9.2 Statutory requirement to "take into account" or "have regard to"
103 In Reg v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329, Mason J, with whom Gibbs J agreed at 324, explained the significance of a statutory requirement that a decision-maker "have regard to" costs necessarily incurred in providing nursing home care in a particular nursing home when determining a scale of fees. Mason J said that the expression "have regard to" required the decision-maker to take the costs into account and give them weight "… as a fundamental element in making his determination": Sean Investments 180 CLR at 329. He explained that in that case there were two reasons for such a construction, first, that the costs were the only matter explicitly mentioned as a matter to be taken into account and, secondly, the scheme of the provisions was that once an approval were given, the proprietor of the nursing home was not permitted to exceed the scale of fees fixed by the decision-maker.
104 As Mason J pointed out the section did not require the decision-maker there to fix the scale of fees exclusively by reference to particular costs. The decision-maker was entitled to have regard, he said, to other relevant considerations. But, the function of the decision-maker was to determine a scale of fees for the particular nursing home, not all nursing homes. Thus the Act directed that regard be had to the costs incurred in providing care in that nursing home: Sean Investments 180 CLR at 329.
105 I am of opinion that when s 152CR(1)(d) required the Commission, in making a final determination, to take into account Telstra's direct costs of providing access to the ULLS in the manner the Commission proposed, it was required to take that matter into account, together with the other matters referred to in the section, and to give weight to them as a fundamental element in making its decision: The Queen v Toohey; Ex parte Meneling Station Pty Limited (1982) 158 CLR 327 at 333 per Gibbs CJ applying what Mason J had said in Sean Investments 180 CLR at 329 to a section requiring a decision-maker to take a variety of matters into account. Mason J said that the requirement to have regard to a matter meant that it would become a central element for the decision-maker in his considerations: Meneling Station 158 CLR at 338. And, as he later explained in his classic judgment in Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24 at 41, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the Court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising a statutory power. Mason J said that the Court could set aside an administrative decision which had failed to give adequate weight to a relevant factor of great importance, or had given excessive weight to a relevant factor of no great importance, but the preferred ground on which that power was to be exercised was that the decision was "manifestly unreasonable". A person entrusted with a discretion must call his own attention to the matters which he is bound to consider: Peko-Wallsend 162 CLR at 39 per Mason J applying Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223 at 228 per Lord Greene MR.
106 A decision-maker must give proper, genuine and realistic consideration to the merits of the case: Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 at 292 per Gummow J; Zhang v Canterbury City Council (2001) 51 NSWLR 589 at 601 [62] where Spigelman CJ collected the authorities; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 367 [138] per Kirby J; NAJT v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 51 at 92-93 [212] per Madgwick J, 96 [229] per Conti J; SZEJF v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 724 at [39], [60] where I applied this principle. In Tickner v Chapman (1995) 57 FCR 451 at 462C-D, Black CJ said that where a decision-maker was required to consider material, the process of consideration "… involves an active intellectual process" directed at the nominated subject-matter: see too per Burchett J at 476F-477E, per Kiefel J at 495F-G and Tobacco Institute of Australia v National Health & Medical Research Council (1996) 71 FCR 265 at 277G per Finn J; Australian Retailers Association 148 FCR at 577 [526] per Weinberg J.
107 Where a decision-maker must consider matters prescribed by law, generally, he or she cannot jettison or ignore some of those factors or give them cursory consideration only in order to put them to one side: East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007)233 CLR 229 at 244 [52] per Gleeson CJ, Heydon and CrennanJJ. As Gummow and Hayne JJ, in concurring observed (East Australian Pipeline 233 CLR at 256 [102]):
"It was not enough for the ACCC to say in its final determination that it had considered those matters in the sense of having looked at but discarded them."
108 Because s 152CR(1) required it to take into account each of the seven specified factors, the Commission had to give each of them appropriate consideration in arriving at its final determination. The number and variety of factors which a statute requires a decision-maker to take into account or to have regard to in arriving at a decision necessarily affects the weight any one of those factors must be given in the deliberative process. In Sean Investments 180 CLR 322, the costs were fundamental - or foundational - because they were the only matter which the statute prescribed. The subject matter, scope and purpose of the statutory power provide a context in which to assess the duties it imposes on the decision-maker in any particular situation: cf: Foster v Minister for Customs (2000) 200 CLR 442 at 452 [22]-[23] per Gleeson CJ and McHugh J, Gaudron and Hayne JJ agreeing with their Honours at 454 [32].
