NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48; 219 CLR 90; 210 ALR 312; 79 ALJR 1

NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48; 219 CLR 90; 210 ALR 312; 79 ALJR 1 - HCA 2004 case summary — Zoe

[26]

McHUGH ACJ, GUMMOW, CALLINAN AND HEYDON JJ. The appellant, NT Power Generation Pty Ltd ("NT Power"), generated electrical power at a plant which it owned. It decided to sell power to consumers within the Northern Territory. It could not sell power without access to the existing electricity transmission and distribution infrastructure in and around Darwin and Katherine. That infrastructure was owned by the first respondent, Power and Water Authority ("PAWA").
PAWA, a body corporate constituted under s 4 of the Power and Water Authority Act (NT)[1] ("the PAWA Act"), was subject to the directions of the Minister for Essential Services for the Northern Territory (s 16). It operated a vertically integrated electricity enterprise. It generated electricity or purchased electricity generated by others; it transported that electricity from generation sites to distribution points via transmission equipment; it then transported it from distribution points to the customers via distribution equipment, and charged the customers. NT Power requested that PAWA supply the electricity transmission and distribution infrastructure services needed for its plan to sell electricity to consumers in competition with PAWA. Though there was no safety, technical or other problem preventing PAWA from acceding to that request, on 26 August 1998 PAWA rejected it. Thereafter PAWA maintained that stand.
While the field of legal controversy arising from that rejection was broader in the courts below, in this appeal three principal questions arise about the construction and application of the Trade Practices Act 1974 (Cth) ("the Act") and related legislation.
The first question is whether s 2B, which creates an exception to the immunity that PAWA (as an emanation of the Northern Territory Government) would otherwise enjoy from s 46 of the Act so far as PAWA "carries on a business", applied to PAWA's conduct[2]. The second question is whether, assuming that the Act did apply to PAWA's conduct, PAWA's rejection of NT Power's request contravened s 46 of the Act[3].
At trial, the Federal Court of Australia (Mansfield J) answered the first question favourably to PAWA[4]. It therefore dismissed NT Power's application for relief. Though it was not strictly necessary for him to deal with the second question, he adopted the helpful course of doing so, and reached conclusions favourable to NT Power[5].
In the Full Court of the Federal Court of Australia, Lee and Branson JJ agreed with the trial judge on the first question[6], and Finkelstein J dissented[7]. Hence the appeal was dismissed. Though it was unnecessary for the Full Court to answer the second question, they followed the trial judge's lead in addressing it: Branson and Finkelstein JJ agreed with the trial judge's conclusions[8], while Lee J disagreed[9].
The third question arising in this appeal relates to certain conduct of the second respondent, Gasgo Pty Ltd ("Gasgo"), a wholly owned subsidiary of PAWA. The trial judge held that the Act did not apply to it[10]; hence he did not determine whether it had contravened s 46[11]. Lee and Branson JJ agreed with the trial judge[12]; Finkelstein J disagreed[13].
The ensuing reasons establish that the contentions of the appellant are correct, and that the appeal should be allowed against both respondents.
In view of the number and complexity of the controversies in the appeal, it is desirable to set out the order in which they will be examined.
It is proposed, first, to summarise the statutory background and then the factual circumstances of the dispute, before turning to the question of whether PAWA was carrying on a business within the meaning of s 2B. That question involves consideration of the reasoning of the courts below, of what PAWA's business activities were, of how the trial was conducted in relation to that issue, and of the correct construction of s 2B. It also involves an analysis of whether PAWA's refusal of NT Power's request fell within an exception to s 2B created by s 2C(1)(b).
It is then necessary to deal with numerous arguments advanced by PAWA against the conclusion that it contravened s 46, namely that there was no relevant market because of a want of transactions; that it had no market power because of s 46(4)(c); that it did not take advantage of its market power, because it took advantage only of its proprietary rights, or because it only did what the Minister for Essential Services directed it to do under s 16 of the PAWA Act; and that the trial judge wrongly inferred an exercise of market power from PAWA's purpose, confused the effect of PAWA's conduct with its purpose, confused the existence of market power and its exercise, and made incorrect, and failed to make correct, assumptions in analysing whether PAWA took advantage of market power.
Finally, it is proposed to consider whether Gasgo was part of the Northern Territory Government, and whether it was in any event able to rely on what was called "derivative Crown immunity".
The reasons are organised as follows:

[39]

On 25 February 1994, the Council of Australian Governments agreed "to the principles of competition policy articulated in the [Hilmer Report]"[30].
On 11 April 1995, the Council of Australian Governments entered into three Agreements[31].
The first was the Conduct Code Agreement. By it, the Governments agreed to extend Pt IV of the Act to all "persons" within the legislative competence of their jurisdictions (an expression which includes local and State government agencies) that carried on a business. The extension was to be effected by applying the "Competition Code text" to all persons within the legislative competence of each State and Territory through complementary enactments (cll 5(1) and (2)). The central element in the Competition Code text was the "Schedule version" of Pt IV of the Act. However, the complementary enactments did not adopt the methods of securing constitutional validity which Pt IV of the Act itself employed, namely reliance in its primary operation on s 51(xx) of the Constitution and reliance, in its additional operation, by virtue of s 6(2) of the Act, on other heads of constitutional power, principally s 51(i) and s 122 of the Constitution. Rather, the new legislation operated directly on "persons", not "corporations", adopting the solution which was the second preference of the Hilmer Committee[32].
The second Agreement was the Competition Principles Agreement. By cl 6(1), it was agreed that the Commonwealth would put forward legislation to establish a "regime for third party access to services provided by means of significant infrastructure facilities". By cl 5(1), the parties agreed to review and reform legislation which restricted competition, unless its benefits to the community outweighed its costs, and the objectives of the legislation could only be achieved by restricting competition. They also agreed, by cl 5(3), to develop a timetable by June 1996 for the review and reform of legislation by 2000.
The third Agreement was the Agreement to Implement the National Competition Policy and Related Reforms. This made provision for payments by the Commonwealth to States and Territories that made satisfactory progress towards the implementation of the reforms set out in the other two agreements.
As a result of these Agreements, s 2B, s 2C (which created some exceptions to s 2B), Pt IIIA (which created a regime for access to essential facilities), and ss 150A and 150C (which incorporated the Schedule version of Pt IV of the Act) were all introduced into the Act by the Competition Policy Reform Act 1995 (Cth) ("the Reform Act").
The Competition Policy Reform (Northern Territory) Act (NT) ("the Competition Act") was then enacted. It provided that the Competition Code (including the Schedule version of Pt IV of the Act) applied as a law of the Territory (s 5(1)). Sections 14 and 15 were, for the Territory, to similar effect as ss 2B and 2C of the Act. Clause 46 of the Schedule version of Pt IV of the Act was in the same terms as s 46 of the Act, save that in lieu of references to "corporation" in the Act there appeared references to "person".
Sometimes, analysis in the courts below proceeded as if the relevant legislation were the Act; sometimes it proceeded as if the relevant legislation were the Competition Act and Competition Code. Neither side contended that it made any relevant difference which applied. PAWA, in particular, appeared content to have the case determined as though the Act applied, which must mean either that it abandoned its pleaded denial that it was a trading corporation, or that it accepted that the conduct took place in trade and commerce within the Northern Territory within the meaning of s 6(2)(b)(iii) of the Act. In general, analysis will proceed by reference to the provisions of the Act.

[40]

