Australian Competition and Consumer Commission v Telstra Corporation Limited ACN 051 775 556

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1934 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

AND: TELSTRA CORPORATION LIMITED ACN 051 775 556

BETWEEN: OPTUS NETWORKS PTY LIMITED ACN 008 570 330

AND: TELSTRA CORPORATION LIMITED ACN 051 775 556

THE COURT: 1 These appeals raise a narrow but important point of statutory construction arising out of orders pronounced and reasons published by Rares J on 24 November 2008 (Telstra Corporation Ltd v Australian Competition and Consumer Commission [2008] FCA 1758). On that date his Honour made the following declaration and orders: THE COURT DECLARES THAT:

1. The final determination made by the first respondent under s 152CP of the Trade Practices Act 1974 (Cth) on 30 November 2007 in relation the access dispute notified by the second respondent on 21 September 2006 was invalid.

2. The final determination made by the first respondent on 30 November 2007 be quashed with effect from 30 November 2007.

3. The matter be remitted to the first respondent for hearing and determination according to law.

4. The second respondent pay the applicant's costs. 2 The proceedings in which those orders were made arose out of a dispute concerning access to an unconditioned local loop service ("ULLS") owned and operated by the first respondent to each appeal, Telstra Corporation Limited, ("Telstra"). Access to Telstra's ULLS by telecommunications providers other than Telstra is governed by a regime established by Part XIC of the Trade Practices Act 1974 (Cth) ("the Act"). One of those other telecommunications providers is Optus Networks Pty Limited ("Optus") which is the second respondent in proceedings numbered NSD 1934 of 2008 and the appellant in proceedings numbered NSD 1936 of 2008. 3 In September 2006 Optus notified a dispute to the Australian Competition and Consumer Commission ("the ACCC") about access to Telstra's ULLS for Optus subscribers in apartments, home unit buildings and town houses collectively called "multi dwelling units" or "MDUs". Many MDUs have common main distribution frames ("MDF") used to connect the telephone service of an individual residence within the MDU to a telephone exchange. The dispute between Optus and Telstra was notified to the ACCC pursuant to s 152CM(1) of the Act, which provides: If:

(a) a declared service is supplied, or proposed to be supplied, by a carrier or a carriage service provider; and

(b) one or more standard access obligations apply, or will apply, to the carrier or provider in relation to the declared service; and

(c) an access seeker is unable to agree with the carrier or provider about the terms and conditions on which the carrier or provider is to comply with those obligations;

may notify the Commission in writing that an access dispute exists. 4 Section 152CP of the Act requires the ACCC, after notification to it of an access dispute, to "make a written determination on access by the access seeker to the declared service". A final determination of that kind was made by the ACCC in relation to the dispute between Optus and Telstra about access to Telstra's ULLS for MDUs. Telstra then challenged that determination in this Court on a number of grounds, all of which were upheld by the primary Judge. 5 Accordingly, his Honour made the declaration and orders which are reproduced at [1] above. 6 No attack has been made in either of the present appeals on the declaration or orders to which we have just referred or on the reasoning of his Honour which underpins those orders. However, each of the ACCC and Optus has disputed the correctness of an interpretation of s 152AQB(2) of the Act which the primary Judge undertook at [26]-[45] of his reasons. That sub-section requires the ACCC to "make a written determination setting out model terms and conditions relating to access to each core service". A "core service" is defined by s 152AQB(1) as each of several declared services including: (c) the Unconditioned Local Loop Service [ULLS] (as described in the relevant declaration); 7 Paragraphs [26]-[45] of the primary Judge's reasons were mainly devoted to an analysis of a final determination made by the ACCC in October 2003 of "the model non-price terms and conditions for ordering and provisioning of the ULLS" ("the 2003 Determination"). 8 His Honour referred at [27] of his reasons to "the apparently mandatory terms of sub-ss 152AQB(2) and (3) regarding the obligation of the [ACCC] to make a written determination of model terms and conditions". He then noted at [28] that, when it published the 2003 Determination, the ACCC had reiterated that model terms and conditions "need not be comprehensive". 9 Reference was also made at [29] of the primary Judge's reasons to a recognition in the 2003 Determination by the ACCC that its model terms and conditions should generally conform with the standards established by the Australian Communications Industry Forum ("ACIF") which had been adopted as a matter of self-regulation by the industry. At [30] of the primary Judge's reasons, it was noted that the 2003 Determination incorporated by reference the 2001 version of ACIF Code 569, cl 8.1 of which required Telstra, as an access provider, to treat the ordering and provisioning of its ULLS in a non-discriminatory manner. As to that clause, the 2003 Determination recited: The Commission adopts this provision and all provisions relating thereto as part of its model non-price terms and conditions. 10 At [31]-[33] of his reasons, the learned primary Judge identified other express incorporations into the 2003 Determination of provisions of ACIF Code 569. As well, his Honour noted at [31] an argument advanced on behalf of Optus that the ACCC's adoption of specific provisions of ACIF Code 569 as model terms meant that "it could not have made the balance of the Code as model terms". 11 At [34] of the reasons at first instance, his Honour noted the statement by the ACCC that the 2001 version of ACIF Code 569 outlined, eg by cl 11.6, the agreed processes for ordering and provisioning Telstra's ULLS and the observation in the 2003 Determination that "any change in this process should be developed through the industry body (ACIF) and the relevant code". 12 Under the heading "The non-comprehensive approach of the Commission" the primary Judge then expressed, in these terms, his view of the correct interpretation of s 152AQB(2) and (3) of the Act: 35 In my opinion the intention of the Parliament when it enacted sub-ss 152AQB(2) and (3) was expressed in emphatic and unambiguous language. The section required the Commission to make a written determination setting out model terms and conditions relating to access to the ULLS and to take all reasonable steps to ensure that such a declaration was made within six months after the commencement of the section on 19 December 2002.

