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Federal Court of Australia - Full Court |
Last Updated: 15 February 2008
FEDERAL COURT OF AUSTRALIA
Rio Tinto Limited v The Australian Competition Tribunal [2008] FCAFC 6
TRADE PRACTICES – Pt IIIA
("Access to Services") of Trade Practices Act 1974 (Cth) – railway
line in remote area of Western Australia used to transport ore from inland mine
to coastal port – another
mining company applied to National Competition
Council for declaration of a service by reference to access to and use of the
railway
line – Council recommended to Minister that he declare service on
a point to point (Mindy Mindy to Port Hedland) basis
– Minister
neither declared service nor decided not to do so within the 60 day period
referred to in s 44H(9) of the Act, and so was taken to have decided not to
declare the service – applicant mining company applied to Australian
Competition
Council under s 44K of the Act for review of Minister’s
deemed decision not to declare the service – owner, operator and manager
of railway
line contended Council’s recommendation to Minister invalid
because service identified in its recommendation did not conform
to service for
which application had been made to it, with consequence that the 60 day
period had never begun to run and there
was no deemed decision to refuse –
whether application to Council had been for a point to point service as Council
later recommended,
or an all points service.
Held: (1) while the
Council’s recommendation must be limited by reference to the particular
service applied for, this does not require
a pedantic correspondence between the
terms of the application and the terms of the recommendation; (2) the
application had been
for the declaration of a point to point service with result
that Council’s recommendation was in conformity with the application.
Trade Practices Act 1974 (Cth)
Pt IIIA
Re Services Sydney
Pty Ltd (2006) 227 ALR 140 cited
Re Virgin Blue Airlines Pty Limited
[2005] ACompT 5; (2005) 195 FLR 242
cited
RIO TINTO LIMITED
(ACN 004 458 404) v THE AUSTRALIAN COMPETITION TRIBUNAL, FORTESCUE METALS GROUP
LTD, BHP BILLITON IRON ORE PTY LTD,
BHP BILLITON MINERALS PTY LTD AND THE
NATIONAL COMPETITION COUNCIL
VID 600 OF 2007
FRENCH,
LINDGREN & JACOBSON JJ
14 FEBRUARY 2008
SYDNEY (HEARD IN
MELBOURNE)
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AND:
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DATE OF ORDER:
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WHERE MADE:
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THE COURT ORDERS THAT:
1. The application be dismissed.
2. The applicant pay the second and fifth respondents’ costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the
Federal Court Rules.
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BETWEEN:
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RIO TINTO LIMITED (ACN 004 458 404)
Applicant |
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AND:
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THE AUSTRALIAN COMPETITION TRIBUNAL
First Respondent FORTESCUE METALS GROUP LTD Second Respondent BHP BILLITON IRON ORE PTY LTD Third Respondent BHP BILLITON MINERALS PTY LTD Fourth Respondent THE NATIONAL COMPETITION COUNCIL Fifth Respondent |
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JUDGES:
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FRENCH, LINDGREN & JACOBSON JJ
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DATE:
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14 FEBRUARY 2008
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PLACE:
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SYDNEY (HEARD IN MELBOURNE)
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REASONS FOR JUDGMENT
THE COURT:
Introduction
1 On 11 June 2004 Fortescue Metals Group Ltd (FMG) made an application to the National Competition Council (the Council) under s 44F of the Trade Practices Act 1974 (Cth) (the TPA). It sought a declaration of a service under Pt IIIA of the TPA. It defined the service by reference to railway lines operated and managed by BHP Billiton Iron Ore Pty Ltd (BHP Billiton). The railway lines were jointly owned by several companies, including BHP Billiton Minerals Pty Ltd, trading as joint venturers. The railway lines were the Mt Newman to Port Hedland line and the Mt Goldsworthy to Port Hedland line. Precise terms of the application and its relationship to the provisions of Pt IIIA will be set out below.
2 The Council released an Issues Paper in March 2005 seeking comment on issues arising from FMG’s application. Submissions were received.
3 In November 2005 the Council published a draft recommendation for the declaration of a service relating to the Mt Newman railway line. By that time it had decided that the Mt Goldsworthy line constituted part of a production process and was not a "service" to which Pt IIIA of the TPA applied. The Council sought the views of interested parties on matters raised in its draft recommendation. The publication of a draft recommendation is not required by the TPA. It was an administrative step taken by the Council in aid of a public consultation process.
