New High Court Appointments and competition law ?>

New High Court Appointments and competition law

A competition lawyer’s guide to the new High Court appointments

The Prime Minister today announced the appointment of the Honourable Justice Susan Mary Kiefel AC to become the next Chief Justice of the High Court of Australia, and the first female Chief Justice, on 30 January 2017. Justice Kiefel will replace the Honourable Justice Robert French AC (Chief Justice since 2008) following his retirement.

The Prime Minister also announced the appointment of a new High Court judge, the Honourable Justice James Joshua Edelman, who will be sworn in on 30 January 2017.

kiefelJustice Kiefel

Justice Kiefel has been a Judge of the High Court since 2007 (making her the longest serving of the current High Court Justices). Prior to her appointment to the High Court she was a judge of the Federal Court since 1994 and served as a part-time Commissioner of the Australian Law Reform Commission (2003-2007). Prior to that her Honour was a judge of the Supreme Court of Queensland (1993-1994) and was appointed Queen’s Counsel in 1987.  Her Honour holds a Master of Laws from the University of Cambridge.

Her Honour’s appointment as first female High Court Chief Justice marks the latest in a series of ‘firsts’: her Honour was also the first woman in Queensland to take silk (1987) and the first woman appointed a Judge of the Supreme Court of Queensland (1993).

Competition law cases

There have not been too many competition law cases in the High Court since Justice Kiefel’s appointment in 2007; her Honour’s appointment post-dated the string of misuse of market power cases (Melway (2001); Boral (2003); Rural Press (2003); NT Power (2004)), the Daniels case on legal professional privilege, the News Ltd and Visy cases in 2003 and the more recent derivative Crown Immunity issue in Baxter.

However, there have been a couple of notable cases, with one judgment pending and one yet to be heard and likely to be presided over by Chief Justice Kiefel. Decided cases include the CFMEU and the Pilbara cases:

Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal [2012] HCA 36

The majority of the High Court, which included Justice Kiefel, referred this access issue back to the Tribunal; in so doing the majority of the High Court endorsed the Full Federal Court’s ‘privately profitable’ test (ie if any person would find it profitable to establish another railway line to provide the relevant service, the access regime would not apply), which had been specifically rejected by the Tribunal, which preferred a broader ‘natural monopoly’ test for access.

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 (9 December 2015)

This decision followed a federal court decision which effectively ruled joint submissions by parties in relation to pecuniary parties was not permitted. Although not a competition case, the ramification of the decision extended to competition law; in particular, the practice of the ACCC submitting joint penalties with parties admitting contravention.

In their joint judgment French CJ, Kiefel, Bell, Nettle and Gordon JJ concluded that ‘a court is not precluded from receiving and, if appropriate, accepting an agreed or other civil penalty submission.’ (para 1). This has restored the ability to make joint submissions; something that that ACCC has taken advantage of recently in its joint submissions on penalties in relation to its action against ANZ and Macquarie bank for attempted cartel conduct.

In addition, there are two cases for which special leave has been granted.

Special leave: ACCC v Flight Centre Travel Group Limited [2016] HCATrans 167

In March this year special leave was granted in the Flight Centre Case by Justices Kiefel and Gageler. The matter was heard before the Court, including Justice Kiefel, in July.  Judgment has been reserved. This involves consideration of relevant market; in particular consideration of whether airlines and travel agents compete in a market for booking and distribution services.

Special leave: Air New Zealand v ACCC; PT Garuda Indonesia Ltd v ACCC [2016] HCATrans 245

On 14 October the High Court (Keane and Gordon JJ) granted Air New Zealand and PT Garuda Indonesia Ltd special leave to appeal the decision in ACCC v P T Garuda Indonesia Ltd [2016] FCAFC 42. The central issue relates to the meaning of market in Australia (s 4E). Both matters will be heard together. The matter is not yet listed for hearing, with submissions and replies due later this year. It is likely to be the first competition law matter heard with Justice Kiefel sitting as Chief Justice.

Federal Court

Justice Kiefel also had some experience with competition law during her time on the Federal Court bench.  An early competition law case which has had an enduring legacy in the context of penalties, was the NW Frozen foods case (1996).  This was an appeal from a trial decision in which the Court had not agreed with submitted penalties, instead imposing a higher penalty.  Justice Kiefel, together with justices Burchett and Carr, allowed an appeal, noting the importance of encouraging settlements and not departing from a figure agreed unless it is inappropriate.