36 The subject matter, scope and purpose of that statutory requirement was directed to providing commercial certainty as to the material contractual rights and obligations of industry participants that would apply in any contract for access to ULLS as a declared service, absent agreement or a determination by the Commission. There would be little point in requiring the Commission to act by declaring model terms and conditions within six months of the commencement of this legislation which regulated access to declared services, if it had the choice of leaving out of a determination made under s 152AQB(2) and (3) some or all material terms and conditions relating to access to the ULLS, such as those in Code 569.

37 The language of the sections does not support the suggestion that the Commission could refrain from setting out some or all model terms and conditions relating to access to the ULLS. The absence of the definite and indefinite article ("the" and "a") before the expression "model terms and conditions" in s 152AQB(2) does not create any ambiguity. This is also evident when that provision is read with the remainder of s 152AQB as a whole. If the Parliament had intended that the Commission need not make all appropriate model terms and conditions relating to access to a core service like the ULLS then it had to say so, rather than use the clear language that it did. 13 At [38] his Honour then observed that the interpretation of s 152AQB raised "an important aspect of the rule of law", noting that, while the section contemplated that the ACCC might not complete, within the six months allotted by s 152AQB(3), the task of making a written determination setting out model terms and conditions relating to access to each core service, "it still obliged the Commission to continue thereafter to take all reasonable steps to promulgate model terms and conditions relating to access to the ULLS service". 14 At [39]-[40] of his reasons, his Honour explained why he rejected as a guide that the model terms and conditions to be formulated by the ACCC need not be comprehensive, a statement in the explanatory memorandum for the Telecommunications Competition Bill 2002 for the insertion into the Act of s 152AQB. That statement recited: It is intended that the model terms and conditions will not need to be comprehensive; the ACCC will be able to publish any or all of the model terms and conditions relating to a core service. 15 In his Honour's view, resort to the explanatory memorandum was precluded by these observations of Mason CJ, Wilson and Dawson JJ in Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 517-518: Furthermore, given that s 19 is ambiguous, consideration may be given in ascertaining the meaning of the provision to the second reading speech of the Minister when introducing the Bill for the Act into the House of Representatives in 1963: Acts Interpretation Act 1901 (Cth), as amended, s 15AB. That speech quite unambiguously asserts that Pt III relates to deserters and absentees whether or not they are from a visiting force. But this of itself, while deserving serious consideration, cannot be determinative; it is available as an aid to interpretation. The words of a Minister must not be substituted for the text of the law. Particularly is this so when the intention stated by the Minister but unexpressed in the law is restrictive of the liberty of the individual. It is always possible that through oversight or inadvertence the clear intention of the Parliament fails to be translated into the text of the law. However unfortunate it may be when that happens, the task of the Court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law. 16 The learned primary Judge considered that the canon of construction elaborated in that passage "also applies in circumstances where the text of the law imposes responsibilities and liabilities on persons, including corporations, who contravene it". His Honour also regarded the passage from Re Bolton 162 CLR 514 as reflecting "a fundamental precept of constitutional law". He continued, at [41]: … When legislative power is used to create rights or impose liabilities and obligations, one consequence is that the freedom of those affected by the legislation is constrained or expanded by what the law provides. Where the law requires the executive branch of government, such as the Commission, to do something to give effect to the intention of the Parliament, the executive must obey the law, just like every other member of the community, be it a corporation or individual. This is because it is the duty of the executive branch of government to obey the law as laid down by the Parliament and the Courts, even if the executive does not agree with those decisions: The Commonwealth v New South Wales (1923) 32 CLR 200 at 214 per Isaacs, Rich and Starke JJ applying Eastern Trust Co v McKenzie, Mann & Co [1915] AC 750 at 759; see also Tran v Minister for Immigration (2006) 154 FCR 536 at 540 [9] per myself. 17 At [42] of his reasons, the primary Judge deprecated the use of explanatory memoranda "to suggest the existence of some unexpressed restriction in the unambiguous terms of the bill before the Parliament". That drafting technique, his Honour considered: … fundamentally undermines the right of persons to know what their freedoms and obligations are as provided by the law in the words enacted by the Parliament. It is one thing to read the (clear) words and text of an Act of the Parliament, but it is another thing to require people to look beyond these to the raft of secondary materials to which s 15AB of the Acts Interpretation Act 1901 (Cth) and its analogues suggest the Court may have resort, for the purposes of divining the intention of Parliament. 18 At [43] his Honour then expressed his view that the "non-comprehensive approach of the [ACCC] in its October 2003 determination treated the words of the Act as if they were not obligatory". He then continued: … The requirement to take all reasonable steps to make a determination, setting out model terms and conditions relating to access to the core service of the ULLS within six months of the enactment of s 152AQB could not have been intended to leave unexpressed important terms and conditions for the provision of access to those services. How would anyone know what the terms and conditions were on which such services would be provided? If the construction put by the Commission were correct, that the uncontentious parts of the terms and conditions used by industry participants in the industry codes were not treated by it as being model terms and conditions within the meaning of s 152AQB, then there would be a significant gap in the model terms and conditions for access to the declared service in contravention of the command of the Parliament. That would lead to uncertainty.

