Contract - construction - meaning of "new entrant into the domestic aviation industry"

Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564

Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd (1921) 2 AC 438

Oil Basins Limited v The Commonwealth of Australia [1993] HCA 60; (1993) 178 CLR 643

Counsel for the Applicant: Mr I. Sutherland QC

Ms F. McLeod

Solicitors for the Applicant: Oakley Thompson and Co.

Counsel for first and second

Respondents: Dr P. Buchanan QC

Mr P. Booth

Solicitors for first and second

Respondents: Middletons

Moore and Bevins

Counsel for third Respondents: Mr C. Maxwell

Solicitors for third Respondents: Mallesons Stephen Jaques

The Court makes the following Orders and Declaration:

1. Orders that the questions referred to the Court for

decision by order of the Court made on 15 September 1996 be

answered as follows:-

(a) Question 1(a)

Does the applicant have sufficient standing to seek declaratory

relief in terms of the declaration referred to in paragraph 2A of

the further amended application ?

Answer: Yes

(b) Question 1(b)

If the Court determines that the applicant has sufficient

standing to seek declaratory relief in the terms of the

declaration referred to in its further amended application, was

the applicant, in making each of the requests referred to in

paragraphs 20 to 22 (inclusive) of the amended statement of claim

herein, a "new entrant to the domestic aviation industry" within

the meaning of that expression as used in the definition of "third

party carrier" in each of the Head Leases referred to in

paragraphs 8 and 10 of the amended statement of claim ?"

Answer: Yes

2. Declares, as against all respondents, that the Applicant,

in making each of the requests referred to in paragraphs 20-22

(inclusive) of the Amended Statement of Claim herein was, a 'new

entrant to the domestic aviation industry' within the meaning of

that expression as used in the definition of 'third party carrier'

in each of the Head Leases referred to in paragraphs 8 and 10 of

the Amended Statement of Claim.

3. Orders that the question of costs be reserved.

NORTHROP J Determination of questions to be tried as separate questions pursuant to O 29, r 2 of the Federal Court Rules and pursuant to orders made by Drummond J on 15 September 1995.

2. These proceedings were commenced by the applicant ("Aussie Airlines") on 26 June 1995. The first two respondents, Australian Airlines and Qantas Airlines Limited, now carry on the business of Qantas Airlines. Although the questions to be determined involve the construction and application of clauses in a lease entered into on 31 December 1987 between the Commonwealth of Australia, as lessor, and Australian National Airlines Commission, as lessee, in these reasons it will be convenient to refer to these two respondents as "Qantas". In these reasons this lease will be referred to as the "Melbourne Head Lease" or the "Head Lease". The other respondent, Federal Airports Corporation, is a statutory corporation created under the Federal Airports Corporation Act 1986. It is now the lessor under the Head Lease and in these reasons will be called "FAC".

3. By its application as amended pursuant to leave granted by Drummond J on 15 September 1995, Aussie Airlines is seeking a number of orders including the following:-

"2A. A declaration against all respondents that the

Applicant, in making each of the requests referred to in

paragraphs 20-22 (inclusive) of the Amended Statement of Claim

herein was, a 'new entrant to the domestic aviation industry'

within the meaning of that expression as used in the definition

of 'third party carrier' in each of the Head Leases referred to

in paragraphs 8 and 10 of the Amended Statement of Claim."

4. It is not necessary to refer to the other orders sought by Aussie Airlines.

5. One of the orders made by Drummond J on 15 September 1995 was:-

"1. Pursuant to order 29, rule 2 of the Federal Court Rules the

Court shall decide separately from all other questions raised by

the pleadings filed in the proceeding herein the following

questions:

(a) Does the applicant have sufficient standing to seek

declaratory relief in terms of the declaration referred to in

paragraph 2A of the further amended application ?

(b) If the Court determines that the applicant has sufficient

standing to seek declaratory relief in the terms of the

declaration referred to in its further amended application, was

the applicant, in making each of the requests referred to in

paragraphs 20 to 22 (inclusive) of the amended statement of claim

herein, a "new entrant to the domestic aviation industry" within

the meaning of that expression as used in the definition of "third

party carrier" in each of the Head Leases referred to in

paragraphs 8 and 10 of the amended statement of claim ?"