4 On 23 March 2006 the Council made a final recommendation to the Minister, in this case the Treasurer. The Council recommended that, what it called the "Mt Newman Service", be declared for a period of 20 years. It described the service in subpara 1.2 of its final recommendation thus:
The service to which FMG seeks access is the use of a 295 kilometre segment of the Mt Newman railway line running from a rail siding to be constructed near Mindy Mindy in the Pilbara to Port Hedland (Mt Newman Service). The Mt Newman Service includes the use of bridges, passing loops, train control systems, sidings, maintenance protection systems and other associated infrastructure.
It is not in dispute that the final recommendation related to the use of the railway on a point to point basis, that is, from Mindy Mindy to Port Hedland. It did not contemplate use involving access to the railway at points in between.
5 Sixty days after receiving the recommendation, the Minister had made no decision on it and as a result he was taken, by virtue of s 44H(9) of the TPA, to have decided not to declare the service and to have published that decision not to declare the service. The date of that deemed decision was the 60th day. That was 23 May 2006. On that date the Council’s final recommendation was made public.
6 On 9 June 2006 FMG applied to the Australian Competition Tribunal (the Tribunal) under s 44K of the TPA for review of the Minister’s decision. At a directions hearing on 8 June 2007 the Tribunal declined to conduct a preliminary hearing to determine its jurisdiction to hear the FMG application. On 4 July 2007 Rio Tinto Limited (Rio Tinto) applied to this Court for an order by way of, or in the nature of, prohibition restraining the Tribunal from further considering the FMG application. It did so on the basis that the service recommended for declaration was a point to point service only. That is to say, the recommended service related to access to the Mt Newman railway at Mindy Mindy for transport of ore to Port Hedland and did not contemplate access in between. The recommendation was said to be inconsistent with the FMG application which had contemplated an all points access service. Rio Tinto contended that the Council acted beyond power in recommending a declaration of a point to point service and that there was therefore, in effect, no deemed decision by the minister. On that basis, it was contended the Tribunal had no jurisdiction to entertain the application for review.
7 For the reasons that follow we do not agree with Rio Tinto’s
contention. The application will be dismissed with costs.
Statutory
framework
8 Before considering in more detail the application by FMG and the way in which it was approached by the Council, it is necessary to refer to the key provisions of Pt IIIA of the TPA. Part IIIA was amended by the Trade Practices Amendment (National Access Regime) Act 2006 (Act No 92, 2006). The amendments commenced on 1 October 2006. The relevant circumstances occurred before that date and are governed by the provisions as they were prior to the amendments. Accordingly, the provisions set out below are the pre-amendment provisions.
9 Part IIIA was entitled "Access to Services". It comprised ss 44B to 44ZZQ. There were a number of definitions set out in s 44B. The definition relevant for present purposes is "service" which was defined thus:
"service" means a service provided by means of a facility and includes:
(a) the use of an infrastructure facility such as a road or railway line;
(b) handling or transporting things such as goods or people;
(c) a communications service or similar service;
but does not include:
(d) the supply of goods; or
(e) the use of intellectual property; or
(f) the use of a production process,
except to the extent that it is an integral but subsidiary part of the service.
10 Division 2 of Pt IIIA was entitled "Declared services" and subdiv A was entitled "Recommendation by the Council".
11 Section 44F provided:
(1) The designated Minister or any other person, may make a written application to the Council asking the Council to recommend under section 44G that a particular service be declared.
(2) After receiving the application, the Council:
(a) must tell the provider of the service that the Council has received the application, unless the provider is the applicant; and(b) must recommend to the designated Minister:
(i) that the service be declared; or
(ii) that the service not be declared.
...
(4) In deciding what recommendation to make, the Council must consider whether it would be economical for anyone to develop another facility that could provide part of the service. This subsection does not limit the grounds on which the Council may decide to recommend that the service be declared or not be declared.
(5) The applicant may withdraw the application at any time before the Council makes a recommendation relating to it.
12 Section 44G(2) identified mandatory relevant considerations for the Council in determining whether or not to recommend declarations, and provided:
The Council cannot recommend that a service be declared unless it is satisfied of all of the following matters:
(a) that access (or increased access) to the service would promote competition in at least one market (whether or not in Australia), other than the market for the service;(b) that it would be uneconomical for anyone to develop another facility to provide the service;
(c) that the facility is of national significance, having regard to:
(i) the size of the facility; or
(ii) the importance of the facility to constitutional trade or commerce; or
(iii) the importance of the facility to the national economy;
(d) that access to the service can be provided without undue risk to human health or safety;(e) that access to the service is not already the subject of an effective access regime;
(f) that access (or increased access) to the service would not be contrary to the public interest.
