FAILURE TO TAKE INTO ACCOUNT RELEVANT CONSIDERATIONS
75 The applicants also allege that the ACCC failed to take into account two relevant considerations:
(a) whether and in what factual circumstances the applicants and other airlines supplied or offered to supply international air cargo services in a market in Australia; and
(b) the burden imposed on the applicants by the issue of certain of the Notices.
76 The principles relevant to this aspect of the proceedings can be simply stated:
(a) The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is an abuse of discretion entitling a party with sufficient standing to seek judicial review of the decision.
(b) This ground of review can only be made out if the decision-maker fails to take into account a consideration that they are bound to take into account in making the decision.
(c) The factors a decision-maker is bound to take into account in making a decision are determined by construction of the statute conferring the power. Where the matters to be taken into account are not expressly stated in the statute, they must be determined by implication from the subject matter, scope and purpose of the Act: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J.
(d) A decision-maker may not have had proper regard to a relevant consideration if they merely make a formalistic reference to the consideration: see Azriel v NSW Land & Housing Corporation [2006] NSWCA 372 at [49] per Basten JA (with whom Santow and Ipp JJA agreed at [1] and [3]).
(e) A decision-maker is required to give proper, genuine and realistic consideration to a relevant consideration: see Deloitte Touche Tohmatsu v Australian Securities Commission (1996) 136 ALR 453 at 468 (per Lindgren J); Bruce v Cole (1998) 45 NSWLR 163 at 185-6 per Spigelman CJ and the authorities cited therein.
(f) The mere failure to refer expressly to a matter will not necessarily give rise to the inference that it was not taken into account: see Australian Conservation Foundation v Forestry Commission (1988) 19 FCR 127 at 132 (per Burchett J). However, it is open to the Court to infer that a matter was not taken into account where no reference is made to it: see, eg, Sullivan v Department of Transport (1978) 20 ALR 323 at 349 (per Deane J).
(g) In Deloitte Touche Tohmatsu 136 ALR 453, Lindgren J said (at 468):
It is for an applicant to make out its case of "failure to take into account", but the circumstances may be such that the applicant will be aided in this task by an absence of evidence from the decision-maker on a particular matter, such as an absence of evidence giving rise to an inference of a failure to make further inquiries when a genuine taking into account would have called for them.
77 The applicants submitted that the evidence reveals that the ACCC and Mr Samuel did not, at any time prior to the issue of any of the Notices, consider whether and in what factual circumstances the applicants and other airlines supplied or offered to supply international air cargo services in a market in Australia. They contended that the Notices themselves were not limited to, and do not refer to, the supply of international air cargo services in a market in Australia.
78 The applicants contended that the papers given to Mr Samuel recommending that the Notices be issued (the 'Reason to Believe' papers) did not refer to the statutory requirement that s 45 is limited to arrangements concerning the supply of services in a market in Australia, and did not consider or discuss whether the arrangements being investigated by the ACCC concerned the supply of international air cargo services in a market in Australia.
79 The applicants further submitted that the failure of the ACCC to refer to the requirement in s 45 of the Act that an arrangement must concern the supply of services in a market in Australia in any of the Reason to Believe papers, or in the Notices themselves, gives rise to an inference that this issue was not considered by the ACCC and Mr Samuel. It was then submitted that the failure by the ACCC and Mr Samuel to consider this fundamental element of s 45 means that the purported exercise of power under s 155 of the Act was an abuse of power entitling the applicants to have the Notices set aside.
80 The simple answer to this submission is that on my construction of the Notices, reference has been made to the supply of services (both inbound and outbound) in a market in Australia. The Notices are to be read as referring to inbound and outbound services, and in context, refer to those services being supplied in a market in Australia. The applicants accept that outbound services may give rise to a possible contravention of the Act. I am satisfied that, having regard to the terms of the Notices themselves and the Reason to Believe papers, there has been consideration of whether, and in what circumstances, the applicants supplied or offered to supply inbound and outbound services in a market in Australia, at least to the extent necessary for the purpose of deciding to issue the Notices.