6. It should be noted that I have varied the form of order 1(a) to bring it into line with the application as amended by the leave given by his Honour on 15 September 1995.

7. Paragraphs 8 and 10 of the amended statement of claim as referred to in question 1(b) relate to and identify five leases all in similar form relating to Melbourne Airport, Sydney Airport, Adelaide Airport, Perth Airport and Coolangatta Airport. With the exception of the names of the airports and expressions related thereto, each of these five leases is in similar form. Each was entered into between the same parties as the Melbourne Head Lease, each was made on or about 31 December 1987 and, for present purposes, each contains identical clauses. In the amended statement of claim the leases are collectively referred to as "the Head Leases". The Head Leases are admitted by the respondents. For the purpose of deciding questions 1(a) and (b), reference will be made to the Melbourne Head Lease, the parties accepting that, for present purposes, the relevant clauses of the other Head Leases are identical to those contained in the Melbourne Head Lease. In these reasons reference will be made to the Melbourne Head Lease, often by the name "Head Lease" on the understanding that similar provisions are contained in the other head leases.

8. Paragraphs 20 to 22 of the amended Statement of Claim as referred to in question 1(b) relate to letters of request sent by Aussie Airlines to Qantas seeking facilities to be used at each of the five airports. Paragraph 20 of the amended statement of claim is set out:-

"20. On or about 21 February, 1995 in reliance upon the terms

of the Head Leases and induced thereby, Aussie Air Requested

Australian and/or Qantas to enter into a sub-lease with Aussie

Air for Third Party Carrier Facilities at or in the Melbourne

Terminal for the boarding and discharge of passenger aircraft

such facilities to be of a type normally utilised by Australian

and/or Qantas for its own operations at that terminal."

Particulars are given to paragraph 20.

9. Paragraphs 21 and 22 are in a similar form to paragraph 20 but with respect to the airports at Sydney, Perth, Adelaide and Coolangatta. By their defence Qantas admit receipt of the letters but otherwise denies the allegations contained in paragraphs 21 and 22.

10. The letter dated 21 February 1995 referred to in paragraph 20 of the amended statement of claim is very long. It includes details of what was sought, details which for present purposes are not relevant. It includes references to past events which have no relevance for present purposes. The parts of the letter relevant to the determination of the questions before the Court are set out. The letter is from Aussie Airlines and is signed by C Bryan Grey as Managing Director/Chief Executive. The letter is directed to James Strong, the Chief Executive Officer, Qantas. Parts of the letter are set out:-

"In accordance with Clause 5(e)(i) of the said contracts, in

respect of the Third Party Carrier Facilities at Adelaide,

Coolangatta and Perth we require these facilities to permit the

handling of one passenger aircraft with its associated freight

handling capabilities at any time and, in respect of Melbourne

and Sydney, as provided under the contract, we require facilities

to permit the handling of two passenger aircraft with their

associated freight handling capabilities at any time.

As detailed under the terms of the contract entered into with

the Commonwealth of Australia, whereby the Commonwealth provided

all available expansion land to the incumbents, expended hundreds

of millions of dollars on this land, in your sole interest,

granting significant extraordinary long term benefits to your

subsidiary, we are aware that under the terms of the contract you

are to provide these facilities at reasonable lease rates and

standards, equivalent to those facilities utilised for your own

purposes.

.....

As required under Clause 5(b)(ii)(bb) the necessary

application for the issue of an Air Operator's Certificate has

been lodged with the Civil Aviation Authority and will be issued

prior to the required utilisation of the Third Party Carrier

Facilities. Appropriate State licence whilst not relevant to this

application has been initiated.

As allowed under Clause 5(e)(ii) we require that the lease,

inclusive of renewal options, have an expiry date of 30 October

We will propose, that should alternative suitable facilities

become available after our occupation date, and the expiry date

of 30 October 2000, and we elect to utilise such facilities prior

to the above expiry date we will be permitted to surrender the

lease upon the giving of three months notice of intention to

quit, without penalty.