Subsections (1), (3) and (4) are not material for present purposes.
13 Subdivision B was entitled "Declaration by the designated Minister". Section 44H provided, inter alia:
(1) On receiving a declaration recommendation, the designated Minister must either declare the service or decide not to declare it.
(2) In deciding whether to declare the service or not, the designated Minister must consider whether it would be economical for anyone to develop another facility that could provide part of the service. This subsection does not limit the grounds on which the designated Minister may make a decision whether to declare the service or not.
...
(7) The designated Minister must publish the declaration of his or her decision not to declare the service. At the time the designated Minister must give reasons for the decision and a copy of the declaration recommendation to the provider and to the person who applied for the declaration recommendation.
(8) If the designated Minister declares the service, the declaration must specify the expiry date of the declaration.
(9) If the designated Minister does not publish under subsection (7) within 60 days after receiving the declaration recommendation, the designated Minister is taken, at the end of that 60 day period, to have decided not to declare the service and to have published that decision not to declare the service.
14 Section 44K provided for review of a Minister’s declaration of a service or decision not to declare a service. It provides:
(1) If the designated Minister declares a service, the provider may apply in writing to the Tribunal for review of the declaration.
(2) If the designated Minister decides not to declare a service, an application in writing for review of the designated Minister’s decision may be made by the person who applied for the declaration recommendation.
(3) An application for review must be made within 21 days after publication of the designated Minister’s decision.
(4) The review by the Tribunal is a re-consideration of the matter.
(5) For the purpose of the review, the Tribunal has the same powers as the designated Minister.
(6) The member of the Tribunal presiding at the review may require the Council to give information and other assistance and to make reports, as specified by the member for the purposes of the review.
(7) If the designated Minister declared the service, the Tribunal may affirm, vary or set aside the declaration.
(8) If the designated Minister decided not to declare the service, the Tribunal may either:
(a) affirm the designated Minister’s decision; or
(b) set aside the designated Minister’s decision and declare the service in question.
(9) A declaration, or varied declaration, made by the Tribunal is to be taken to be a declaration by the designated Minister for all purposes of this Part (except this section).
15 Section 44Q required the Australian Competition
and Consumer Commission to maintain a public register that included each
declaration,
including a declaration that is no longer in force.
The FMG
application
16 The application by FMG was entitled "RAIL ACCESS DECLARATION APPLICATION". It was sub-titled:
FORTESCUE METALS GROUP LIMITED – APPLICATION UNDER PART IIIA OF THE TRADE PRACTICES ACT 1974 FOR DECLARATION OF THE SERVICE PROVIDED BY PART OF THE MT NEWMAN RAILWAY LINE AND PART OF THE GOLDSWORTHY RAILWAY LINE
It may be noted that the application contemplated by s 44F is a request to the Council to recommend that a particular service be declared. It is not in terms an application for a declaration. However no point was or could be made of that difference.
17 The introductory paragraphs of the application read as follows:
1.1 Fortescue Metals Group Limited wishes to access the service provided by part of the Mt Newman Railway Line and part of the Goldsworthy Railway Line by having the relevant parts of those railways lines Declared as a service under Part IIIA of the Trade Practices Act 1974.
1.2 Accordingly, Fortescue Metals Group Limited hereby makes this application to the National Competition Council to have the relevant parts of the Mt Newman Railway Line and Goldsworthy Railway Line Declared.
18 Paragraph 2 of the application set out a number of definitions. These included:
2.1(6) "Facility" means the facility and associated infrastructure as described in paragraph 5 of this Application;
...
2.1(11) "Mt Newman Railway Line" means the railway line of approximately 425 kilometres in length which is currently used to carry ore from the mines in the Mount Newman area as well as from Yandi, to Port Hedland as described in paragraph 5.1 of this Application;
...
