ISSUE 1 - CONSTRUCTION OF THE NOTICE
39 It was common ground between the parties that the phrase "including on routes to and/or from Australia", where first appearing in the Notices, introduces a limiting factor. As the primary judge said at [48], it identifies the international air cargo carriers who are alleged to be parties to the arrangement.
40 The issue which divides the parties, and on which the appeal largely turns, is the proper construction of the phrase where second appearing in the Notices.
41 Dr Griffiths SC and Mr O'Bryan, who appeared for Singapore Airlines, made submissions on the meaning of the phrase and these appear at first sight to have some force.
42 They pointed to an apparent contradiction in the approach to construction adopted by the primary judge. As they emphasised, his Honour was of the view that a "blue pencil" could not be applied so as to delete the word "including". Yet the effect of his interpretation of the phrase was to construe it as if that word were removed.
43 The fact that the ACCC has suggested at various points more than one approach to the interpretation of its document highlights the difficulty encountered in construing clauses such as these, which regrettably remain common in legal drafting.
44 The ACCC's written submissions proceeded on the basis that the primary judge was correct to find that the word "including", where it appeared second, was otiose. However, in his oral address, Mr Sheahan SC adopted a different construction, which leaves some work to do for the word "including" in the proper construction of the Notice.
45 Mr Sheahan's oral submission addressed the phrase in its full context and took into account the way in which it was used at each point in [1] of the Notice. The effect of what he said is set out below.
46 Where the phrase first appears in the Notice, it qualifies the competitors. They must be competitors for the supply of international air cargo services, including on routes to and/or from Australia. The significance of the word "including", and the words which immediately follow it, is that if carriers do not compete on routes to and/or from Australia, they are not within the class identified in the Notice.
47 In that context, the phrase is one of limitation. It is not one of expansion, even though that is commonly the effect of the word "including", depending of course upon a consideration of the full context: Sherritt Gordon Mines Ltd v Commissioner of Taxation of the Commonwealth of Australia [1977] VR 342 at 353; YZ Finance Co Pty Limited v Cummings (1964) 109 CLR 395 at 398, 401-402, 405.
48 In Mr Sheahan's submission, where the phrase "including on routes to and/or from Australia" appears the second time, it qualifies the provisions of the arrangements which are said to have the purpose or effect of controlling or fixing prices.
49 Each such provision is said to have the proscribed purpose or effect of fixing prices. The purpose or effect applies to the price of international air cargo services supplied by the parties to the arrangement. Those services extend to routes entirely outside Australia.
50 But it is only the provisions of any arrangements that have the purpose or effect of fixing prices on routes which include routes to and/or from Australia that fall within the Notice. This means that if the provisions do not have the purpose or effect of fixing prices on routes to and/or from Australia, they do not fall within the Notices.
51 Construed in this way, the "matters" relating to which the information is sought by the Notices are arrangements or understandings:
· between any two or more of Singapore Airlines, the stipulated carriers, and other international air cargo carriers with whom Singapore Airlines competes for the supply of international air cargo services on routes which (necessarily) include routes to and/or from Australia; and
· which contain provisions that have the purpose or effect of fixing prices in respect of international air cargo services supplied on routes, which include (but are not limited to) routes to and/or from Australia, by any of the carriers falling within the class identified in the first part of the Notice and described as the Fuel Surcharge Parties. This will extend to provisions affecting routes entirely outside Australia, provided that they have the proscribed purpose or effect on routes to and/or from Australia.
52 In our view, this is the proper construction of the Notices. It gives a sensible, rather than a precious or hypercritical approach to the construction of the Notices.
53 It is true that this was not the construction for which the ACCC previously contended and it is not that which was adopted by the primary judge. It is also true, as Gibbs CJ said in Pioneer Concrete (Vic) Proprietary Limited v Trade Practices Commission (1982) 152 CLR 460 at 468, that the power under s 155 is a drastic one which must be exercised with care.
54 But the issue of construction which now arises is not concerned with the information sought by the Notices. There was no suggestion that the schedules to the Notices failed to convey with reasonable clarity to the recipient the information to be furnished: Seven Network at [49(i)]. Rather, the dispute between the parties was as to whether the Notices disclose a "matter" entitling the ACCC to require the recipient to furnish the information stipulated in the schedules.
55 In our view, subject to the question of whether the "matters" referred to in the Notices identify a market in Australia, construed in the manner stated above, the matters are capable of amounting to a contravention of s 45 so as to amount to a valid exercise of power.
56 We do not need to consider the question of whether s 46 of the Acts Interpretation Act 1901 (Cth) operates so as to effect a partial validation of the Notices: Victoria v The Commonwealth (1996) 187 CLR 416 at 502. This is because we are of the view that the market for the services comprised in the matters is capable of amounting to a market in Australia.
57 The relevant services are "international air cargo services". They are defined to mean transportation of air cargo between international airports, including between Australia and foreign airports, and they include transportation by international air cargo carriers through "code-sharing" or "interlining arrangements". These are explained in Australian Competition and Consumer Commission v Singapore Airlines Cargo Pte Ltd (ACN 095 934 857) (2009) 256 ALR 458 at [16].
58 Before turning to the question of the market, we should add that the definition of "international air cargo services" reinforces the view we have reached as to the proper construction of the "matters". The definition indicates that the services (at least in the first Notice) are not confined to routes to or from Australia but include those legs of the journey which comprise individual sectors of the journey from Australia to the ultimate destination, or from the point of origin to Australia.
59 The primary judge explained this concept at [6]-[9] by way of a hypothetical example. Computers transported from Australia to Bangalore, he said, might conceivably be required to be first transported in a separate leg from Bangalore to Singapore. While the cargo rates for this leg of the journey might be fixed solely between parties in Singapore and Bangalore, the primary judge said, those rates would no doubt have an effect on the total cost of the transaction (and would thus have an overall impact in a market in Australia).