In accordance with the decision of the Commonwealth to vest

the administration of the subject Contract with the Federal

Airports Corporation, we have today forwarded a copy of this

demand for the provision of the facilities to the FAC and

requested their cooperation in ensuring the negotiation of the

Third Party Carrier Facilities within the terms, spirit and

intent of the Contract.

Your early advice as to the dates when negotiations can

commence would be appreciated."

11. At this stage it is sufficient to say that Qantas took the view that Aussie Airlines was not a "new entrant to the domestic aviation industry" within the meaning of that expression as used in the definition of "third party carrier" in the Head Lease.

12. Qantas sought particulars from Aussie Airlines to establish the fact that it was not a new entrant to the domestic aviation industry. Aussie Airlines refused to give those particulars. By its defence FAC makes it clear that it considers Aussie Airlines should be treated as a new entrant to the domestic aviation industry.

13. For many years before the end of October 1990 the Parliament had adopted and applied what was known as the two airline policy under which the main domestic interstate trunk routes could be operated by what are now known as Ansett Airlines ("Ansett") and Qantas. By a press release dated 7 October 1987, the then Minister for Transport and Communications announced that the two airline policy would end in October 1990. As part of the deregulation of the domestic aviation industry, Ansett and Qantas were to be granted long leases to enable each of them to develop terminal facilities essential for the operation of their services. The leases were to contain provisions compelling Ansett and Qantas to provide sub-leases to new entrants to the domestic aviation industry to enable the new entrants to conduct their business. The Head Lease is typical of the long leases so granted.

14. The Melbourne Head Lease is dated 31 December 1987, that is after the announcement by the Government that the two airline policy was to be brought to an end in October 1990 but well before that late date.

15. The recitals to the Head Lease refer to the importance of terminal facilities for the conduct of airline operations and that to give effect to that FAC would grant long term leases of suitable sites for airline terminals and on terms "which make provision for new entrants to the airline industry and commuter and regional airlines." The term of the Head Lease was for 20 years with options for extensions to be exercised by Qantas.

16. Clause 5 is crucial to the consideration of the questions before the Court but before referring to some of the provisions contained in Clause 5, some definitions are of importance. Clause 2 contains definitions and interpretations. The phrase "Third Party Carrier Facilities" is defined, in summary, as including terminal facilities necessary to enable a third party carrier to conduct its passenger, luggage and related activities at that terminal. "Third Party Carrier" is defined to mean:-

"subject to clause 2.4, a new entrant to the domestic

aviation industry or an existing regional or commuter carrier

who becomes a Third Party Carrier to clause 5(2)."

17. In the present case Aussie Airlines claims to be a new entrant to the domestic aviation industry within the first part of that definition. Sub-clause 2.4 has no application to the facts of this proceeding.

18. Clause 5 is very long. A limited number of its provisions are relevant for present purposes. Some of those will be set out. In Clause 5, the word "Lessee" refers to Qantas and "Lessor" refers to FAC.

"5. Third Party Access

Interpretation

(a) In this clause 5:

(i) the expression "Relevant Period" means the period which

begins at 00.01 a.m. (Local time) on 30th October 1990 and expires

at midnight (Local time) on:

(aa) where no third party has made use of Third Party Carrier

Facilities prior to 30 October 1995, that date;

(bb) where sub-paragraph (aa) does not apply but at any time

after 30th October, 1995 Third Party Carrier Facilities have not

been utilised pursuant to a Sub-Lease by a Sub-Lessee for any

continuous period of two years, the last day of that period; and

(cc) where neither sub-paragraph (aa) nor (bb) applies, 30th

October 2000; and

(ii) a certificate of the Secretary shall be conclusive as to

the status of any licence or application referred to in

sub-paragraphs (b)(ii), (c)(viii), (h)(iv) or (h)(v).