2.1(13) "Service" means the use of, and access to, the Facility described in paragraph 5 of this Application;
19 Under the heading "The Applicant", FMG described itself as an Australian resident public company listed on the Australian Stock Exchange Limited (ASX) with a "major focus in the Australian iron ore industry". It stated:
3.3 FMG has a number of projects in the Pilbara region of Western Australia in which it is expanding its iron ore resource operations. The Company acquired tenements in the Mount Nicholas area of the Pilbara in 2001 and is currently completing a major drilling program to delineate reserves in this area. It has also identified further resources along the Chichester Ranges including its interests at Christmas Creek which the Company estimates will host a resource of over 1 billion tonnes of iron ore. In total the Company holds tenement interests covering in excess of 12,000 square kilometres and estimates the associated resources on these tenements are likely to exceed three billion tonnes.
3.4 FMG is also involved in a 50/50 incorporated joint venture under the name of Pilbara Iron Ore Pty Ltd (ACN 100 410 295) with Consolidated Minerals Limited (ACN 000 727 926). This joint venture is nearing completion of resource identification at Mindy Mindy. FMG is making this application on its own behalf and in its capacity as a joint venture shareholder and operations manager of Pilbara Iron Ore Pty Ltd.
20 Critical to the present application is the description of the service and facility used to provide the service set out in para 5 of the application. The relevant parts of that paragraph are as follows:
5.1 The Service which FMG seeks to have Declared is:
(1) the use of the Facility, being:
(a) that part of the Mt Newman Railway Line which runs from a rail siding that will be constructed near Mindy Mindy in the Pilbara to port facilities at Nelson Point in Port Hedland, and is approximately 295 kilometres long further details of which are set forth and coloured red in the diagram annexed to this Application and marked "Annexure 1" for the purposes of identification; and(b) the part of the Goldsworthy railway line that runs from where it crosses the Mt Newman railway line to port facilities at Finucane Island in Port Hedland, and is approximately 17 kilometres long further details of which are set forth and coloured red in the diagram annexed to this Application and marked "Annexure 2" for the purposes of identification.
(2) access to the Facility’s associated infrastructure, including, but not limited to:
(a) railway track, associated track structures, over or under track structures, supports (including supports for equipment or items associated with the use of the railway);(b) bridges;
(c) passing loops;
(d) train control systems, signalling systems and communication systems;
(e) sidings and refuges to park rolling stock;
(f) maintenance and protection systems; and
(g) roads and other facilities which provide access to the railway line route.
21 The service provider was identified at subpara 6.2:
FMG understands that the Facility is jointly owned by BHP Billiton Minerals Pty Ltd (ACN 008 694 782), Mitsui-Itouchu Iron Pty Ltd (ACN 008 702 761) and CI Minerals Australia Pty Ltd (ACN 009 256 259) trading as joint venturers. FMG further understands that the operator and manager of the joint venture or joint ventures is BHP Billiton Iron Ore Pty Ltd (ACN 008 700 781).
22 Under the heading "The Application" in para 7 of the application the following appeared:
7.1 FMG submits that the Facility which it seeks to have Declared is an infrastructure service of national significance. FMG hereby applies to the Council to have the Service Declared under Part IIIA of the Act. If the Service is Declared, FMG will utilise access to the Service to operate trains and rolling stock to transport iron ore and iron ore products from Mindy Mindy to port facilities at Port Hedland (as referred to in paragraph 5.1 of this Application) in accordance with best practice and in compliance with all relevant safety and other legislative requirements.
...
7.3 FMG requires access to the Service for the following reasons:
(1) to transport its iron ore and iron ore products from Mindy Mindy and various other mine sites to the export facilities at Port Hedland and accordingly, to enable the transport of iron ore from those mine sites for sale and export;
(2) there is currently no rail alternative to transport iron ore from Mindy Mindy to Port Hedland for the type and volume of product planned by FMG;
...
(4) to facilitate FMG’s efforts to exploit other iron ore reserves that might not in their own right, justify the construction of rail infrastructure;
(5) to increase the options available to FMG when determining the optimum method of transporting FMG’s iron ore and iron ore products from Chichesters to Port Hedland; and
(6) to further enable FMG to optimise the utilisation of its own rail infrastructure together with the Provider’s rail infrastructure in a mutually advantageous way. FMG envisages this will effectively result in organisation of the combined assets of FMG and the Provider, to facilitate the most efficient use of the Facility and FMG’s own infrastructure.
23 In subpara 7.4 FMG said it sought access to promote "... its foundation principle that rail infrastructure in the Pilbara region of Western Australia should be more readily available to third parties to encourage the development and expansion of the currently stranded resources to boost and benefit both the local and national economy."