Before 1978, electricity was supplied in the Northern Territory by the Commonwealth Department of Works and Housing. After the advent of self-government on 1 July 1978, the Commonwealth's electricity assets were vested in the Northern Territory[33] and the Northern Territory Electricity Commission ("NTEC") took over the function of electricity supply[34]. In 1987, by s 4(2)(d) of the PAWA Act, PAWA succeeded NTEC.
PAWA conducted a vertically integrated enterprise. First, PAWA had generation facilities. It generated electricity at several stations in the Northern Territory which it either owned or controlled through contracts. It also purchased electricity generated by other persons, who conducted mining operations and made their surplus power available. One of these persons was NT Power.
In addition, PAWA had transmission facilities. It carried power of 33 kV and above through the 529 kilometres of power transmission lines which it owned. The only other power transmission line in the Northern Territory, 300 kilometres in length (known as "the 132 kV line") linked Darwin and Katherine. The 132 kV line was owned by a company related to NT Power and leased to another company related to NT Power, namely NT Power Transmission Pty Ltd ("NT Transmission"). NT Transmission used the 132 kV line to transmit electricity to and from PAWA under a series of agreements pursuant to which PAWA bought electricity from that company at certain supply points and sold it to that company at certain re-delivery points. NT Transmission was authorised to sell electricity to customers other than PAWA at certain points along the 132 kV line on certain conditions, but not to customers within 50 kilometres of Darwin, 20 kilometres of Katherine or 5 kilometres of Pine Creek.
PAWA also owned distribution facilities - low voltage electricity lines, substations and transformers. These operated as a distribution network, eventually leading into the meter box of each individual consumer.
In 1996, Pegasus Gold Australia Pty Ltd ("Pegasus"), the then operator of the Mt Todd Gold Mine ("the Mt Todd Mine"), contracted with NT Power for the operation and maintenance of a gas-fired power station at that mine ("the Mt Todd PS"). In September 1996, PAWA licensed NT Power to sell electricity to Pegasus. That electricity was either generated by NT Power at the Mt Todd PS or purchased from PAWA. PAWA agreed to buy surplus electricity generated at the Mt Todd PS from NT Power as it required it. The Mt Todd Mine was approximately 20 kilometres east of the Edith River Substation on the 132 kV line, and two 22 kV lines owned by NT Power ran between the Edith River Substation and the Mt Todd Substation, adjacent to the Mt Todd PS.
In November 1997, Pegasus ceased to operate the Mt Todd Mine, and it fell dormant until a new owner assumed control in July-August 1999.
For NT Power this created a problem and an opportunity. The problem was that it would have much more surplus power available from the Mt Todd PS. The opportunity was that it became entitled to acquire the Mt Todd PS from Pegasus. NT Power decided to solve the problem by selling the electricity it generated at the Mt Todd PS to the general public, including commercial users of electricity in Darwin and Katherine, in competition with PAWA. To that end, NT Power decided to acquire the Mt Todd PS in January 1998, and did so on 3 April 1998.
For the previous three years, the Northern Territory had been endeavouring to implement the obligations arising from its adherence, at the meeting of the Council of Australian Governments on 25 February 1994, to the principles of competition policy articulated in the Hilmer Report, and its entry into the Agreements of 11 April 1995. After it carried out the first of these obligations by enacting the Competition Act, it became apparent that there were various aspects of the Northern Territory's obligations which affected PAWA.
One of these related to Pt IIIA of the Act. By cl 6(2) of the Competition Principles Agreement, it was agreed that the regime for access then contemplated, and which was in due course established by Pt IIIA, was "not intended to cover a service provided by means of a facility where the … Territory Party in whose jurisdiction the facility is situated has in place an access regime which covers the facility and conforms to the principles set out in this clause". These principles were stated in cl 6(4) of the Competition Principles Agreement and broadly corresponded to those underlying Pt IIIA of the Act. Clause 6(2) was reflected in the Act in provisions which excluded the operation of Pt IIIA in respect of an "effective access regime". Thus an effective access regime is "a regime for access to a service or a proposed service" (s 44M(1)) which either the relevant Commonwealth Minister (s 44H(5) and s 44N(1)) or the National Competition Council ("the Council") (s 44G(3)) has decided is "effective" in the light of the principles set out in the Competition Principles Agreement.
After some indecision, in October 1997 a PAWA officer was allocated to work full-time on evaluating and recommending a regime for access to PAWA's infrastructure. Around that time, Mr Gardner took up office as Chief Executive Officer of PAWA. He formed the view that PAWA had serious operational deficiencies which inhibited its ability to compete with any other supplier of electricity to consumers in the Darwin-Katherine area. He prepared an operational assessment supporting that view in December 1997, which assessment was submitted to Cabinet for its meeting on 5 March 1998. Cabinet decided that a major review of PAWA should be undertaken. This was announced in the Treasurer's Budget Speech on 28 April 1998, which said that one aspect would be "the development of access regimes in accordance with National Competition Policy requirements"[35].
On 26 June 1998, PAWA granted NT Power a licence to sell to any person in the Northern Territory electricity generated by it at the Mt Todd PS[36].
Before that date, NT Power had made plain to PAWA its desire for access to PAWA's infrastructure so as to supply electricity to consumers in the Darwin-Katherine area, and they had communicated with each other about this extensively[37].
This led Cabinet, on 29 June 1998, to approve the making of a "Scoping Study" by a consortium comprising Merrill Lynch International (Australia) Limited ("Merrill Lynch") and Fay Richwhite Australia Limited ("Fay Richwhite"), so as to enable PAWA to respond to NT Power's desire for infrastructure access. Consideration of the question within PAWA, and in dealings between PAWA and NT Power on the one hand and PAWA and the Government on the other, continued for the next two months.
On 17 August 1998, the solicitors for NT Power wrote a letter to PAWA, asking that the charges for NT Power's use of the infrastructure be settled speedily, and seeking a response within seven days. They sent a copy to the Australian Competition and Consumer Commission. The question of what response should be sent led to a few days of intensive dealings between officers of PAWA, PAWA's solicitors, Merrill Lynch, the Treasurer and the Minister for Essential Services. On 26 August 1998, a letter from PAWA's solicitors, approved by the Treasurer and the Minister, denied that any access had been agreed and said that the issue was the subject of a policy review by PAWA and the Government.
The trial judge found that the letter of 26 August 1998 brought to an end the discussions about the terms upon which NT Power might be granted access to PAWA's infrastructure. It meant that NT Power was not to be granted access to PAWA's infrastructure at that time or until, and under the terms of, the access regime introduced on 1 April 2000; and that PAWA would not indicate to NT Power the terms upon which PAWA would grant access to its infrastructure, at least until the access regime was disclosed[38].
No further progress was made, and these proceedings commenced on 12 March 1999. The access regime for electricity supply referred to by the trial judge was approved by Cabinet on 14 September 1999 and enacted in 2000 by the Electricity Networks (Third Party Access) Act (NT) and related legislation. On 30 November 1999, the Chief Minister applied to the National Competition Council pursuant to s 44M of the Act for a recommendation that the access regime was an effective regime. That had not been determined by the time of the trial judge's decision on 3 April 2001.

[41]

The courts below found, and in this Court it was common ground, that PAWA was a body corporate established for the purposes of the Northern Territory under the PAWA Act, and hence was an "authority of the … Territory" under s 2B(1)[39].
The courts below accepted various arguments advanced by PAWA that PAWA was not relevantly carrying on a business within the meaning of s 2B. Those arguments centred on the fact that it did not provide any access to its infrastructure to anyone.
The trial judge said that PAWA's use of its assets for the purpose of conducting the business of generating and selling electricity "is not in respect of the carrying on of business by PAWA in the provision of access to its infrastructure, but is for the fulfilment of PAWA's function of planning and coordinating the generation and supply of electricity in the Northern Territory: see s 14(1)(b) and (d) of the PAWA Act"[40]. He applied to s 2B a construction which he said had been adopted by Emmett J for s 2A in J S McMillan Pty Ltd v Commonwealth[41]. Emmett J rejected the view that once it is accepted that the relevant government is carrying on a business, the Act applies to all conduct connected in some way with that business. He said that the expression "insofar as the Commonwealth carries on a business" indicated "that the Commonwealth is to be bound only where the conduct complained of is engaged in, in the course of carrying on the business"[42].
The reasoning of the majority of the Full Federal Court was similar to that of the trial judge[43] but they also held that the non-applicability of s 2B was supported by Dowling v Dalgety Australia Ltd[44]. Lockhart J there held that the owners of private yards for the auction of livestock were not obliged to make them available to a person desiring to trade in the yards as a livestock auctioneer, because they were not in the business of granting licences or leases of the yards but in the business of providing livestock selling services. Their exclusion of the applicant was held to be lawful, according to the majority's reading of Lockhart J's reasoning, because they took advantage of their proprietary rights, and not their market power[45]. Hence, to use Branson J's words, ss 2A and 2B[46]:

[45]

One matter is not controversial. PAWA was carrying on a very substantial business. The trial judge found that PAWA used its infrastructure "as part of the means of conducting the business of generating and supplying electricity"[48]. There are many references in PAWA's internal documents revealing that its officers perceived it to be carrying on a business. This can also be seen in its 1998 Annual Report ("the Report"), which was being prepared as the decision to refuse access was being made and then adhered to.
The Report was presented to the Minister for Essential Services in accordance with s 28(1) of the Public Sector Employment and Management Act (NT). Section 28(4) imposed an obligation on the Minister to make it public by laying a copy of it before the Legislative Assembly within six sitting days of receipt. The Report spoke of PAWA's "core business", of the fact that it was undergoing "commercialisation", of its "commercial functions", and of "its Vision" ("[t]o thrive in the competitive north Australia utility services market"). The Report stated: "Like all business, [PAWA] needs to generate a return on the very significant amount of capital invested", and spoke of the need for efficiency and cost-effectiveness. The Report discussed indicators like the rate of return on assets and the debt to capital ratio. In many respects, the language of the Report and the form of the accounts correspond with those in any non-governmental trading corporation. This is scarcely surprising in view of PAWA's duty, under s 17(1) of the PAWA Act, to act "in a commercial manner". PAWA had sales revenue in the year to 30 June 1998 of $253,181,000, of which power sales accounted for $206,272,000.
More specifically, the Report referred to the transmission and distribution facilities, which PAWA now contends are outside the scope of any business activity, as "business products" and it referred to the use of those facilities as "electricity transmission services" and "commercial services". The Report described PAWA's entire operation as a "business" having a "power" segment, with "upstream (generation …) and downstream (transmission, distribution and reticulation networks, and retail) components".
These are admissions. Technically they are "informal" admissions, but, having been made pursuant to statutory duties and in a document which there was a statutory duty to make public, they are of the utmost solemnity. The admissions in relation to the transmission and distribution facilities, in particular, are totally inconsistent with the case on the application of s 2B which PAWA propounded in this litigation.

