent:	I Tonking with D J C Mossop
Solicitor for the Second Respondent:	Minter Ellison
Date of Hearing:	16, 17 and 18 December 2003
Date of Judgment:	25 February 2004