In a joint opinion with Burchett J, her Honour noted:

Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount.

… A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case.

… The question is … simply whether, in the performance of the Court’s duty under section 76, this particular penalty, proposed with the consent of the corporation involved and of the Commission, is one that the Court should determine to be appropriate. In our opinion, it is appropriate.’

Other competition cases while sitting on the Federal Court include:

Justice Edelman

highcourt3Justice Edelman has an impressive academic and judicial record, including qualifications in economics and commerce. His Honour has been a judge of the Federal Court of Australia (Brisbane registry) since 2015 and, prior to that was a judge of the Supreme Court of Western Australia from 2011-2015. Prior to that he spent time in the UK as a Professor of the Law of Obligations at the University of Oxford and has been called to the Western Australian Bar and the Bar of England and Wales.

His Honour holds the degrees of Bachelor of Economics (UWA-1995), Bachelor of Laws (First Class Honours) (UWA-1996) (recipient of Frank Parson’s prize for most outstanding graduate of 1996), and Bachelor of Commerce (Murdoch-1997). He also holds a Doctor of Philosophy in Law from the University of Oxford, having been chosen as the Rhodes Scholar for Western Australia in 1998.

Competition cases

Justice Edelman’s most recent experience with competition law litigation involved the ACCC v Air NZ/PT Garuda case, for which special leave to appeal to the High Court was granted in October.  This case alleged price fixing between airlines in relation to surcharges and fees for the carriage of air cargo.  The key issue revolving around market definition; in particular, whether there was a relevant market ‘in Australia’.  His Honour, together with Justice Dowsett, allowed the ACCC’s appeal, finding that there was a market for air cargo services between Hong Kong an Australia and that this was a market ‘in Australia’.  From the joint judgment (Justice Yates dissented):

[para 150] ‘In considering whether an identified market is ‘in Australia’ for the purposes of s 4E, one must understand the nature of the concept which one seeks to locate. Although the issue of whether the market is in Australia is intimately connected to the identification of the market, as we have said it is not any single dimension of the market that must be considered in determining whether it is ‘in Australia’ but the market itself. Unless the overall dimensions of the market (and perhaps the relevant content of the market) are known, it may be difficult to determine whether it is in Australia.’

[para 151] ‘Our point, in short, is that one addresses the characterisation question by reference to a ‘market’ not by reference only to some part of the market identification exercise. Market identification is part of an economic analysis. The characterisation question posed by s 4E serves quite a different purpose. It limits the extent to which Parliament has chosen to exercise its legislative power in relation to a market.’

..

[para 155] ‘The text of s 4E provides that, “unless the contrary intention appears, market means a market in Australia”. The preposition “in” may have a wide variety of meanings. …’

[para 156] ‘… The Trade Practices Act should be construed so as to facilitate achievement of its stated objective. It is difficult to see how a narrower interpretation of s 4E would assist in such achievement. The better approach is, in effect, to “visualise” the metaphorical market, having regard to all of its dimensions and its content, and then to consider whether it is within Australia, in the sense that at least part (perhaps a substantial or significant part) of it must be in that “location”.’

[para 157] As part of the characterisation exercise, we therefore accept the Commission’s submission that the test for the market in Australia cannot focus exclusively upon matters such as the presence of the supplier at the origin of the service, and that among other factors it is necessary to identify where suppliers must operate in order to satisfy the relevant demand for the product (here, a suite of services).

[para 158] ‘However we reject the Commission’s submission that the sphere of operation of a service is conclusive of the geographic dimension of the market. In other words, we reject the Commission’s submission that the geographic dimension of the market, in this case, includes Australia simply because part of the suite of services, even an important part, is provided in Australia. There need not be “one to one correspondence” of the product dimension and geographic dimension of the market, a concept rightly rejected by Professor Gilbert.’

