The test for "sufficient interest"
The conclusions of law expressed in this section, and elsewhere in these reasons are those of the Acting President. Section 42(1) provides that a question of law arising in a matter before a division of the Tribunal shall be determined in accordance with the opinion of the presidential member presiding. The application of the test for "sufficient interest" stated by the Acting President has been applied by the Members constituting the division to the facts to arrive at the Tribunal's ruling and determination: s 42(2) of the Act.
The Act does not define what is meant by "sufficient interest".
The question of locus standi or sufficient interest to bring civil proceedings to challenge or review administrative decisions has been addressed by the courts both in relation to claims for equitable relief in the form of injunctive or declaratory relief, and under specific statutes which provide for judicial review. In cases of the former kind it is established in Australia that an applicant must have "a special interest in the subject matter of the action": Australian Conservation Foundation Inc v The Commonwealth (1980) 146 CLR 493 at 530-531, 547; Onus v Alcoa of Australia Ltd (1981) 149 CLR 27; Wentworth v Woollahra Municipal Council & Others (1982) 149 CLR 672 at 680. In Australian Conservation Foundation Inc v The Commonwealth, it was held that the Foundation did not have standing to maintain an action to challenge the validity of administrative decisions made under the Environment Protection (Impact of Proposals) Act 1974 (Cth) and the Banking (Foreign Exchange) Regulations which allowed the establishment and operation of a tourist resort in central Queensland. Gibbs J at 530-531 said:
"I would not deny that a person might have a special interest in the preservation of a particular environment. However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails. A belief, however strongly felt, that the law generally, or a particular law, should be observed, or that conduct of a particular kind should be prevented, does not suffice to give its possessor locus standi. If that were not so, the rule requiring special interest would be meaningless."
Mason J at 548 expressed his entire agreement with the penultimate sentence of this passage from the judgment of Gibbs J. Stephen J at 539 said:
"An individual does not suffer such damage as gives rise to standing to sue merely because he voices a particular concern and regards the actions of another as injurious to the object of that concern."
In Onus v Alcoa of Australia Ltd, Gibbs CJ at 36 said:
"The rule is obviously a flexible one since, as was pointed out in that case, [Australian Conservation Foundation Inc v The Commonwealth] the question what is a sufficient interest will vary according to the nature of the subject matter of the litigation."
These statements of principle were followed in Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552 at 558 and Bateman's Bay Local Aboriginal Land Council & Anor v The Aboriginal Community Benefit Fund Pty Ltd & Anor [1998] HCA 49 at par 46 per Gaudron, Gummow and Kirby JJ where their Honours added:
"This emphasises the importance in applying the criteria as to sufficiency of interest to support equitable relief, with reference to the exigencies of modern life as occasion requires. It suggests the dangers involved in the adoption of any precise formula as to what suffices for a special interest in the subject-matter of the action, where the consequences of doing so may be unduly to constrict the availability of equitable remedies to support that public interest in due administration which enlivens equitable intervention in public law." (Footnote omitted).
In the field of judicial review of administrative decisions the issue of standing is addressed in a general way in the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"). Section 5(1) of that Act provides that "a person who is aggrieved by a decision" to which the Act applies may apply to the Federal Court for a review of the decision. Section 3(4) of the Act provides that a reference to a person aggrieved by a decision includes a reference to a person whose interests are adversely affected by the decision. Beyond that the Act gives no direct assistance as to the meaning of the expression "a person who is aggrieved by a decision…". The content of the expression was considered by Gummow J, then a judge of the Federal Court, in Australian Institute of Marine and Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124. After a review of relevant authorities in other fields his Honour said, at 132-133:
"The result is that there is a measure of broad agreement as to locus standi both for legal and equitable remedies in public law and in that situation it would be a strange result if the ADJR Act posited, by use of the concept of grievance, some narrower criterion. It also has to be borne in mind that the ADJR Act is ambulatory in its operation and draws within its scope a diverse and extensive collection of decision-making processes, truly an unclosed class. Too rigid a criterion of locus standi will threaten to stultify the utility of the procedures the ADJR Act offers.
