Australian Gas Light Company (ACN 052 167 405) v Australian Competition & Consumer Commission

REASONS FOR JUDGMENT ON PRELIMINARY ISSUE AS TO JURISDICTION Introduction 1 Pursuant to agreements made in July 2003 the Australian Gas Light Company ('AGL') proposes to acquire shares in a company which, with others, it has incorporated to acquire shares in entities operating the Loy Yang Power Station and Coal Mine in the Latrobe Valley. An issue has arisen between AGL and the Australian Competition and Consumer Commission ('ACCC') about the proposed acquisition and whether it would contravene s 50 of the Trade Practices Act 1974 (Cth). AGL has instituted proceedings in this Court seeking declarations that the proposed acquisitions would not contravene s 50. The ACCC has pleaded, inter alia, that the Court does not have jurisdiction to entertain the claim. By direction of the Court the objection to jurisdiction is to be heard and determined as a preliminary question on the papers and on written submissions. For the reasons that follow I am satisfied that the Court does have jurisdiction to entertain these proceedings. The Applicant's Claims 2 On 15 September 2003 AGL filed an application in this Court seeking a declaration that proposed share acquisitions relating to the Loy Yang Power Station and Coal Mine in the Latrobe Valley would not have, or be likely to have, the effect of substantially lessening competition in a market in contravention of s 50 of the Trade Practices Act. AGL named as first respondent the ACCC. It is between AGL and the ACCC that issue is joined in these proceedings. Also joined as respondents by AGL are Great Energy Alliance Corporation Pty Limited ('GEAC') and GEAC Operations Pty Limited ('GEAC OpCo'). 3 GEAC and GEAC OpCo were incorporated by AGL, together with Tokyo Electric Power Company International BV ('TEPCO BV'), the Commonwealth Bank of Australia ('CBA'), the Motor Trades Association of Australia Superannuation Fund Pty Ltd ('MTAA') and Westscheme Pty Ltd ('Westscheme'). These companies are called the GEAC Members. GEAC and GEAC OpCo were incorporated for the purpose of acquiring the Loy Yang partnership which owns the power station and the coal mine. 4 The Loy Yang partnership comprises a number of companies being Horizon Energy Holdings Limited, CMS Generation Horizon Energy Holdings Ltd, Horizon Energy Investments (No 2) Pty Limited and NRGenerating Holdings (No 4) BV. The owners of these companies are referred to in the statement of claim filed by AGL as the Loy Yang Vendors. 5 On 3 July 2003, GEAC OpCo agreed with the Loy Yang Vendors to acquire all the shares in the Loy Yang Partners. This agreement is called the Loy Yang Share Sale Agreement. By another agreement made on the same day each of the GEAC members agreed to acquire additional shareholdings in GEAC to bring their respective interests to the following levels: . AGL - 35% . TEPCO BV - 35% . CBA - 14.48% . MTAA - 11.21% . Westscheme - 4.31% 6 The Loy Yang Share Sale Agreement was amended on 2 and 15 September 2003. It has not yet been completed. It can be terminated by any party if completion does not occur by 19 December 2003 on account of conditions precedent not being satisfied or waived. 7 The above facts appear from the AGL statement of claim and are not in dispute. 8 AGL's statement of claim sets out arrangements for the operation of the Loy Yang partnership following the GEAC acquisition (pars 16-26). It alleges that the ACCC has contended that the proposed acquisitions are likely to substantially lessen competition in contravention of s 50 of the Act (par 27). Reference is made in particular to various letters and two media releases issued by the ACCC. In its defence the ACCC does not admit that allegation and says that a letter dated 5 September 2003 from it to AGL's solicitors stated its position in relation to the proposed acquisition and that that position has not changed (Defence par 17). 9 AGL pleads that if it and the other GEAC members proceed to complete the proposed acquisition the ACCC '… may commence proceedings in the Court against AGL, amongst others, seeking remedies arising from an alleged contravention of s 50 of the Act' (Defence par 28). The ACCC does not admit this allegation and repeats its claim that its position is as stated in its letter of 5 September 2003. 10 AGL next pleads: '29. By reason of the matters set out at paragraphs 30 to 116 below the Proposed Acquisitions do not contravene s 50 of the Act.' The ACCC denies this allegation in par 19 of its defence. 11 The AGL statement of claim pleads numerous factual matters about the supply of electricity in Victoria. These include the categories of retail consumer, the growth in retail demand and the potential suppliers of electricity in the Victorian retail market. AGL says its market share in terms of Victorian Retail Customers as serviced by it is about 35%. The total volume of electricity sold by AGL to Victorian Retail Customers is about 25% of the total electricity consumed in Victoria (par 37). 