[para 159] ‘The fallacy of assimilating the product description with the geographic dimension of the market was also exposed by the Court of First Instance (third chamber) in Atlantic Container Line AB v Commission (TAA). Such assimilation is also inconsistent with the approach taken by French and Spender JJ in Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd. The geographic dimension of the market in Taprobane Tours was Australia. It was not Bali, Fiji, Tahiti, New Caledonia, Hawaii, Penang, the Philippines, the Solomon Islands, the Barrier Reef islands, Guam, and Mauritius. The submission is not supported by any Australian authority. And it is similar to the submission described as a “fallacy” by the Court of First Instance in the European Court of Justice.

[para 160] ‘The central question posed by s 4E, read with ss 45 and 45A, is whether the Hong Kong to Australian port markets for the suite of air cargo services (and involving the participants to which we have referred) were markets “in Australia”. We identify seven overlapping reasons for concluding that the identified markets for the suite of air cargo services between Hong Kong and Australian ports should be characterised as being “in Australia”. … as we have explained, the proper construction of s 4E involves (i) identifying the relevant market including each of its dimensions; and (ii) characterising whether that market is in Australia.’

[Their Honours then set out the overlapping reasons and conclude]:

[para 160] ‘… the markets for the suite of air cargo services from Hong Kong to Australian ports, involving airlines, freight forwarders, exporters and (at least) including some large shippers, were markets “in Australia”.’

Non-judicial work

His Honour’s non-judicial work has been largely in the area of restitution and unjust enrichment as well as more broadly in the law of obligations. In a speech welcoming his Honour to the Supreme Court of Western Australia, Chief Justice Martin commented:

‘Despite your teaching and professional obligations, your record of publications has been prodigious and includes the writing and editing of six books on topics which range from damages to unjust enrichment and restitution, equity and tort. You have also published more than 80 articles, notes and reviews on topics spanning a wide range of legal issues … your research interests include unjust enrichment and restitution, equity and trusts, contract, torts, Roman law, legal history and criminal law.’

See also Ceremonial Sitting of the Full Court For the Swearing In and Welcome of the Honourable Justice Edelman (20 April 2015)

His Honour’s publications include:

  • Unjust Enrichment in Australia (with Bant) (OUP, 2006)
  • Edelman, J.J., Dyer, E. 2015, ‘A Defence of Duress in the Law of Torts? in Defences in Tort’ (with Dyer in Defences in Tort, Hart Publishing Ltd, 2015)
  • ‘The Role of Status in the Law of Obligations in Philosophical Foundations of Fiduciary Law’ (in Philosophical Foundations of Fiduciary Law, OUP, 2014)
  • ‘Contemporary problems in the law of contract’ (2015) 40(3) Australian Bar Review) 174-183 (with Goudkamp and Degeling)
  • ‘Two conceptions of equitable assignment’ (2015) 131 Law Quarterly Review 228-250 (with Elliott)
  • ‘Unnecessary causation’ (2015) 89(1) Australian Law Journal 20-30
  • ‘Property rights to our bodies and their products’ (2015) 39(2) University of Western Australia Law Review 47-70
  • ‘Fundamental errors in Donoghue v Stevenson’ (2014) 39 Australian Bar Review 160-173
  • ‘Loss of a Chance’ (2013) 21(1) Torts Law Journal 1-15

For a dabble in competition law (in the context of remedies) his Honour (with Odudu) penned ‘Compensatory Damages for Breach of Article 81’ (2002) 27(3) European Law Review 327-340. The article concludes:

Restitution is a purely restoratory response effecting corrective justice by reversing a transaction and restoring both parties to the position prior to the transaction and simply flows from the recognition that a transfer should be reversed. This remedy seems appropriate for cases when conduct is not intended and does not normally have the effect of restricting competition, and particularly in cases of transient breach, since we would not wish to deter such conduct but require a remedy for conduct that nevertheless restricts competition.

Compensatory damages are a more extreme remedy. …  Where one party intends to restrict competition, or uses practices that normally have this effect, then the co-contractor not bearing significant responsibility should have the remedy of compensatory damages available. This allows the co-contractor to protect his Article 81 rights and provides an incentive for him to enforce these rights since consumers are the greatest beneficiaries of enforcement.

His Honour has also delivered numerous speeches; many of the most recent can be found here:  (including ‘Hadley v Baxendale’ (Paper presented at University of Cambridge, Obligations VIII, Revolutions in Private Law, 9-22 July 2016)

 

* High Court images sourced from High Court of Australia website and reproduced according to copyright notice.

 

 

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