The National Competition Council v. Hamersley Iron Pty Ltd and Ors
The National Competition Council v. Robe River Mining Co Pty Ltd and Ors

Lower Court Judgment

4/05/2011 Federal Court of Australia (Keane CJ, Mansfield & Middleton JJ)

[2011] FCAFC 58

Catchwords

Competition law — Declared services — Rio Tinto Ltd and associated entities ("Rio") operate Hamersley and Robe railway lines in Pilbara region — The Pilbara Infrastructure Pty Ltd ("TPI") applied for declarations to allow third party trains and rolling stock to move along Hamersley and Robe lines — Commonwealth Treasurer declared Hamersley and Robe lines for period of 20 years pursuant to s 44H of Trade Practices Act 1974 (Cth) (now Competition and Consumer Act 2010 (Cth)) ("Act") — Australian Competition Tribunal ("Tribunal") made determination, pursuant to s 44K(7) of Act, setting aside Hamersley declaration and varying Robe declaration to ten year period — Tribunal found, inter alia, that Hamersley and Robe lines are natural monopolies, but access would be, by reason of putative benefits associated with construction of alternate railway lines and cost to Rio and therefore national economy, contrary to public interest — Full Court of Federal Court upheld Tribunal's decision in respect of Hamersley line and set aside limited declaration in respect of Robe line — Whether criterion for declaration of service specified in s 44H(4)(b) of Act imposes test of private profitability or test applying economic principles taking into account natural monopoly characteristics — Whether public interest criterion in s 44H(4)(f) of Act requires or permits inquiry into likely net balance of social costs and benefits if declaration made — Whether s 44H of Act confers broad discretion on Minister to conduct social cost-benefit analysis if prescribed matters in s 44H point in favour of declaration being made — Whether Minister's discretion confined to matters within purpose and object of s 44H — Whether open to National Competition Council to recommend Hamersley and Robe line services be subject of declaration under s 44H of Act.

Words and phrases — "uneconomical for anyone to develop another facility to provide the service".

Short Particulars