24 The period for which the declaration was sought was 20 years, and in subpara 9.2 FMG said:
This is the period which FMG envisages is of sufficient duration to enable the resources at Mindy Mindy and its other mines, to be mined.
25 In making its competition case in the application, FMG asserted that access to the service would promote competition in a number of markets including (at subpara 12.1):
(2) production, development and exploitation of other minerals and products in the Pilbara region of Western Australia requiring transport services from the source of production to port facilities at Port Hedland;
26 In addressing the economic difficulties facing the development of alternative facilities, FMG said (at subpara 13.2):
Therefore, in order for any party to develop another facility to provide the same service, that person would need to construct an alternative railway line from the Mindy Mindy siding to Port Hedland. This would in effect, duplicate both the existing Mt Newman railway line as well as the associated infrastructure support.
27 In its supplementary submissions to the Council dated 8 July 2004, in relation to markets associated with iron ore production, FMG stated:
6.8 Other mining companies could be developing resources in the Pilbara and in particular could be applying new technologies and new marketing strategies to develop such resources. However they are inhibited from doing so because they are regarded as stranded due to the ability of the Provider to deny access to its railway line.
And under the heading "OTHER MINERAL ORES" it said:
7.1 The absence of the development of appropriate markets is not confined to iron ore related activities upstream from the railway systems. Many other mineral activities ranging from copper, lead, zinc, nickel and molybdenum through to gold are similarly stranded without access to transport. All potentially exploitable deposits of such mineral resources are stranded without access to the Provider’s railway transport infrastructure despite the fact that these products would not compete with the Provider’s iron ore product.
28 Again there was a reference to significant iron ore deposits throughout the Pilbara region and the fact that no other company (other than the existing duopoly) had exploited those resources. FMG attributed this to the absence of suitable transport systems with the result that the deposits were regarded as uneconomic to develop. In submitting that there would be positive competitive impact from a declaration FMG argued that a declaration would open up all the markets upstream from the point at which control was exerted and introduce competition progressively downstream as new entrants competed for the expanding volume of long-term contracts emanating from China (at subpara 15.1).
29 The broad sweep of these submissions is notable. It was submitted that they were inconsistent with an application for a point to point service between Mindy Mindy and Port Hedland.
30 In its response dated 6 May 2005 to the Issues Paper released by the Council on 11 March 2005, FMG said, inter alia:
3.9 Regardless of the outcome of its Declaration Application, Fortescue needs to build a railway from the Christmas Creek area in the Chichester Ranges to a point in close proximity to the Mount Newman railway line. If Fortescue is successful in its efforts to have the Facility declared, it is entirely possible it will not be necessary for Fortescue to build those sections of its proposed railway line that will run in close proximity to the Facility. Instead, Fortescue would seek to use the Facility.
31 FMG further made the point that the development of the Mindy Mindy mine was currently wholly reliant on accessing the Mt Newman railway. If the service were not declared and access were not available, resources at the Mindy Mindy mine would effectively be stranded and FMG could not justify further expenditure in developing it. Even if the Chichester Range to Port Hedland railway were built by FMG in its entirety, it was said not to be commercially viable, based on production alone from the Mindy Mindy mine, to construct a spur from that railway to the Mindy Mindy mine site.
32 There was some correspondence exchanged between the Council and FMG in July 2005 which was the subject of comment at the hearing and it is appropriate to refer to it briefly. On 26 July 2005 the Council wrote to FMG observing that, taken together, FMG’s application, its response to the Issues Paper and recent public statements gave rise to at least two potential scenarios as to FMG’s intentions if the service were declared. The Council identified those scenarios as follows:
a. That FMG proposes to use the Service to rail ore from its Cloud Break and Christmas Creek projects, as well as the Mindy Mindy joint venture, to Port Hedland, thus avoid the cost of constructing that part of FMG’s own railway which duplicates the Facility. If necessary, this may entail some delay in the start-up of the Cloud Break and Christmas Creek projects to allow for negotiation of access terms, appeals to the Australian Competition Tribunal and/or arbitration by the ACCC;
b. That FMG proposes to commence construction of its own railway line in late 2005, and will use that railway to carry iron ore from the Cloud Break and Christmas Creek projects to Port Hedland. In this case, FMG will use the Service only to carry iron ore from Mindy Mindy, and/or to provide haulage services to third parties.
33 The Council indicated that FMG’s intentions would have a significant impact upon its consideration of the likely effects of declaration, although not necessarily upon the outcome of that consideration. The Council sought a statement of FMG’s intentions in that regard and the degree of certainty that should be given to it.
