Cabcharge Australia Ltd v Australian Competition and Consumer Commission

Judgment (4 paragraphs)

[1]

THE APPLICATION FOR LEAVE 20 The tests which inform the exercise of the Court's discretion to grant leave to appeal are well-established and articulated in the decision of the Full Court in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; namely whether the decision is attended with sufficient doubt as to warrant it being reconsidered by a Full Court; and whether substantial injustice would result if leave were refused, supposing the decision to be wrong. The two elements of the test are not unrelated. As Burchett J observed in Sharpe v Deputy Commissioner of Taxation (1988) 19 ATR 908 at 910: "…, the sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments. They bear upon each other, so that the degree of doubt which is sufficient in one case may be different from that required in another. Ultimately, a discretion must be exercised on what may be a fine balancing of considerations." It will, therefore, be convenient to delay consideration of the question of whether or not leave should be granted until after we have considered the arguments advanced in support of the proposed grounds of appeal.

[2]

DRAFT GROUNDS 3, 4 AND 5 36 Under these grounds Cabcharge alleges that the Tribunal (over which the primary judge presided) decided facts in Jools which will arise in the present proceeding and which are said to be central to that proceeding. Cabcharge complains that the findings were not based on undisputed or substantially undisputed facts and that, in the circumstances in which the findings were made, a fair-minded observer might entertain a reasonable apprehension of bias. 37 In its written submissions, Cabcharge identified the following findings of fact which, it says, were made by the Tribunal in Jools and which it is said are facts in issue in the present proceeding: · "[Cabcharge] terminals have gained such a stranglehold on the market for the provision of non-cash payments that there appears to be a restriction of competition in relation to electronic processing systems." · "[T]here are significant barriers to entry in relation to the market for the provision of payment processing systems." · "It may be that more would do so [use an alternative system to Cabcharge's] if an alternative system could process Cabcharge credit cards. But that can only happen with Cabcharge's consent, and its consent is not likely to be forthcoming while Cabcharge is able to maintain its virtual monopoly on EFTPOS systems in taxis." · "[T]he practical effect of the authorisations has been to compel networks and drivers to install Cabcharge EFTPOS terminals." · "The position now is that it is extremely difficult for competing terminals to replace Cabcharge terminals, that is for a new entrant to provide a processing system and terminal as an alternative to Cabcharge … They [the authorisations] have created barriers to entry and have allowed Cabcharge to become dominant." · "Cabcharge is introducing e-tickets to replace Cabcharge vouchers ... This development is likely to cement Cabcharge's market position further by reducing the alternatives to use of Cabcharge terminals. It would leave cash as the single alternative means of payment. … This dominance is likely to persist with the introduction of the e-ticket." · "[T]he authorisations have enabled Cabcharge to become a virtual monopolist at least in relation to the provision of payment systems." 38 It should be observed that Cabcharge is not correct in claiming that the Tribunal made all of the findings attributed to it. The first "finding" which is identified in the preceding paragraph was no more than a recording, by the Tribunal, of part of the reasons, given by the ACCC, for its decision to grant the authorisations: see Jools at 120 [19]. The second "finding" is a summary of a submission made to the Tribunal by Mr Jools: see Jools at 124 [35]. 39 It is relevant to repeat that the findings which were made by the Tribunal were made in June 2006. They were based in part on a statement of agreed facts which appeared as a schedule to the Tribunal's reasons. They were also based on unchallenged evidence given orally before the Tribunal. They were made by an administrative tribunal not bound by the rules of evidence and acting informally. 40 It is next to be observed that the Tribunal's decision was not concerned with the operation of either ss 45 or 46 of the Trade Practices Act. The ACCC had declined to revoke certain authorisations which had been granted by its predecessor, the Trade Practices Commission. The authorisations had been granted to some taxi networks. They permitted the networks to penalise or suspend drivers from the use of the networks' radio booking facilities if they failed to display a notice advising of the availability of a Cabcharge credit system approved by the networks. The networks could also penalise or suspend drivers who failed to accept Cabcharge cards for payment of fares. The authorisations were necessary because such arrangements amounted to third line forcing which is prohibited by s 47(6) or s 47(7) of the Trade Practices Act. In order to grant the authorisations, which effectively permitted what would otherwise have been contraventions of the Act, the Commission had to be satisfied, pursuant to s 90(8) of the Act, that the implementation of the proposal "would result, or be likely to result, in such a benefit to the public" that the implementation should be allowed. 