81 I now turn to the second alleged failure to take into account another relevant consideration, namely the burden imposed upon the recipient of a notice.
82 The Notices do not merely require the production of information and documents, they also require that these be furnished within a specified time. The time for compliance specified in a notice is an aspect of the notice which affects the extent of the burden imposed on the recipient. I accept that Mr Samuel must consider the time for compliance when considering the burden on the recipient.
83 The applicants submitted that the scope of certain of the Notices was such that they imposed a severe burden on the applicants if they were to comply with them. This I readily accept, without recourse to the evidence sought to be relied upon by the applicants. I also accept that the greater the burden that is imposed by a notice to be issued under s 155, the greater the obligation to consider that burden when deciding whether a notice should be issued.
84 I find on the basis of the objective circumstances that the original time for compliance by the applicants, taking into account what was required by certain of the Notices, was objectively oppressive and harsh. A number of matters support this finding: the expansive scope of the applicants' international air cargo operations throughout the world; the fact that the information sought spanned a period of some seven years; the fact that information and documents were sought concerning surcharges and general freight rates applying to international air cargo services supplied by the applicants from any destination in the world to Australia; the fact that detailed information and documents was sought concerning every charge and change in charge imposed by the applicants that was attributed to a change in certain costs (which could require the applicants to investigate the reasons for every single charge imposed by them over an extensive period); the fact that two notices sought information and documents concerning surcharges applying to international air cargo services supplied by the applicants between every destination in the world; the fact that the nature of the information and documents sought would require the applicants to search records and conduct interviews of employees, in every location from which they supplied international air cargo services; and the fact that each of the notices said to be burdensome sought production of the information and documents within a period of approximately four or five weeks.
85 Irrespective of the resources available to a recipient (whether measured in personnel or monetary terms), and irrespective of whether the applicants could in fact undertake the task demanded within the period of time originally allowed, the objective harshness and oppressiveness derives from the original restrictive time limit imposed in which to carry out the tasks required for compliance with a notice.
86 However, this is not the end of the enquiry. The first question raised by the applicants was whether Mr Samuel failed to take into account the burden and the extent of the burden imposed upon the applicants.
87 There was no direct evidence from Mr Samuel that he had regard to the burden imposed on the applicants when deciding to issue the Notices. In proceedings of this nature I would not expect Mr Samuel to provide direct evidence: see eg Korean Air Lines v Australian Competition and Consumer Commission (No 3) [2008] FCA 701 at [116] per Jacobsen J. The only available evidence suggesting that Mr Samuel might have taken into account the effect of issuing the Notices on the applicants is derived from the Reason to Believe papers, and the objective matters available to Mr Samuel at the time of the issuing of the Notices, including the Notices themselves.
88 Many identical s 155 notices were issued at the same time to many airlines. The Reason to Believe papers seemed to be prepared in standard form for each such notice. This also applied to the 'burden' of the Notices. No allowance seems to have been made for the different burden that may have been imposed on different airlines by reason of the fact that their operations differed in scale and geographic scope.
89 It seems to me that the 'burden' sections of the Reason to Believe papers were pro-forma statements. This is not necessarily to be unexpected. The use of such standard paragraphs is not fatal in itself. However, if a verbal formula is used 'to cloak the decision with the appearance of conformity with the law', the use of that formula will not save the decision from invalidity: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 266 per Brennan CJ, Toohey, McHugh and Gummow JJ.
90 The 'burden' sections of the Rason to Believe papers in dealing with the time for compliance specifically refer to the magnitude of the burden imposed and to the time in which the recipient could provide the information and documents. Consideration was then given to the burden generally and, specifically, to the time in which a recipient would need to make the necessary searches and enquiries, collate the material necessary and obtain legal advice. Significantly, Mr Samuel was reminded that he needed to consider the magnitude of the burden. This indicates that the Reason to Believe papers did not contain the only information relied upon by Mr Samuel, although they contained recommendations.
91 I am not satisfied that the requirement to comply within a certain limited time was imposed without regard to the ultimate burden which it would impose on the recipient, even on the facts as I have found as to the burden objectively imposed.