12 AGL pleads the existence of retail markets for the supply of electricity to customers in Victoria (par 38). Two of these are not disputed by the ACCC. They are the Victorian residential and small business customer market and the Victorian commercial and industrial customer market. 13 The statement of claim refers to competitive strategies adopted by Victorian electricity retailers and other aspects of competition in the markets. By reason of these matters AGL says it is competitively constrained in the supply of electricity to Victorian Retail Customers. 14 The statement of claim goes on to set out the elements and operation of the interconnected electricity transmission and distribution system which comprises the National Grid as defined in the National Electricity Code established pursuant to the National Electricity Law of each of Victoria, New South Wales, South Australia, Queensland and the Australian Capital Territory. It identifies electricity generating entities in Victoria and in States other than Victoria which supply electricity into the National Grid. The shares of electricity generation capacity available in Victoria are set out (pars 48 to 58). The operation of a wholesale electricity exchange, the National Electricity Market ('NEM'), is then set out as well as the fact that all or almost all electricity transmitted through the National Grid is traded on a spot price basis. 15 The NEM is administered by an entity called NEMMCO which receives offers at thirty minute intervals for the supply of electricity from electricity generators registered in respect of connection points in the National Grid. Among other things, NEMMCO determines the NEM spot price and is responsible for the settlement of any NEM transactions between generators and retailers. By reason of the operation of the NEM it is said that interstate electricity generators compete with and constrain the pricing of Victorian electricity generators (par 69). The statement of claim goes on to refer to weighted average NEM spot prices in the periods from 1 July 2001 to 30 June 2002 and 1 July 2002 to 30 June 2003. 16 By reason of these and other matters relating to pricing and the cost of electricity generation (pars 48 to 77) it is said by AGL that the Loy Yang business is: '(a) unable to sustainably and profitably price electricity above the average long run costs of generating electricity, which represents the competitive level of electricity prices; (b) unable to sustainably and profitably withhold capacity from being available for generation at the competitive level of electricity prices; and (c) competitively constrained in the supply of electricity into the NEM.' This allegation is denied by the ACCC. 17 The statement of claim also describes the management of spot price volatility. This refers to the variation of the NEM spot price of electricity from one half hour interval to another within a day and throughout the year. Spot price volatility is said to represent a substantial business risk to Victorian electricity retailers and to electricity generators. Victorian electricity retailers seek to minimise the risk by entering into electricity derivative contracts with electricity generators or other parties or through trading exchanges providing a hedge against their obligations to settle at the NEM spot price (par 83). Electricity generators in Victoria enter into electricity derivative contracts at what is called the Victorian Regional Reference Node (par 87). Generators located outside Victoria also enter into electricity derivative contracts (par 88). NEM spot prices and the prices, terms and conditions of electricity derivative contracts are said to be closely correlated. The Loy Yang business is said to be competitively constrained by other suppliers of electricity derivative contracts (pars 97 and 98). 18 It is pleaded at par 99 that the ACCC alleges the existence of a wholesale electricity market and an electricity derivative contracts market. AGL contends that there is a single market in which all electricity generators participating in the NEM compete for the supply of electricity and electricity derivative contracts to Victorian electricity retailers and other wholesale purchasers of electricity and electricity derivative contracts in Victoria. This is referred to as the single wholesale electricity and derivatives contract market. It is denied by the ACCC. 19 The statement of claim then asserts that by reason of the competitive position in the Victorian retail markets AGL has, and following the Proposed Acquisitions, will have: '(a) no ability to control the operations of the Loy Yang Business to benefit its retail operations and/or disadvantage the retail operations of competitors to AGL; and (b) no incentive to control the operations of the Loy Yang Business to benefit its retail operations and/or disadvantage the retail operations of competitors to AGL.' Reference is made to further competitive constraints on AGL's ability to affect the pricing of electricity from Loy Yang A and the constraints imposed by the ownership structure of GEAC and the GEAC interests in the Loy Yang business. There are also said to be constraints imposed by arrangements for the operation of the Loy Yang business by GEAC OpCo (par 107). 