2021 Mason Conversation

I was watching the 2021 Mason Conversation with Her Excellency the Honorable Margaret Beazley AC QC recently.

I was struck by one of the first things she said. She was asked whether she remembers receiving any advice from the former Chief Justice Anthony Mason during her time on the bench. She said that she had received some indirect advice from Sir Anthony when she first became a judge to the effect of "Don't write too much!". She added that the message was to "make sure you stayed on track", "did not engage in flights of interest (not fancy!)", avoided "overwriting" and finally an "admonition to sharpen your judgments - to get to the point."

What great advice not just for judges but for all lawyers.

This also seems to me to be advice which should be heeded by plenty of currently sitting judges particularly in the Federal Court where we are seeing overly long, repetitive judgments of 300 pages plus. I won't mention any names!

https://www.youtube.com/watch?v=c8sy0mXxF54

Protecting and promoting competition in Australia

I attended the Competition and Consumer Workshop 2021 Virtual Event on 27 August 2021.

The highlight was without doubt Rod Sims' announcement of a package of very significant proposed changes to merger laws in Australia. An outline of the changes is set out in Sims' speech which was released by the ACCC yesterday - link below.

However the biggest tragedy about the range of suggested reforms is the proposal to remove the informal merger clearance system and replace it with a formal system, a proposal which I think will be accepted by the Government.

As a former director of the ACCC's Sydney Mergers and Asset Sales Branch for a number of year I have always been a strong believer in the benefits of Australia's unique informal merger clearance system- it is a quick, efficient and very cost effective system. However, it is a system which is based largely on trust - namely the ACCC has to be able to trust that the merger parties and their legal practitioners have provided accurate and complete information to the ACCC about the merger. Whilst I recall from my days at the ACCC that there were a couple of outliers who regularly provided false and incomplete information, most parties respected and undertstood the need to be truthful.

Unfortunately, it seems to me that over recent years the poor behaviour of most likely only a few merger parties has forced the ACCC to give up on the informal clearance system and propose what will be without a doubt a much slower and much more expensive formal merger clearance system.

https://www.accc.gov.au/speech/protecting-and-promoting-competition-in-australia

Phoenix Institute acted unconscionably and misled students

Whilst this a good outcome, I wonder why the ACCC is continuing with the case for penalties and other orders against two companies which went into liquidation ages ago (which was probably not entirely unexpected given the name of one of the companies was the Phoenix Institute?)

The Commonwealth has already cancelled the debts of eligible students enrolled by Phoenix, so consumer redress has been achieved.

Unfortunately, the ACCC did not take legal action against any of the individuals behind the Phoenix Institute.

Therefore, declarations, injunctions, penalties and other orders against these two companies will serve no practical purpose.

I also note the recent changes to the Commonwealth Regulator Performance Guide issued in July 2021 which includes new guidance under Principle 2 - namely that Commonwealth regulators must take into consideration the "cost effectiveness" of regulatory action - ie:

"Adopting a risk based and data driven approach means regulators:
· consider the risks, cost effectiveness and impact of regulatory action, both before and after the regulatory action has commenced"

It may be time for the ACCC to drop this one - no point spending taxpayer's money to secure a phoenix fine against the Phoenix Institute!

https://www.accc.gov.au/media-release/phoenix-institute-acted-unconscionably-and-misled-students

Class Action Forum 2021

 For anybody interested in class action law in Australia I would strongly recommend the following Podcast entitled "Class Actions: Capital, Regulation and the Public Interest" hosted by the Australian Academy of Law and the Law Council of Australia.

The introduction by John Sheahan QC is a classic as he charts the inconsistent decision making and government interventions in the class action field over the last few years.

I would also recommend you listen carefully to Jason Betts' presentation. Jason Betts is from Freehills and is probably the leading class action defence lawyer in the country. I particularly liked his subtle use of language - ie

(1) referring to an analysis of class action activity as a "diagnosis" which seemed to me to be suggestive of the idea that class actions are some type of disease;

(2) referring to the fees charged by litigation funders as an "extraction" which sounded a bit like they are pulling people's teeth out - maybe defence law firms are doing their class action defence work on a pro bono basis rather than charging (extracting?) $800 plus an hour?

