The meaning of "likely"
37 Miller's Australian Competition and Consumer Law Annotated (33rd ed) 2011 says this (at [1.50.30], 717):
The word "likely" has various shades of meaning. It may mean "probable" in the sense of "more probable than not", "more than a 50 per cent chance". It may mean "material risk" as seen by a reasonable man "such as might happen". It may mean "some possibility" more than a remote or bare chance or it may mean that the conduct engaged in is inherently of such a character that it would ordinarily cause the effect specified …
38 Miller also suggests (at [1.45.45]): "It would appear that, in ss 45, 46 and 47 [of the Competition Act], the term 'likely' means that there is a real chance or possibility, rather than 'more likely than not' …". Three cases are cited in support of that conclusion: Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110 ("Monroe Topple"); Universal Music Australia Pty Ltd v ACCC (2003) 131 FCR 529 ("Universal Music"); and Seven Network Ltd v News Ltd (2009) 182 FCR 160 ("Seven Network"). I shall refer to each of them in due course. By contradistinction, Miller suggests that the meaning of "likely" in s 50 of the Competition Act has not been settled.
39 The same, or a similar, drafting technique of juxtaposing reference to a factual circumstance ("has the effect" (s 45 and s 47(10)), "would have the effect" (s 45D and s 50), "is misleading or deceptive" (Sched 2, s 18)) with a less determinative conclusion ("is likely to have the effect" (s 45 and s 47(10)), "would be likely to have the effect" (s 45D and s 50), "is likely to mislead or deceive" (Sched 2, s 18)) occurs in a number of places in the Competition Act. In some cases it is relatively easy to see that the drafter has drawn a distinction between what has happened and what might happen (ss 45 and 47(10)). Similarly, a distinction between something that is misleading or deceptive and something that is likely to mislead or deceive (Sched 2, s 18) is not conceptually too difficult. Necessarily, in the situations so far mentioned, the concept of "likely" arises in connection with a prediction about something not then manifest. In other cases (e.g. involving s 50) the distinction is less clear. Postulating that something would have a particular effect may be a firmer prediction than saying it would be likely to have that effect, but neither involves identification of an effect already manifest. Both require prediction.
40 In some (but not all) of the cases to which I shall turn shortly the perceived (but in my view non-existent) tension between the two ways of expressing the test has led to the conclusion that the first must be established on the balance of probabilities and (as a result) the second by reference to some lesser standard, often referred to as the "real chance" test. In my respectful view, that is an error of analysis and an incorrect approach to the issue of construction. The first limb of the test allows a prediction of probable (therefore likely) consequence, without account being taken of, or allowance needed for, other contingencies. The second limb concentrates on the quality of the circumstances, and the probable consequence, without permitting falsification of that probability by proof of the actual occurrence of some inherently less probable result. In other words, establishing a probable consequence will suffice, even if in fact it did not occur. In the leading case on the issue, that is what happened. Both limbs of the test, as found for example in s 50, in my view require the same standard of proof (balance of probabilities) and they should probably be regarded as constituent elements of a compound conception. As a matter of ordinary language I see no tension or inconsistency between them. As a matter of ordinary language I see no adequate foundation for concluding that the second limb of such a test imports and applies, at any stage of the process, a departure from the ordinary civil standard of proof on the balance of probabilities.
41 Some of the authorities support this view; some do not. At present, the authorities against it are the more influential. The test ("real chance") to which they give support was followed by the trial judge.
42 Australian Telecommunications Commission v Krieg Enterprises Pty Ltd (1976) 27 FLR 400 ("Krieg") dealt, amongst other things, with a statutory liability for interference with or damage to property under the control of the Australian Postmaster-General where there was "reasonable cause to believe that the doing of the work [was] likely" to result in such interference or damage. Bray CJ observed that the section (s 139B of the Post and Telegraph Act 1901-1973) had never been the subject of judicial interpretation. Bray CJ posed the question for his decision as follows (at 406):
The real point of the case turns on the word "likely" in sub-s. (1) (a). Is that synonymous with "probable" or, in other words, with there being more than a fifty per cent chance of the event happening? Or is it enough if Mr. Field had reasonable cause to believe that there was some possibility more than remote or "bare", to use the phrase preferred by Mr. von Doussa, of damage or interference?