20 Paragraphs 108 to 116 then plead facts relevant to the factors referred to in s 50(3) of the Act. In par 117 it is then said: 'By reason of the matters set out herein, and having regard to the factors in s 50(3) of the Act, the Proposed Acquisitions would not have the effect, and would not be likely to have the effect, of substantially lessening competition in: (a) any of the Victorian Retail Markets; and (b) any of the Electricity Generator Markets, in contravention of s 50 of the Act.' 21 Paragraphs 10 to 26 of the statement of claim set out the shareholding arrangements already referred to and the agreements comprising and supporting the proposed acquisitions as well as the post-acquisition operational arrangements for the Loy Yang partnership. These are in the nature of pleas of the prospective and continuing acquisition and post-acquisition arrangements. 22 In pars 11 and 13 of the defence, the ACCC admits the terms of the GEAC Shareholders Agreement and the GEAC Subscription Deed subject to production of those documents and reference to their full terms and effect. In relation to the GEAC Shareholders Agreement it pleads, at par 11(b): '… that, in the absence of binding undertakings given to the Court by each of the parties to the GEAC Shareholders Agreement to give effect to the GEAC Shareholders Agreement consistently with its terms (as is the fact), it does not otherwise admit the allegations contained in paragraph 11 of the Statement of Claim.' A similar plea is made in respect of the GEAC Subscription Deed in par 13(b) of the Defence. Paragraph 16 of the defence says: 'In the absence of binding undertakings given to the Court by each of the parties to the GEAC Shareholders Agreement to give effect to the GEAC Shareholders Agreement consistently with its terms (as is the fact), the ACCC does not admit any of the allegations contained in any of paragraphs 16 to 26 inclusive of the Statement of Claim.' The allegations referred to relate to operational arrangements for the Loy Yang partnership following the GEAC acquisition. 23 Paragraphs 106 and 107 of the statement of claim plead the inability of AGL to affect pricing post the proposed acquisitions by reason of the ownership structure of GEAC and the GEAC interests in the Loy Yang business and by reason of the arrangements for the operation of the Loy Yang business by GEAC OpCo. 24 In pars 96 and 97 of the defence the ACCC denies the allegations contained in pars 106 and 107 of the statement of claim and says further: '… in the absence of binding undertakings given to the Court by each of the parties to the Proposed Acquisitions that they will give effect to the GEAC Shareholders Agreement and the GEAC Subscription Deed consistently with their terms (as is the fact), those allegations are irrelevant.' 25 Then in par 111 of the defence it is said: 'AGL is not entitled to the relief sought in the Application because: (a) by reason of the matters alleged in paragraphs 10 to 26 inclusive of the Statement of Claim and the absence of the undertakings referred to in paragraphs 11, 13, 16, 96 and 97 above, the proceeding is not a matter within the meaning of: (i) Chapter III of the Constitution; (ii) section 39B(1A)(c) of the Judiciary Act 1903; (iii) section 21 of the Federal Court of Australia Act 1976; or (iv) section 163A of the Trade Practices Act 1974; (b) the Court should not, in the exercise of its discretion, make such declarations.' The Relief Claimed by AGL 26 The relief claimed by AGL is claimed pursuant to s 163A of the Trade Practices Act and/or s 21 of the Federal Court of Australia Act 1976 (Cth). The jurisdiction invoked is that conferred by s 163A of the Trade Practices Act and s 39B(1A) of the Judiciary Act 1903 (Cth). The relief claimed is in the following terms: '1. A declaration that the acquisition by The Australian Gas Light Company (AGL) of shares in Great Energy Alliance Corporation Pty Limited (GEAC) pursuant to the GEAC Subscription Deed dated 3 July 2003 would not have the effect, or would not be likely to have the effect, of substantially lessening competition in a market in contravention of section 50 of the Trade Practices Act 1974. 2. A declaration that the acquisition by GEAC Operations Pty Limited (GEAC OpCo), a wholly owned subsidiary of GEAC, of the Loy Yang Sale Shares (as that term is defined in the Statement of Claim) would not have the effect, or would not be likely to have the effect, of substantially lessening competition in a market in contravention of section 50 of the Trade Practices Act 1974. 