At [44] his Honour said: The purpose of a model is to ensure that everyone is aware of the usual terms and conditions applicable in the relevant situation. Of course, in a particular arbitration or dispute, where the parties have not been able to agree on other terms and conditions to replace those model terms and conditions, the Commission is entitled to impose a solution, but in doing so it must have regard to the model terms and conditions, as s 152AQB(9) clearly requires. 19 It seems somewhat curious, with respect, that the learned primary Judge found it necessary to engage in the interpretative excursus which we have described. That is because Telstra did not make any submissions at first instance in favour of the construction of s 152AQB which his Honour preferred. That construction was not advanced by any party below and, to the extent that it was drawn to the attention of the ACCC and Optus, was resisted by both of them. The explanation for the course which his Honour took appears to lie in his view that the 2003 Determination should be read as adopting, as model terms and conditions governing the ordering and provisioning of Telstra's ULLS, all applicable existing ACIF codes unless excluded by express provision in the 2003 Determination. That approach seems to underlie his Honour's conclusion at [45] of his reasons that: Notwithstanding the way in which the Commission expressed itself, first, in its determination under s 152AQB, and secondly, in submissions it made (and Optus adopted) before me, I am of opinion that the October 2003 determination can and should be read consistently with the Act. I find that the then existing industry codes relating to the ordering and provisioning of the ULLS were determined by the Commission to be model terms and conditions (except to the extent that there were any different or inconsistent "contentious" terms expressly specified) in the October 2003 determination. 20 In other words, despite the ACCC's disavowal of a comprehensive formulation in the 2003 Determination, that determination, his Honour decided, should be construed as comprehensive in conformity with his interpretation of s 152AQB. The requisite degree of comprehensiveness was treated by his Honour as having been achieved by the implied incorporation in the 2003 Determination of all applicable ACIF codes.