43 Bray CJ thought that the word "likely" bore its ordinary meaning, as a synonym of the word "probable", or more likely to happen than not. His Honour went on, as follows (at 407):
… After all, the converse of "likely" is "unlikely" and the converse of "probable" is "improbable" and if an event can properly be described as likely though not probable, or probable though not likely, then it can also be described as unlikely though probable or improbable though likely. This seems contrary to common usage and, I am inclined to say, to commonsense.
It may be sufficient to say that the natural and ordinary meaning of the word "likely" is the one I have indicated and prima facie that is its meaning in the statute and that there is nothing in the context of this statute that I can see to indicate any other meaning. But, in deference to Mr. von Doussa's able and subtle argument based on the concepts of likelihood and probability as contained in traditional formulations of the common law of negligence, I will say something more.
44 There followed an extended discussion of the common law position. Then Bray CJ said (at 410):
I do not, however, regard these difficult semantic questions about the proper meaning of familiar adjectives in the various formulations of common law doctrine as decisive of the point in issue, or even very relevant. The common law depends on concepts, not on words. It is not bound to the particular phraseology adopted by a particular court. It can be refined on and expounded in more or less detail according to the circumstances of the particular case. Here we are concerned with the word "likely" in a statute. As I have said, the ordinary and natural meaning of the word is synonymous with the ordinary and natural meaning of the word "probable" and both words mean, to adopt the expression of Lord Hodson in the passage previously quoted, that there is an odds-on chance of the thing happening. That is the way in which statutes containing the words have usually been construed: see, for example, Re Bayer Products' Ltd.'s Application, per Lord Greene M.R. and per Asquith L.J.; Dowling v. South Canterbury Electric Power Board; Transport Ministry v. Simmonds. Particularly is this so when the statute is a penal statute (see Transport Ministry v. Simmonds or, I think, where, as here, an additional liability in tort beyond the common law liability is being imposed.
I think that is the meaning which should be attached to the word "likely" in sub-s. (1) (a). It is the natural and ordinary meaning and there is nothing to show that another meaning was intended. Like the learned special magistrate, therefore, I think that "likely" in the subsection means "probable" and I think that that means that there is a more than fifty per cent chance of the thing happening.
45 Two years later this Court dealt with a case which directly involved s 50 of the Trade Practices Act 1974 (Cth) ("TP Act") (now s 50 of the Competition Act) although, as will be seen, some differences in the statutory test must be noted. In Trade Practices Commission v Ansett Transport Industries (Operations) Pty Ltd (1978) 32 FLR 305 ("Ansett Industries") Ansett Transport Industries Ltd offered to purchase all the issued shares in the capital of Avis Rent-A-Car System Pty Ltd. The offer was accepted. The Trade Practices Commission commenced proceedings seeking an injunction alleging that the acquisition of shares contravened s 50.
46 Section 50 was then in different terms. It did not refer to competition but referred to a corporation being (or being likely to be) "in a position to control or dominate a market for goods or services". A previous version of s 50, however, had been in a form which is closer to the present formulation. Northrop J referred to those matters as follows (at 316 and 317):
The relevant market having been identified, it is necessary to determine whether, as a result of the acquisition of the shares in the capital of Avis, Ansett Operations "would be or be likely to be, in a position to control or dominate" that market. Before turning to the evidence, it is necessary to discuss the interpretation of s. 50 of the Act.
…
Section 50 as contained in the 1974 Act was markedly different from s. 50 as introduced by the 1977 Act. The former s. 50(1) was in the following form: "A corporation shall not acquire, directly or indirectly, any shares in the capital, or any assets, of a body corporate where the acquisition is likely to have the effect of substantially lessening competition in a market for goods or services". That section proscribed the acquisition of shares where the acquisition was "likely to have the effect of substantially lessening competition in a market".