3. A declaration that the acquisition by AGL of shares in GEAC pursuant to the GEAC Subscription Deed dated 3 July 2003 in combination with the acquisition by GEAC OpCo of the Loy Yang Sale Shares would not have the effect, or would not be likely to have the effect, of substantially lessening competition in a market in convention of section 50 of the Trade Practices Act 1974. 4. Such further or other orders as the Court may consider appropriate. 5. The First Respondent pay the Applicant's costs of these proceedings.' The Directions for Determination of the Jurisdictional Question 27 The trial of this action has been listed for three weeks commencing 18 November 2003 on the basis that judgment will be delivered prior to 19 December when a major payment is due in respect of the proposed acquisitions. The outcome of the case may affect the fulfilment of a condition precedent to the proposed acquisitions and that payment. 28 Programming directions were made, originally by Heerey J and subsequently by myself as trial judge. On 8 October 2003, I ordered that the question of jurisdiction raised in par 111 of the defence be determined on the papers by reference to the pleadings and written submissions, as a separate question. Directions were given for the filing of written submissions by the ACCC and by AGL and judgment was provisionally listed for 31 October 2003 at 2.15pm. Submissions were lodged in accordance with those directions. Statutory Framework 29 The provision of the Trade Practices Act central to the present application is s 50 which provides: '50(1) A corporation must not directly or indirectly: (a) acquire shares in the capital of a body corporate; or (b) acquire any assets of a person; if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market. (2) A person must not directly or indirectly: (a) acquire shares in the capital of a corporation; or (b) acquire any assets of a corporation; if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market. (3) Without limiting the matters that may be taken into account for the purposes of subsections (1) and (2) in determining whether the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market, the following matters must be taken into account: (a) the actual and potential level of import competition in the market; (b) the height of barriers to entry to the market; (c) the level of concentration in the market; (d) the degree of countervailing power in the market; (e) the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins; (f) the extent to which substitutes are available in the market or are likely to be available in the market; (g) the dynamic characteristics of the market, including growth, innovation and product differentiation; (h) the likelihood that the acquisition would result in the removal from the market of a vigorous and effective competitor; (i) the nature and extent of vertical integration in the market.' Subsections (4) and (5) are concerned with the case in which a contract to acquire shares or assets is subject to a condition that its provisions will not come into force until authorisation for the acquisition has been granted. 30 The other relevant provision for present purposes is s 163A of the Act which provides: '163A(1) Subject to this section, a person may, in relation to a matter arising under this Act, institute a proceeding in a court having jurisdiction to hear and determine proceedings under this section seeking the making of: (a) a declaration in relation to the operation or effect of any provision of this Act other than the following provisions: (i) Division 2, 2A or 3 of Part V; (ia) Part VB; (ii) Part XIB; (iii) Part XIC; or (aa) a declaration in relation to the validity of any act or thing done, proposed to be done or purporting to have been done under this Act; or (b) an order by way of, or in the nature of, prohibition, certiorari or mandamus; or both such a declaration and such an order. … (3A) In so far as this section has effect as a law of the Commonwealth, the Federal Court has jurisdiction to hear and determine proceedings under this section.' Subsections (2), (2A) and (3) relate to the institution or intervention in proceedings under s 163A by the Minister and the ACCC respectively. Subsection (4) relates to declarations concerning things done by the Australian Competition Tribunal. 31 Also relevant is the jurisdiction conferred upon the Court by s 39B of the Judiciary Act and, in particular, s 39B(1A) which provides: 'The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: (a) in which the Commonwealth is seeking an injunction or a declaration; or (b) arising under the Constitution, or involving its interpretation; or (c) arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.' 32 The powers of the Court in matters in which it has jurisdiction are defined in part by ss 21 and 23 of the Federal Court of Australia Act which provides: '21(1) The Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed. 21(2) A suit is not open to objection on the ground that a declaratory order only is sought. 