Submissions of the ACCC and Optus on the Construction of s 152AQB(2) 21 Counsel for the ACCC submitted that Part XIC of the Act evinces a legislative preference for terms and conditions of access to declared telecommunications services to be determined by bilateral negotiation and agreement between the access seeker and the access provider (see s 152AY(2)(a)). In default of such an agreement or a unilateral undertaking by the access provider to offer access to all access seekers on terms and conditions approved by the ACCC, the ACCC is required to arbitrate a dispute between an access provider and an access seeker which is notified to the ACCC. The dispute may raise a single issue or many issues. In exercising its arbitral function, the ACCC may specify the terms and conditions on which the access provider is to comply with any, or all, of the standard access obligations and specify any other terms and conditions of the access seeker's access to the declared service (see s 152CP). 22 The statutory framework which has as its centrepiece the arbitral function entrusted to the ACCC was said to provide the context for the conferral on the ACCC by s 152AQB of a duty to make a determination setting out model terms and conditions relating to access. It was pointed out by both the ACCC and Optus that the model terms are not binding on an access seeker or an access provider. Nor do they bind the ACCC if it is required to arbitrate a dispute, although, by force of s 152AQB(9), the ACCC must have regard to them. That sub-section provides: The Commission must have regard to a determination under this section if it is required to arbitrate an access dispute under Division 8 in relation to a core service covered by the determination. 23 Counsel for the ACCC acknowledged that the relief which it seeks by its appeal is unusual in that it does not seek to disturb either the operative declaration or the orders made by Rares J. However, the case was said to be of a kind which warrants a review of part of the reasoning on which orders, which are otherwise unexceptionable, have arguably been erected. Thus, in Baxter Healthcare Pty Ltd v Comptroller-General of Customs (1997) 72 FCR 467, Burchett J, although dissenting in the result, said this, at 483, about the form of order necessary to give effect to the conclusions reached by the majority: However, the majority of the Court holds that the Tribunal did err in failing to provide an adequate statement of its reasoning process, and that a decision of fact either way would be open, in law, to the Tribunal. Accordingly, the appeal fails insofar as it challenges the orders, made below, setting aside the Tribunal's decision and remitting the matter to the Tribunal for reconsideration in accordance with law. But this Court does not agree with the additional findings of the trial judge designed to restrict the scope of the further hearing in the Tribunal. A right of appeal, of course, relates to a court's orders, not its reasons: Driclad Pty Ltd v Commissioner of Taxation (Cth) (1968) 121 CLR 45 at 64; Landsal Pty Ltd (In liq) v REI Building Society (1993) 41 FCR 421; Copperart Pty Ltd v Commissioner of Taxation (1994) 50 FCR 345. Nevertheless, the form of the substantive order as made here leaves open in the Tribunal the effect of the conclusions which this Court holds to be erroneous. Had those conclusions been expressed in some declaration, it would have been set aside or varied: cf Australian Telecommunications Commission v Colpitts (1986) 12 FCR 395; Secretary of State for Trade and Industry v Rogers [1996] 1 WLR 1569 at 1577, 1579; North Sydney Council v Ligon302 Pty Ltd (1996) 185 CLR 470 at 474-475.

In the circumstances, the appeal should be allowed, and an appropriate declaration should be inserted in the orders.

See also Secretary, Department of Social Security v Lowe (1999) 92 FCR 26, at 33-34 [16]. 24 An order of the kind made in Baxter Healthcare 72 FCR 467 is said to be necessary in this case because, without it, the ACCC would be under a continuing obligation to make comprehensive determinations of model terms and conditions for each of the core services specified in s 152AQB(1). The discharge of such an obligation would impinge severely on the ACCC's resources and have serious implications for access providers and access seekers as well as being likely to affect competition in relevant markets. In addition, it was pointed out, if the construction preferred by the primary Judge were to prevail, the validity of existing determinations would be called into question including that for the model terms and conditions made by the ACCC in November 2008 ("the 2008 Determination"). That, in turn, would have ramifications for any arbitration by the ACCC which took account of existing model terms and conditions. 25 The ACCC accepts that it is bound by s 152AQB(2) to make a determination of some model terms and conditions governing access to each core service. However, it argued that the scope and content of those terms and conditions is a matter of judgment for the ACCC. The judgment must be formed bona fide for the purpose for which the power was conferred but is not constrained by a need to ensure that each set of terms and conditions is "comprehensive". 26 The construction for which the ACCC contends is said to be supported by the text, context and purpose of s 152AQB read as a whole. Counsel for both the ACCC and Optus have pointed out that the reference to "model terms and conditions" in s 152AQB(2) is not qualified by any such adjective as "all" or "all material" and is not preceded by the definite article "the". Any of those drafting techniques, or others just as readily available, could have been used had it been intended that each set of model terms and conditions should be "comprehensive". 27 At its lowest, according to the ACCC, s 152AQB(2) is ambiguous. As a result, recourse can properly be had to extrinsic material to illuminate or determine the meaning of the provision. The ambiguity, if there be one, is directly resolved, the ACCC and Optus claim, by the statement in the explanatory memorandum produced at [14] above that "the model terms and conditions will not need to be comprehensive". 28 The learned primary Judge's invocation of Re Bolton 162 CLR 514 in support of eschewing recourse to the explanatory memorandum was criticised by Counsel for the ACCC. They pointed out that s 15AB of the Acts Interpretation Act 1901 (Cth) ("the Acts Interpretation Act") expressly permitted resort to the explanatory memorandum and the High Court in Re Bolton 162 CLR 514 acknowledged that utilising the relevant second reading speech as an aid to interpretation was not only permissible but required "earnest consideration". Moreover, in Re Bolton 162 CLR 514 there was a reluctance to use the extrinsic material to extend the reach of the statute so that it rebutted the common law presumption in favour of a construction conducive to the liberty of the subject: see eg Re Bolton 162 CLR 514, at 520. By contrast his Honour declined to allow the extrinsic material to restrict what he considered to be the full reach of the statutory language. 29 The difficulties inherent in his Honour's interpretation were said to be exemplified by his references at [36] of his reasons to "leaving out of a determination … some or all material terms", and at [37] to a possible need to "not make all appropriate model terms and conditions" (emphasis added) (see [12] above). As well, at [43] of his reasons, his Honour declined to impute to the legislature an intention to leave unexpressed "important terms and conditions for the provision of access" and identified at [44] the purpose of a model as being to ensure awareness "of the usual terms and conditions applicable in the relevant situation" (emphasis again added) (see [18] and [19] above). 30 Allied to the difficulties just described was what the ACCC and Optus said is the inherently indefinite nature of formulating a set of terms and conditions to provide for every contingency which may arise out of the contractual relationship which they are intended to govern. That is particularly so, the ACCC claimed, in relation to a technically, physically and commercially complex activity such as the provision of telecommunications services. A related consideration is the absence of a reasonably certain legal standard against which a court could determine whether a set of model terms and conditions contained "all" or "all material" terms and conditions relating to access. Those expressions denote "a category of indeterminate reference". In the same context Counsel for Optus pointed to the "significant scope for disagreement among access providers, access seekers and the ACCC about what types of terms and conditions are required in order to deal 'comprehensively' with the terms and conditions of access". 31 In seeing s 152AQB(2) in context, the ACCC argued, note must be taken of the limited operation given by s 152AQB(9) set out at [22] above to a determination of model terms and conditions. The sole operative effect of that sub-section is to require the ACCC to have regard to the model terms and conditions when arbitrating a dispute about access. The primary Judge was said to be mistaken in regarding, at [39] of his reasons, s 152AQB as obliging Telstra, amongst others, to ensure that access is given in accordance with the model terms and conditions. That misconception led his Honour to characterise the section as a law "restrictive of the liberty of an individual" and as affecting "freedoms and obligations" (see [40] and [42] of the reasons at first instance). 32 In support of the construction for which it contended, the ACCC drew on the object of Part XIC of the Act which is identified in s 152AB(1) as the promotion of the long-term interests of end-users of listed services. It is then stipulated in s 152AB(2) that, in determining whether a particular thing promotes the object of Part XIC, regard must be had exclusively to the extent to which the thing is likely to result in the achievement of the following objectives: (c) the objective of promoting competition in markets for listed services;