47 It will be noted that, in the original formulation, the only test was whether an acquisition would be "likely to" have a particular effect. In the altered formulation introduced in 1977 the formulation referred to both actual and likely circumstances. Northrop J found, for reasons which were very extensively expressed, that the result of the share acquisition was not to immediately place Avis in a position to dominate the car rental market in Australia. His Honour then turned to another aspect, saying (at 339-340):
It now becomes necessary to consider the secondary case put by the commission. This depends upon additional factors being provided by Ansett Operations and by which the position of Avis is enhanced to such an extent that Ansett Operations will be in a position to dominate the car rental market in Australia. … I have held that Avis is not in a position to dominate the market, and it follows that the mere acquisition of all the shares in the capital of Avis by Ansett Operations does not of itself place Ansett Operations in a position to dominate the market. For present purposes, the crucial words are "would be likely to be". This expression connotes a consideration of what is likely to happen in the future.
48 His Honour addressed that question by applying the conventional standard of proof on the balance of probabilities. His Honour said, for example (at 344):
The mere existence of an economically strong company in a corporate relationship with an operator in a particular market in Australia does not lead by itself to the conclusion, on the balance of probabilities, that the economically strong company would be or be likely to be in a position to dominate that particular market.
and, more directly (at 346):
Although it is sufficient for the commission to establish that Ansett Operations would be likely to be in a position to dominate the car rental market as a result of the acquisition of the shares in Avis, the issue of whether Ansett Operations is in that position must be judged in the light of commercial probabilities.
His Honour made a further reference to satisfaction on the balance of probabilities at 347.
49 With respect, this was a firm, straightforward and conventional approach to an issue which is at the heart of the operation of the civil justice system - namely, the standard of proof to be met by a party initiating civil proceedings against another.
50 The point of departure from the approach taken by Bray CJ in Krieg and Northrop J in Ansett Industries is the judgment of Deane J in Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331 ("Tillmanns Butcheries"), although it should be noted that no reference at all was made in Tillmanns Butcheries to the judgment of Northrop J in Ansett Industries.
51 Tillmanns Butcheries concerned s 45D of the TP Act (also s 45D of the Competition Act). Section 45D required proof of a number of elements: acting in concert; hindering or preventing the supply of goods or services; for the purpose of causing substantial loss or damage; and "the conduct … would have or be likely to have the effect" of causing substantial loss or damage. The case at first instance was heard by St John J (Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1978) 34 FLR 494). St John J took the view, on the facts of that case, that loss or damage within the meaning of s 45D had not been proved. As it would have been open to the plaintiff to prove that substantial loss or damage had, in fact, been caused by the impugned conduct St John J took the view that (at 498):
… the plaintiff company is not entitled to argue that the conduct would be likely to cause substantial loss where the means of proving whether in fact it did cause substantial loss is in its power.
52 That approach was reversed on appeal, because the view was taken that the conduct of the respondent union was of a character, and undertaken with such a purpose, that it was likely to cause substantial loss or damage (at whatever standard proof was necessary) whether or not it actually did so in that case. It was also relevant that the effect of the conduct had been limited by an injunction which prevented it continuing. This was a case, therefore, where a probable result could be said to be contradicted by what happened. Once that was removed as an obstacle of construction the case for relief was a clear one.
53 It was not necessary, in order to determine the appeal and uphold it, to reach or express a firm or final view about the standard of proof to be employed. Bowen CJ, with whom Evatt J agreed, explicitly declined to do so.
54 Bowen CJ said (at 339):
The word "likely" is one which has various shades of meaning. It may mean "probable" in the sense of "more probable than not" - "more than a fifty per cent chance". It may mean "material risk" as seen by a reasonable man "such as might happen". It may mean "some possibility" - more than a remote or bare chance. Or, it may mean that the conduct engaged in is inherently of such a character that it would ordinarily cause the effect specified.
55 After referring to some cases (both Australian and American) in the general area of discourse Bowen CJ said (at 340):
The circumstances to which s. 45D may apply are so various that I hesitate to place a gloss on the section by preferring one meaning of "likely" rather than another for the determination of this particular case. It is unnecessary to do so, because I have formed the view that whichever meaning is adopted the evidence leads me to the conclusion that the likelihood of substantial loss or damage has been established.