Sub-Lease of Third Party Carrier Facilities

(b) (i) Subject to the other provisions of this Clause, during

the Relevant Period the Lessee shall, if so requested by a Third

Party Carrier (a "Sub-Lessee"), enter into a sub-lease of Third

Party Carrier Facilities comprised in the Premises for the

boarding and/or discharge of passenger aircraft (a "Sub-Lease");

(ii) Any Sub-Lessee either:

(aa) shall hold; or

(bb) shall have made a bona fide application for,

all licences necessary for the conduct to and from the Airport

of a regular public air transport service or passenger charter

operation as defined in the Air Navigation Act 1920 and the Air

Navigation Regulations.

(c) Any such Sub-Lease will be on reasonable commercial terms

and, without limitation, will provide for:

(i) the sub-Lessee to be entitled, where appropriate, to

provide and remove at its own expense equipment and facilities for

use within the Third Party Carrier Facilities;

(ii) a term of not less than one year;

(iii) ....

(e) Sub-Leases under paragraph (b) shall:

(i) in aggregate relate to Third Party Carrier Facilities for

the handling of not more than two passenger aircraft at any time;

(ii) expire (together with any option or further options for

renewal) not later than 30 October, 2000;

(iii) require the Lessee to provide Facilities within six

months of the date of the Sub-Lease; and

(iv) terminate forthwith upon cessation by in the case of a

Sub-Lessee who became a Third Party Carrier by reason of being a

new entrant to the domestic aviation industry to carry on domestic

aviation services ..."

19. At this stage, it is obvious that it is desirable that Question 1(b) be answered as a preliminary question. If the question is answered "No", the whole proceeding will be brought to an end. If the question is answered "Yes" the proceeding would continue and many difficult questions of fact and law would need to be investigated. Question 1(b) is said to be dependant on an affirmative answer to question 1(a), namely that Aussie Airlines has "sufficient standing" to seek the declaratory relief as referred to in paragraph 2A of the further amended application, but that declaratory relief is in the same form as question 1(b). It is impossible to answer question 1(a) until consideration is given to question 1(b). To enable this to be done, the Court must consider further facts.

20. Mr Grey has had extensive experience in the conduct of airline operations within Australia, Papua New Guinea and the USA with particular experience in the financial provisions relating to all aspects of the conduct of airline operations. In the year 1988 Mr Grey commenced preparing a plan to establish a domestic aviation business within Australia with the intention of introducing a third domestic carrier into Australia following the end of the two airline policy. In 1990 he caused a number of companies to be formed to be used as the basis for this to be done by Compass Airlines Pty Ltd ("Compass"). Compass made a request under Clause 5 of each of the Head Leases relating to the Melbourne, Sydney, Adelaide, Perth and Coolangatta terminals for access to third party carrier facilities. Following negotiations in conformity with the terms of the Head Leases, sub-leases were granted by Qantas to Compass.

21. Compass commenced its domestic airline passenger service on 1 December 1990. Compass continued to operate its domestic airline passenger service making use of the terminal facilities until 20 December 1991 when a provisional liquidator was appointed to Compass. Thereafter, following negotiations between the provisional liquidator and a company, Southern Cross Holdings Ltd, that company entered the domestic aviation industry using the terminal facilities previously used by Compass. It conducted its business under the name Compass. Southern Cross Holdings Ltd operated its airline business until March 1993 when it was placed in liquidation.

22. Later in the year 1993, Mr Grey began to consider the establishment of another domestic airline business. He registered the name Aussie Airlines. In February 1995 Aussie Airlines Pty Ltd was incorporated. It has an issued capital of $550 and is controlled by Mr Grey. Other directors are members of his family. Its principal activity is stated to be "Airline Operations Airline Management Tourism Travel". Its registered office is a unit in Toorak being the residence of Mr Grey.

23. Aussie Airlines sent the letter of request dated 21 February 1995 to Qantas. Qantas disputed that Aussie Airlines was a "new entrant" to the domestic aviation industry because it was not conducting any business at all in the aviation industry, its registered business address was a residential unit and it had a small paid up capital only. Qantas sought "full details of the reasons, facts and circumstances said by the applicant to justify its request for access to third party carrier facilities as a 'new entrant'". Much correspondence between Aussie Airlines and Qantas followed with Aussie Airlines refusing to give most of the information sought.

