Australian Competition and Consumer Commission v Pacific National Pty Limited (No 2)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 15 May 2019
• Neutral Citation: [2019] FCA 669
• Date: 15 May 2019

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Pacific National Pty Limited (No 2) [2019] FCA 669

File number(s):	VID 864 of 2018
Judge(s):	BEACH J
Date of judgment:	15 May 2019
Catchwords:	COMPETITION – acquisition involving Queensland rail terminal – Acacia Ridge Terminal including the Brisbane Multi User Terminal – access to terminal – acquisition producing vertical integration – discrimination against new entrants by vertically integrated operator – ability to discriminate – incentive to discriminate – reasonable perception of ability and incentive to discriminate – barriers to entry heightened by such acquisition – availability of alternative terminals – Brisbane Multimodal Terminal at Port of Brisbane – standard gauge terminal at Bromelton, Queensland – narrow gauge terminal at Tennyson, Queensland – Inland Rail Project – prospect of new entry – efficiencies from vertical integration – elimination of double marginalisation – intermodal and steel rail interstate linehaul services – market definition – defining market by reference to end users with no ready substitutable services for rail services – two economic conditions supporting definition by reference to end users – capacity to price discriminate amongst users – no capacity for profitable arbitrage – interstate market(s) – north-south interstate market – east-west interstate market – Queensland market – non-bulk steel – bulk steel – competition in the relevant market(s) – substantial lessening of competition – meaning of “likely” – real chance – standard of proof of counterfactual – contravention of s 50 of the Competition and Consumer Act 2010 (Cth) – undertaking proffered by the acquirer – terminal services subcontract – provisions having likely effect of substantial lessening of competition – comparison of factual and counterfactual scenarios – alternative causation case – contravention of s 45(2) of the Competition and Consumer Act 2010 (Cth)
Legislation:	Competition and Consumer Act 2010 (Cth) ss 2, 4(1),(4), 4G, 45(1),(2),(3), 46, 50(1),(3),(6), 76, 87B Rail Safety National Law (South Australia) Act 2012 (SA) Sch, ss 50, 52(3) Rail Safety National Law (Queensland) Act 2017 (Qld) s 4
Cases cited:	Air New Zealand Ltd v Australian Competition and Consumer Commission (2017) 262 CLR 207 Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2017) 258 FCR 312; [2017] FCAFC 159 Australian Competition and Consumer Commission v Flight Centre Travel Group Pty Ltd (2016) 261 CLR 203 Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297 Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 282 ALR 464 Australian Competition and Consumer Commission v Pacific National Pty Ltd [2018] FCA 1221 Australian Gas Light Company v Australian Competition & Consumer Commission (No 3) (2003) 137 FCR 317 Boral Besser Masonry Ltd v Australian Competition & Consumer Commission (2003) 215 CLR 374 NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 Re Application by Chime Communications Pty Ltd (No 2) (2009) 257 ALR 765 Re Queensland Co-operative Milling Association Ltd (1976) 8 ALR 481 Stirling Harbour Services Pty Ltd v Bunbury Port Authority (2000) ATPR ¶41-752; [2000] FCA 38 Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission (2003) 131 FCR 529
Date of hearing:	19 to 23, 26 to 29 November 2018, 12, 13, 19 and 20 February 2019
Date of last submissions:	25 February 2019
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Economic Regulator, Competition and Access
Category:	Catchwords
Number of paragraphs:	1613
Counsel for the Applicant:	Mr PD Crutchfield QC, Mr A McClelland QC, Ms C Van Proctor, Ms S Forder, Ms A Muhlebach and Mr D Preston
Solicitor for the Applicant:	DLA Piper Australia
Counsel for the First to Fourth Respondents:	Mr NC Hutley SC, Dr RCA Higgins SC, Mr A Barraclough and Mr B Lim
Solicitor for the First to Fourth Respondents:	Clayton Utz
Counsel for the Fifth to Eighth Respondents:	Mr CA Moore SC, Mr DJ Roche and Mr A D’Arville
Solicitor for the Fifth to Eighth Respondents:	Ashurst Australia
Counsel for the Interested Person:	Mr N De Young
Solicitor for the Interested Person:	Gilbert + Tobin

ORDERS

		VID 864 of 2018
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	PACIFIC NATIONAL PTY LIMITED (ACN 098 060 550) First Respondent ; HV RAIL PTY LTD (ABN 26 615 302 111) Second Respondent ; QUEENSLAND LH CO PTY LTD (ACN 620 979 768) (and others named in the Schedule) Third Respondent
	QUBE HOLDINGS LIMITED Interested Person

JUDGE:	BEACH J
DATE OF ORDER:	15 MAY 2019

THE COURT ORDERS THAT:

1. Within 14 days of the date hereof, each party file proposed minutes of orders and short submissions (limited to 3 pages each) addressing:

   1. the necessary undertaking to be given by the Pacific National parties;

   2. orders disposing of this proceeding;

   3. costs; and

   4. any confidentiality issues or restrictions.

2. Until further order, these reasons not be made available to or published to any person save for the parties’ legal advisors, Qube Holdings Limited’s legal advisors and senior staff members and commissioners of the ACCC.

3. Liberty to apply.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

[Redacted version]

BEACH J:

1. This case concerns competition questions involving the ownership and operation of a...