56 It was urged upon us by counsel for the second respondent to the present appeal that we should exercise similar restraint. That is a suggestion which has a good deal to recommend it but the circumstances are now quite different. Substantial confusion has in my view arisen about this issue and it would be better to address it. In addition, the issue has arisen directly in the present case. It was one with which was necessary for the trial judge to grapple and it is one in respect of which the appellant has argued, in substance as I see it, for a further relaxation of the standard of proof.
57 Deane J in Tillmanns Butcheries dealt with the matter at greater length. His Honour said (at 346):
The word "likely" can, in some context, mean "probably" in the sense in which that word is commonly used by lawyers and laymen, that is to say, more likely than not or more than a fifty per cent chance … It can also, in an appropriate context, refer to a real or not remote chance or possibility regardless of whether it is less or more than fifty per cent. When used with the latter meaning in a phrase which is descriptive of conduct, the word is equivalent to "prone", "with a propensity" or "liable". ... Thus, if I fire a rifle through drawn curtains into a quiet lane in a country village, it is not likely, in the sense of more likely than not or an odds-on chance, that I will injure anyone. It would, however, be difficult to deny that there was a real chance or possibility (or likelihood in that sense) that an occasional passer-by would be wounded by the bullet. Plainly, the act of firing a rifle through drawn curtains into a lane used by pedestrians would be an act which was, in the circumstances, prone or liable (likely in that sense) to cause injury to a passing pedestrian.
(References omitted)
58 Deane J expressed his conclusion about this issue in the following way (at 347-348):
The conclusion which I have reached is that, in the context of s. 45D (1), the preferable view is that the word "likely" is not synonymous with "more likely than not" and that if relevant conduct is engaged in for the purpose of causing loss or damage to the business of the relevant corporation, it will suffice, for the purposes of the subsection, if that conduct is, in the circumstances, such that there is a real chance or possibility that it will, if pursued, cause such loss or damage. Whether or not such conduct is likely (in that sense) to have that effect is a question to be determined by reference to well-established standards of what could reasonably be expected to be the consequence of the relevant conduct in the circumstances. In determining the answer to that question, it will be relevant that the persons engaging in the conduct did so with the purpose of causing such loss or damage.
(Emphasis added)
59 It will be apparent from what I said earlier, that Deane J's analysis of the statutory test (and his rejection elsewhere in the judgment of the approach taken by Bray CJ in Krieg) are not matters with which I agree. However, even accepting the analysis for present purposes it does not, in my view, apply to s 50 of the Competition Act.
60 The phrases I have emphasised in the last extract seem to me to be of real significance to his Honour's reasoning in the statutory context in which the discussion occurred. Purpose and likelihood were (and are) conjoined elements in the overall satisfaction of the statutory test under s 45D of the Competition Act. That may not be said about s 50.
61 In my respectful view, it is necessary to approach the reasoning employed by Deane J in Tillmanns Butcheries with the realisation firmly in mind that the notion of purpose was directly linked by his Honour, through the prism of foreseeability, with anticipated results - "what could reasonably be expected to be the consequence of the relevant conduct in the circumstances" - i.e. having regard to the purpose of causing loss or damage. That set of circumstances finds no counterpart in s 50 and, in my respectful view, the reasoning employed by Deane J in Tillmanns Butcheries is not appropriate to the construction of s 50.
62 Bowen CJ referred to the purpose for the conduct in the case in the following terms (at 339):
In the case before us the ban affected the raw materials for Tillmanns' business and even though it was a large and diversified butchery and smallgoods producer it nevertheless depended on meat. There is evidence for an inference that the ban was intended to be a total one. There is evidence too that Mr. Tillmann was not prepared to relent and that the union was quite prepared for the ban to last indefinitely. In my view, having regard to the number of beasts involved in the ban in the present case and the circumstances proved, the proper conclusion is that the purpose was to cause substantial loss or damage.