24. The General Manager, Commercial Asset Development, of FAC took a different view. Aussie Airlines had given a copy of the correspondence between it and Qantas to FAC. On 24 April 1995 the general manager wrote to Qantas as follows:

"RE: AUSSIE AIRLINES PTY LTD

I note that Aussie Airlines Pty Ltd has requested Qantas to

provide it with Third Party Carrier Facilities in its domestic

terminals at Adelaide, Coolangatta (Gold Coast), Melbourne, Perth

and Sydney Airports.

Mr Bryan Grey of Aussie Airlines has given us copies of the

correspondence between Aussie Airlines and Qantas and it appears

that this request was made on 21 February 1995. I note that

Qantas has requested Aussie Airlines to provide information to it

to substantiate its claim to be a new entrant to the domestic

aviation industry. I understand that Aussie Airlines has been

reluctant to furnish commercially sensitive information to

Qantas, as this could disadvantage it in the future. I am

sympathetic to Mr Grey's position.

Under clause 5(b) of the terminal leases Australian Airlines

is under an obligation to grant subleases of its facilities if

requested by a Third Party Carrier. Also clause 5(a) of those

leases requires Australian Airlines to "negotiate in a bona fide

and timely manner with applicants whose priority is such as to

make them eligible for Third Party Facilities at the Airport to

endeavour to finalise a Sub-Lease within two months". Although

Aussie Airlines did not receive a priority ranking, it is clear

that as no other parties who did are likely to require third

party access, I believe that it is appropriate for Australian

Airlines to treat Aussie Airlines as having the necessary

priority.

Accordingly, I request Australian Airlines to give effect to

its obligations under clause 5 of the leases and to commence bona

fide negotiations forthwith with Aussie Airlines.

I am not aware of any reason why Aussie Airlines should not

be treated as a new entrant to the domestic aviation industry. If

you believe that Australian Airlines is not obliged to negotiate

with Aussie Airlines would you please, as a matter of urgency,

provide me with your reasons for this belief."

25. Sufficient facts have been found to enable the Court to consider the question 1(a), namely "whether Aussie Airlines has sufficient standing to seek the declaratory relief set out in the second question". The nature of the standing of a person to seek declaratory relief has been considered recently in Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564. There the High Court, having held that the appellants were not entitled to substantive orders, considered whether they were entitled to declaratory relief. As a first step the Court considered whether the appellants had standing to seek declaratory relief. In a joint judgment, Mason CJ, Dawson, Toohey and Gaudron JJ said at 581-2:-

"It is now accepted that superior courts have inherent power

to grant declaratory relief. It is a discretionary power which

"(i)t is neither possible nor desirable to fetter ... by laying

down rules as to the manner of its exercise." (Forster v.

Jododex Aust. Pty. Ltd. [1972] HCA 61; (1972), 127 CLR 421, at p.437, per

Gibbs J). However, it is confined by the considerations which

mark out the boundaries of judicial power. Hence, declaratory

relief must be directed to the determination of legal

controversies and not to answering abstract or hypothetical

questions. (See In re Judiciary and Navigation Acts (1921), 29

CLR 257). The person seeking relief must have "a real

interest" (Forster (1972), 127 CLR, at p 437, per Gibbs J;

Russian Commercial and Industrial Bank v. British Bank for

Foreign Trade, Ltd., (1921) 2 AC 438, at p 448, per Lord

Dunedin) and relief will not be granted if the question "is

purely hypothetical", if relief is "claimed in relation to

circumstances that (have) not occurred and might never happen"

(University of New South Wales v. Moorhouse [1975] HCA 26; (1975), 133 CLR 1,

at p 10, per Gibbs J) or if "the Court's declaration will

produce no foreseeable consequences for the parties" (Gardner v.

Dairy Industry Authority (N.S.W.) (1977), 52 ALJR 180 at p. 188,

per Mason J; see also p. 189, per Aickin J)."