41 Mr Jools, in his capacity as President of the New South Wales Taxi Drivers' Association, was dissatisfied with the ACCC's decision not to revoke the authorisations. He exercised his right, under s 101(1) of the Trade Practices Act, to apply to the Tribunal for a review of the ACCC's decision. The Tribunal was required to conduct a re-hearing: see s 101(2) of the Act. Having considered the competing arguments the Tribunal concluded that the authorisations should be revoked because it did "not believe that the potential benefit in sustaining them is a sufficiently certain benefit": see at 127. 42 As has already been noted, the ACCC, in the present proceeding, alleges contraventions by Cabcharge of ss 45 and 46 of the Trade Practices Act. It alleges that, between 2002 and 2008, Cabcharge took advantage of its "substantial degree of market power" in certain Australia-wide markets for the supply of services for the purposes of "eliminating or substantially damaging" competitors, or "preventing the entry" of potential competitors into those markets, or "deterring or preventing competitors" from engaging in competitive conduct in those markets. It further alleges that Cabcharge, in 2004, entered into a contract or arrangement containing a provision which had the purpose and likely effect of substantially lessening competition in the relevant markets and gave effect to that provision in contravention of s 45(2)(a)(ii) of the Act. 43 The pleadings in the present proceeding are closed. Relevantly, the ACCC alleges, and Cabcharge denies the following facts: · Cabcharge was a monopolist in the relevant markets. · There were significant barriers to entry in relation to the relevant markets. · Cabcharge possessed substantial market power in the relevant markets. · By not consenting to requests from alternative system providers to process Cabcharge charge cards, Cabcharge took advantage of its substantial market power in the relevant markets. · The practical effect of the authorisations considered in Jools included that drivers and operators affiliated with the networks subject to the authorisations were required to use Cabcharge's payment system in order to be able to accept Cabcharge instruments. · The majority of taxi drivers and operators prefer to use and used only one EFTPOS terminal. · Drivers and operators who use more than one EFTPOS were compelled to install and use Cabcharge's payment system. 44 It may be accepted, as the ACCC concedes, that there is some overlap between the factual findings made by the Tribunal (set out above at [37]) and some of the issues of fact which are in dispute in the present proceeding. It does not necessarily follow that the primary judge is, for this reason, disabled from conducting the forthcoming trial. He will only be disqualified if it is "firmly established" that a reasonable observer might apprehend that he might be "so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented" at trial. 45 We do not consider it to have been established that a fair-minded observer might reasonably apprehend that the trial judge might harbour any such irrevocable commitment to factual findings which he made as President of the Tribunal over four years ago. Those findings were made largely on the basis of undisputed evidence. It is evident from the transcript of argument before the primary judge that he had but a vague recollection of what had transpired at the Tribunal hearing and of the reasons for its decision. He was at pains to emphasise that such findings as were made were made (as best he could recall) on uncontested evidence. 46 By contrast, the forthcoming hearing will be hotly contested with much of the evidence on each side likely to be tested under cross-examination. His Honour will be called on to assess the weight to be given to conflicting factual assertions for the purpose of determining whether contraventions of provisions of the Trade Practices Act, other than those which were relevant in Jools, have occurred. He will have the benefit of expert evidence. His Honour has neither said nor done anything which would suggest that, in performing his judicial duties, he might be committed to findings which he made as a member of an administrative tribunal in 2006. It is highly likely that, in the interim, there will have been material changes to the structure of the industry or markets. In any event, there will be different and conflicting evidence about those matters which his Honour will need to consider and which may well lead him to different conclusions. 47 There is nothing in the material to suggest that a fair-minded observer might reasonably apprehend that evidence led by Cabcharge in the present case might not be considered and acted upon if it is accepted by the trial judge.