63 It was a natural inference to draw that conduct involving an outright ban of supplies which might last indefinitely until capitulation, and which was done for the purpose of causing the target business substantial loss and damage, was likely to cause that loss or damage. Bowen CJ and Evatt J were satisfied about that element whatever standard of proof was involved. There is no reason to think that Deane J was satisfied to some lesser standard of proof. The contrary is clearly the case. Deane J said (at 350):
There was no end in sight of the ban on processing of livestock for the appellant. The quantities of livestock and carcasses involved make it clear that, at the time, the appellant used the facilities of the particular abattoir to a considerable extent. It can be assumed that the appellant did not have livestock slaughtered at the abattoir in the pursuit of some macabre pleasure and that the carcasses of livestock assigned to be slaughtered were required for the purposes of the appellant's business. In these circumstances, it appears to me that, at the time the proceedings were instituted and the injunction first granted, the relevant conduct was plainly likely to cause substantial damage to the appellant's business as a wholesale and retail butcher regardless of which of the alternative meanings be given to the word "substantial" [about which Deane J expressed no view].
64 In the circumstances of Tillmanns Butcheries, therefore, there was no necessity for the application of some lesser standard of proof than the ordinary civil standard. It is also clear that Deane J's analysis was connected with the idea that a particular purpose of causing loss or damage was the origin of the conduct in question. An assumption of the necessary quality is not available in a case involving s 50 of the Competition Act. An assumption that a business acquiring shares in the capital of another does so to assist its own commercial position does not go nearly the distance which is evident from the discussion in Tillmanns Butcheries.
65 Even the illustration provided by Deane J, of firing a rifle careless of any passer by, is accompanied by pejorative overtones which are simply not available in a case such as the present.
66 Finally, as I said earlier, no doubt was expressed about the soundness of the approach taken by Northrop J in Ansett Industries, so far as it concerned s 50, which had been decided in only the previous year.
67 The next important development was the apparent approval of the observations of Deane J in Tillmanns Butcheries, by the High Court in Sheen v Fields Pty Ltd (1984) 58 ALJR 93. The statutory context was quite different. The case concerned Rules made under the Factories and Shops Act 1960 (Qld). The report of the case states:
Rule 1, cl. 21 of the Rules made under the Factories and Shops Act 1960 (Q.) required that protection in accordance with the Australian Standards for Industrial Eye Protection (CZ7-1967, Z7-1967 and Z45-1967) should be provided in cases where there was a "likelihood of injury" to the eyes of an employee in a factory. The Standards required that if a "hazard" existed, eye protectors should be issued, and that if the employee was exposed to flying particles, the provision of safety spectacles was the minimum acceptable method of protection.
68 The standard of care thereby identified clearly did not depend on a probability of injury before eye protection was obligatory.
69 Gibbs CJ (with whom Mason, Wilson and Dawson JJ agreed) accepted for that purpose that a "likelihood of injury" means "a real or not remote chance or possibility regardless of whether it is less or more than 50 percent" applying the observations of Deane J in Tillmanns Butcheries, but observed that this conclusion did "not decide the present case". Again, it was not actually necessary for a "real chance" test to be applied. Liability was denied by the High Court, even on that lesser test, because the injury to the employee was, in the particular circumstances of the case, not reasonably foreseeable. He was using an unauthorised work method. The authorised methods would not have involved risk of eye injury. His unauthorised method did, but he had chosen not to wear his safety goggles.
70 In my respectful view, despite the endorsement in that statutory context, of the "real chance" test, Sheen v Fields does not support its application to the operation of s 50 of the Competition Act.
71 Later that year (1984) a Full Court of this Court approved the application of the "real chance" test to the operation of s 52 of the TP Act (now Sched 2, s 18 of the Competition Act) (Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 ("Global Sportsman")). The Court said (at 87):
A contravention of s. 52(1) is established by conduct which is misleading or deceptive or which is likely to mislead or deceive. Conduct is likely to mislead or deceive if that is a "real or not remote chance or possibility regardless of whether it is less or more than fifty per cent": cf. Tillmanns Butcheries Pty Ltd v. Australasian Meat Industry Employees' Union (1979) 42 F.L.R. 331 at 346, per Deane J.; Sheen v. Fields Pty Ltd (1984) 58 A.L.J.R. 93.
72 However, no occasion arose to apply the test to actual facts. The proceedings involved a stated case. As the Court said (at 89):
One of the disadvantages of the Stated Case procedure in this matter is that questions which the parties anticipate may arise must be considered in the abstract.