[70]

However, since PAWA had not lost any chance, before the evidence closed, of calling evidence "which by any possibility could have prevented the point from succeeding"[50], the point can be taken now. In this Court, PAWA initially asserted, but then abandoned, a complaint of prejudice arising from a loss of opportunity to call evidence; it complained only of the difficulty of addressing the "issue on our feet with time constraints". In written submissions filed two months after the oral hearing, the primary prejudice which PAWA identified lay in its supposed inability to deal in written submissions with the argument whether it was possible that PAWA could derive market power in one market from power in another, and to refer to authorities on that subject. That is not prejudice in view of the opportunity to provide, and the actual provision of, those written submissions after the conclusion of the oral argument. The authorities which prevent points being raised in ultimate or intermediate courts of appeal do not prevent them being raised if those points remained open at the trial. PAWA also relied on the fact that this Court does not have the views of the trial judge on the point, but it was pleaded, evidence was called on it, and related questions were sufficiently fully considered to prevent the unavailability of the trial judge's views being a disabling handicap. Further, though the objection raised now by PAWA (that it was not carrying on business in the transmission and distribution markets) appears to have attracted the trial judge and was presumably argued before him, it was not pleaded by PAWA. A party who has not pleaded, but later raises, a particular factual barrier cannot criticise a second party for seeking to overcome that factual barrier by relying in an appellate court on matters pleaded by that second party which were not abandoned at trial and which are supported by evidence called at trial.
NT Power therefore contends that the question is whether PAWA's conduct can be characterised as taking advantage of its power in the Electricity Sale Market, in which it unquestionably carried on business within the meaning of s 2B, for the purpose of injuring NT Power either in the Electricity Supply Market or the Electricity Sale Market. It is a question which is open in this Court, since it does not turn on any assessment of testimonial credibility.
The trial judge found that PAWA had power in the markets concerned with transmission and distribution[51]. There was no challenge to or disagreement with that finding in the Full Federal Court, and there was no challenge to it in this Court. PAWA also had power in the Electricity Supply Market: PAWA admitted that there were substantial barriers to entry to, and that it had a substantial degree of market power in, the Electricity Supply Market. It followed from this admission and the agreement of the parties not to distinguish between the Electricity Supply Market and the Electricity Sale Market that PAWA had a substantial degree of power in the Electricity Sale Market, despite PAWA's denial of that allegation in the pleadings. That conclusion was supported by NT Power's expert. The power in both classes of market - the transmission/distribution markets, and the Electricity Supply Market/Electricity Sale Market - derived in part from PAWA's ownership of infrastructure: the trial judge found that it "constitutes a natural monopoly", and there was no "credible threat of entry" by another competitor[52]. That ownership operated as a barrier to entry in both classes of market and was hence a source of market power in both as well. PAWA took advantage of its market power, not only in the transmission/distribution markets, but also in the Electricity Supply Market/Electricity Sale Market, for the purpose of injuring NT Power in the latter markets. There is an unconvincing artificiality in PAWA's distinction between exercising market power in the former markets and exercising it in the latter, when the critical fact underlying both types of market power was PAWA's control of the infrastructure.

[74]

Even if, contrary to what has just been said, PAWA's last contention is correct, it was carrying on a business within the meaning of s 2B on its correct construction.
The legislative context. While the word "business" in any particular context takes its meaning from that context[54], normally it is a "wide and general" word[55]. Its meaning in the Act is widened by s 4(1), since "business" includes "a business not carried on for profit". The legislation as a whole is remedial; s 2 provides that the object of the Act is "to enhance the welfare of Australians through the promotion of competition …". The purpose of introducing s 2A, as explained by the Swanson Committee and noted above, was to ensure that the Commonwealth Government should, in its commercial activities, be subject to the same regime as corporations[56]. One of the goals of the legislation recommended by the Hilmer Report was to ensure that the legislation applied to businesses conducted by the governments of the States and Territories to the same extent as it did to those conducted by the Commonwealth[57]. The Second Reading Speech delivered in the House of Representatives when the Reform Act was introduced as a Bill stated that it and the three Agreements of 11 April 1995 represented "a complete response to the recommendations of the Hilmer committee"[58]. It was said that the amendments to the Act, taken with State and Territory application legislation, ensured that "the prohibitions against anti-competitive conduct can be applied to all businesses in Australia"[59]. It was further said that one of the main features of the Bill was that it "extends the operation of [the Pt IV] competitive conduct rules to currently exempt businesses"[60]. Section 2B was clearly a crucial provision in attaining these goals.
The flaws in PAWA's approach. PAWA proceeded on an erroneous construction of s 2B. It may be accepted that the conduct proscribed by the Act, if it is to fall within s 2B, must be engaged in in the course of PAWA carrying on a business. But the conduct need not itself be the actual business engaged in. Had s 2B not been enacted, the conduct alleged against PAWA would not be examinable under the legislation because PAWA is an authority of the Territory - part of the "Crown in right … of the Northern Territory", ie the Northern Territory Government[61]. But where such an authority "carries on a business" this removes the governmental obstacle to curial examination of its conduct in order to see whether s 46 has been contravened. PAWA would reverse the process and invert the correct approach: according to PAWA, it is necessary to examine specific conduct, and only when a particular contravention is found is it then relevant to examine whether that contravention can be described as carrying on a business.
The Act is seeking to advance the broad goal of promoting competition. Certain provisions of the Act, particularly in Pt IV, necessarily turn to a significant degree on expressions which are not precise or formally exact. One example is "market": there can be overlapping markets with blurred limits[62] and disagreements between bona fide and reasonable experts about their definition, as in this case. Other examples are "substantial", "competition", "arrangement", "understanding", "purpose" and "reason" (which need only be a "substantial" purpose or reason: s 4F). It is not appropriate to subject the application of this type of legislation to a process of anatomising, filleting and dissecting in the fashion advocated by PAWA.
Another flaw in PAWA's contention that its failure to supply the service of access to its infrastructure meant that it was not carrying on a business is that it substitutes the question of defining markets for the question of whether a business is being carried on. It was crucial to the trial judge's reasoning that PAWA was not trading or attempting to trade in the service of providing access to its infrastructure, and was not engaged in the business of acquiring infrastructure assets[63]. It was crucial to Branson J's reasoning that "PAWA does not compete with others either to obtain the use of infrastructure or to provide access to its infrastructure to third parties. It is not in the commercial marketplace in relation to its infrastructure"[64]. This recourse to ideas of rivalry in the acquisition or provision of services, of "competition" and of "market places", suggests a search for goods or services that were "substitutable for, or otherwise competitive with" each other - that is, a search for the existence of markets as defined in s 4E of the Act[65]. However, the words "market" and "business" have distinct meanings. Nothing in the Act limits the meaning of "business" by reference to the criteria for market definition. Businesses often operate across the boundaries of separate markets. PAWA's use of its infrastructure assets was a part of its carrying on of a business, whether or not it was in a market for their acquisition, sale or hire. In 1998, the provisions applied by s 2B to State and Territorial government businesses were limited to Pts IV, XIB and related provisions. Part XIB, like Pt IV itself, deals with much conduct that is not related to market definition. Further, s 2A, which uses substantially the same language as s 2B, applies the Act as a whole to Commonwealth businesses. Thus, the immense range of provisions that relate to consumer protection (Pts IVA, IVB, V, VA and VC) apply to Commonwealth Government businesses, quite independently of any market issues.
All these considerations militate against any approach to the question of "carrying on a business" by reference to competition in a market. That in turn renders it irrelevant whether PAWA was competing in acquiring infrastructure assets or was active in seeking to supply infrastructure services. The only question is: what business was PAWA carrying on? So far as it was carrying on a business, s 46 applied to it.
Further, as Finkelstein J pointed out[66], PAWA's construction, in treating as crucial its non-supply of access to its infrastructure, detracts from the legislative goal of securing equivalent treatment of non-government and government businesses. Private businesses which refuse absolutely to provide goods or services desired by others, even if they are competitors, can in some circumstances fall within the language of s 46[67]. A construction of s 2B which prevents the same outcome for government businesses that do so is unconvincing. It would permit a government business to remain immune from the legislation so long as it were consistently anti-competitive in denying infrastructure access; and indeed to remain immune on the first occasion when it permitted access, even if it did so on a discriminatory basis. After that point it would be "carrying on a business" and therefore caught by the Act, but only then. The statutory language does not suggest that this anomaly was contemplated.
In short, PAWA's denial of access to its infrastructure to NT Power, for no reason of want of capacity or technical difficulty or safety, but simply in order to protect its revenue position in relation to electricity sales, was conduct designed to secure PAWA's position as part of its carrying on of a business.
Authorities relied on by PAWA. The authorities relied on in support of PAWA's construction do not in fact support it.
The first authority, J S McMillan Pty Ltd v Commonwealth[68], a decision of Emmett J, held that the fact that the Australian Government Printing Service carried on a publishing business did not mean that the Commonwealth, in conducting a sale of that business, was carrying on a business. The officers engaged in the sale had nothing to do with the day-to-day operations of the enterprise; the Commonwealth did not conduct any business of selling assets[69]. The reading by PAWA of Emmett J's judgment as based on grounds narrow enough to exclude PAWA from the Act is not convincing. Emmett J required the "conduct complained of" to be "engaged in, in the course of carrying on the business"[70]. Those words apply to PAWA: in the course of carrying on the business of supplying retail customers, and for the purpose of preventing short-term competition in that business from NT Power, it denied NT Power access to its infrastructure services.
Next, the reliance by PAWA on Dowling v Dalgety Australia Ltd[71] is misplaced in relation to s 2B. No governmental body was involved in the case, and Lockhart J was not considering the construction of s 2A (or s 2B, which did not then exist). Whether or not Lockhart J's reasoning assists PAWA in its denial of a contravention of s 46, a matter considered below, it cannot cast light on an issue not considered by him.
Compelling the Crown to carry on a business. Branson J denied that ss 2A and 2B, in conjunction with s 46, could be read as requiring the Crown to engage in a business activity[72]. However, s 46 and other provisions can operate not only to prevent non-governmental traders from doing prohibited things, but also to compel them positively to do things they do not want to do[73]. If non-governmental traders are in this position, and governmental traders are to be treated equivalently, there is nothing surprising in a conclusion that the latter may be compelled to engage in business activities when they do not wish to.
Constitutional complexities? Branson J said that nothing in s 2B suggested that it was intended to have a different application in respect of the Northern Territory and the Australian Capital Territory from that which it had in respect of the States. Her Honour then stated that there were "significant constitutional complexities associated with a law of the Commonwealth which purports to interfere with the property rights of a State"[74]. She implicitly suggested that these difficulties must compel a narrower reading of s 2B than would otherwise be the case.
However, in this Court, no notices under s 78B of the Judiciary Act 1903 (Cth) were thought necessary, least of all by PAWA. None of the three States which intervened by leave raised any constitutional point. No difficulties of the kind indicated by Branson J can arise in relation to NT Power's claim under the Competition Act, for it is a law of the Northern Territory interfering (if it does interfere) with the property rights of an authority of the Northern Territory. Nor, by parity of reasoning, can any difficulty of that kind arise in relation to the State legislation that corresponds to the Competition Act. Any constitutional difficulties that may exist in relation to s 2B of the Act are thus immaterial.
Granting access to Crown infrastructure: problems of remedy. Branson J said that s 2B should not be read so widely as to introduce an access regime via s 46, because to do so would cause "significant difficulties" to arise in relation to the framing of orders "to grant access to Crown infrastructure"[75]. Her Honour stated that these were difficulties over and above the difficulties which exist anyway in s 46 cases "when attempting to frame orders that require a party to behave as it would in a competitive market where in fact there is no such market by which to determine this behaviour"[76]. There certainly could be difficulties in relation to injunctions "to grant access to Crown infrastructure". However, they are not, in s 46 cases, unique to situations involving governments or governmental authorities[77]. If the difficulties in relation to injunctions are insuperable, they may prevent injunctions from being granted but they do not prevent other relief.
Section 46 as an alternative access regime. Branson J pointed out that s 44E provides that Pt IIIA binds the Crown in right of the Commonwealth, the States and the Territories without any limitation with respect to the carrying on of a business. She also pointed out that s 2B was introduced into the Act by the same statute as introduced Pt IIIA (that is, the Reform Act)[78]:

[76]

There are several answers to this reliance on the availability of access under Pt IIIA as a reason for construing s 2B so as to prevent an alternative access regime arising under s 46.
First, the structure of the Act indicates the opposite because s 44ZZNA provides that Pt IIIA is to have no effect on the operation of Pt IV.
Secondly, the point would not answer NT Power's alternative cause of action under the Competition Act, which has no provisions similar to Pt IIIA.
Thirdly, if there is a disharmony between the existence of Pt IIIA as a means of access, and a construction of s 2B that enables s 46 to be used as a means of access, that disharmony would weigh against s 46 being used to create an access regime even if the Crown were already in the business of providing access to infrastructure. Yet it is accepted in the passage just quoted that s 2B does not prevent s 46 applying in those circumstances.
Indeed, the supposed disharmony would weigh against s 46 being used to create an access regime of any kind, and Lee J, who was of the opinion that s 46 "does not purport to interfere with the due exercise of rights of property per se"[79], gave various examples of the supposed inability of one competitor to obtain access to the real or personal property of another[80]. However, private traders could be obliged to supply goods or services against their will before s 2B was enacted, provided the preconditions to s 46 liability were satisfied[81]. Lee J accepted that this was so for intellectual property rights[82]. The exclusion by s 51 of various types of conduct from Pt IV is limited in relation to intellectual property rights. In deciding whether Pt IV has been contravened, anything specified in, or specifically authorised by, a Commonwealth Act must be disregarded - but not an Act relating to patents, trademarks, designs or copyrights: s 51(1)(a). A contravention of a provision of Pt IV is not to be taken to have been committed by various licences and other contracts, arrangements or understandings relating to patents, registered designs, copyright and other rights, and trademarks - but this does not apply to ss 46, 46A and 48: s 51(3). The legislative scheme contemplates that whether the conduct is refusal to supply intellectual property, or the supply of it on particular conditions, s 46 can be attracted[83]. The fact that s 46 can apply to intellectual property rights, and hence to the market power which they can give, suggests that it can apply to the use of market power derived from other property rights not specifically mentioned in the Act. It follows that, provided the notoriously difficult task of satisfying the criteria of liability can be carried out, s 46 can be used to create access regimes, and that s 2B is not to be read down as if it could not.
Finally, there is no contradiction in legislation which contains Pt IIIA and also contains s 2B and s 46. It is possible to imagine circumstances similar to those of the present case in which PAWA would not be vulnerable to a s 46 challenge, but would eventually have to provide access, either under an effective access regime devised by the Northern Territory or under a regime developed pursuant to Pt IIIA. Further, in cases where there is a contravention of s 46, it is possible that curial relief, sought speedily, might be obtained before completion of the somewhat elaborate arbitral, review and appellate procedures provided for in Pt IIIA.
Argument advanced by Western Australia. The Solicitor-General for Western Australia supported PAWA's submission that it was not carrying on a business because it did not supply access to its infrastructure by reference to Bass v Permanent Trustee Co Ltd[84]. He said it showed that activities "engaged in solely for traditional governmental purposes" stood outside the term "businesses"[85]. The passage relied upon was dealing with a question entirely different from the present - that of accessorial liability. In any event, it does not support PAWA's construction, since PAWA's conduct in this case was not "engaged in solely for traditional governmental purposes"[86].
Conclusion on s 2B. The reasons set out above have rejected PAWA's contentions that NT Power's conduct at the trial prevents it from relying on the pleadings; have concluded that even if NT Power cannot rely on the pleadings, the conduct of PAWA that is alleged to have contravened s 46 was in the course of carrying on a business; and have rejected PAWA's proposed construction of s 2B. The result is that it is open to the Court to consider whether PAWA's refusal of access to NT Power contained in the letter of 26 August 1998 contravened s 46.

[101]

It is true that the style in which PAWA conducted negotiations up to 26 August 1998 makes it difficult to infer precisely what form any favourable response to NT Power's request would have taken. But the complexity of the issues under discussion between the parties made it likely that it would have been sufficiently detailed to meet any requirement of formality.
Fundamental flaws in PAWA's argument. However, PAWA would fail on the s 2C issue, even if all its contentions just considered were sound. This is so for two reasons.
First, s 2C(1)(b) provides only that the mere doing of the enumerated acts in relation to licences does not amount to carrying on a business. Similarly, the other paragraphs of s 2C(1) provide that carrying on a business is not to be found in merely imposing or collecting taxes, levies or fees for licences (s 2C(1)(a)), or merely carrying out an intra-governmental transaction (s 2C(1)(c)), or merely compulsorily acquiring primary products (s 2C(1)(d)). It is not alleged that PAWA was carrying on a business merely because it granted, revoked, suspended or varied licences. If the only basis on which PAWA had been said to carry on a business was that it entered into agreements with persons whom it then appointed as licensees to generate, store, reticulate and sell electricity within the meaning of s 25(1) of the Electricity Act, it would fall within the exception in s 2C(1)(b). But PAWA was said to carry on a business for other, quite different reasons. Hence, it is irrelevant whether PAWA's refusal to make infrastructure services available to NT Power was a refusal to grant a licence.
Secondly, a fundamental difficulty in PAWA's position is that the definition of "licence" in s 2C(3) requires that it "allows the licensee to supply goods or services". The trial judge accordingly construed "licence" as an "authorisation … to sell goods or services"[97]. It is common for the word "licence" to be used in the sense employed by Latham CJ in Federal Commissioner of Taxation v United Aircraft Corporation[98]:

[116]

Here, there was the potential for dealings in transmission and distribution services: NT Power was willing to acquire them, and during the months of communications up to 26 August 1998, PAWA abstained from refusing to supply them. PAWA submitted that the observations of the three justices in the Queensland Wire case were only dicta, because the case turned not on a Y-bar market but on a wider steel products market in which there were many transactions. PAWA also submitted that the dicta should not be followed. Even if they are dicta, it would be wrong not to follow them without much fuller argument on the point in a case with a less unsatisfactory procedural background.
PAWA's contention that the absence of any direction from the Minister for Essential Services under s 16 of the PAWA Act precluded the existence of a market is invalid. Markets cannot appear and disappear at the whim of the Minister for Essential Services. In any event, PAWA could trade as it wished until a contrary ministerial direction was received.
Section 46(4)(c) and market power. PAWA next submitted that it had not contravened s 46 because it lacked market power in the Electricity Infrastructure Market and the Electricity Carriage Market[106]. It said that it lacked that power because s 46(4)(c) required it to have that power as "a supplier" of goods or services in that market, and it did not in fact supply any goods or services. PAWA's power was said to derive only from "its position as regulator and its ownership of the infrastructure". Apart from the terms of s 46(4)(c), PAWA relied on Verizon Communications Inc v Law Offices of Curtis V Trinko, LLP[107].
If this s 46(4)(c) point were to be relied on, it should have been pleaded. It was not. Nor was it taken at the trial, or in the Full Court, or in the Notice of Contention. It was first taken in submissions in this Court. The trial judge found, as indicated above, that it did not matter whether there was an Electricity Infrastructure Market or an Electricity Carriage Market, or whether there were instead an Electricity Distribution Market and an Electricity Transmission Market. The trial judge in his analysis referred to[108]:

[128]