(d) the objective of achieving any-to-any connectivity in relation to carriage services that involve communication between end-users;

(e) the objective of encouraging the economically efficient use of, and the economically efficient investment in:

(i) the infrastructure by which listed services are supplied; and … 33 Drawing on the explanatory memorandum for the Telecommunications Competition Bill 2002, which resulted in the insertion into the Act of s 152AQB, Counsel for the ACCC deduced that a primary purpose of the section is to increase competition by facilitating access to telecommunications services "by assisting parties to reach commercial agreement on the terms and conditions of access". It was acknowledged that model terms and conditions that are more prescriptive and comprehensive may facilitate quicker access. However, against that consideration, the ACCC sees itself as required to balance the often competing interests of the parties involved and the need not to harm competition or efficient investment by promulgating terms and conditions which can have unforeseen effects. The risk of such effects is heightened by the ACCC's comparative lack of information, knowledge and experience when measured against the expertise of the actual participants in the telecommunications industry. 34 Counsel for the ACCC also noted that the ACCC is subjected by s 152AQB(5) to a requirement of consultation with the telecommunications industry before making a final determination of model terms and conditions. That sub-section provides: Before making a determination under this section, the Commission must:

(a) publish a draft of the determination and invite people to make submissions to the Commission on the draft determination; and

(b) consider any submissions that are received within the time limit specified by the Commission when it published the draft determination. 35 As the ACCC perceives the effect of s 152AQB(5) in its statutory context, it allows it sufficient flexibility to determine a model term or condition directed to a particular issue or to refrain from doing so, leaving access providers and access seekers to negotiate the matter for themselves if that would conduce to greater competition and efficiency. If construed in the way favoured by the primary Judge, s 152AQB(2) would deny to the ACCC that degree of flexibility. 36 Finally, the ACCC invoked s 33(3A) of the Acts Interpretation Act which provides: Where an Act confers a power to make, grant or issue any instrument … with respect to particular matters (however the matters are described), the power shall be construed as including a power to make, grant or issue such an instrument with respect to some only of those matters … That prescription, Counsel for Optus pointed out, is not subject to some such qualification as "unless the contrary appears". 37 The ACCC analysed the "matters" with which s 152AQB(2) is concerned as model terms and conditions relating to access to core services. On that analysis, s 33(3A) is available to validate an exercise of the power with respect to some only of the possible or available model terms and conditions. 38 Counsel for Optus imputed to the primary Judge a confusion between the concededly mandatory duty imposed by s 152AQB(2) to "make" a written determination and the additional duty imposed by s 152AQB(3) to "take all reasonable steps", with the requirement in s 152AQB(2) to "set out" model terms and conditions. The latter requirement, it was argued, goes not to performance of the duty but to the content of the terms and conditions. This is a matter which the legislature has left to the discretion of the ACCC informed, as it must be, by the object of Part XIC (as to which see s 152AB). 39 Counsel for Optus took particular pains to demonstrate a fallacy which was said to infect what the primary Judge said, at [45] of his reasons which is reproduced at [19] above. In their written outline of submissions Mr Robertson SC and Mr Free argued: 32. Even if the ACCC was under a legal obligation to make comprehensive model terms and conditions, it is readily apparent that in making the October 2003 Model Terms the ACCC did not understand itself to be under such an obligation and chose to make an avowedly non-comprehensive determination of terms and conditions (AP B page 98.7). If his Honour's approach to the construction of the obligation in s. 152AQB(2) is correct, then the result is that the October 2003 determination is deficient. It was not open to his Honour to attempt to fill the vacuum by a constructive reading of the document in a manner which is inconsistent with its terms and the underlying intention.