26. The Court allowed the appeal and granted the declaration sought. Brennan J was of the same opinion. He discussed this question at 595-597. AT 596 his Honour set out the passage from Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd referred to in the joint judgment. The passage reads:-

"The question must be a real and not a theoretical question;

the person raising it must have a real interest to raise it; he

must be able to secure a proper contradictor, that is to say,

some one presently existing who has a true interest to oppose the

declaration sought."

27. On this question, the submissions made on behalf of Qantas seemed to be directed to another issue namely whether Aussie Airlines could establish a substantive case. The submissions appeared to be directed to supporting a motion that the statement of claim disclosed no cause of action and so the statement of claim should be struck out and the application be dismissed. No direct submission was made that the principles discussed in Ainsworth had no application to the present case. In truth, the submissions made on behalf of Qantas were very similar to submissions rejected by Dawson J in Oil Basins Limited v The Commonwealth of Australia [1993] HCA 60; (1993) 178 CLR 643. That case involved the construction and application of the Petroleum Resource Rent Tax Assessment Act 1987 (the "PRRT Act"). The plaintiff had sued a number of defendants including the Commissioner of Taxation and the Commonwealth of Australia. Unless these two defendants were proper parties, the High Court had no jurisdiction to hear the matter. The defendants moved the Court seeking that those two defendants be struck out as parties and that the action be brought to an end. The only relief sought against those two defendants was for declarations. For the purposes of the hearing of the motions, the two defendants were treated as one by the name "the Commissioner".

"The Commissioner contends that the plaintiff is not entitled

to any relief against him because the statement of claim does not

allege any material fact from which it might be concluded that

there has been or will be any wrongful act or omission on the

part of the Commissioner. He contends that nothing he has done

is impugned.

Be that as it may, it is plain that the plaintiff has a real

interest in obtaining a declaration that it is not liable to pay

P.R.R.T."

29. His Honour then quoted the passages from Russian Commercial and Industrial Bank and Ainsworth set out earlier in these reasons, and continued:-

"The question raised by the plaintiff is neither abstract nor

hypothetical and the answer to that question will clearly produce

consequences for the parties. In those circumstances I would,

for my own part, doubt whether the failure on the part of the

Commissioner to indicate whether or not he disputes the

plaintiff's claim could preclude the plaintiff from seeking

against him the relief which it does. The most that could be

urged is that there is no proper contradictor, but I doubt

whether that is so when the Commissioner's participation in the

action is likely to force him to abandon his present stand of

neutrality. Even if he were to maintain that stand, I doubt

whether that would prevent him from being a proper contradictor.

He clearly has a true interest in the plaintiff's claim and, if

he were to choose not to oppose it and to abide by any order

which the Court might make, that might perhaps amount to no more

than the performance of his role as a contradictor in a

particular manner."

31. In the present case, counsel for FAC supported and added to the submissions made on behalf of Aussie Airlines.

32. The facts of this case clearly come within the principles set out in the authorities quoted. There is no need to repeat or summarise those facts. There is a real legal controversy between Aussie Airlines and Qantas which is not abstract. There is no hypothetical question. Aussie Airlines has a real interest in the second question, namely whether its claim fails at this point. The consequences of the determination, if made, will produce clear foreseeable consequences for the parties. There are opposing parties having a legal interest to make opposing submissions.

33. Accordingly question 1(a) must be answered in the affirmative.

34. Question 1(b) is whether Aussie Airlines, in making the requests contained in the letters dated 21 February 1995, was "a new entrant to the domestic aviation industry" within the meaning of that expression as used in the definition of "third party carrier" in the Head Leases. This question is framed in a very narrow way. The expression does not appear in Clause 5 of the Head Lease. For present purposes, the relevant part of that clause is paragraph 5(b)(i). That paragraph is made subject to the other provisions of Clause 5. The syntax of the paragraph is unusual. The operative parts are:-

"... during the Relevant Period the Lessee (Qantas) shall, if

so requested by a Third Party Carrier (a "Sub-Lessee"), enter

into a sub-lease of the Third Party Carrier Facilities comprised

in the Premises for the boarding and/or discharge of passenger

aircraft (a "Sub-Lease")."