Hence the force of the observations (frequently adopted in this Court) by Ellicott J in Toohey's case [Tooheys Ltd v Minister for Business and Consumer Affairs] (1981) 54 FLR 421 at 437-438 to the effect that the meaning of 'a person aggrieved' is not encased in any technical rules and that much depends upon the nature of the particular decision and the extent to which the interest of the applicant rises above that of an ordinary member of the public."
Gummow J after reviewing the facts of the case concluded at 133-134 that the applicant in that case had standing. There flowed from the decision of the Secretary:
"…a danger and peril to the interests of the applicant that is clear and imminent rather than remote, indirect or fanciful, and the applicant has an interest in the matter of an intensity and degree well above that of an ordinary member of the public."
That statement was approved by a Full Court of the Federal Court in Broadbridge and Anor v Stammers (1987) 16 FCR 296 at 298.
The reason for a broad and flexible test for standing under the ADJR Act was further explained by Lockhart J in Ogle & Anor v Strickland and Others (1987) 13 FCR 306 at 314-315. His Honour said:
"The importance of not giving the expression 'a person who is aggrieved' a narrow meaning is readily perceived when regard is had to the wide range of decisions under Commonwealth enactments which are susceptible to review under the Judicial Review Act and to the continually expanding field of Commonwealth law. As statutes, regulations, ordinances and other laws of the Commonwealth are continually emerging from the draftsman's pen, the definition of the words 'a person who is aggrieved' must be as applicable for future, as it is for current, enactments."
Lockhart J also noted that the adoption of a broad flexible meaning to the expression "a person who is aggrieved" did not expose the courts to a risk of being swamped with cases - "the floodgates" argument - because the burden of costs, including the risk of orders for costs being made against an applicant if the application failed, and the power of the courts to control their own proceedings, including the power to dismiss proceedings or to strike out pleadings if they are vexatious, frivolous or an abuse of process, provided constraints.
In Queensland Newsagents Federation Ltd v Trade Practices Commission; Ex parte Newsagency Council of Victoria Ltd and Others (1993) 15 ATPR 41-276 at 41,725, Spender J noted under the ADJR Act that in addition to showing a special interest in a decision under challenge, the applicant must also show that the decision will in some way expose that interest to peril.
These statements of principle in decisions in other branches of the law as to what constitutes a sufficient interest to bring proceedings are helpful, but not decisive. What is in issue here is the meaning and content of the expression "sufficient interest" in s 101(1) of the Act, not the meaning attributed to similar expressions in other statutes or in cases under the general law: see Lord Hewart CJ in Sevenoaks Urban District Council v Twynam [1929] 2 KB 440 at 443-444. The expression "sufficient interest" must be interpreted in the context of s 101 and having regard to the purpose of the Act, and to the purpose of the limitation which the expression imposes on the power of the Tribunal to review a determination of the Commission.
The power of review contained in s 101 is specific to a particular kind of administrative decision, namely a decision relating to the grant or revocation of an authorisation by the Commission under Part VII of the Act. Insofar as the rationale for a broad flexible test for standing enunciated in the above cases depends on a recognition that the remedies under consideration apply to a broad range of situations and statutes, that consideration does not arise in the interpretation of s 101. Under the general law, and with judicial review, because the courts have powers to award costs and summarily dismiss proceedings which are vexatious, frivolous or an abuse of process, there is no policy reason why rules as to standing should act as a control against unmeritorious claims. No such powers are bestowed on the Tribunal. A purpose of the threshold requirement of "sufficient interest" is to act as a filter to ensure that the review procedure is not misused or abused.
If s 101(1) did not provide the second of the threshold tests, the principles in the above cases would apply to impose on the interpretation of "a person dissatisfied with a determination" a requirement that the person have a special interest in the subject matter of the determination, so as to disqualify an application by a person who had no interest in the determination beyond that of any other member of the public, and who merely sought to pursue a point of principle on intellectual or emotional grounds. That the section expressly adds the further threshold of "sufficient interest" indicates that a more stringent test than "special interest" is intended.