preliminary observations 10 There are some unusual aspects of this application for leave to appeal which warrant immediate comment. 11 The first is that leave to appeal is sought against the two orders made by the primary judge. Those orders were orders dismissing Cabcharge's motion for a change of venue and an order requiring it to pay the ACCC's costs of the motion. His Honour made no order refusing to disqualify himself from dealing with the motion or from hearing and determining the proceeding in which the motion was filed. 12 There was no occasion for the primary judge to make an order refusing to disqualify himself because Cabcharge had not moved the Court for such an order. This failure may be attributable to the line of authority commencing with Barton v Walker (1979) 2 NSWLR 740 at 748 that formal applications for disqualification should not be entertained by a judge. Barton was approved by a Full Court of this Court in Parramatta Design and Developments Pty Ltd v Concrete Pty Ltd (2005) 144 FCR 264 at 275. This view has not commanded universal approval: see, for example, Brooks v Upjohn Company (1998) 85 FCR 469 at 476-7; Kirby v Centro Properties Limited (No 2) (2008) 252 ALR 557 at 563-5; Margarula v Northern Territory (2009) 175 FCR 333 at 340-4. Whatever may be the correct view on the proper procedure to be observed where it is sought to have a judge disqualify him- or herself on the ground of apprehended bias, it is clear that, once the judge has made an order in the proceeding, that order may be impugned on the ground that the judge was disqualified: see Idoport Pty Ltd v National Australia Bank Ltd [2004] NSWSC 270 at [9]; Parramatta Design at 275; Brooks at 475-6. This will be so even if the order is made on a mundane interlocutory procedural issue: see, for example, Brooks, where the appeal was brought from an order fixing a trial date. 13 The precise manner in which the issue of disqualification was raised before the primary judge is not clear from his reasons. He merely records (at [19]) that: "There is one additional point that I should mention. Under the rubric of its venue application, the respondent raises the spectre of an apprehended bias complaint." The position is clarified when reference is made to the written submissions of counsel and the transcript of argument. Cabcharge's written submissions in support of the transfer application concluded with a single paragraph which read: "It is respectfully submitted finally that necessary consideration of the ends of justice on this application also requires one additional matter peculiar to this proceeding to be considered. That is the possibility that difficulties of the kind considered by Finkelstein J in Bright v Femcare Limited (2003) 195 ALR 574 at 607 [158] might arise if his Honour hears this matter in light of his Honour's consideration of and findings in relation to similar issues and conduct of the respondent in Re Jools …, for example at [19], [20], [35], [36], [37], [38], [46] and [50], Mr Jools also being a significant witness for the ACCC in this proceeding whose credit is likely to be in issue." In Bright at [158] Finkelstein J did not allude to any issue relating to apprehended bias. In the previous paragraph, however, he dealt with difficulties which might arise if various related claims were to be heard concurrently or sequentially before the same judge. He noted, referring to Australian National Industries Limited v Spedley Securities Limited (in liq) (1992) 26 NSWLR 411, that, were the same judge to hear separate actions, "the possibility of apprehended bias by prejudgment may be a legal barrier that would prevent one judge from hearing related claims …". It appears that this is the passage which counsel had in mind because, in a footnote, reference is made to the observation of Mahoney JA in Spedley (at 442) that "where decisions of fact or credibility have been made, the pre‑judgment principle will apply unless it appears that there is a 'necessity' for the judge to sit or that the case is 'an extraordinary case' or one which involves 'special circumstances'". 14 Notwithstanding the emphasis in his written submissions on the credibility issue, counsel's principal attention in oral argument was directed to the factual findings made in the identified paragraphs of the Jools judgment. Reliance on credibility issues relating to Mr Jools was disavowed. This appears to have been overlooked by his Honour when he prepared his reasons for judgment. 15 Whether this be so or not it is clear that the issue was raised and is an available ground for Cabcharge pursuing an appeal from the orders made by his Honour on the interlocutory application. 16 The second preliminary matter which warrants mention is that, if leave to appeal is granted, Cabcharge would wish to contend that the primary judge should be disqualified for some reasons which were not fully developed by Cabcharge when it made its submissions to him. 17 As already noted, the principal basis on which the primary judge was invited, in Cabcharge's written submissions, to disqualify himself was that the ACCC was proposing to rely, at trial, on the evidence of a Mr Jools. Mr Jools was said to be "a significant witness … whose credit is likely to be in issue." Mr Jools had been the successful moving party in a review, by the Australian Competition Tribunal ("the Tribunal") (over which the primary judge had presided), of a decision by the ACCC refusing to revoke authorisations granted to certain taxi networks to penalise drivers for failing to display credit systems approved by the networks: see Re Application by Jools (2006) 233 ALR 115. His Honour rejected this ground on the basis that most of the evidence which it was anticipated Mr Jools would give at trial would be uncontroversial evidence relating to the operation of the taxi industry in New South Wales and that Mr Jools had not given evidence at the hearing before the Tribunal. The Tribunal had accepted submissions by Mr Jools but his credit had not been put in issue. 18 Finkelstein J did not, however, overlook the alternative basis on which the disqualification submission was advanced in oral argument. His Honour noted, somewhat cryptically, (at [21]) that: "In addition, in the course of its ruling the Tribunal made certain observations about Cabcharge and its role in the market for the provision of credit processing services to taxicab passengers. Those observations were made substantially on uncontested facts and related to markets whose dimensions were not in issue." 19 The grounds on which Cabcharge would seek to rely if leave to appeal were granted do not include any complaint relating to the credit of Mr Jools. Rather, Cabcharge focuses on what it contends is a significant overlap between material facts found by the Tribunal in Jools and the factual issues in dispute in the present proceeding. It will be necessary for us, later in these reasons, to examine in greater detail the factual issues which are said to be common to Jools and the present proceeding. It is sufficient, for present purposes, for us to observe that Cabcharge did not develop those arguments in the same depth before the primary judge as it did on the present application.

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