35. This paragraph is a classical example in logic of a subjunctive conditional with an imperative subsequent namely if A were to do B then X must do Y. Using legal terminology, the subjunctive conditional would be described as a condition precedent which, if satisfied, results in the imposition of a duty. If the condition precedent is satisfied, Qantas must enter into a sub-lease of the type specified in Clause 5 of the Head Lease.

36. In the context of the facts of this action, the question to be determined is whether Aussie Airlines comes within the group "Third Party Carrier" appearing in Clause 5. If the answer to the question is in the affirmative, it is not necessary to determine whether the requests were made during the Relevant Period as defined in the lease. It appears to be accepted by all parties that the letters containing the requests were received by Qantas within that Relevant Period. On one view, that Relevant Period has now expired. Submissions were put on behalf of Qantas that because of this fact it is not obliged to enter into a sub-lease of the Third Party Carrier Facilities with anyone.

37. By this submission it was claimed that the relevant period expired at midnight on 30 October 1995. It was contended that a court should not grant declaratory relief if there is no right which can be exercised as a result of the declaration. This contention cannot be considered in determining question 2, which has a narrow meaning. In any event, Ainsworth is authority for the proposition that a declaration may be made even if no substantive orders can be made.

38. The Court considers the nature of question 1(b). The question is whether Aussie Airlines comes within the defined meaning of "Third Party Carrier" as defined in the Head Lease. The expression is defined to mean "a new entrant to the domestic aviation industry or an existing regional or commuter carrier who becomes a Third Party Carrier pursuant to clause 5(2)". It should be noted that by clause 2.4 of the Head Leases the expression "Third Party Carrier" does not include Australian Airlines, Ansett or any person, in substance, related to either of those carriers.

39. The expression "a new entrant to the domestic aviation industry" which will be described in these reasons as "a new entrant", is to be construed having regard to the context in which it appears and having regard to the use of the expression Third Party Carrier in the Head Leases as well as the other facts giving rise to the ending of the two airline policy.

40. Paragraphs 5(l), (m), and (n) of the Head Lease appear under the sub-heading "Existing Carriers". Under these paragraphs, Qantas was, until 31 December 1992, under an obligation to make facilities available to "Existing Carriers", described in Schedule 10 as Eastern Australian Airlines and East-West Airlines (Operations) Pty Ltd. Under those paragraphs that obligation ceases should the existing carrier become a Third Party Carrier under the provisions of paragraph 5(n). Under paragraph 5(n) an Existing Carrier would become a Third Party Carrier on the happening of one of a number of specified events.

41. Having regard to these provisions, the expression "new entrant" in the definition of "Third Party Carrier" is used in contra-distinction to existing carriers as described in the Head Lease. Quite clearly Aussie Airlines is not an existing carrier as that expression is used in the Head Lease, but this fact does assist in determining the meaning of the expression "new entrant" The full expression is "new entrant to the domestic aviation industry". The expression "domestic aviation industry" is not defined in the Head Lease but its meaning is not in serious dispute. It would encompass any person engaged in the business of carrying passengers for reward within Australia whether inter-state or intra-state. There can be no doubt that the existing carriers within the meaning of the Head Lease were engaged in the domestic aviation industry.

42. The Court can take judicial notice of the fact that many persons are engaged in the business of carrying passengers for reward within Australia but which do not make use of premises at the five airports the subject of the Head Leases utilised by Qantas or Ansett for third party carrier facilities as defined in the Head Leases. Many such carriers operate from other airports. Accordingly, the expression "new entrant to the domestic aviation industry" when used in the Head Lease, must be limited to those persons who are seeking access to third party carrier facilities at the premises controlled by Qantas at the five named airports. In other words, a new entrant may be operating a business in the domestic aviation industry at the time a request was made under clause 5 of the Head Lease.