23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.' Whether the Court has Jurisdiction to Hear and Determine the Application 33 In substance, AGL seeks declarations that its proposed acquisition of a 35% shareholding in GEAC and the acquisition by GEAC and other parties of the business and assets of the Loy Yang A power station and associated transactions will not have or be likely to have the effect of substantially lessening competition in a market in breach of s 50 of the Trade Practices Act. This was the way in which the ACCC sought to encapsulate AGL's claim in its written submissions and it is a sufficient general description for present purposes. 34 The ACCC's contentions in summary were as follows: 1. The Federal Court has no jurisdiction to grant the declarations sought as there is no 'matter' in relation to the s 50 issue. 2. The Federal Court has no jurisdiction to grant the declarations sought as neither s 163A of the Trade Practices Act nor s 39B(1A) of the Judiciary Act on their proper construction provide an available source of original jurisdiction. Section 21 of the Federal Court of Australia Act presupposes the existence of original jurisdiction derived elsewhere. 3. The Court can and should now decide that it is inappropriate to grant the declarations sought in the exercise of its discretion. This contention, it should be noted, pays no regard to the terms of the direction for the hearing of the preliminary issue which was limited to the question of jurisdiction. The question of discretion in relation to the relief sought is in this case, as in most cases, properly left until all the evidence is in and findings of fact have been made. 35 The point of departure for consideration of the jurisdictional question is the observation of Starke J about the jurisdiction of the High Court in R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 464 which applies with equal force to the jurisdiction of federal courts created by the parliament: 'To the Constitution and the laws made under the Constitution it owes its existence and all its powers, and whatever jurisdiction is not found there either expressly or by necessary implication does not exist.' Those words were applied to the Family Court in the joint majority judgment of the High Court in DJL v The Central Authority (2000) 201 CLR 226 at 241. 36 The requirement that there be a 'matter' before the Court derives from the terms in which jurisdiction is conferred on the Court under s 163A(1) of the Trade Practices Act and s 39B(1A) of the Judiciary Act. That terminology has its origin in the grant of power to the parliament, under s 77 of the Constitution, to define the jurisdiction of the courts it creates and to invest the courts of the States with federal jurisdiction. As Gleeson CJ and McHugh J observed in Abebe v The Commonwealth (1999) 197 CLR 510 at 524: 'The jurisprudence of this Court makes it clear that federal jurisdiction is limited to deciding "matters".' Their Honours went on to say: 'Central to the notion of a "matter" is the determination of rights, duties, liabilities and obligations in a legal proceeding.' 37 The High Court in In Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265 required that a matter ordinarily be concerned with 'some immediate right, duty or liability to be established by the determination of the Court'. That case concerned an attempt to confer jurisdiction on the Court under the Judiciary Act to hear and determine any question referred to it by the Governor-General as to the validity of any enactment of the Parliament of the Commonwealth. The Court rejected this as an invalid attempt to '… authorise this Court to make a declaration of the law divorced from any attempt to administer that law' (at 266). Consistently with what the Court said in that case, declaratory relief cannot be claimed as a way of securing legal advice from the Court or answering an hypothetical question divorced from real controversy. So in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582, it was said in the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ, at 581-582, that the grant of declaratory relief is confined by the considerations which mark out the boundaries of judicial power. Their Honours went on: 'Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties".' 38 A crucial difference between an advisory opinion and a declaratory judgment was pointed out by the joint judgment in Bass v Permanent Trustee Company Limited (1999) 198 CLR 334 at 356 thus: '… an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties.' Their Honours referred with approval to Zamir & Woolf, The Declaratory Judgment 2nd Ed, (1993) where it was said that if the dispute is not attached to specific facts and the question is only whether the plaintiff is generally entitled to act in a certain way, the issue will still be considered theoretical. In such a case there would be no certainty that a general declaration would settle the dispute finally. Their Honours nevertheless said of the jurisdiction with respect to declaratory relief, at 356, that: 'The jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law and such a declaration will not be hypothetical in the relevant sense.' They referred to Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 at 305 (Barwick CJ). 