109 Here, s 152CR(1) prescribes a number of matters for consideration. This is a sure legislative indication that these matters must be central matters for the Commission. But, because s 152CR(2) expressly widens the range of matters which the Commission may consider, it is authorised to arrive at a final determination, after due consideration, which accords more weight to some other factor or factors than those in s 152CR(1). Indeed, the factors in s 152CR(1) itself tend in different directions. The interests of a carrier (s 152CR(1)(b)) and those of all persons who have a right to use a declared service (s 152CR(1)(c)) more often than not will be opposed. If the Commission were to give fundamental weight to each in the sense which Telstra argued, how could it arrive at a decision favouring one at the expense of the other? cf Telstra Corporation Limited v Australian Competition and Consumer Commission [2008] FCA 1436 at [311]-[312] per Lindgren J.
110 I am of opinion that the sense in which the High Court used the expression "fundamental weight" in this context is to require the decision-maker to treat the consideration of the factors, as opposed to the factors themselves, as a central element in the deliberative process: Meneling Station 158 CLR at 338 per Mason J. In this way the decision-maker will give appropriate weight to those factors. The Parliament sought to ensure that the Commission would give proper, genuine and realistic consideration to each of the factors it specified in s 152CR(1) but without confining it to those matters, as s 152CR(2) showed. Such consideration must be reflected in the Commission's reasons for its decision.
111 In Telstra [2008] FCA 1436 at [122] Lindgren J held that s 152CR(1)(a) is the factor which should be given fundamental weight, namely, whether the determination will promote the long-term interests of end-users of services supplied by means of carriage services. This was because, he held, that factor reflected the sole object of Part XIC of the Act as expressed in s 152AB(1): see Telstra [2008] FCA 1436 at [17]. Of course, s 152AB(2)(e) supplements this concept by identifying an objective of encouraging the economically efficient use of, and economically efficient investment in, the infrastructure by which listed services are supplied. Often that objective may not be attained if an infrastructure investment is not economically feasible for the service provider to make or support. So, by dint of s 152AB(2)(e) the interests of end-users may well include that the service provider is not forced to act in a way which for it is economically unjustifiable. Possibly, a monopolist may be able to be forced to lower prices or make way for competition under s 152AB(2)(e), but not to run the business as a charitable exercise or at a loss.
112 Therefore, depending on the facts of a particular arbitration, one or more of the matters in s 152CR(1) may become of greater or lesser weight in the decision-making process. However, as a matter of law, none of the factors, including s 152CR(1)(d), is entitled to a fixed weighting in that process regardless of the subject matter of any arbitration and all other relevant factors: Peko-Wallsend 162 CLR at 41 per Mason J; Foster 200 CLR at 452 [22]-[24] per Gleeson CJ and McHugh J; cf: Telstra [2008] FCA 1436 at [118] per Lindgren J.
113 Optus argued before the Commission that Telstra's costs of providing the new form of access should be recovered from all access seekers rather than solely from Optus, as Telstra had contended. Optus argued, and the Commission accepted, that Telstra would be able to recover those costs through the application of the Commission's pricing principles in separate arbitrations which were being conducted concurrently by the Commission (Reasons [106], [131]).
114 Telstra argued that the Commission was not entitled to defer consideration of Telstra's costs of compliance with the final determination by asserting that the regulatory regime permitted Telstra to recover the efficient costs of supplying and charging for the ULLS (Reasons [131]). It relied on Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65 at 86 per Sheppard J, 89 per Ryan J.
115 Optus responded that Telstra had not asked the Commission to consider a price as part of the final determination. It argued that the Commission was entitled to have regard to the existence of a separate mechanism by which Telstra could recover its costs of provisioning for the ULLS caused by implementing the final determination.
116 Optus argued that s 152CR(1)(d) was concerned with the direct costs of provision of the ULLS rather than the particular costs of complying with the Commission's determination. It contended that the Commission approached s 152CR(1)(d) on the basis that Telstra's direct costs of providing access to the ULLS included costs incurred or caused by the provision of access occasioned by the terms of the final determination, as the Commission had stated in its reasons at [118].
117 I am of opinion that the mere fact that Telstra might seek to recover its costs, whatever they may be, under a separate process is beside the point. The existence of that fact did not elucidate what s 152CR(1)(d) required the Commission to do, namely to take Telstra's direct costs of compliance into account in making the final determination. The incurring of a cost is different from its possible recovery. The Act in s 152CR(1)(d) required the Commission to give real consideration to what Telstra would be required to incur directly as the cost of implementing what the Commission was considering. But the Commission did not do so. In the passages of its reasons which dealt with costs, all the Commission did was assert that Telstra would in fact incur costs and, without identifying or quantifying those costs, it asserted that they would be "minimised" (Reasons [130]), "negligible" (Reasons [199]) or "recoverable" (Reasons [131]). And the Commission referred to Telstra's ability, in separate arbitrations, to recoup costs that it incurred in implementing the final determination.