There is only one reported instance where the interpretation of "sufficient interest" in s 101(1) has been considered. The question arose in Application by Wylie Steel Pty Ltd for review of grant of authorization to Broken Hill Proprietary Company Ltd (1980) 3 ATPR 40-170. That determination concerned an application under s 101 to review a determination of the Commission granting authorisation to the acquisition by Broken Hill Proprietary Company Ltd ("BHP") of shares in John Lysaght (Australia) Ltd held directly or indirectly by another company. BHP challenged whether Wylie Steel had a "sufficient interest" to require the Tribunal to conduct a review under s 101. Lockhart J, sitting as the Deputy President of the Tribunal (then the Trade Practices Tribunal), said at 42,344:
"It is not necessary to define the various categories of persons who may have a 'sufficient interest'; but they include a person who establishes that his business interests or prospects could be adversely affected by the proposed merger."
And later at 42,345:
"...subsec. 101(1) requires that before proceeding with the review of the determination of the Commission, the Tribunal must be satisfied that the applicant, not being the applicant for the authorisation, has made out a prima facie case that it has a 'sufficient interest'. The test is not an unduly high one. If it were, it may involve determining the very questions that will loom large in the hearing on the merits of the determination including the allegations of Wylie Steel to which we have referred. These are hardly matters that fall for determination at this stage. If it emerges during the course of the hearing that the applicant in truth may not have a 'sufficient interest' the Tribunal may then review the locus standi of the applicant and consider the future course of the application for review."
The allegations made by Wylie Steel to which reference is made in this passage included that BHP had refused to supply Wylie Steel with steel products, had encouraged its distributors not to supply Wylie Steel, and had followed a policy that reduced competition in the market in which Wylie Steel carried on business. Wylie Steel alleged that if the acquisition proceeded, John Lysaght would adopt similar policies which would directly affect it in obtaining steel products of the kind which it required to carry on its existing business.
Counsel for BHP had submitted that Wylie Steel did not have a "sufficient interest" because the business of Wylie Steel was only peripherally concerned with the products of John Lysaght, namely steel sheet and coil, and that Wylie Steel was largely a broker for the purpose of bringing together buyers and sellers of steel products. The Tribunal however, noted that Wylie Steel had sales for the last year that were not appreciably less than the tonnage sold by the smallest of the distributors of BHP and John Lysaght. The Tribunal noted:
"Wylie Steel carries on business as an importer, stockist and dealer in steel products. It buys and sells a wide range of steel products including plates, universal beams and columns, channels, angles, flats, rounds, rectangular hollow section, pipe, rails, sheet and coils."
The decision of the Tribunal was considered by a Full Court of the Federal Court on an application for declarations and other relief under s 163A of the Act. The decision of the Tribunal was set aside on grounds unrelated to the question of "sufficient interest", but Bowen CJ said that he would not disagree with the Tribunal's statements or approach to the question of "sufficient interest", and Franki J said that the Tribunal's approach "was not wrong": Broken Hill Pty Co Ltd v Trade Practices Tribunal and Others (1980) 3 ATPR 40-173 at 42,390 and 42,391. The other member of the Court, Brennan J, did not consider the question of "sufficient interest" as it was not necessary for the decision: see at 42,402.
Whilst Lockhart J said that the test of "sufficient interest" was not an unduly high one, that statement was made in the context of considering how far the Tribunal should go into the merits on a preliminary application to determine whether the applicant has shown a "sufficient interest" to require the Tribunal to enter into the review. Part of the merits in that case concerned the extent to which the operations of the proposed merged entity would impact on the business of Wylie Steel. The Tribunal held that the existing business operations of Wylie Steel in the relevant market were substantial enough to make out a prima facie case of "sufficient interest" for the review to commence, but reserved the possibility of ruling at a later stage during the hearing that Wylie Steel did not have a sufficient interest, presumably on the ground which BHP asserted, namely that Wylie Steel was only peripherally concerned with steel sheets and steel coil. It seems that the Tribunal considered that Wylie Steel's longstanding commercial activities in the market might not be enough to establish a "sufficient interest" when the evidence about the effects of the proposed merger was examined.