43. It must be remembered that the expression to be construed is "a new entrant to the domestic aviation industry". The expression must be construed as a composite one and it is not permissible to define each word used in the expression and then join all these meanings together to give a meaning to the expression. Nevertheless it is helpful to look at the appropriate meanings to be given to some of the individual words. Even so, no definitive meaning can be given to the expression so as to exclude the possibility of other persons claiming, successfully, that they come within the expression.

44. The word "new" has many different meanings. It can have the meaning of "not existing before; now made; or brought into existence, for the first time"; the Shorter Oxford English Dictionary. Other meanings given are "other than the former or old, different, changed." The difference can be illustrated. A person who has acquired a used motor car commonly refers to it as "my new car". Similar meanings are given in the Macquarie Dictionary.

45. The word "entrant" means "one who or that which enters". The Macquarie gives a meaning "a new member, as of an association, a university, etc." The word "enter" has many meanings. Essentially it connotes to come or go into. One of the meanings given in Macquarie is "to make a beginning of or in, or begin upon, engage or become involved in."

46. Having regard to its context in the Head Lease, the terms of the Head Lease and the need for the Head Leases following the "deregulation" of the two airline policy, the expression "new entrant to the domestic aviation industry", the expression is designed to include persons who do not have third party carrier facilities at the premises controlled by Qantas at the five relevant airports. The Head Leases make it clear that Ansett and its related companies, as well as existing regional or commuter carriers making use of those facilities, are excluded from the expression. Unless this exclusion appeared, Ansett could have been a "new entrant to the domestic aviation industry" in so far as Qantas was concerned. The existing regional or commuter carriers may come within the expression upon the happening of an event specified in the Head Leases. The expression could include persons carrying on business in the domestic aviation industry but not making use of the third party carrier facilities at the premises controlled by Qantas at the five specified airports. A person proposing to enter the domestic aviation industry, even though not then being engaged in that industry, and seeking to make use of the third party carrier facilities at the five airports would come within the expression.

47. In my opinion, the expression should be construed to include persons, not presently engaged in the domestic aviation industry, but who are seeking the use of the third party carrier facilities as defined in order to enable the person to enter the domestic aviation industry. These facts raise the issue to be decided in answering question 1(b).

48. Counsel for Qantas contended that on the facts before the Court, Aussie Airlines had not established that it was "a new entrant" because it had not shown that it was in a position to become engaged in the domestic aviation industry. They contended that it was not sufficient that Aussie Airlines should simply assert it wanted to enter or engage in business in the domestic aviation industry. It had to demonstrate, positively, its ability to conduct a domestic airline business in Australia or that it has a business plan for conducting the business of an airline.

49. In my opinion, this contention should be rejected. The evidence discloses that Aussie Airlines is not presently able to enter the domestic aviation industry. It has none of the equipment and personnel required to commence operations. It does not have the use of infrastructure facilities at the five airports to enable it to enter the industry even if it had the equipment and personnel. The policy of the "deregulation" of the two airline policy and the terms of the Head Leases make it clear that new entrants are to be encouraged. A barrier in the form of a new entrant having to establish the equipment and personnel required to conduct an airline business in Australia before it could become a new entrant should not be permitted. For similar reasons such a person should not be required to satisfy Qantas that it is commercially viable and would be successful in that business.

50. In my opinion, a person can be a new entrant if that person has the knowledge and experience to conduct a business in the domestic aviation industry, has the ability to engage in that business if able to obtain the necessary third party carrier facilities even though that ability depends upon the happening of future events and that the person is acting genuinely and in good faith in pursuing the objective of engaging in that activity.

51. On all the material before the Court, I am satisfied that Aussie Airlines comes within the expression "a new entrant to the domestic aviation industry" within the meaning of the expression "Third Party Carrier" in paragraph 5(b)(i) of the Head Leases. Accordingly question 1(b) should be answered in the affirmative.

52. For reasons already given, the Court declines to express an opinion on whether Qantas is required to enter into negotiations with Aussie Airlines preparatory to the granting of the sub-leases. Essentially, those reasons are that this issue is not involved in either of the questions to be determined.

53. The questions shall be answered in accordance with these reasons.

54. I will reserve the question of costs to allow the parties to make submissions after considering these reasons.