118 Those mere references did not amount to the Commission having regard to Telstra's direct costs of providing access in any genuine, proper or realistic manner as required by s 152CR(1)(d). The Commission made no finding of what direct costs Telstra would incur in providing its proposed new form of access to ULLS. Telstra had contended, with substantive corroborating evidence, that its direct costs would be about $1.7 million. If the Commission's approach, supported by Optus in its submissions, were correct, the Commission did not need to consider any particular cost or costs, let alone identify what direct costs Telstra would incur in providing access. Any consideration of such costs resulting in these descriptions required the Commission to give reasons analysing what Telstra claimed were its direct costs of implementing the final determination and how the Commission came to its significantly different conclusion.
119 Section 152CP(5) required the Commission to give its reasons for making the final determination. And pursuant to s 25D of the Acts Interpretation Act 1901, that obligation extended to setting out its findings on material questions of fact including references to the evidence or other material on which those findings were based. Those requirements focus on the subjective thought processes of the decision-maker. It must set out its findings on those questions of fact which it considers to be material to the decision it has made and the reasons it had for reaching that decision as explained by McHugh, Gummow and Hayne JJ in Yusuf (2001) 206 CLR at 346 [68].
120 The purpose of the arbitration was to determine whether Optus should be granted access to the ULLS in a manner different to its then current access. The subject matter, scope and purpose of ss 152CP(2) and 152CR(1)(d) required the Commission, in making a final determination about the subject matter of the arbitration concerning access by Optus to the declared ULLS service to have regard to the actual direct costs which Telstra would incur in providing the access to Optus as required by the final determination.
121 The Commission accepted that there were already direct costs incurred by Telstra in providing the existing access. But, the Commission, as decision-maker, had to have regard in addition to the direct cost to Telstra of effecting what it was considering as a final determination. This view is reinforced by the prohibition imposed by s 152CQ(1)(f). That directs the Commission not to make a final determination for access if in doing so Telstra would be required to bear an unreasonable amount of the costs of extending or enhancing the capability of a facility. Thus, not only was the Commission required to have regard to Telstra's actual direct costs for the purposes of arriving at a final determination, it was prohibited, if the costs of doing so were unreasonable, from making a final determination.
122 In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69] McHugh, Gummow, Kirby and Hayne JJ said that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisionsof the statute.
123 I am of opinion that the requirement in s 152CR(1)(d) that the Commission take into account the direct costs of providing access to the declared service in making a final determination must be read consistently with its obligation to refrain from making such a determination if, in doing so, a party would be required to bear an unreasonable amount of the costs of extending or enhancing the capability of a facility.
124 The Commission did not set out any findings as to the direct costs of Telstra providing access to the ULLS either generally (see Reasons at [118]) or specifically those which would be incurred by Telstra in providing the service required in the final determination. The Act required the Commission to have regard to those costs by giving them proper, genuine and realistic consideration in arriving at its final determination. A mere recitation of submissions to it and then the expression of an unreasoned conclusion, could not suffice to comply with the Commission's obligation, within the meaning of s 152CR(1)(d), to have regard to Telstra's direct costs of providing access and its claim that they would be about $1.7 million. It did not have regard to Telstra's direct costs of providing the access it required under its final determination.
125 Whether the Commission used $360,000 as Telstra's costs or not, it gave no reasons for its finding that Telstra's costs would be negligible. The Commission either made a mistake about what Optus submitted or it had no reasons for rejecting Telstra's estimate of $1.7 million. Optus' submission that the Commission had not used the $360,000 as Telstra's costs recognised at least implicitly, that such a use would be a failure by the Commission to have regard to Telstra's direct costs under s 152CR(1)(d). While I think that it is likely that the Commission was confused about Optus' estimate of $360,000 as being an estimate of Telstra's costs, it is not possible to decide one way or the other whether it did because of the Commission's lack of reasons on this matter: Palme 216 CLR at 223-224 [39] per Gleeson CJ, Gummow and Heydon JJ.
126 I am of opinion that the deficiencies in the Commission's reasons which I have just discussed show that it had no reasons for rejecting Telstra's estimate of $1.7 million and that it did not comply with the requirement of s 152CR(1)(d).