Part VII of the Act makes provision for the Commission, after going through the procedures laid down in ss 89 and 90A, to grant an authorisation. The relevant tests to be applied by the Commission, in ss 90(6) and 90(8) involve weighing public benefits against public detriments which arise, or are likely to arise from the conduct, or from the proposed contract arrangement or understanding, that is the subject of the application for authorisation. The grant of an authorisation is concerned with wide public interests rather than the private interests of a particular individual.
The procedures to be followed by the Commission emphasise the broad scope of the interests which must be considered in arriving at a determination based on net public benefit. When an application for authorisation is received by the Commission, public notice of the application is given: s 89(2). The requirement of notice is to allow persons who desire to do so to make submissions. There is no requirement as to standing which limits who may make a submission. The Commission is required, including those from "any other person", to take all submissions into account: s 90(2). The Commission must then prepare a draft determination: s 90A(1), and invite the applicant and each "interested person" to notify the Commission within a stipulated time whether any of them wish the Commission to hold a conference in relation to the draft determination: s 90A(2). If so, the Commission must hold a conference: s 90A(6). The Commission must take account of all matters raised at a conference when making its determination: s 90A(11). For the purposes of the procedures relating to such a conference held under s 90A, s 90A(12) provides:
"For the purposes of this section, 'interested person' means a person who has notified the Commission in writing that he, or a specified unincorporated association of which he is a member, claims to have an interest in the application, being an interest that, in the opinion of the Commission, is real and substantial."
At the first stage of consideration of an application for authorisation any person may make a submission, whatever their interest. Once the draft determination is published the Commission is required to invite submissions only from the applicant and persons whose interest is "real and substantial" (although this is not to say that in a particular case the Commission may not extend the invitation more widely to anyone who has made a submission, without strictly applying a "real and substantial" test). The "real and substantial" interest requirement in s 90A(12) introduces a requirement of relativity or proportionality into the decision making process at the stage of the pre-decision conference. As the Act recognises that a person with less than a real and substantial interest may be excluded from the process at that stage, it would follow that the Act does not contemplate that review under s 101 is available to a dissatisfied person with an interest which is not at the least real and substantial.
The question of what constitutes a real and substantial interest will depend on the subject matter of the conduct, or of the proposed contract arrangement or understanding which is under consideration, on the nature and extent of the interest possessed by the person asserting it, and in the way in which the grant of the authorisation will impact on that interest.
The concept of relativity or proportionality inherent in the requirement of a "real and substantial" interest arising under s 90A(12) should be carried through to the interpretation of "sufficient interest" in s 101(1), so that the applicant for review must have, on the considerations just mentioned, a real and substantial interest. Moreover, the interest should be one that is sufficient to warrant putting those who will be involved in the review to the very considerable time, effort and expense that a review involves. The requirement of "sufficient interest" is concerned primarily with the interest of the applicant in the subject matter of the authorisation (or revocation) rather than with the merits of the contentions which the applicant seeks to ventilate on the hearing of the review. However, if the contentions of the applicant are plainly without substance, or are irrelevant to the issues which the Tribunal would be required to consider on a review, the applicant would fail to satisfy the Tribunal that his or her interest was "sufficient" to warrant the Tribunal reviewing the Commission's Determination.
Does Mr Wakeman have a sufficient interest?
The information before the Tribunal indicates that Mr Wakeman resides in New Zealand. He has deposed that he has held a pilot's licence and worked as a pilot in New Zealand, Australia and Singapore for 20 years. He says he has also "worked in managerial positions with airlines", but no further detail is given.
Mr Wakeman's statement of interest made in his application to the Tribunal is set out earlier in these reasons. The statement identifies interests arising from:
· a designation in accordance with Article 4 of the Air Services Agreement between the Governments of New Zealand and Australia, since withdrawn;
· his wish to start an airline;
· being a customer of travel and freight services;
· being a taxpayer in Australia and New Zealand who considers the Governments of these countries are not looking after their national interests by not objecting to the authorisations.
It is convenient to consider these alleged interests in reverse order. Mr Wakeman's interests as a taxpayer in Australia and New Zealand who is dissatisfied with the policies of the two Governments would not qualify him as a person with a "special interest" sufficient to give him standing to sue for equitable relief: Australian Conservation Foundation Inc v The Commonwealth.