92 In my view, Mr Samuel had regard to the effect that his exercise of power to issue the Notices would have on the recipients, including those notices said to be burdensome. The use of standard paragraphs in the recommendations to Mr Samuel was not cloaking the decision of Mr Samuel with the appearance of conformity with the law.
93 It is the decision of Mr Samuel that should be considered and this should be viewed in the context of the objective matters known by Mr Samuel. This is not a situation where a decision-maker is required to give reasons, or is required to set out all the considerations going to his belief. The Reason to Believe papers brought to Mr Samuel's attention the need for him to consider the magnitude of the burden and the time for compliance. Mr Samuel would have been obviously aware of the geographic scope of the applicants' business operators, the language difficulties involved in gathering documents and information, and the extent of the enquiry itself having regard to the Schedules to the Notices themselves. I do not think Mr Samuel needed to consider every considerable factor that may impact upon the task of any recipient in complying with a notice. He was certainly not bound to consider (because he could not know) the extent of the work required to comply as described by the applicants in evidence sought to be tendered in these proceedings.
94 Mr Samuel did know that the applicants might have collated relevant information in response to earlier overseas requests and he might have reasonably expected the applicants to have gathered some information prior to the issue of the Notices. Mr Samuel was obviously aware that an extension of time could be granted if required. It was not contended he did not have this power. Whilst not fully aware of the state of preparation of a recipient and what resources the recipient has available, in this case, Mr Samuel could assume some state of preparedness.
95 Of course, by the time the fourth and fifth notices were issued to Singapore Airlines, there had been extensive correspondence as to the earlier notices and compliance therewith in set time frames, which I infer Mr Samuel would have been well aware. There was evidence in the form of correspondence between the ACCC and the applicants regarding the burden and the insufficiency of time for compliance, with Mr Samuel extending the time for compliance by varying the original notices. This shows a preparedness on the part of Mr Samuel to do so, and an understanding by the applicants (at least after the first extension) that Mr Samuel would be prepared to so extend upon a request by the applicants. I do not think it was contended by the applicants that even before the first of the Notices they did not have this understanding.
96 Therefore, in my view whilst the burden imposed was objectively harsh and oppressive, it was relevantly considered. Mr Samuel properly considered the burden imposed by the Notices. He did adopt the recommendations put to him as for the time for compliance. Whether Mr Samuel was correct in his assessment of the burden and the ability of the recipients to comply within the time set is not germane to the attack made by the applicants.
97 It then remains to address the application of the principles enunciated in Pyneboard 57 FLR 368. Northrop, Deane and Fisher JJ there observed (at 377-8):
There remains to be considered the availability to the appellants of the grounds upon which they object to a particular requirement to produce documents, namely, that it is harsh, oppressive and unreasonable.
The mere fact that compliance with a requirement to furnish information or to produce documents would be burdensome will not invalidate that requirement in a s.155 notice (see Melbourne Home of Ford v Trade Practices Commission (No. 3); Riley McKay Pty Ltd v Bannerman). Nor will objective harshness, unreasonableness or oppressiveness of a requirement in such a notice constitute an independent ground of invalidity. If invalidity by reference to these qualities is to be established, it must be by reference to the implied general limitation upon the power conferred by s 155(1) of the Act to which reference has already been made, namely, that it is a condition of a valid exercise of the power that it be used in good faith for the purpose for which it was conferred and with regard to the effect that the exercise of the power will have upon those affected thereby. It is only if the harshness, oppressiveness or unreasonableness of a requirement in a s 155 notice is, in all the circumstances, such as to warrant the conclusion that the requirement could not have been imposed in good faith or could only have been imposed to achieve a collateral purpose or without regard to the burden which it would impose upon the recipient, that harshness, oppressiveness or unreasonableness will result in invalidity.
(Emphasis added, citations omitted.)