In 1986, s 46 was amended and, inter alia, sub-ss (1)-(4) assumed their present form[114]. The Explanatory Memorandum stated that the amendments were "designed to lower the threshold test for determining whether the section is applicable"[115]. The definition of power in relation to or conduct in a market in s 46(4)(c) corresponds mutatis mutandis with the definition of controlling a market for goods or services in the 1977 form of s 46(4). The Explanatory Memorandum said nothing about it. The 1977 form of s 46(4) made it plain that it was directed to the character of participation in the market. It would be strange if in the course of enacting amendments designed to lower the threshold test, Parliament increased it in one respect by re-enacting s 46(4) as the new s 46(4)(c) with a focus different from its former focus on the character of participation in the market.
If, contrary to the foregoing, the point could be taken now and had merit, it would not avail PAWA, because its conduct can also be analysed as the taking advantage of market power which, for reasons given above, existed in the Electricity Sale Market. In that market PAWA made very many sales.
It was not entirely clear whether PAWA was relying on Verizon Communications Inc v Law Offices of Curtis V Trinko, LLP as an aid to the construction of s 46(4)(c) or as an aid to the construction of s 46 generally. In either event, it is not an authority which compels or influences the result in this case. Section 46 is in different terms from s2 of the Sherman Act 1890[116]. Section 2 is backed by the sanction of imprisonment; s 46 is not. Section 2 requires "the willful acquisition or maintenance" of monopoly power[117] - a test which is entirely different from and stricter than that in s 46[118]. Verizon's case was decided on factual circumstances arising in an industry - telephonic communications - which was subject to intense federal regulation; in particular, as the United States Supreme Court said, the regulating legislation had "extensive provision for access" and this made it "unnecessary to impose a judicial doctrine of forced access"[119]. Part IIIA of the Act cannot be treated as a rough analogue of the United States legislative regime permitting access because of the radically different position flowing from the preservation by s 44ZZNA of the independent operation of s 46.
Taking advantage of proprietary rights, not market power? PAWA's next argument was that its conduct was to be characterised, not as taking advantage of market power, but only as taking advantage of its proprietary rights.
PAWA contended that it was entitled, as owner of the infrastructure assets, to decline to consent to the use of them by others. That overstates the matter: PAWA was not asked to deliver its assets into the hands of NT Power's employees but merely to receive and transmit, via its infrastructure, electricity generated by NT Power. PAWA relied on the following passage in Dowling v Dalgety Australia Ltd, in which the owners of saleyards declined to permit the applicant auctioneer to conduct livestock sales at the saleyards[120]:

[130]

When that passage is read in context, it does not support PAWA. The case is distinguishable. In Dowling's case, none of the respondents had a substantial degree of power in the market, because there were no significant entry barriers, and the conduct of each respondent was constrained by its competitors and customers[121]. In the present case, as already noted, the trial judge found that PAWA did have a substantial degree of power in the market[122]. However, on the contrary assumption that the respondents in Dowling's case were not operating in a competitive market, and on the assumption that their proprietary rights were capable of creating market power, Lockhart J reached two conclusions. The first was that the respondents were not acting for any substantial purpose which was proscribed[123]. The second was reached in the passage quoted above - that the conduct of the respondents was not conduct that they would be unlikely to engage in, or could not afford for commercial reasons to engage in, had the market been competitive, and hence that they were not taking advantage of market power. But, in the present case, PAWA did take advantage of market power, because it was only by virtue of its control of the market or markets for the supply of services for the transport of electricity along its infrastructure, including its transmission and distribution network, and the absence of other suppliers, that PAWA could in a commercial sense withhold access to its infrastructure; if PAWA had been operating in a competitive market for the supply of access services, it would be very unlikely that it would have been able to stand by and allow a competitor to supply access services[124].
Further, to suggest that there is a distinction between taking advantage of market power and taking advantage of property rights is to suggest a false dichotomy, which lacks any basis in the language of s 46. As already discussed, property rights can be a source of market power attracting liability under s 46[125] and intellectual property rights are often a very clear source of market power.
In short, Dowling v Dalgety Australia Ltd is not authority for any general proposition that a property owner who declines to permit competitors to use the property is immune from s 46. That proposition is, in any event, intrinsically unsound.
Was a direction given under s 16 of the PAWA Act? PAWA's next submission was directed against two propositions: that it had taken advantage of market power and that it had a prohibited purpose. The submission rested on the contention that the Minister for Essential Services had given it a direction under s 16 of the PAWA Act[126]. The trial judge found that the Minister had given a s 16 direction[127]; Finkelstein J found that he had not[128].
When the letter of demand from NT Power's solicitors dated 17 August 1998 was received by the Chief Executive Officer of PAWA, a copy was sent to the Minister for Essential Services. The solicitor for PAWA, Mr Noonan, was asked to consider what the response of the Northern Territory Government should be. Mr Noonan advised, by letter of 20 August 1998, that PAWA had no legal obligation to provide access to its network; although challenges were possible, no legal proceeding was likely to succeed in the short term. The letter concluded:

[144]

PAWA has not demonstrated error in the reasoning of Finkelstein J. PAWA took this Court to some oral evidence of Mr Gardner in an endeavour to counter Finkelstein J's conclusion that the Minister's desire to have PAWA act as he wished was not always conveyed by direction. That oral evidence was vague, was undermined by other evidence, and, in any event, did not falsify Finkelstein J's conclusion. The PAWA Act does not stipulate that s 16 "directions" are to take any particular form, and the Court was not taken to any other legislation which did. Even if Mr Gardner's evidence establishes that he thought he had received a s 16 direction in August 1998, that does not prove that he did. Everything depends on the terms of the briefing note: no other possible "direction" was relied on. But it is not possible to infer from the briefing note that any direction was given. The acceptance of the recommendation in the briefing note was too vague to amount to a s 16 direction. It did not refer to s 16, yet citation of the source of power could be a crucial matter in the event of later political or forensic controversy about whether any directions had been given or obeyed - for Mr Gardner had a duty to obey them[131]. It did not speak in the language of command or mandate or instruction - it did not direct.
If a s 16 direction had been given, was s 46 contravened? PAWA submitted that if (contrary to the conclusion just arrived at) the acceptance of the recommendation in the briefing note was a s 16 direction, it could not be said that PAWA had taken advantage of its market power, because the Minister had directed the refusal of access. PAWA further submitted that its conduct was therefore not for a proscribed purpose, but rather for the purpose of complying with the Minister's direction. PAWA additionally submitted that if the Minister's purpose was relevant, that purpose was establishing an access regime in fulfilment of the Northern Territory's obligations under the Competition Principles Agreement in the belief that to provide earlier access would disadvantage consumers and damage competition.
None of these contentions succeeded before the trial judge, Branson J or Finkelstein J.
Although, as PAWA conceded in argument, there was no legal impediment to Mr Gardner deciding the question of access for himself, the trial judge accepted Mr Gardner's evidence that the question of access was ultimately for the Northern Territory Government[132].
Even if PAWA received a s 16 direction from the Minister and acted in accordance with it, in deciding what PAWA did, it is necessary to look at the conduct and the mental state of both the Minister and the Chief Executive Officer. What PAWA did in response to a direction of the Minister was conduct of PAWA, and the Minister's accompanying mental state was PAWA's mental state. That would be so, even if a s 16 direction came without any solicitation by or warning to the Chief Executive Officer of PAWA. It is so a fortiori where, as here, the Chief Executive Officer and the Acting Under Treasurer solicited the approval of the recommendation which PAWA said constitutes the s 16 direction.
The trial judge found that the mental state of those who advised the Minister to recommend as he did, and of the Minister himself[133], was to deter or prevent NT Power from participating in the transmission or distribution markets and in the Electricity Supply Market (in which it was likely that its prices would undercut PAWA's) until the Northern Territory introduced an access regime. For that conclusion there was ample evidence. The conclusion was not affected by the fact that the reason why the Minister and his advisers reached this mental state was the desire, by establishing an access regime providing effective competition[134], to encourage genuine and efficient competition in the medium to long term[135]. PAWA submitted that, on a purposive construction, s 46 should be read so as to negate the existence of a proscribed purpose in the short term, if there exists a longer term, pro-competitive purpose. The trial judge rightly held that this was an impermissible gloss on s 46[136]. Section 46 does not permit the drawing of a distinction between short-term anti-competitive purposes (here keeping NT Power out of the market) and long-term pro-competitive objectives (establishment of an access regime), and does not permit the former to be nullified or excused by the latter. Nor is it relevant that, in PAWA's submission, entry by NT Power might cause such losses to PAWA that it would cease to subsidise services to remote communities. If authorisation were available for s 46 conduct, reasoning of that kind might be relevant in an application to the Australian Competition and Consumer Commission for authorisation under s 88, at least so far as the purposes were likely to mature into effects generating public benefits. But, subject to the operation of s 46(6)[137], s 88 does not make authorisation available for s 46 conduct, and in any event authorisation is not a matter for the courts. In fact, the "relatively short-term" character of the anti-competitive purposes was far from being de minimis: it took the Northern Territory until 1 April 2000 to introduce its access regime, that access regime provided for only staggered and limited access to the infrastructure, and, so far as the evidence goes, the access regime has not yet been declared an effective access regime. The alternative route of a Pt IIIA access regime can thus take years, even with the best will of all persons participating.
The legislation does not contemplate that immunity from s 46 can be found in a desire to bring about what the Under Treasurer called "sensible competition"[138]. In truth, that expression is a reference to the process by which an inefficient monopolist sought to give itself time to reorganise its affairs by obstructing emerging competition. "Competition by its very nature is deliberate and ruthless. Competitors jockey for sales, the more effective competitors injuring the less effective by taking sales away."[139] Competition is also dynamic. It tends to create conditions of constant turbulence. It generates instability. These circumstances trigger the emulation and striving which produce competitive benefits. Paternalistic control from a monopolist is antithetical to competition, and a construction of s 46 which permitted it, even if only in the short term, is inconsistent with the structure of the section and the legislation as a whole.
Erroneous inference from purpose to exercise of market power? At this point, PAWA's submissions appeared to visit upon the trial judge a list of errors made in other cases construing s 46. These contentions all fail. The first of them was that the trial judge's conclusion was vitiated by the error of inferring too readily an exercise of market power from a proscribed purpose[140]. That is not so. The findings of the trial judge on market power[141], and on exercise of that power[142], were arrived at earlier than, and quite independently of, his findings about purpose[143]. So, incidentally, were those of Finkelstein J[144].
Confusion between purpose and effect? PAWA next submitted that the trial judge failed to appreciate that s 46 is not concerned with the effect of conduct but with the purpose of it. This error was said to lie in passages culminating in the statement that a substantial purpose of PAWA was to deter or prevent NT Power from participating in the market or markets for the supply of services for the transport of electricity along PAWA's infrastructure or the Electricity Supply Market until an access regime had been introduced, and that that "was the particular means by which the ultimate desired end was, in part, to be achieved"[145]. PAWA submitted that the exclusion of NT Power was not the means for achieving long-term competition through an access regime but merely an incidental effect of it.
This submission has two flaws. First, it directly contradicts PAWA's submission at the trial, which was that its "purpose in refusing access to its infrastructure … was to enhance competition, and … the refusal of access was a means to that end "[146]. Secondly, it ignores the trial judge's findings that PAWA was of the view that[147]:

[146]

Confusion between existence of market power and exercise of market power. PAWA further criticised the trial judge for making a connection too readily between the existence of market power and its exercise, and for thereby ignoring or rejecting alternative sources of power. The alternative sources of power to which PAWA referred were its statutory powers in carrying out its "regulatory function", and its statutory duty to comply with s 16 directions from a Minister in the Northern Territory Government (which was under a duty imposed by the Competition Principles Agreement to carry out structural reform of its monopolies). But all the trial judge did was to point out that if there had been other suppliers of infrastructure services it would not have been possible for PAWA to withhold access to its infrastructure, and it would not have done so[148]. This criticism creates too sharp a bifurcation, for which there is little support in the PAWA Act, between PAWA's "commercial role" and its "regulatory" role. While, on the one hand, the trial judge found that PAWA desired to delay access so as to enable a more effective competition regime to be introduced in the future, that was not only because of concern about consumer interests: PAWA was conscious of its own competitive inefficiencies, the risk to its revenues of allowing access and the consequential risk of suffering losses, and the risk that granting early access would reduce its sale value on privatisation[149]. Its regulatory powers could be used to help its commercial position; the weaknesses and strengths of its commercial position could affect the success with which it used its regulatory powers[150]. The trial judge's conclusion that PAWA could not have used its regulatory powers under s 16 if it had faced competition in the transmission and distribution services markets, has not been shown to be wrong. PAWA contended that the distinction advanced between its regulatory and commercial roles was well-recognised by authority[151]. It is not necessary to examine the correctness on their facts of the authorities on which PAWA relied; the suggested distinction in its application to the present facts does not assist PAWA.
Failure to make correct assumptions about a competitive market. Finally, PAWA contended that the trial judge erred in finding that it took advantage of its market power because, had there been other suppliers of infrastructure services, it would not have been possible for PAWA to withhold access to its infrastructure. PAWA contended that the trial judge did not attempt to consider whether PAWA could have refused access to its infrastructure had it lacked market power. On the other hand, PAWA criticised Finkelstein J for making assumptions about what would happen in a competitive market, one of which was that there was "at least one other firm with similar infrastructure" to that of PAWA. This assumption was said to take "the analysis beyond the realms of reality".
Finally, PAWA drew attention to the following statement in Melway Publishing Pty Ltd v Robert Hicks Pty Ltd[152]:

[148]

That statement does not say that unrealistic assumptions may not be made. The assumption on which the reasoning of four members of the Court in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd[153] proceeded - that BHP lacked market power and was operating in a competitive market - was highly unrealistic, but no later case has held that it was wrong to make it. The statement in Melway Publishing Pty Ltd v Robert Hicks Pty Ltd was only urging the need for cogent analysis on the basis of the assumptions, and the reasoning that follows the quoted passage demonstrates that cogent analysis did not, in that case, support a conclusion that advantage had been taken of market power.
PAWA also asked why, if Finkelstein J were prepared to assume another firm with infrastructure competing with PAWA's, it should not also be supposed that the Government would use its regulatory powers to exclude NT Power? One answer is: "Because the Government had ample powers to adopt the course proposed in 1998, but it chose not to do so." And, whether the assumption that there was competing infrastructure is retained or removed, the use of "regulatory powers" simply to vindicate the self-interest - even the short-term self-interest - of the regulator, would be likely to create unacceptable political risks, a possibility which Mr Noonan foresaw in his advice of 20 August 1998.
If PAWA's criticisms were sound, it would be very difficult ever to demonstrate that a firm, whose monopoly power depends on infrastructure which it is, in practice, very difficult to duplicate, had taken advantage of the market power which its control of that infrastructure gave it. It can be necessary, in assessing what would happen in competitive conditions, to make assumptions which are not only contrary to the present fact of uncompetitive conditions, but which would be unlikely to be realised if the monopolist were left free to operate as it wished. But s 46 and other provisions of Pt IV were introduced in order to stop monopolists being entirely free to act as they wish. If the difficulties in making assumptions were to prevent them from being made, possessors of market power that was hard to erode would be shielded from the Act. That would defeat its purpose.
If, as PAWA urges, the assumption that an alternative infrastructure was available is not made, the most realistic assumption to be made about a market in which PAWA would not have a substantial degree of power is a market in which PAWA was subject to a legislatively created duty to give immediate access. On that assumption, PAWA would not have refused access, which demonstrates that in the actual world of 1998 it took advantage of market power, since it was only the assumed legislation that forestalled the existence of market power.
Finkelstein J also adopted[154] what he saw as an alternative approach - that of Deane J (Dawson J concurring) in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd[155]. In Melway Publishing Pty Ltd v Robert Hicks Pty Ltd that approach was described without disapproval in the following way[156]:

[152]

It is now necessary to turn to the case against the second respondent, Gasgo. The nature of the case and the trial judge's reasoning will be set out, before considering whether Gasgo is part of the Northern Territory Government, and whether Gasgo's conduct is protected by "derivative Crown immunity".
Gasgo's role in the trial. Gas is the cheapest fuel for generating electricity in the Northern Territory. Gasgo is a company in which PAWA beneficially holds all the issued shares. It has entered a long-term gas purchase contract ("the Mereenie Agreement") with certain suppliers ("the Mereenie Suppliers"). It has habitually sold the gas supplied to NT Gas Pty Ltd ("NT Gas"), which on-sells to PAWA. Clause 2.26 of the Mereenie Agreement gives Gasgo a pre-emptive right in relation to the sale of gas by the suppliers to customers other than Gasgo, at the price offered to the third party. NT Power required gas from the suppliers for its generator, and requested that Gasgo give an undertaking that it would not insist on its pre-emptive rights. Gasgo declined to give that undertaking, and NT Power contends that that is a breach of s 46.
At the trial, Gasgo argued three points.
First, it argued, and the trial judge denied, that it was "entitled to Crown immunity as an emanation of the Crown"[159].
Secondly, Gasgo argued, and the trial judge agreed, that it was entitled to "derivative Crown immunity", because the interests of the Northern Territory would be prejudiced by the application to Gasgo of s 46. The prejudice claimed was "financial prejudice", namely that if Gasgo could not exercise the pre-emptive right in cl 2.26, there would be a consequential need for it or PAWA to seek additional supplies of gas in a competitive market where those supplies might be constrained by available reserves of deliverable quantities[160]. The trial judge said that the relief sought against Gasgo included an order that it forego its cl 2.26 right of pre-emption, and the effect of that order "would be to dismantle the security of gas supply which the Northern Territory Government procured through NTEC and [Gasgo] in 1985"[161]. The trial judge held that the relief sought against Gasgo[162]:

[165]

Can Gasgo then be characterised as part of the Government of the Northern Territory? Although acquired specifically for the purpose of entering the Mereenie Agreement and others like it, Gasgo was a trading corporation. Its articles of association took the form, apparently, of standard trading company articles. Its shares were owned by PAWA. It sold gas to NT Gas, the largest shareholder in which was AGL Pipelines (NT) Pty Ltd ("AGL"). NT Gas, which constructed and has a lease over the relevant gas pipeline from its owners, a bank consortium, in turn sold gas to PAWA. It was not suggested that either AGL or NT Gas could be regarded as "emanations of the Crown" or parts of the Northern Territory Government. This is damaging to Gasgo's reliance on the orchestration by the Northern Territory Government in June 1985 of arrangements to obtain "security of gas supply … through NTEC and [Gasgo]"[174]. It negates an inference which might otherwise be available. The interpolation of non-governmental entities in this contractual and physical chain of supply undermines the characterisation of the trading corporation Gasgo as part of the Northern Territory Government. There is nothing to suggest that the directors of Gasgo do not have the usual duties and functions of directors. There is nothing to suggest that the directors are under any duty to obey directions from PAWA or the Northern Territory Government, any more than directors of non-governmental companies are under any duty to obey directions from members of those companies. No doubt a failure to respond to indications of the Northern Territory Government's desires might lead to the removal of directors, whether by the Minister or by a meeting of shareholders, but the same is true of ordinary companies: directors tend to respond to expressions of shareholder will well before shareholders' meetings are called to remove the directors. The giving of guarantees by the Northern Territory Government is not an indication of an intention that Gasgo should have the immunities of the executive government from legislation, and nor is the agreement of Gasgo to exercise certain rights in consultation with NTEC.
Finally, as the trial judge pointed out, the utilisation of a body corporate incorporated under a general enactment for the incorporation of companies as the party contracting with the Mereenie Suppliers, rather than a body established by a particular statute, does not reveal an intention on the part of the Northern Territory Government that that body corporate should have its immunities[175]. Gasgo submitted that there is no reason why a body corporate established under a general enactment of that kind should be treated any differently from one established under its own statute. In some circumstances that may be true, save that it becomes harder to identify the necessary intention where a general enactment is relied on. It is not possible to find sufficient evidence of it here.
Is Gasgo protected by "derivative Crown immunity"? The next issue is whether, at the time the Mereenie Agreement was entered into, Gasgo had "derivative Crown immunity". That expression is employed in par 45A(l) of the Defence. What appears to be involved is an extension of what, before Bropho v Western Australia[176], was a rule of statutory construction that legislative provisions worded in general terms are prima facie inapplicable to the Crown.
Denning LJ was of the view that this "immunity" could only be claimed by those "having Crown status"[177]. He would, however, have allowed for the class of case identified by Blackburn J in "The Mersey Docks and Harbour Board" Trustees v Cameron[178]. Kitto J in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) later identified this as[179]:

[171]

A more accurate way of putting the issue which Gasgo raises accords with what was said by Kitto J in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW). This is to ask whether s 46, in preventing enforcement of a clause in a contract between two parties, neither of whom is the Government, caused "some impairment of the existing legal situation of" the Northern Territory Government in this case[182]. The object, to adapt what was said by Kitto J, is to ascertain whether the application of s 46 to Gasgo "would be, for a legal reason, an interference with some right, interest, power, authority, privilege, immunity or purpose belonging or appertaining" to the Government[183]. More recently, this Court said that the interference to be looked for is a "divesting" of "property, rights, interests or prerogatives"[184] belonging to the Government. The better view is that the principle applies to proprietary, contractual and other legal rights and interests and not otherwise, notwithstanding that it has been said to extend to "arrangements or understandings"[185]. That phrase was used by Mason and Jacobs JJ in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd[186] but, as appears below, requires further consideration.
Gasgo advanced two arguments. The first was that "Gasgo's participation in the series of agreements entered into in 1985 was at the express direction of and on behalf of the Northern Territory Government and is clearly a part of an arrangement or understanding of the Northern Territory Government in the sense spoken of in" Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd by Mason and Jacobs JJ. What Mason and Jacobs JJ were speaking of in that case was an allegation of a "contract, arrangement or understanding" contrary to s 45 of the Act, pursuant to which a BHP company was to finance the building of a railway line by the Commissioner of Railways for Queensland (part of the Queensland Government) on the condition that equipment be purchased exclusively from BHP. The "contract, arrangement or understanding" of which Mason and Jacobs JJ spoke was different from anything arising in the present circumstances, because one of the parties to it was the Government[187]. Gasgo is not part of the Northern Territory Government. If the words of Mason and Jacobs JJ were to be applicable here, it would be necessary to show a contract, arrangement or understanding to which not just Gasgo, but also PAWA or some other part of the Northern Territory Government, was a party. In the present case, there was only one contract between Gasgo and the Mereenie Suppliers; another contract between Gasgo and NT Gas; and contracts between NT Gas and PAWA. The only part of the Government involved was PAWA. Whatever the understandings between PAWA and Gasgo, the trial judge made no finding that there were any understandings between PAWA (or any other part of the Northern Territory Government) on the one hand and the Mereenie Suppliers on the other. Indeed, his judgment does not suggest that the argument under consideration was put.
The second argument advanced was that which the trial judge accepted[188], namely that the Government would be prejudiced if cl 2.26 were not enforceable. The prejudice found by the trial judge was that to the extent that gas bought by third parties could not be acquired by Gasgo, less would be sold to NT Gas and thence to PAWA. Gasgo would have to seek to enter further negotiations for replacement quantities. If it failed, or succeeded only by paying a higher price, PAWA would be worse off. But it would be worse off only in an indirect economic sense. No proprietary right or interest or contractual right or prerogative of the Northern Territory Government would be affected, for neither PAWA nor any other part of the Northern Territory Government have any such rights, interests or prerogatives as against the Mereenie Suppliers under the Mereenie Agreement.
Gasgo frankly acknowledged that no legally enforceable interest of the Northern Territory Government was prejudiced, and that its only prejudice was financial. It bluntly invited this Court to extend the law. It submitted that "the consequences of being denied contractual rights or property rights are more often than not financial consequences. If that is so, what reason in logic is there for confining the prejudice to prejudices arising out of interference with contractual or property rights?" In strict logic, there may be no reason. But there is a standard distinction in many fields of law between the financial consequences of breaches of a person's legal rights, and the financial consequences that flow to a person independently of any breach of that person's legal rights. And the law allows wider recovery for financial losses flowing from injuries to a plaintiff's body, and injuries to land or chattels which a plaintiff owns, than it does for pure financial loss, unless that loss is the result of a broken contract. Where, contract apart, the law allows recovery of pure financial loss, it does so more freely for intentionally caused financial loss than negligently caused financial loss. Gasgo did not explain what precise test it advocated, why it should be adopted, or how it would fit in with the concerns underlying these principles. Gasgo did not explain why, if it could claim immunity from s 46, many non-governmental entities would not gain immunity from statutory obligations as long as it could be shown that there was some financial impact on the Government's position. Nor did it explain how that reliance could be reconciled with the intent of the statutes imposing those obligations. What is clear is that to apply "derivative Crown immunity" in favour of Gasgo would extend that immunity beyond any point the Australian authorities have so far reached. Gasgo did not advance any argument of sufficient merit to justify that extension.
Some phrases in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd were relied on to support an extensive construction, going well beyond prejudice to property rights, legal rights, legal interests or legal prerogatives[189]. But those words cannot be read as extending beyond the solution of the problem before the Court. The actual decision was only that where it was alleged that the Commissioner of Railways had entered into a contract, arrangement or understanding with BHP contrary to ss 45 or 47 of the Act, and where the Commissioner was not bound by ss 45 or 47, the Act could not apply to BHP either. That was because application of the Act would affect the Government's enjoyment of a direct consensual relationship between itself and a non-governmental party.
If PAWA had entered into a contract with the Mereenie Suppliers, it would have fallen within the four corners of the decision in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd. But PAWA was not a party to the Mereenie Agreement, and although PAWA is part of the Northern Territory Government, Gasgo is not. The factual circumstances are very different from those dealt with in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd, and so is the problem for decision. That problem can only be answered favourably to Gasgo if Gasgo's request that the law be extended is acceded to. No satisfactory basis for acceding to it was advanced, and it should not be acceded to.
The Solicitor-General for South Australia advanced an argument which was more specific than Gasgo's. He argued that among the relevant interests which could give rise to immunity were the interests which the Government has in contracts other than those to which it is a party. He argued that if a statute affected one party's contractual rights in a manner which compromised that party's capacity to fulfil its obligations under another contract with the Government, an interest of the Government had been affected. The facts here would actually require the principle to be extended even beyond that submission: it would require the principle to be that if a statute affected the contractual rights of one non-governmental party (Gasgo) against other non-governmental parties (the Mereenie Suppliers) in a manner which compromised Gasgo's capacity to fulfil its obligations under a second contract with a non-governmental party (NT Gas) so as to compromise that latter party's capacity to supply gas to the government (PAWA), an interest of the government had been affected.
The Solicitor-General for South Australia relied on In re Telephone Apparatus Manufacturers' Application[190]. The circumstances considered in that case are indeed the closest to the circumstances contemplated by the Solicitor-General's argument, though they are narrower than the circumstances of the present case. The case concerned two agreements.
The first was the "Crown agreement". Eight manufacturers of telephone apparatus promised to supply apparatus in accordance with orders placed by the Postmaster-General (cl 2), and to establish a committee which was to appoint a secretary (cl 3(1)). The Postmaster-General was not to be concerned with the constitution of the committee (cl 3(2)). Clause 4(1) provided that the Postmaster-General was to notify the secretary of any orders which he or she proposed to place, and the committee was within fourteen days to inform the Postmaster-General of the contractors with which each of the orders was to be placed. If the committee did not so inform the Postmaster-General, the Postmaster-General was at liberty to place each order with whichever contractor he or she wished.
The second agreement was the Telephone Apparatus Manufacturers' agreement ("the TAM agreement"). It provided for the allocation of orders received by the Postmaster-General under the Crown agreement by unanimous decision of the committee; failing that, orders were to be allocated according to the quota standing of the members, on the basis that the business was to be divided in equal shares.
The English Court of Appeal held that if there were a duty to register the TAM agreement under the Restrictive Trade Practices Act 1956 (UK), s 6(1)(c), there would be a risk of a declaration by the Restrictive Practices Court that the TAM agreement was against the public interest. The legislation was held not to apply to the TAM agreement because that would have damaged the interests of the Crown. The decision can be viewed as proceeding on two alternative bases - a wide one and a narrow one.
The first, wide, basis for the decision treated the two agreements as distinct: the striking down of the TAM agreement would make the Crown agreement almost wholly ineffective and deprive the Postmaster-General of the services of the committee. This first basis is questionable. Willmer LJ said that the Postmaster-General's "interests" would be prejudicially affected by the invalidity of the TAM agreement[191], and Upjohn LJ said that the Crown's "rights and interests" would be prejudiced[192]. But the interests were only commercial interests: the legal position of the Postmaster-General was unimpaired. Harman LJ said that to interfere with the TAM agreement was "to frustrate in whole or in part the Crown agreement, and thus to interfere with the freedom of contract of the Crown"[193]. That "freedom" was not a legal right: the Crown and the manufacturers could have included within the Crown agreement any term of the TAM agreement they wished, but they chose not to.
However, all three judges mentioned a second, narrower, basis for their decision. Willmer LJ said that the agreements were "necessarily complementary", and though in separate documents, were not "really severable" but "hopelessly mixed up together"[194]. Harman LJ said that the agreements were "complementary" and "intimately connected"[195]. Upjohn LJ said that they were "complementary and must be read together"; and from the point of view of the contractors they constituted "one agreement"[196].
It is this narrow basis which should be treated by Australian courts as the true ground of the decision. There was not one agreement to which the Crown was a party and another to which it was not a party, but one composite agreement to which it was a party. So viewed, the decision is not unlike the actual decision in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd. However, as indicated above, that second ground for the decision is inapplicable here: it is not possible to analyse the transactions relating to the Mereenie Agreement as comprising a single, composite agreement.
The Solicitor-General for South Australia submitted that In re Telephone Apparatus Manufacturers' Application was accepted in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd, referred to in Bass v Permanent Trustee Co Ltd, and had not been doubted. But the crucial question is whether there is a decision of this Court which depends on the application of the reasoning underlying the first basis for the decision. In Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd, Gibbs ACJ said of In re Telephone Apparatus Manufacturers' Application only that the case before him was "a stronger one"[197]. Stephen J said that the Act would not apply directly to the Commissioner "but [would] also not apply so as to prejudice its interests when in contractual relationship with parties to whom the Act clearly applies or when otherwise interested in transactions affecting those parties (In re Telephone Apparatus Manufacturers' Application)"[198]. That is an approving reference to the case in its wider application, but one not necessary for the decision in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd itself. Mason and Jacobs JJ said that in accordance with such authorities as In re Telephone Apparatus Manufacturers' Application, "the absence of an intention to bind the Crown in right of Queensland will not only exonerate it from the direct application of the statutory provisions but will also exonerate from the application of those provisions the contracts arrangements or understandings made by that Crown and the other parties thereto as well"[199]. The language of Mason and Jacobs JJ is adapted to the facts before them, and not to the facts of In re Telephone Apparatus Manufacturers' Application. Murphy J said that In re Telephone Apparatus Manufacturers' Application did not persuade him to accept the contention that even if the Act bound the Commissioner, ss 45 and 47 were not applicable to the contract, arrangement or understanding before him[200].
Thus, apart from Stephen J, no justice in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd approved the reasoning underlying the broad basis of In re Telephone Apparatus Manufacturers' Application. Also, and for several reasons, any approval was obiter. The issue in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd was much narrower than the issue in In re Telephone Apparatus Manufacturers' Application. The latter case was only relied on in argument for the proposition underlying its narrow basis, namely that the immunity enjoyed by the Crown "extends to contracts arrangements or understandings made by the Crown with others"[201]. Its correctness was not argued by the parties, was not examined critically by the Court, and was not crucial to the outcome.
This Court in Bass v Permanent Trustee Co Ltd[202] quoted Stephen J's words set out above, but did not specifically consider their correctness because, for various reasons, it was unnecessary to do so[203].
Since the narrow basis of In re Telephone Apparatus Manufacturers' Application is not applicable here, since no decision of this Court depends on the application of the reasoning underlying the wider basis, since the correctness of that reasoning has not been demonstrated, and since it would have to be extended a further stage to apply to the present circumstances, the case does not assist Gasgo.
In Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd, there was mention[204], without disapproval, of New Zealand cases[205] in which it was held that regulations requiring building contractors to obtain a permit before commencing work pursuant to a contract with the Government, and to be carried out on the Government's land, did not apply because of their impact on the Government. The outcome in these cases is capable of explanation as falling within the decision in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd: the statutory provisions had a direct impact on the Government's contractual rights. There is a more borderline case of a contract to which the Crown was not a party but under which the work was to be carried out on Crown land and paid for by the Crown[206], but, again, the reference to this case without disapproval was not crucial to the reasoning in Bradken Consolidated Ltd v Broken Hill Proprietary Co Ltd.
It follows that if s 2B had not been enacted, and the Mereenie Agreement were considered in the light of the law as it stood before 19 August 1994, there is no reason why s 46 would not have operated on the Agreement: it would not have been disregarded, and s 89(2) of the Reform Act has no application favourable to Gasgo[207].
Conclusion. It follows that since Gasgo is not part of the Northern Territory Government, and since it could not claim "derivative Crown immunity" before 19 August 1994, its reliance on cl 2.26 of the Mereenie Agreement is open to scrutiny under s 46, and the proceedings must be returned to the trial judge for NT Power's allegations on this issue to be tried, together with a consideration of what, if any, remedies should be granted to NT Power in relation to the conduct of PAWA.