39 It is well established that a declaration can be made to the effect that a proposed course of conduct will not be unlawful. So in Commonwealth v Sterling Nicholas Duty Free Pty Ltd, Barwick CJ observed that the capacity of courts to declare that conduct which has not yet taken place will not be in breach of a contract or a law 'contributes enormously to the utility of the jurisdiction'. In Royal College of Nursing (UK) v The Department of Health and Social Security [1981] AC 800, a declaration was granted that departmental advice relating to the termination of pregnancy by medical induction did not involve the commission by hospital staff implementing it of any offence against the Abortion Act 1967 (UK). In that case there was no discussion of the desirability of the relief sought. Its desirability was discussed in Airedale National Health Service Trust v Bland [1993] AC 789 in which a declaration was sought that the Trust and attending responsible physicians could lawfully discontinue life-sustaining treatment and medical support for a young patient in a permanent vegetative state. Lord Goff accepted that although strong warnings had been given against the civil courts usurping the function of the criminal courts, the jurisdiction existed to grant such a declaration and it would be a deplorable state of affairs if no authoritative guidance could be given to the medical profession in a case such as that before the court. See also Lord Browne-Wilkinson at 880 and Lord Mustill at 888. 40 The making of a declaration as to the lawfulness of future conduct has long been accepted as an exercise of judicial power. The fact that declaratory relief relates to future conduct does not place it outside the bounds of federal jurisdiction. If the claim for the declaration arises out of a contemporary controversy in which a party's freedom of action is challenged in some way, that controversy can constitute a matter for the purposes of the exercise of federal jurisdiction. Whether or not there is a real controversy is a question of judgment. In the present case, in my opinion, there is a real controversy about the right or freedom of AGL to proceed with the proposed acquisition in relation to the Loy Yang A power station and the coal mine. Its freedom to do so has been challenged in a very practical way by the regulator in correspondence and most explicitly in its defence where it denies that the proposed acquisitions would not contravene s 50 of the Trade Practices Act. Reservations about or opposition to a proposed acquisition expressed by the regulator can have very concrete commercial consequences and may in some, if not most, cases effectively prevent an acquisition from proceeding. 41 The ACCC asserts that many parts of the statement of claim proceed upon the unstated assumptions that the future states of affairs, activities and relationships of GEAC and its associated corporations will be as asserted in the statement of claim. Most of those matters, according to the ACCC, are regulated by commercial contracts or other arrangements such as shareholders' agreements and 'term sheets' which describe anticipated commercial activities and relationships but are not the subject of binding agreements in existence. And as to the agreements themselves, the unstated assumptions underlying the statement of claim include the assumption that the arrangements will remain entirely valid and enforceable in accordance with their terms and that there will be no variation, waiver, rescission, acquiescence in a breach or any other material non-performance, or non-compliance with, any of those agreements. 42 Reference is made to cl 11.4 of the GEAC Shareholders Agreement which provides for its variation to be approved by the shareholders in accordance with required majorities specified in the agreement. It is on this basis that the ACCC explains its defence that in the absence of binding undertakings given to the Court by each of the parties to the relevant agreements the ACCC does not admit the allegations in the statement of claim relating to the future state of contractual or other arrangements between the parties or the effects of future or proposed transactions on the relevant markets or on competition in those markets. This line of argument informs the submission by the ACCC that the underlying factual subject matter of the proposed declaration is too uncertain or hypothetical so that in accordance with the principles stated by the High Court in Bass the Court is without jurisdiction to make a declaration because it lacks justiciable subject matter. 