In relation to his claimed interest as a customer of travel and freight services there is no suggestion in the material before the Tribunal, let alone evidence, that Mr Wakeman has any interest in these services other than as an ordinary fare paying passenger travelling on established commercial airline services between Australia and New Zealand. Such an interest can hardly be said to be an interest beyond that of any other member of the public. In the context of the issues and public interests involved in the grant of the authorisations the interest is trivial, and not sufficient even to constitute a special interest under the principles that govern proceedings for equitable relief.
Plainly the last two interests asserted by Mr Wakeman do not constitute a "sufficient interest" for the purpose of s 101(1) of the Act. If Mr Wakeman has a "sufficient interest" it will be found to arise out of his professed desire to start an airline, and steps once taken by him to do so.
Apart from stating his desire to start an airline, Mr Wakeman has brought forward no information to show that his desire has any prospect of emerging as a reality - either in the near future or at all. He has adduced no evidence to show he has the financial or organisational backing to establish an airline, or that he has any current plans to do so.
The evidence, such as it is, shows that whilst he attempted to establish an "airline" in 1994, he never commenced operations, and the attempt finally failed in 1996 when his designation to operate on scheduled services between Australia and New Zealand was withdrawn by the New Zealand Government. The available information about that attempted venture strongly suggests that Mr Wakeman does not have the financial or organisational backing to establish an airline.
On 17 November 1994 Mr Wakeman was granted an international air service licence to operate between Auckland and Sydney. The licence was restricted to the purchase of seats on other airlines operating on this route on a "code share" basis. This restriction was applied to the licence as Mr Wakeman did not provide the necessary financial and other information required by the licensing authority to enable an application for a full licence to be considered.
Mr Wakeman made subsequent requests to the licensing authority to extend his licence to cover other international routes, but despite repeated requests from the licensing authority he never provided the information necessary to allow decisions to be made on those requests.
The air service licence required that the services authorised by the licence be commenced not later than 21 November 1995. This date was later extended to 21 February 1996. However the service never commenced, and for that reason the licence was withdrawn on 31 July 1996.
Mr Wakeman has informed the Tribunal in an affidavit that he was unable to obtain seats from any other airline.
In 1994 Mr Wakeman applied to the International Airline Transport Association for an airline code. He says he "paid the application fee of approximately US$1,500 for the express purpose of setting up an airline". This application did not lead to the grant of a code. Mr Wakeman says his application is still on "hold". There is no evidence that Mr Wakeman outlaid any other money for the purpose of setting up his proposed airline.
Mr Wakeman says he has objected to the cancellation of his licence by writing to the New Zealand Minister of Transport, and the Office of the Ombudsman, but it appears that no constructive steps have been taken to pursue this objection. A letter provided by Mr Wakeman, addressed to him from the Minister of Transport and dated 31 January 1997, suggests that the objections made by Mr Wakeman have not been made pursuant to any statutory or other procedure for formal review.
There is no evidence that Mr Wakeman has taken any positive or constructive steps to establish any form of air service since the withdrawal of his licence on 31 July 1996.
Mr Young in his submissions described Mr Wakeman's interest as no more than a "speculative aspiration". With this description we agree. Mr Wakeman has no current or prospective plans, nor has he produced any evidence that he has the capacity or backing to commence and operate even a very modest code sharing undertaking of the kind that he was authorised to operate in 1994. His interest in the subject matter of the authorisations is no more than "remote, indirect or fanciful": per Gummow J in Australian Institute of Marine and Power Engineers v Secretary, Department of Transport at 133. The authorisations present no danger or peril to any present interest or realistic prospect of Mr Wakeman. In the opinion of the Tribunal, Mr Wakeman has no real and substantial interest in the subject matter of the authorisations. The Tribunal is not satisfied that Mr Wakeman has a sufficient interest such that the Tribunal is required to enter into a review of the determination of the Commission.
