Southern Cross Pipelines Australia Pty Ltd & Ors v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator & Anor [2002] WASC 149

Southern Cross Pipelines Australia Pty Ltd & Ors v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator & Anor [2002] WASC 149 - WASC 2002 case summary — Zoe

[91]

50 Enough has already been said to explain how, because of the formula adopted by cl 10(2) of the GTA, the benefit of Reference Tariffs set by the regulator in his draft decision which is challenged by the plaintiffs, will, if they apply to the State Agreement, flow on to the applicant. However, WMC Resources Ltd is not a party to the State Agreement and has no contractual privity upon which it can claim it should be heard when the Court is called upon to construe cl 21(3) in a dispute between the parties to that contract. Mr Zelestis QC seeks to counter the effect of that obvious fact by submitting that the question of the true meaning and effect of cl 21(3) of the State Agreement will have a direct bearing on his client's interest under the GTA and is a matter which WMC Resources Ltd could litigate with the first plaintiff under the GTA in various circumstances, some of which he outlined. Mr Zelestis QC posited a difference arising between WMC Resources Ltd and the first plaintiff over whether, pursuant to cl 10(2) of the GTA, the applicant would be entitled to the benefit of lower tariffs if these were determined by the regulator as proposed in his draft decision. Such a dispute would entail a determination, as between WMC Resources Ltd and the first plaintiff, of the issue of whether or not any such decision by the regulator would extend to the first plaintiff in the circumstances having regard to the provisions of cl 21(3) of the State Agreement. This is the principal issue between the parties in the present litigation but a decision on that issue as between those parties, would not bind WMC Resources Ltd. Therefore, there is the possibility, perhaps even a probability, that further proceedings between WMC Resources Ltd and the first plaintiff may be necessary to determine that question. All that may be accepted and it reveals that, at least to this extent, there is a common question which has arisen in the present litigation between the parties and which may also arise between the first plaintiff and WMC Resources Ltd over their respective rights and obligations under the GTA. Whether the existence of such a common question is sufficient to require that WMC Resources Ltd be joined in these proceedings is another matter.

[92]

51 WMC Resources Ltd advances a second argument upon which it relies for the proposition that it is a necessary party to the existing litigation. This submission is that, insofar as the regulator undertakes the process of determining Reference Tariffs for the Goldfields Gas Pipeline under s 8 of the Code, he is a public officer performing a statutory function the outcome of which is likely to affect many persons. As the submission goes, the proper performance of that function and the correctness of any decision made by the regulator under the Gas Pipelines Access (Western Australia) Law are issues in the present litigation upon which any person having a sufficient interest is entitled to be heard. The submission likens the challenges to the jurisdiction and correctness of the decision by the regulator made by the plaintiffs in the present action, to claims for judicial review which, if involving an application for certiorari, would allow a person with a special interest to be heard. On this submission, the form in which the proceedings have been instituted, namely, by writ seeking declarations of right, should not be allowed to prevent the joinder and the rights to be heard of persons who have a sufficient interest to support or oppose the decision of the regulator as a matter of public law. Accordingly, on the basis that there is a statutory power which is being questioned in these proceedings, the applicant contends that it is entitled to be heard. The basis of this entitlement, as the submissions were developed, appears to be the combination of the applicant's interests in ensuring that any review of the decision of the regulator on grounds of jurisdiction or error of law, involves the presence of a proper contradictor (a role it cherishes for itself), and the entitlement of any person with a sufficient interest to be heard. The sufficiency of the interest claimed by the applicant lies in its role as a party who takes gas from the pipeline, and as a party whose contractual arrangements with the first plaintiff incorporate a price-fixing mechanism applying any decision of the regulator which extends to the first plaintiff.