73 The question in the proceedings was identified in these terms (at 92):
The basic dispute between the parties concerns the respondents' contention that the publication of statements including statements of opinion made in the ordinary course of the publication of news in those parts of a newspaper which are not advertising material cannot be conduct which is misleading or deceptive or likely to mislead or deceive within the meaning of s. 52(1) of the Act. For the reasons which we have stated, we are of opinion that the respondents' assertion is incorrect.
(Emphasis in original)
74 In the circumstances, in my respectful view, the apparent endorsement of the "real chance" test cannot bear too much weight, as a result of its apparent approval in Global Sportsman, if a sufficient reason exists to revisit the question in a concrete setting, such as provided by the present case.
75 In Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 ("TNT") Franki J dealt, in a very substantial piece of litigation, with allegations of contravention of s 45 of the TP Act (also s 45 of the Competition Act, but now in different terms). That provision dealt with contracts, arrangements or understandings in restraint of trade or commerce. Such a contract, arrangement or understanding was not in restraint of trade or commerce unless "the restraint has or is likely to have a significant effect on competition". Franki J referred to Tillmanns Butcheries. His Honour said (at 49):
… I consider that the word in s 45(2) now under consideration is to be read with due regard to the fact that it appears in a penal statute, that it is linked with the word "significant" and that this means that, whilst the meaning need not be restricted to a situation where the odds are greater rather than equally balanced or somewhat less than equally balanced, the probability must be something not very far short of "more probably than not", except in unusual circumstances as, for example, the situation mentioned by Deane J of firing a rifle through drawn curtains into a quiet lane in a country village.
(Emphasis added)
76 With respect, this is not a completely satisfactory approach to the issue. Having regard to the provisions of the Evidence Act to which I earlier referred, the civil standard applies to the disposition of a cause of action unless it is possible to conclude that some other statute has effectively modified the position. I confess I do not understand exactly what Franki J was intending to convey in the passage I have emphasised, except that it seems a less than wholehearted embrace of the "real chance" test. It does seem clear that Franki J regarded the example offered by Deane J as an exceptional one.
77 Now I may turn to the cases offered by Miller as illustrations of the proposition that the "real chance" test appears to apply with respect to the operation of ss 45, 46 and 47 of the Competition Act (although perhaps not for s 50).
78 In Monroe Topple the trial judge had dismissed an application relying on ss 45, 46, 47 and 51AC of the TP Act. Section 45(2)(a)(ii) and s 45(2)(b)(ii) prohibited a corporation from making or giving effect to a provision of a contract which has the purpose or which had or is likely to have the effect of substantially lessening competition. A case for relief had not been established. An appeal failed. It is important to understand that the appeal failed when tested against the lesser standard of proof of "real chance". In the Full Court, on appeal, Heerey J (with whom Black CJ and Tamberlin J agreed) said (at [111]):
111 As to effect, it is to be noted that the section is also satisfied if the conduct is likely to have the effect of substantially lessening competition. This involves assessing the future effect of the conduct, considered as at the time it is engaged in: Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 50. "Likely" does not mean "more likely than not". It is sufficient that there is a real chance or possibility that a substantial lessening of competition will occur: Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331 at 346-348 per Deane J. Tillmanns was a case under s 45D of the Act, but the reasoning of Deane J is equally applicable to the concept of likely effect in s 47(10).
(Emphasis in original)
79 No further discussion was necessary. The appeal failed on the lesser test expressed by Deane J in Tillmanns Butcheries. I intend no disrespect to the judges who constituted that Full Court by saying that the matter did not appear to receive (and did not need to receive) more than passing attention in the circumstances.
80 In Universal Music somewhat reserved endorsement was given to the statements of Heerey J in Monroe Topple. In Universal Music the Court said simply (at [247]):
247 … We are prepared to assume, for the purposes of argument, that likely does not mean more likely than not, but rather that there is a real chance or possibility that a substantial lessening will occur (Monroe Topple per Heerey J at [111]).