98 I have already concluded that Mr Samuel had regard to the burden imposed on the applicants. It now remains to consider the question of good faith, and a possible separate issue of unreasonableness. To a certain extent, the issues of failing to take into account the burden, good faith and unreasonableness overlap. Obviously, a requirement may be harsh, unreasonable and oppressive, and still not result in invalidity.
99 Bad faith normally involves a lack of an honest or genuine attempt to undertake the statutory function allocated to the decision-maker: see, eg, SCAS v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 397 at [19] per Heerey, Moore and Kiefel JJ. There is a very heavy burden upon any applicant seeking to demonstrate bad faith.
100 Undoubtedly, where a large number of documents or extensive information is sought within a short period of time, and where an extension of time is not possible, the specification of a short period of time may reflect upon whether the power was exercised in good faith, for a collateral purpose or was unreasonable: see, eg, A. B. Pty Limited v Australian Crime Commission [2009] FCA 119 at [65] per Flick J. In fact, it was alleged that the burden imposed on the applicants was of such a magnitude that no reasonable person exercising the power under s 155 would have made the decisions giving rise to the issue of certain of the Notices. Reliance was placed on the principles stated by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 and s 5(2)(g) of the ADJR Act.
101 The applicants attacked the breadth of the information and documents sought to support their argument as to burden, in conjunction with the time frame allowed for compliance.
102 I do not regard the breadth of documents or information as being improperly requested under the Notices or as giving rise in itself to harshness or oppressiveness. Even on the basis of the interpretation of the Notices given by the Court as applying to inbound and outbound services, the information and documents sought are, in my view, relevant and sufficiently identified, and answer the description of 'information relating to' or 'documents relating to' the matters referred to in the Notices.
103 It is important to keep in mind that it is an investigative power which is under consideration in these proceedings. As stated by the Full Court in Melbourne Home of Ford Pty Ltd 47 FLR 163 (at 174):
The investigative power may properly be exercised by inquiring into the existence of facts which do not themselves constitute a contravention or deny the possibility of a contravention. The power may properly be exercised to ascertain facts which may merely indicate a further line of inquiry, or which may tend to prove circumstances from which an inference can be drawn as to the existence of other facts which have a more immediate and proximate relationship to the matter under investigation.
104 The applicants are involved in international activities, and decisions and discussions concerning the matter under investigation may readily be accepted as having occurred overseas, as well as in Australia. The conduct of the applicants wherever occurring could be relevant to the investigation of the matter as defined in the Notices. It is not for this Court to confine or restrict the course of an investigation if the powers conferred by s 155 have not been exceeded.
105 In relation to the interpretation of the Notices, the applicants allege that the definition of 'Fuel Surcharge' is wide and unclear. However, to the extent that the applicants have responded to the Notices, they appear to have had no difficulty at all in understanding the meaning of the term. It seems to me that the applicants should be, and in fact are, well versed in the concept of 'Fuel Surcharge'.
106 The applicants also alleged that in certain of the Notices (the third notice to Emirates and the fought and fifth notices to Singapore Airlines) reference has been made to various meetings without there being any necessary linkage to Australia.
107 The Notices are seeking to investigate possible collusion between various airlines and the documents sought to be obtained need only 'relate to' such an arrangement. If the ACCC sought all documents recording correspondence or conversations between one airline and another airline about cargo then it could be 'relevant to' the alleged infringement. It would be apparent to a participant in the airline industry who reads the Notices that the reason why the respondents were interested in these documents was because any price fixing arrangements may have been discussed or agreed at these meetings. Insofar as documents are sought for overseas meetings of airline representatives that are not necessarily restricted with respect to air cargo to and from Australia, these may be records of meetings with representatives of airlines in competition in Australia, from which there may be reason to believe certain evidence was relevant (in the broad sense) to the investigation.
108 I raise these matters now, relevantly to burden, to indicate that the range of information sought does not lead to the conclusion that there was a lack of good faith or a collateral purpose, or that the burden was not properly considered. The fact that there may be instances where a Schedule to the Notices includes one or two items that may not be "relevant" or may not relate to the matter, does not necessarily invalidate the Notices. In my view, it cannot be said that the information and documents sought are excessive in the circumstances of the investigation and the nature of the alleged contravention of the Act.