34 FMG responded on 28 July 2005. It informed the Council that it was its current intention in relation to its "Chichester Project" to construct its own railway line. This had been confirmed in numerous public statements by FMG. The exact route and extent of the railway was not finalised but it was expected to run from Port Hedland to a point in the Chichester Ranges, probably running to an area known as Cloud Break initially. Its alignment would probably be more to the east than originally envisaged. A map showing the latest version of a corridor within which the railway would be built was attached.
35 FMG’s intentions were stated in the following paragraph of the letter of 28 July 2005:
The Company’s intentions in relation to its "Mindy Mindy Project", which is the subject of the Declaration Application as lodged with the NCC, are unchanged from those set forth at the time of submission of that application. Namely, it is the Company’s intention to use the Service to move iron ore from Mindy Mindy to Port Hedland.
36 FMG reserved its position to the extent that it said:
However, as with any large resource based company, the Board must consider all of the facts and circumstances existing at any particular time in order to review and consider its strategy and objectives and therefore the Company’s intentions could change. However, there are currently no specific likely events that would trigger a change of strategy.
It also stated that if the service were declared, there was a variety of other potential entrants to the iron ore and resource markets that would be encouraged to bring their projects and developments to fruition.
The Council’s draft recommendation
37 The Council published its draft recommendation in November 2005. It defined the service to which FMG sought access as:
... the use of a 295km segment of the Mt Newman railway line running from a rail siding to be constructed near Mindy Mindy in the Pilbara, to Port Hedland (Mt Newman Service).
It added that the service included the use of the various kinds of associated infrastructure referred to in the application. The Council stated that it had determined in November 2004 that the Mt Goldsworthy line constituted part of a production process within the meaning of s 44B of the TPA such that use of that part of the facility was not a "service" to which Pt IIIA of the TPA applied. It did not proceed further with the application for a declaration of the Goldsworthy service.
38 The Council referred in its draft recommendation to FMG’s contention that the development of Mindy Mindy would require access to the Mt Newman service because the deposit was too small to support the construction of a stand-alone railway (at subpara 4.9). The Council continued:
Given that Mindy Mindy is in close proximity to the Mt Newman railway (see map at Attachment 1 of this report), FMG maintains that the deposit would be economically viable if FMG could use the railway to move Mindy Mindy ore to Port Hedland.
39 The Council made reference at subpara 6.43 of its draft recommendation to its letter of 26 July 2005, that requested that FMG clarify its intentions with respect to construction of the Chichester line. The Council noted at subpara 6.44 that, in response to the letter, FMG had reiterated that the focus of its Part IIIA application was the Mindy Mindy project and that:
... it is the company’s intention to use the Service to move iron ore from Mindy Mindy to Port Hedland.
40 The Council also observed at subpara 12.10 that FMG’s Part IIIA application cast a "wide net" in respect of its reasons for access but:
... the primary focus of the application appeared to be to acquire access to move iron from Mindy Mindy to Port Hedland. FMG has some since reiterated this focus.
The Council’s final recommendation
41 In its final recommendation made on 23 March 2006, the Council stated:
3.2 It is for the Council to interpret the definition and scope of a service that is the subject of an application for declaration under Part IIIA of the TPA. In delineating the Mt Newman Service, the Council has taken into account FMG’s Application, the purpose for which FMG intends to use access to the service and the relevant service which is bought of sold or for which there are likely to be potential transactions.
3.3 FMG has stated its intention to use the Mt Newman Service to operate trains and rolling stock to transport iron ore and iron ore products from its proposed siding near Mindy Mindy to port facilities at Port Hedland. (footnotes omitted)
42 The Council went on to say:
3.7 In the Council’s view the Mt Newman Service is appropriately defined to encompass the use of the Mt Newman line to operate a transport service between a geographic area in the vicinity of Mindy Mindy to Port Hedland. The Council has evaluated the Application under s44G of the TPA on this basis.
3.8 The Council considers the precise points of connection to the Mt Newman line near Mindy Mindy and Port Hedland are appropriately regarded as conditions of access to be negotiated between the parties or, if necessary, the subject of arbitration under s44V of the TPA.
3.9 The Council notes that while some flexibility as to connection points is in the interests of all parties, such connection points must relate to the service that may be declared. For the avoidance of doubt, the Council notes that a connection that sought to access the Mt Newman line to provide transport services from FMG’s Chichester Ranges deposits would not be consistent with the service considered in this recommendation.
