ACCC v NSW Ports

Federal Court of Australia (NSW Registry)
[2021] FCA 720 (29 June 2021)
Justice Jagot

Catchwords

COMPETITION – privatisation of Port Botany and Port Kembla – port commitment deeds – where provisions of deeds require the State to compensate port operators if container volumes above specified threshold divert to possible container terminal at the Port of Newcastle – alleged contravention of s 45 of the Competition and Consumer Act 2010 (Cth) – whether hypothetical container terminal at Port of Newcastle would operate in same market as Port Botany or Port Kembla – relevant market existing monopoly market for container terminal services in New South Wales – whether compensation provisions had purpose, effect or likely effect of substantially lessening competition – no likely anti-competitive effect of compensation provisions – where provision of port commitment deed relating to privatisation of the Port of Newcastle required port operator to reimburse the State for compensation paid under Port Botany or Port Kembla deeds – whether reimbursement provisions had purpose, effect or likely effect of substantially lessening competition – no likely anti-competitive effect of reimbursement provisions.

STATUTORY INTERPRETATION – Crown immunity – whether s 45 of the Competition and Consumer Act 2010 (Cth) applies to State making and giving effect to port commitment deeds – whether State entering or giving effect to compensation provisions was “carrying on business”– privatisation of ports giving effect to government policy – Crown immunity – whether s 45 applied to first to third respondents making or giving effect to port commitment deeds – derivative Crown immunity – whether application of s 45 to first to third respondents would adversely affect proprietary right or interest of the Crown – where Treasurer had statutory rights to enter privatisation transactions – where legislative intention that statutory rights allow acts necessary or convenient to enter transactions – where compensation provisions necessary or convenient to effect privatisation transactions – s 45 inapplicable by operation of derivative Crown immunity.

Legislation (select)

Competition and Consumer Act 2010 - ss 2, 2A, 2B, 4, 4E, 4F, 4G, 4L, 45, 51

Summary

In its media release announcing the proceedings, the ACCC provides the following details:

The ACCC has instituted proceedings in the Federal Court against NSW Ports Operations Hold Co Pty Ltd and its subsidiaries Port Botany Operations Pty Ltd and Port Kembla Operations Pty Ltd for making agreements with the State of New South Wales that the ACCC alleges had an anti-competitive purpose and effect.

“We are alleging that making these agreements containing provisions which would effectively compensate Port Kembla and Port Botany if the Port of Newcastle developed a container terminal, is anti-competitive and illegal,” ACCC Chair Rod Sims said.

The NSW Government privatised Port Botany and Port Kembla in May 2013 and the agreements, known as Port Commitment Deeds, were entered into as part of the privatisation process, for a term of 50 years.

At trial

Justice Jagot dismissed the proceedings.

On appeal

The matter has been appealed (in July 2021)

External case link

ACCC v NSW Ports Operations Hold Co Pty Ltd [2021] FCA 720 ➤