43 The future remains an unknown country and the facts upon which any declaration as to future conduct is made or an injunction granted may change. There is nothing in that circumstance which goes to jurisdiction. 44 The ACCC argues that the Court is not being asked to rule upon the present competitive positions of AGL, the GEAC consortium or other competitors, but on the effect or likely effect on competition in various markets of a new state of affairs in the Victorian electricity generation and retailing markets which does not presently exist. That new state of affairs depends upon the completion and performance of the contracts involved in the proposed acquisitions. It is also said by the ACCC to depend upon many other uncertain factors such as the likely competitive responses of other actual and potential participants in the relevant markets. At the present time the precise terms and outcomes of the proposed transactions are unknown. The permanency and continuity of the proposed transactions and arrangements between the GEAC consortium members, AGL and others now and in the future are uncertain. For these reasons, according to the ACCC, the transaction is properly characterised today as hypothetical or uncertain in ways which it is submitted negate the Court's jurisdiction to grant declaratory relief. 45 Section 50 prohibits acquisition of shares or assets conditionally. The condition is that the effect or likely effect of the acquisition will be to substantially lessen competition in a market. That condition necessarily imports uncertain judgments about the post-acquisition state of competition in the market whether those judgments are required to be made before or after acquisition and whether in the context of claims for declaratory or injunctive or other relief. Such judgments may require consideration of the likely responses of other actors or potential actors in the market. The uncertainty does not render the section non-justiciable. Uncertainty is an inescapable aspect of the operation of a section based upon likelihoods which have to be assessed in determining whether the condition upon which acquisition is prohibited is satisfied. 46 In my opinion the Court is apprised of a real controversy with real consequences depending upon its resolution. It is not therefore deprived of jurisdiction for want of a 'matter' in this case. 47 The ACCC's submissions then focussed upon the terms of the grant of jurisdiction under s 163A of the Trade Practices Act and s 39B(1A) of the Judiciary Act. Those provisions respectively confer jurisdiction in relation to matters 'arising under this Act' (the Trade Practices Act) and 'arising under any laws made by the parliament'. Given that AGL plainly has standing to seek the relief it seeks, it may invoke with equal facility the jurisdiction conferred by s 39B(1A) and that conferred by s 163A albeit the latter may be subsumed in the former in the event that standing is not an issue. The ACCC however submits that, if there be a matter in the case, it is not a matter 'arising under' the Trade Practices Act for the purposes of either of those provisions. 48 In my opinion the central question in the proceeding is whether the proposed acquisitions would contravene s 50. That is to say, is AGL prohibited by s 50 from proceeding with the proposed acquisitions? I do not intend to refer to the many cases cited by the ACCC in support of its contention that the present proceedings do not arise under the Trade Practices Act. In my opinion it is sufficient to refer to the oft cited statement of Latham CJ in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154: '… a matter may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law. In either of these cases, the matter arises under the Federal law. If a right claimed is conferred by or under a Federal statute, the claim arises under the statute.' Latham CJ made it clear that this was not an exhaustive definition of 'matters arising under a law'. Plainly enough the question whether a prohibition under federal law applies to a particular course of conduct is a matter which arises under that law. 49 The question of the scope of the power conferred by s 163A need not be considered in the present context. In any event the general jurisdiction conferred by s 39B(1A) coupled with the power of the Court to award declaratory relief under the provisions of the Federal Court of Australia Act would appear to be sufficient to support the grant of the relief sought by AGL. 50 In my opinion, the Court does have jurisdiction to entertain the present proceedings. Paragraph 111 of the ACCC defence fails in so far as it asserts want of jurisdiction. The question whether the Court should, in the exercise of its discretion, make the declarations sought falls for determination in the final judgment. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French .