[112]

66 Considerations which led to the rejection of any implied term to similar effect in Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 per Gibbs CJ at 65 - 66; Mason J at 1991 and 95 - 96; Wilson J at 118; Deane J at 121 and Dawson J at 139 appear to me to be apposite in the present case, especially with regard to limitations upon the scope of any such term if one were to be implied. Furthermore, it is well established that for any term to be implied in a contract among other things, it must not contradict any express term of the contract - BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. The Gas Transmission Agreement was made on 29 September 1998, that is, after the enactment, but before the commencement, of the Gas Pipelines Access (Western Australia) Act 1998 and cl 10(2) plainly contemplates that a different access and tariff regime applying to the pipeline was likely to become applicable. This can only be a reference to the introduction of the uniform laws and, indeed, it was part of the submission by Mr Zelestis QC for the applicant that the GTA was entered into by its parties in the knowledge and expectation that a statutory regime, as eventually enacted, was imminent. That regime included s 97(4) of the Gas Pipelines Access (Western Australia) Act 1998 and cl 2.25 of the Code. I have already examined those provisions and have concluded that, they contemplate that cl 21(3) of the State Agreement would not be qualified or abrogated by the exercise of any powers by the regulator under the Code. Accordingly, an implied term of the broad general nature contended for by Mr Zelestis QC for the applicant would offend the rule requiring consistency with the express contract terms. Confronted with this point, counsel for the applicant then submitted that it was arguable that his client had the benefit of another implied term in the GTA to the effect that, notwithstanding the provisions of cl 21(3) of the State Agreement, the first plaintiff would not avail itself of that clause in order to ensure that WMC Resources Ltd obtained the full possible benefit under the GTA including cl 10(2). While I accept that a term to that effect in a contract between the applicant and the first plaintiff would be valid and enforceable if it existed, this is not a term which I consider could possibly be implied in the GTA for all the reasons already stated.

[115]

69 Indeed, all the cases, in jurisdictions where the original form of rule O 18 r 6(2) is or was in force at the time, take the approach that some direct effect on the right of the person who is seeking to be joined must be demonstrated before it is necessary to join that person to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon. Examples where this requirement was applied and joinder refused include Australian Tape Manufacturers' Association Ltd v Commonwealth [1990] HCA 38; (1990) 94 ALR 641 at 644; National Australia Bank Ltd v Bond Brewing Holdings [1991] VicRp 31; [1991] 1 VR 386 at 579 - 580; ACCC v News Corporation Ltd (supra) at 153 - 158 and Emory University v Biochem Pharma Inc (supra). Cases involving the traditional form of the Rule of Court where joinder has been ordered include Foxe v Brown [1984] HCA 69; (1984) 58 ALR 542; 59 ALJR 186 per Mason J at ALR (ALJR 187) 545 and Bredvica v Radulovic [1975] VicRp 42; [1975] VR 434 at 445. These two cases each involved applications by a compulsory statutory insurer to be joined as an additional defendant in an action for damages for personal injuries in circumstances where the plaintiff's action was against a tortfeasor whose liabilities could, eventually, be enforced against the insurer. The basis for the joinder in both cases was that a determination of liability in the principal proceedings against the tortfeasor would create a liability directly enforceable against the insurer in certain circumstances. By contrast, an interest of a financial or commercial kind which did not directly affect the rights of the person seeking to be joined was not regarded as sufficient to justify joinder in National Australia Bank Ltd v Bond Brewing Holdings (supra); Australian Tape Manufacturers' Association Ltd v Commonwealth or ACCC v News Corporation Ltd. The judgment of Hill J in the last case contains a comprehensive analysis of the relevant principles and an examination of the practical criteria to be addressed in applying the test. On the other hand, an example of joinder being ordered because it would be just and convenient to deal with a common issue, under the revised version of the rule then applying in Victoria, is provided by Boral Resources (Vic) Pty Ltd v Robak Engineering & Construction Pty Ltd [1992] 2 VR 507 per Chernov JA at 523 - 4.

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Judgment (123 paragraphs)

Southern Cross Pipelines Australia Pty Ltd & Ors v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator & Anor [2002] WASC 149 (12 June 2002)

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Legislation Cited (7)

Cases Cited (17)