Moreover, matters of complaint which Mr Wakeman has pursued in his submissions to the Commission are not matters which could influence the outcome of a review of the determination granting the authorisations. For example, Mr Wakeman argued in his initial submission to the Commission, and again in his submission on the draft determination that the Alliance Agreement would create the potential for the Alliance Carriers to misuse their market power contrary to s 46 of the Act. That submission was rejected as a real possibility by the Commission, but, for present purposes, the important consideration is that the authorisations do not authorise conduct contrary to s 46. If the Alliance Carriers acted in contravention of s 46, the appropriate action could be taken under the Act to stop the contravention. The possibility of conduct in contravention of s 46 would not provide a ground for setting aside the authorisations made in respect of conduct governed by other sections of the Act. Mr Wakeman also complains that the New Zealand Government has abused its powers by having the Minister of Transport authorise the Alliance Agreement on 4 December 1997 pursuant to s 88 of the Civil Aviation Act 1990 (NZ), rather than require the Alliance Carriers to seek authorisation from the New Zealand Commerce Commission under the Commerce Act 1986 (NZ). That is not a matter that this Tribunal could explore on a review under s 101. The Tribunal would give respect and credit to an apparently lawful decision of the Minister and treat the s 88 authorisation as valid in accordance with the laws of New Zealand.
We should refer to one submission of the Alliance Carriers on which we have not placed weight in reaching our conclusion. The written outline of submissions contended that:
"In considering and assessing the sufficiency of the Applicant's interest, the Tribunal should also have regard both to the position of the Alliance Carriers and the public interest. To date the authorisation process has taken some 8 months, during which time the Alliance Carriers, and in particular Ansett, have operated and continue to operate at a real commercial disadvantage to their competitors. This commercial disadvantage is exacerbated by the fact that a number of significant commercial and government travel accounts are currently the subject of tender. Further, the delay in implementing the activities the subject of the Alliance Agreement also enables the competitors of the Alliance Carriers to operate without the more effective competitive pressure which it is submitted that authorisation and implementation of the activities contemplated by the Alliance Agreement will bring.
The Alliance Carriers' inability to implement the activities the subject of the authorisations sought also means that the other public benefits which the Commission recognised would flow from the implementation of the Alliance Agreement will not be realised."
In our view these submissions presuppose a view on the merits favourable to the Alliance Carriers. If an applicant for review otherwise had a sufficient interest to require the Tribunal to conduct a review under s 101, commercial considerations of the kind urged in this submission must give way to the statutory right of a person with a sufficient interest to have an adverse decision reviewed by the Tribunal.
The Tribunal announced its ruling, that it was not satisfied that Mr Wakeman had a sufficient interest, at the conclusion of the hearing. Mr Wakeman said that he wished to challenge the ruling and urged the Tribunal to make no order until he had done so. Had that course been taken, the Alliance Carriers would have been left without the benefit of the authorisations granted by the Commission. Once the Tribunal had ruled that the applicant had no sufficient interest, it is, at the least, arguable that the Tribunal had no power thereafter to grant an interim authorisation. The Tribunal considered that it should forthwith dismiss the application, with the consequential effect that the authorisations would come into immediate effect. If the ruling is set aside by the Court the application under s 101 will be revived and will be heard by the Tribunal. If the hearing of the application results in an order setting aside the authorisations, the Alliance Carriers will lose the protection of the authorisations, and will be obliged thereafter to conduct their operations so as not to contravene ss 45 and 45A, or any other provision of the Act. Mr Wakeman is not correct in his submission that immediate dismissal of his application will deprive his right to challenge the Tribunal's ruling of practical value.
The formal order of the Tribunal made on 27 August 1998 was that the application by Mr Wakeman under s 101 of the Act be dismissed.
I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Decision herein of the Australian Competition Tribunal
Associate:
Date:
The applicant appeared in person
Counsel for the Alliance Carriers : Mr N J Young QC with Ms M Sloss
Solicitors for the Alliance Carriers : Arthur Robinson & Hedderwicks
Counsel for the Australian
Competition Consumer Commission : Mr S White
Solicitor for the Australian
Competition Consumer Commission : Mr M Gauci
Date of hearing : 27 August 1998
Date of Reasons for Decision : 15 September 1998