81 Seven Network is the judgment on appeal from Sackville J in the C7 litigation. The C7 litigation also concerned the operation of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the TP Act. At [747] Dowsett and Lander JJ set out the passage from the judgment of Heerey J in Monroe Topple extracted above. Their Honours said (at [749]-[750]):
749 News's submissions on this question focus upon matters of policy. It is said that the Court will normally construe legislation having a penal aspect so as to favour the subject in the event of any ambiguity. It also submits that there may be considerable difficulties for a competitor in deciding whether or not there is a real chance of an anti-competitive outcome as a consequence of proposed conduct. Further, it is said that the basis upon which the cases have adopted the "real chance" test has been that the alternative approach would give the words little functional effect. This, News submits, is not a proper basis for construing the word "likely" as meaning "a real chance" in the context of s 45(2).
750 … That is not our view of the case. We … consider that we should follow the decision in applying s 45 unless we are satisfied that it is clearly wrong. Reconsideration of policy matters will not generally be an appropriate basis for such satisfaction, at least in the absence of any evidence as to wide-spread inconvenience or injustice caused by the established approach. The decision in Monroe Topple 122 FCR 110 has stood since 2002. News's submissions do not cause us to doubt its correctness.
82 Two observations may be made about the approach which their Honours took. First, it is clear that the statements were made in response to submissions which, as their Honours said, focussed "upon matters of policy". Secondly, it seems equally clear that their Honours were not invited to embark on a more detailed analysis to assess the persuasive force of the legal reasoning which, as I have endeavoured to show, is really derived from the judgment of Deane J in Tillmanns Butcheries in quite different circumstances. In the circumstances, while of course their Honours' conclusions are entitled to substantial weight, their endorsement of Monroe Topple does not add to the analysis in a way which makes it impermissible for it now to be revisited.
83 None of the cases to which I have so far referred (including Tillmanns Butcheries) provide, in my respectful view, sufficiently persuasive support for the application of the "real chance" test when assessing whether something is likely to happen. For my own part, I prefer the earlier approach by Bray CJ in Krieg and the never disapproved judgment of Northrop J in Ansett Industries. However, there are two cases which seem to command greater attention, owing to the deliberate and considered statements they contain. One concerns s 50 of the Competition Act and one does not.
84 In News Limited v Australian Rugby Football League Limited (1996) 64 FCR 410 (at 564, 565, 571) a Full Court explicitly endorsed Tillmanns Butcheries and referred to Global Sportsman, when considering the definition of the term "exclusionary provision" in s 4D of the TP Act and, in particular, when a person was deemed to be competitive with another within the meaning of that definition. The Court said (at 565):
As Deane J pointed out in Tillmanns at 487, the phrase "would be likely to have" conveys a lower degree of likelihood than the phrase "would have". Similarly, the phrase "would be likely to be" in s 4D(2) conveys a lower degree of likelihood than the phrase "would be". Given that "likely" has the meaning attributed to it by Deane J when used within the expression "would be likely to be", it must also bear the same meaning when used in the expression "is likely to be".
85 In that case, the Court went on to actually apply the test it had stated (at 571). The ultimate result was that certain Commitment and Loyalty Agreements were found to be in breach of s 45(2)(a)(i) of the TP Act. The case involved the same statutory provision, therefore, as Seven Network.
86 So far as s 50 itself is concerned the strongest statement in support of the application of the approach expressed by Deane J in Tillmanns Butcheries is to be found in the judgment of French J (when his Honour was a judge of this Court) in Australian Gas Light Company v Australian Competition and Consumer Commission (2003) 137 FCR 317 ("AGL"). This was the authority applied by the trial judge. French J acknowledged (at [343]) that there had been "some divergence in the construction of 'likely' in various provisions of the Act". He also said (at [344]) "[d]ifferent views have been expressed from time to time in connection with s 50" in that respect. His Honour referred to some of those matters including a number of the cases to which I have referred.
87 Consideration of all those matters led to conclusions stated as follows (at [347]-[348]):
347 The collocation "would have the effect, or be likely to have the effect, of substantially lessening competition" appears in similar and identical versions in other provisions of Pt IV. It appears in ss 45, 45A, 45B, 45C, 47(10) and 50A. In my opinion that formulation is intended to have the same construction throughout Pt IV. Neither language nor policy mandates a variation in its construction from section to section. In any event as a matter of construction if "likely" simply meant more probable than not, it would be difficult to distinguish the application of that limb of the formula from the application of the first limb which, having regard to the onus of proof applicable in proceedings under Pt IV, could be established on the balance of probabilities.