109 The issue, is then, only one of timing for compliance. I have found that the original time for compliance was objectively a harsh and oppressive burden, but nevertheless, an issue actually considered by Mr Samuel. This conclusion alone does not lead to invalidity. Should I then conclude that the original time restriction was imposed in bad faith or was otherwise unreasonable?
110 In my view, there is no basis for doing so. Bad faith involves an element of dishonesty. Mr Samuel may well have made an error in his assessment of the burden, but I do not conclude on the evidence before me that he lacked honesty or did not make a genuine attempt to undertake the statutory function imposed on him. In focusing on the time for compliance, there is no reason to assume that at the time of the decision to issue the Notices, Mr Samuel would not agree if appropriate for an extension of time to comply with the Notices. This aspect is relevant to whether the original time for compliance was imposed in bad faith. For instance, if there was evidence Mr Samuel deliberately chose a short period for compliance knowing it could not be complied with, knowing the nature of the request for information and documents, and was minded in no circumstances to grant an extension if necessary, this may reflect on the reasonableness of the exercise of the power, or whether it had been exercised in good faith. This is not the situation in these proceedings. Here Mr Samuel was entitled to make his own assessment of the burden, but to also reason that if the recipient of any of the Notices could not respond, it could request a variation to extend the time for compliance.
111 In my view, there is no warrant for the conclusion that the requirements set forth in the Notices were not imposed in good faith or without regard to the burden.
112 As observed by Gibbs CJ in Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460, '[t]he power [under s 155] is a drastic power and is capable of abuse and must be exercised with care' (at 468). The time for compliance has statutory significance. The recipient is obliged to furnish the information sought within the time specified in the notice, and must produce the documents sought in accordance with the notice: subs 155(1). It is an offence to fail to comply: subs 155(5) and (6A). These are matters that needed to be considered by Mr Samuel, as they undoubtedly were, as part of the statutory context of issuing the Notices and as part of the consequences of non-compliance. Once one reaches the conclusion that the decision to issue the Notices was exercised with care, took into account the relevant considerations, and was not to be impugned on the basis of the principles in Pyneboard 57 FLR 368, then the reference to the statutory significance of compliance takes the argument no further.
113 Mr Samuel did have a duty to consider properly the scope of the information and documents sought, and make a realistic estimate of the time that would be required to produce the information and documents. However, it is permissible for the decision-maker to impose a time frame he considers appropriate, in the further knowledge that the time frame can be extended by a variation to the notice.
114 I now turn to the separate ground relied upon of unreasonableness. It may be that the concept of unreasonableness is caught within the principles of Pyneboard 57 FLR 368. Nevertheless, I do not consider that approaching the matter on the basis of unreasonableness, even if a separate ground to consider apart from the approach taken in Pyneboard, further advances the arguments of the applicants in support of their applications.
115 Any separate allegation of unreasonableness, particularly in the statutory context of s 155 of the Act, needs to be approached with caution. As Gleeson CJ said in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S 20/2002 (2003) 198 ALR 59 at [5]:
… to describe reasoning as illogical, or unreasonable, or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision-maker, and to identify the legal principle or statutory provision that attracts the suggested consequence.
116 Similarly, Mason J in Peko Wallsend 162 CLR 24 said (at 40):
The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned: (Wednesbury Corporation, at 228).
117 In any event, for the reasons I have already given, whilst the burden of some of the Notices, having regard to the original time limit, was objectively harsh and oppressive, the decision to issue such Notices was not so unreasonable (or illogical or irrational) that it could not have been made in the circumstances. Even if I looked to the question of 'proportionally', it seems to me that having regard to the very nature, breadth and extent of the investigation, the consequences of the burden were not such as to demonstrate unreasonableness so as to impugn the decision: see discussion in Bruce 45 NSWLR 163, at 184-5 per Spigelman CJ. I would reach this conclusion even on the basis of the evidence sought to be tendered by the applicants on the burden issue, although its relevance may be questionable - see above [13].