3.10 The Council has decided not to include in the definition of the Mt Newman Service specific interconnection points on the Mt Newman line, that is, the point at which FMG’s proposed siding connects to the Mt Newman line at Mindy Mindy, because if the Mt Newman Service is declared, an access seeker will still have to negotiate with BHPBIO to establish the exact location at which it can connect to the Mt Newman line to access the Mt Newman Service.
43 Importantly, the Council rejected a submission made by BHP in December 2005 that, in assessing the quantity of FMG’s demand, account should also be taken of the possible movement of ore from the Chichester Ranges. The Council also rejected BHP’s submission that, by including the movement of ore from Chichester, FMG’s demand for the Mt Newman services ranged from 5 mtpa to 60 mpta; see subparas 6.69 – 6.70.
44 The Council went on to say at subpara 6.71:
Accordingly, the Council considers that FMG’s demand for the Mt Newman Service is for the transport of approximately 5 mtpa of iron ore sourced from FMG’s Mindy Mindy mine.
45 The Council’s final recommendation also included findings in respect of the likely extent of demand from junior explorers. These findings were not included in the draft recommendation. The Council noted at subpara 6.74 that:
... in order to gain access, junior explorers would also need to develop spur lines (or a shared spur line) that connect to the Mt Newman line around Mindy Mindy. This requirement is likely to limit potential demand.
46 The Council’s final recommendation included the observation that appeared in the draft at subpara 12.10 which we have set out at [40] above. It was repeated at subpara 12.10 of the final recommendation.
47 At subpara 12.14 of the final recommendation, the Council accepted the submissions from BHP Billiton and Rio Tinto that Part IIIA could not provide an outcome that would require BHP to "loop" its railway with the proposed FMG Chichester line. The Council continued:
However, as noted, the primary purpose of the Application appears to be the movement of iron ore from Mindy Mindy to Port Hedland.
The present application by Rio Tinto
48 As noted at [6], Rio Tinto seeks an order by way of, or in the nature of, prohibition restraining the Tribunal from further considering FMG’s application for review of the Minister’s (deemed) decision not to declare the service of 23 May 2006. Rio Tinto’s application was supported by BHP Billiton and by the fourth respondent, BHP Billiton Minerals Pty Ltd.
49 The Tribunal filed a submitting appearance.
50 According to Rio Tinto’s application by which the proceeding was commenced, Rio Tinto relied on the grounds stated in the accompanying affidavit of Craig William Owen Phillips sworn on 4 July 2007. Mr Phillips is a member of Allens Arthur Robinson, Rio Tinto’s solicitors.
51 Mr Phillips’s affidavit shows that Rio Tinto’s submission before the Tribunal was that the Tribunal lacked power to review the Minister’s decision because FMG had sought the declaration of "an all points service that would permit access at any point between Mindy Mindy, and Port Hedland" whereas the Council’s final recommendation had recommended "a point to point service permitting access only in the vicinity of Mindy Mindy and Port Hedland".
52 Mr Phillips’s affidavit made it clear that Rio Tinto’s case was that in order to be valid, a recommendation by the Council under s 44F must conform to the application that had been made to it, and, in particular, that the service the subject of the recommendation must conform to the service as identified in the application.
53 Rio Tinto claimed that the Council’s recommendation was invalid and that s 44H was not enlivened to oblige the Minister to declare the service or to decide not to declare it. It followed, according to Rio Tinto, that the 60 day period referred to in s 44H(9) had never begun to run, and that upon expiry of the 60 day period, the Minister was not taken to have decided not to declare the service and to have published that decision.
54 At a directions hearing before the Tribunal, Rio Tinto asked that a day be set aside for the hearing and determination of the questions of power and jurisdiction, but Goldberg P declined Rio Tinto’s request and made directions for the progressing of FMG’s application towards a hearing.
55 As noted earlier, Rio Tinto lodged the application by which this
proceeding was commenced on 4 July 2007.
Discussion
56 The essential issue which arises is whether the description of the "particular service" in FMG’s application to the Council under s 44F(1) was materially altered in the Council’s final recommendation. Rio Tinto contends that FMG’s application identified the service as an all points service between Mindy Mindy and Port Hedland whereas the Council recommended a point to point service.