33. In the particular context of ordering and provisioning, the October 2003 Model Terms expressly incorporate various particular clauses of ACIF Code 569, in response to particular concerns raised in submissions to the ACCC (AP B pages 131-134). This is consistent with the ACCC's approach of dealing in the determination only with the "key contentious terms and conditions as raised by industry participants" (AP B page 98.7). There is nothing in the language, context or intention of the October 2003 Model Terms which supports the view that the determination implicitly incorporates or adopts ACIF Code 569 in its entirety.

Telstra's Submissions 40 Counsel for Telstra reiterated the position which it had taken at first instance. That was only to submit that the ACCC had a duty to make a written determination setting out model terms and conditions for access to each core service. Neither before the primary Judge nor on appeal did Telstra advance any submission as to whether sub-ss 152AQB(2) and (3) mandate the making by the ACCC of model terms and conditions which are comprehensive or relate to all, or all material, terms and conditions for access to Telstra's ULLS. It was further submitted on the appeal that the primary Judge's observations on that question of construction "were strictly obiter in terms of his Honour's ultimate conclusions". 41 Dr Griffiths SC and Dr Allars, who appeared for Telstra, accepted that it is open to an appellate court to vary an order of remitter to a tribunal so as to correct what it regards as an error in the reasoning which arguably led to the making of the orders at first instance. That can be done without disturbing the operative orders made by the primary Judge: see Commonwealth Superannuation Scheme Board of Trustees v Kitching (2004) 139 FCR 272 at 274 [3]. 42 However, Telstra contended that, irrespective of what this Full Court might regard as the proper construction of s 152AQB(2), it should, in the exercise of its discretion, decline to grant any of the relief sought by the ACCC and Optus. 43 In the first place, it was submitted that an order of the kind contemplated by Baxter Healthcare 72 FCR 467 and Kitching 139 FCR 272 would be futile. That was said to be so because the existing order of remitter requires the ACCC to rehear and determine in its entirety the dispute notified by Optus. Even accepting that the primary Judge's interpretation of s 152AQB(2) was undertaken as a step in arriving at a proper construction of the 2003 Determination, that would have no bearing on the ACCC's rehearing because the 2003 Determination has been superseded by the 2008 Determination. The 2008 Determination was made and commenced operation on 17 November 2008, shortly before the orders the subject of this appeal were made. 44 Second, Telstra submitted that the declaration sought by the ACCC and Optus was effectively a declaration about an abstract or hypothetical question. That question was whether the 2003 Determination as made was authorised by s 152AQB. Even more significantly, the validity of the 2008 Determination is also a hypothetical question not considered by the primary Judge and therefore not the subject of the present appeal. 45 The third contention advanced on behalf of Telstra was that a declaration should not be made if it is no more than a vehicle for an advisory opinion. An effective order, it was submitted, must declare in a binding way the rights of the parties or the proper construction of an instrument.

The Proper Construction of s 152AQB(2) 46 We accept that s 152AQB(2) of the Act imposes a mandatory duty on the ACCC to make a written determination setting out model terms and conditions for access to each core service. However, we can discern in s 152AQB nothing which prescribes in a mandatory way the content of the model terms and conditions which the ACCC's determination is required to set out. The obligation imposed by sub-ss 152AQB(3) and (4) to "take all reasonable steps" is directed to compliance with the time limit of six months from the commencement of the section, or the relevant regulation, as the case may be. It says nothing about the matters to be covered by the model terms and conditions for each core service. 47 A positive indication that the model terms and conditions to be set out in a determination made under s 152AQB(2) were not intended to be exhaustive is afforded by s 152AQB(10). That sub-section provides: A determination under this section has no effect to the extent that it is inconsistent with:

(b) any determination under section 152AQA. 48 Section 152AQA requires the ACCC, by writing, to determine "principles relating to the price of access to a declared service". As is clear from s 152AQB(1), a declared service includes a core service. In consequence, s 152AQA carves out of the model terms and conditions available to be determined under s 152AQB(2) terms and conditions going to the price of access to a core service. That excision from the ACCC's power to determine model terms and conditions governing price, which would otherwise be central to terms and conditions for access, is confirmed by s 152AQB(10). 49 Accordingly, we have been led to construe s 152AQB(2) as obliging the ACCC to make a written determination setting out at least some model terms and conditions relating to access to each core service (other than terms and conditions going to the price of such access). Otherwise, the sub-section leaves to the ACCC's discretion the scope and content of the model terms and conditions which it determines. 50 It is also significant, in our view, that s 152AQB(2) does not preface the phrase "model terms and conditions" with a definite article or any other expression apt to indicate that the model terms and conditions are contemplated as being all those which could reasonably be made for access to a particular core service or as being otherwise exhaustive. This feature of the language of the sub-section creates, at the very least, an ambiguity as to the duty which was intended to be imposed in relation to the reach or content of the model rules and conditions which the ACCC is required to determine. 51 We also derive some assistance in the proper construction of s 152AQB(2) from the fact that the section as a whole is concerned with the determination of "model" terms and conditions. The epithet "model", we think, connotes an illustrative guide or template rather than a prescriptive definition of the substance or scope of the regulation of access to a core service which the terms and conditions are to effect. 52 The phrase "model terms and conditions" is not specifically defined anywhere in the Act and is only used in the Act in Part XIC. The other sections where it appears are ss 152BK, 152BS, 152BV, 152BW and 152BX. Section 152BK deals with the content of a telecommunications access code made under s 152BJ of the Act. Section 152BK(2) provides that: Different sets of model terms and conditions may be set out for:

(b) the same kind of obligation in so far as it applies to different kinds of declared services. 53 Sections 152BS, 152BV, 152BW and 152BX deal with the interaction between ordinary access undertakings and the provisions that are to apply if model terms and conditions are adopted as well as those which are to apply in the event that model terms and conditions are not adopted. All of those provisions contemplate the existence of different sets of model terms and conditions - not just by reference to different kinds of declared services but also by reference to different kinds of obligations. The existence and terms of these provisions in Part XIC in close proximity to s 152AQB supports our view that s 152AQB(2) does not mandate that the ACCC is obliged to produce one all encompassing set of model terms and conditions for each core service but rather contemplates the flexible non-exhaustive approach adopted by the ACCC in its 2003 and 2008 Determinations in respect of (inter alia) ULLS ordering and provisioning processes. 54 The arguable existence of the ambiguity discussed at [50] above permits the invocation of s 15AB of the Acts Interpretation Act. That section provides, so far as is relevant: (1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:

(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or

(b) to determine the meaning of the provision when:

(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.

(2) Without limiting the generality of subsection (1), the material that may be considered in accordance with that subsection in the interpretation of a provision of an Act includes:

(e) any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the provision was enacted; 55 The explanatory memorandum which accompanied the Telecommunications Competition Bill 2002 which inserted s 152AQB into the Act said of that section, at p 41: It is intended that the model terms and conditions will not need to be comprehensive; the ACCC will be able to publish any or all of the model terms and conditions relating to a core service. (emphasis added) 56 In our view, that preparatory material, as contemplated by s 15AB of the Acts Interpretation Act, either confirms that the ordinary meaning of s 152AQB(2) accords with that suggested at [49] of these reasons or resolves the ambiguity between that meaning and the one preferred by the primary Judge. With respect, we disagree with his Honour's suggestion that the reasoning of the High Court in Re Bolton 162 CLR 514denies resort to s 15AB in a case like the present. 57 Indeed, as the High Court said in CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408, quite apart from any reliance on s 15AB of the Acts Interpretation Act, a court may, in construing a statute, have regard to extrinsic material (which would include the explanatory memorandum) in order to ascertain the mischief which the statute was intended to cure or the benefit which it was intended to secure. 58 We also consider that the interpretation of s 152AQB(2) which we favour is more conducive to a formulation by the ACCC of model terms and conditions which gives practical effect to the policy inherent in the objectives identified in s 152AB of the Act of encouraging access providers and access seekers to agree on a regime for access to a core service which promotes competition in markets for those services. The ACCC is not itself a participant in the telecommunications industry. Accordingly, if it were required to promulgate a model set of terms and conditions providing exhaustively for access to a particular core service, it could well stifle or reduce competition which might otherwise be enhanced by technical innovations or additions to the model devised by an access provider and an access seeker. 59 In the same context, we agree with the contention advanced on behalf of Optus that it is impossible to glean from within the four corners of Part XIC of the Act a sufficiently certain legal standard against which a court could determine whether a particular set of model terms and conditions contained "all" or "all material" provisions for regulating access to the core service in question. 60 A related consideration which militates against the view that s 152AQB(2) requires the promulgation of an exhaustive set of model terms and conditions is the fact that the model terms and conditions do not, of themselves, confer rights or impose obligations on access providers, access seekers or end users. Their only operative effect is that the ACCC must "have regard" to them if required to arbitrate an access dispute in relation to the relevant core service (see s 152AQB(9)). 61 We are reinforced in our conclusion about the proper interpretation of s 152AQB(2) by the canon of construction embodied in s 33(3A) of the Acts Interpretation Act. That sub-section provides: Where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws) with respect to particular matters (however the matters are described), the power shall be construed as including a power to make, grant or issue such an instrument with respect to some only of those matters or with respect to a particular class or particular classes of those matters and to make different provision with respect to different matters or different classes of matters. 62 Here the Act clearly confers on the ACCC power to make an instrument (the determination stipulated in s 152AQB(2)) with respect to particular matters being the model terms and conditions relating to access to each core service. Assuming, for the purposes of argument, that it is possible to identify all of the model terms and conditions which could conceivably relate to access to a particular core service, the power conferred on the ACCC should be construed as a power to make a determination with respect to some only of those model terms and conditions if it should choose to do so. It is significant that, by contrast with some other provisions of the Acts Interpretation Act, s 33(3A) is not expressed to be subject to any contrary intention appearing in the Act required to be interpreted.

Form of Orders Disposing of the Appeal 63 We regard it as a proper exercise of the discretion reposed in this Full Court to make it clear that the interpretation of s 152AQB(2) outlined at [46]-[62] above is part of the law to be applied by the ACCC on making a determination "according to law" of the dispute between Telstra and Optus about access to Telstra's ULLS. That new determination will have to be made in lieu of the determination of 30 November 2007 which was quashed by the primary Judge. 64 It may well be that the primary Judge's observations on the interpretation of s 152AQB(2) were obiter dicta if the ratio of his reasons be identified in accordance with strict principle. Whether or not that is so, we consider it as entirely possible, if not likely, that the ACCC, in the absence of a contrary direction by this Full Court, will regard itself as bound to adopt that interpretation when it comes to make its new determination. That possibility or likelihood is not diminished by the fact that, in making its new determination, the ACCC will be bound to have regard to the 2008 Determination and not the superseded 2003 Determination. We say that because both the 2003 Determination and the 2008 Determination have been formulated on the basis of the same interpretation of s 152AQB(2) which his Honour has held to be erroneous. 65 In our view, the validity of the 2008 Determination is likely to be called into question when the ACCC comes to make its fresh determination pursuant to the remitter by the primary Judge. Accordingly, to give effect to our interpretation of s 152AQB(2) will do more than furnish an advisory opinion in answer to an abstract or hypothetical question. 66 As indicated by Burchett J in Baxter Healthcare 72 FCR 467, it should not be left open to the ACCC, when it enters on the remitter, to adopt an interpretation of the sub-section which we regard as erroneous. We propose therefore to follow the course taken by another Full Court in Kitching 139 FCR 272 at 274 [3] and to vary the order made by the primary Judge so as to reflect our view of the proper construction of s 152AQB(2).

Conclusion 67 In the result, we shall order in each appeal that:

1. The appeal be allowed.
2. Paragraph 3 of the orders made by Rares J on 24 November 2008 be set aside and in lieu thereof it be ordered that: "3. The matter be remitted to the first respondent (the Australian Competition and Consumer Commission) for hearing and determination according to law including the law as explained in the reasons of the Full Court published on 5 June 2009." 68 We do not think that it is appropriate to make a declaration along the lines of the declaration sought by the ACCC on appeal. 69 Counsel for Optus did not seek to disturb the order for costs which had been made below but argued that the costs of the appeal should follow the event. However, although Counsel for Telstra urged discretionary reasons for declining to make the order which we propose, Telstra did not support either on appeal or at first instance the interpretation which we have held to be erroneous. In the circumstances, we consider that the better exercise of this Court's discretion in this respect is to make no order as to the costs of the appeal. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Ryan, Jacobson and Foster.

Associate: Dated: 5 June 2009 Counsel for the ACCC: Mr J S Hilton SC with Mr M H O'Bryan

Solicitor for the ACCC: Australian Government Solicitor

Counsel for Telstra: Dr J Griffiths SC with Dr M Allars

Counsel for Optus: Mr A Robertson SC with Mr S Free