348 The meaning of "likely" reflecting a "real chance or possibility" does not encompass a mere possibility. The word can offer no quantitative guidance but requires a qualitative judgment about the effects of an acquisition or proposed acquisition. The judgment it requires must not set the bar so high as effectively to expose acquiring corporations to a finding of contravention simply on the basis of possibilities, however plausible they may seem, generated by economic theory alone. On the other hand it must not set the bar so low as effectively to allow all acquisitions to proceed save those with the most obvious, direct and dramatic effects upon competition. By the language it adopts and the function thereby cast upon the Court and the regulator in their consideration of acquisitions s 50 gives effect to a kind of competition risk management policy. The application of that policy, reflected in judgments about the application of the section, must operate in the real world. The assessment of the risk or real chance of a substantial lessening of competition cannot rest upon speculation or theory. To borrow the words of the Tribunal in the Howard Smith case, the Court is concerned with "commercial likelihoods relevant to the proposed merger". The word "likely" has to be applied at a level which is commercially relevant or meaningful as must be the assessment of the substantial lessening of competition under consideration - Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [41].
88 With respect, the conclusion that the "assessment of the risk or real chance of a substantial lessening of competition cannot rest upon speculation or theory" must be accepted as compelling. However it does not seem to me, with respect, to be accurate to postulate that the ordinary requirement to prove a case (including this element of a case) to the usual civil standard would "set the bar so low as effectively to allow all acquisitions to proceed save those with the most obvious, direct and dramatic effects upon competition". I also, speaking for myself, entertain considerable doubt about the notion that the Court is intended to have a function of applying "a kind of competition risk management policy". That may be a legitimate function for a regulator considering acquisitions under s 50, and making decisions whether proceedings are to be commenced to restrain them, but once those decisions are made and proceedings commenced I see no real alternative to the Court attempting to deal with them on the basis of identifiable legal standards which are sufficiently certain and well established to yield predictable outcomes. Asking whether there is a "real chance" of something occurring seems to me, with respect, to invite and endorse speculation and conjecture. The range of possibilities (greater than "mere possibility") existing below a more than equal chance or possibility seems potentially so extensive as to create great uncertainty. The problem cannot be overcome by employing the technique favoured by Franki J in TNT of suggesting that the probability "must be something not very far short of 'more probably than not', except in unusual circumstances". That approach betrays the potential uncertainty of departing from the usual civil standard.
89 I accept the persuasive force, and the authoritative source, of the judicial pronouncements (particularly those of Deane J in Tillmanns Butcheries and French J in AGL where the matter has received closest attention and analysis) in support of the "real chance" approach. If I were sitting at first instance I would feel obliged, as did the trial judge in the present case, to give effect to that approach. As a member of a Full Court, however, I feel at liberty to express reservations about the matter, which I have endeavoured to do in the preceding discussion. In my view, the "real chance" test should not be applied to s 50 of the Act.
90 If it is appropriate to apply that test at all, I agree with the approach taken by the trial judge. Moreover, in the circumstances of the present case, even adopting the full scope of the approach urged by the ACCC would not have changed my view about the outcome of the appeal. Even if I had been persuaded that the trial judge had erred in applying a requirement of proof on the balance of probabilities to the establishment of the facts constituting the so-called "counterfactual" (which I am not), testing the matter on the basis of whether it should have been concluded that there was a "real chance" of the outcome suggested by the ACCC would have made no difference. The trial judge decisively rejected that suggested outcome as involving any "real chance". He said, plainly, that he had come to that view applying the "real chance" test to that issue, in case it was necessary to do so. Contrary to the submissions advanced for the ACCC the analysis which preceded that statement is not confined by the terms in which it is expressed to the application of a test on the balance of probabilities. The trial judge said repeatedly that it was unlikely that various elements of the scenario suggested by the ACCC would occur. It follows necessarily that he did not accept that it was likely that they would occur, whether as a "real chance" or otherwise, nor that the overall hypothesis had a "real chance" of recurring.