57 In Re Services Sydney Pty Ltd (2006) 227 ALR 140 at [21], the Tribunal accepted the principle that the Council is limited to dealing with the application made to it and that a recommendation to declare a service must be limited to the particular service identified in the application.
58 It is for the Council, the designated Minister and the Tribunal, on review, to interpret the definition of the service. However, it is not for the Council, or the designated Minister, or the Tribunal, to redefine or expand the scope of the "particular service" which is the subject of the application to the Council; Re Virgin Blue Airlines Pty Limited [2005] ACompT 5; (2005) 195 FLR 242 at [112].
59 This is not to say that there must be a slavish attachment to the words of the application. A "literal or pedantic adherence" to the description of the service is not required, provided that the substance and essential nature of the service is not altered; Re Services Sydney Pty Ltd at [21], [23]; Re Virgin Blue at [113].
60 The policy which underlies this approach is readily apparent. The declaration process is concerned with the public interest in the promotion of competition. Members of the public must be given an opportunity to make submissions to the Council upon the basis of the particular service sought to be declared. If the Council were to make a recommendation to the designated Minister in respect of a service different in substance from that which is applied for, then the applicant, the provider of the service and interested third parties will be denied the opportunity to make relevant submissions to the Council.
61 It seems to us to be clear that the essential nature of the service described in subpara 5.1 of FMG’s application (see the relevant parts at [20] above) is a point to point service. There is nothing in the description of the service which would permit access at any point between Mindy Mindy and either Nelson Point or Finucane Island in Port Hedland.
62 This approach is supported by the statement of the purpose for which FMG requires access to the service as set out at subpara 7.3 of the application. In subpara 7.3(1), which we have set out at [22], FMG stated that it requires access to the service to transport iron ore products from Mindy Mindy "and various other mine sites" to the export facilities at Port Hedland.
63 A map of the region, which was in evidence before us, shows that the references to the other mine sites was to sites within the vicinity of Mindy Mindy from which ore could, potentially, be transported using the service.
64 It is true that in subpara 7.3(5) of its application FMG stated that one of the reasons for which FMG requires access is to increase the options available to it when determining the optimum method of transporting its iron ore from Chichester to Port Hedland. However, this does not support the contention that FMG’s application was for an all points service. Rather, it was a reference to commercial arrangements that FMG wished to make to loop the Mt Newman railway with FMG’s Chichester line.
65 This is borne out by FMG’s announcement to the ASX dated 15 June 2004. It is also sufficiently clear from the terms of subpara 7.5(6) of FMG’s application.
66 That FMG’s application for a declaration was confined specifically to the transfer of ore from Mindy Mindy was recognised by Rio Tinto and BHP Billiton in their submissions to the Council dated 6 May 2005 and 3 June 2005. Both of them said so in plain terms. BHP Billiton’s submission was:
The application in this matter makes it very clear that the service is proposed to be used by FMG only for the transportation of iron ore from Mindy Mindy.
67 Furthermore, the letter from the Council to FMG dated 26 July 2005 and FMG’s reply of 28 July 2005, resolved any perceived ambiguity in the service definition. We have set out the correspondence at [32] – [35] above.
68 This correspondence was part of the declaration process. FMG’s letter of 28 July 2005 was apparently published on the Council’s website, and the relevant portions were quoted at subparas 6.43 and 6.44 of the Council’s draft recommendation. The Council stated at subpara 6.44 that FMG reiterated in the letter that the focus of its application was the Mindy Mindy project.
69 In our view it is permissible to refer to this correspondence in addressing the question of whether the service considered by the Council was in conformity with the substance of the service described in FMG’s application.
Conclusion and Orders
70 It follows in our view that the application must be dismissed. We
propose to order that Rio Tinto pay the costs of the application
of FMG and the
Council. There will be no order as to the costs of the BHP Billiton parties
which supported the application made
by Rio Tinto.
Associate:
Dated: 14
February 2008
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Solicitor for the Applicant:
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Counsel for the Second Respondent:
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Solicitor for the Second Respondent:
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Counsel for the Third and
Fourth Respondents: |
Mr AC Archibald QC and Mr P Crutchfield
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Solicitor for the Third and
Fourth Respondents: |
Blake Dawson Waldron
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Counsel for the Fifth Respondent:
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Mr CM Scerri QC and Mr IB Stewart
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Solicitor for the Fifth Respondent:
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Clayton Utz
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Date of Hearing:
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Date of Judgment:
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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/6.html