[181]

KIRBY J. The appellant had a generator for the production of electricity. The first respondent, a statutory authority, created by the legislature of the Northern Territory of Australia, had legal functions to generate, distribute, supply and sell electricity throughout the Territory. Under its Act[210], the first respondent had to perform its duties in accordance with any directions given to it by the relevant Minister.
The facts and statutory context: The appellant from time to time sold electricity, manufactured by its generator, to the first respondent for use in the first respondent's grid. Pursuant to a series of electricity sale and purchase agreements, the first respondent bought the appellant's electricity at various supply points along the appellant's electricity transmission line[211]. It was not sold by the appellant direct to the first respondent's customers. With the exception of one 300 kilometre section of high-voltage transmission line running between Darwin and Katherine, the network of high-voltage wires used to distribute, supply and sell electricity in the Territory was owned by the first respondent.
The first respondent refused a request by the appellant to allow it to use the first respondent's infrastructure and equipment to supply its electricity to selected consumers in the Darwin-Katherine area. The appellant wished to do so and considered that it could do so at a price cheaper than that charged by the first respondent. By law, the first respondent was responsible for the supply of electricity to the Territory. Inferentially, its price structure took into account, at least in a general way, the increasing costs of supplying electricity everywhere in the Territory and its duty to supply the product to remote consumers as well as those in the more populous areas of Darwin and Katherine. The first respondent was concerned that the appellant was seeking to use its facilities to "cherrypick" electricity consumers in Darwin and Katherine and that it was trying to do so before the first respondent had put in place an effective and proper arrangement for the effective "privatisation" of its business undertaking[212], as part of the announced policy of the Territory Government.
The Territory had, in fact, become generally committed to the policy of "privatisation" of governmental authorities engaged in business activities, such as the first respondent. This policy followed the Hilmer Report[213] and a number of inter-governmental agreements between the Commonwealth, State and Territory governments designed to implement its main recommendations. In the Territory, those agreements were followed by legislation, by Ministerial protestations of commitment to competition policy, as well as by the annual report of the first respondent containing general statements to like effect. However, the Territory officials and the first respondent were concerned, when the appellant's request to use the first respondent's electricity distribution facilities was received, that the system of general "privatisation" should be eased into effect, including in respect of the first respondent. That concern led to a minute by officials to the Minister suggesting how this should be done.
A question arises whether the Minister, in responding to this minute, gave a "direction" under the Act and whether this could bind the first respondent in the face of legislation binding on the Minister, the Government of the Territory and the first respondent, including s 46 of the Trade Practices Act 1974 (Cth) ("TPA") (see Waters v Public Transport Corporation[214]). I do not stay finally to resolve that contested point. However it may be, the first respondent refused to allow the appellant to use its infrastructure to supply electricity to the domestic electricity market in the Darwin-Katherine area.
The decisions of the Federal Court: The appellant brought proceedings in the Federal Court of Australia against the first respondent claiming that the first respondent's refusal amounted to a breach of s 46(1) of the TPA and/or cl 46(1) of the Schedule version of Pt IV of the Competition Code, which, under s 5(1) of the Competition Policy Reform (Northern Territory) Act (NT), applied as a law of the Territory. Specifically, the appellant complained that the first respondent had a substantial degree of power in one or more of the markets for electricity supply, infrastructure, transmission and distribution, and, by use of its infrastructure, had "take[n] advantage" of that power for the "purpose" of preventing the entry of a person, namely the appellant, into that or "any other market" (see TPA, s 46(1)(b)). The "other market" alleged was the market for the supply and sale of electricity, including to consumers in the Darwin-Katherine area, which the appellant wished to enter.
The primary judge in the Federal Court (Mansfield J) rejected the appellant's claim[215]. His judgment was upheld by a majority in the Full Court of the Federal Court[216] (Lee and Branson JJ; Finkelstein J dissenting). Now, by special leave, the appellant has appealed to this Court.
"Take advantage" and "purpose" in this case: In my view, the appeal should be dismissed. As I approach the case, it is a comparatively simple one. It turns essentially on the statutory notions of "take advantage of" and "purpose" appearing in s 46(1) of the TPA. I do not accept that it was not open to the governmental authorities in the Northern Territory, and the first respondent, acting under the Territory legislation, to delay the immediate commencement of a regime affording unimpeded access to the first respondent's electricity supply infrastructure. As such, this was a governmental decision concerning the use of the infrastructure of a public agency based on governmental reasons. It was informed by governmental conclusions about the gradual implementation of a new competition policy in public business‑type authorities and the use of publicly funded resources for overall public benefit. It was not a purely commercial or business decision attracting the operation of the TPA. It had a clear governmental and a lawful political context which was both open to the Territory Government and its instrumentality, and understandable in the circumstances. It was probably the subject of a Ministerial "direction" under Territory law. But even if it was not, it was an available regulatory decision in the use of the electricity infrastructure of the Territory at the time the appellant demanded access to the first respondent's electricity distribution infrastructure.
Even more importantly, I do not accept that the conduct of the appellant was anti-competitive within s 46 of the TPA. It is one thing, under that section, to redress the misuse of market power, including by the use of the resources and the property of a corporation to the marketing disadvantage of a would-be competitor. But s 46 of the TPA does not give the would-be competitor the right to demand and use, as its own, the property of another corporation. It merely prevents that other corporation from misuse of its power to prevent the entry of the other into the market[217]. Trade practices laws in Australia, and antitrust laws in the United States (from which the basic notions of our law derive), have not been interpreted to impose on an owner of private property a duty to make that owner's property available to a competitor. As the Supreme Court of the United States said of the Sherman Act in January 2004 in Verizon Communications Inc v Law Offices of Curtis V Trinko, LLP[218]:

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