(3) asking the question whether the class action system is being used by plaintiff lawyers as a mechanism for the recovery of compensation for aggrieved consumers or rather as a launching pad for the generation of significant profits from the legal system - it seems to me that defence lawyers are very well compensated for their work (generating significant profits) particularly when you consider that they are not taking the same significant financial risks as plaintiff firms and litigation funders in running such claims on a no win no fee basis; and

(4) constant disclaimers that what Jason has just said or is going to say about class actions is not meant in a "pejorative" sense - now, I wonder why we would suspect that?

I strongly recommend the Podcast.

https://www.lawcouncil.asn.au/federal-litigation-dispute-resolution/class-actions-forum-2021

ACCC accuses Telstra, Optus and TPG of misleading consumers over maximum NBN speeds

The ACCC's sounds pretty mad about this case which involves allegations that Telstra, Optus and TPG's made false or misleading representations in their promotions of some 50Mbps and 100Mbps NBN plans. As stated by Sims:

"We've lost patience here. And we think it should be taken to court. And we'll be seeking very high penalties."
 
I suspect the ACCC will be pressing for multi-million-dollar fines, most likely making an argument for a 10% of turnover penalties against all three respondents. These could be the biggest penalties ever ordered under the ACL if the ACCC's likely arguments on penalties are accepted by the Court.
 
There is also an issue as to whether the companies complied with their earlier undertakings: Sims said:
 
“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC.”
 
On the undertaking point, it seems to me that part of the blame for non-compliance falls on the ACCC for not including more rigorous reporting obligations in the undertakings and requiring that compliance with the obligations be verified by an independent reviewer. The undertakings are clearly defective in both of these respects.

https://www.abc.net.au/news/2021-08-09/accc-telstra-optus-tpg-court-nbn-speeds-maximum-plans-misleading/100362298

ACCC appeals in NSW Ports competition case

 The ACCC has appealed Jagot J's decision in the NSW Ports matter. I like their chances on the purpose of the agreements.

“We will argue that the Court made an error in finding that the Port Commitment Deeds didn’t have an anti-competitive purpose, even though the Court found that the purpose of the Deeds was to secure a higher sale price for the State from selling the existing monopoly of Port Botany, and ensure that NSW Ports would retain the full value of that monopoly,” Mr Sims said.

I think it was very clear that the agreements had an anti-competitive purpose.

And going out on a limb here, my prediction for the composition of the Full Court would be Allsop CJ, Yates and O'Brien JJ.

https://www.accc.gov.au/media-release/accc-appeals-in-nsw-ports-competition-case

Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd [2021] FCA 720

 I had a quick look at Justice Jagot's decision in the ports case. I am not too sure the judge came to the right decision. While her effects analysis looks sound, her discussion of the purpose of the provisions looks weak and unconvincing.

Jagot J's analysis of the counterfactual led her to conclude (1) that the chance of the State permitting or supporting the development of a container terminal at the Port of Newcastle before Port Botany reached its capacity was "fanciful, far-fetched, infinitesimal or trivial and not a real chance or real possibility" and (2) there was no real chance of Port of Newcastle, its board and shareholders and financiers being able to satisfy themselves that a container terminal at the Port of Newcastle would be viable while Port Botany had capacity. 
 
Therefore, the Port Commitment Deeds which obliged the State of NSW to compensate the operators of Port Botany and Port Kembla if container traffic at the Port of Newcastle rose above a minimal specified cap had no practical effect as there was never any chance of the Port of Newcastle developing a container terminal.
 
However, it seems to me that Jagot J has not adequately dealt with the purpose case. I was reminded of Allsop J's observations in the Liquorland case where we were not able to establish an effects case. First, Allsop J observed that sophisticated business-people rarely enter into commercial agreements which have no commercial purpose. He then concluded that the anti-competitive purposes of the agreements were clear:
 
"..this purpose can be seen plainly to be relevant to the competitive process in that market. It was directed to denying any new potential entrant to the local market this vehicle (being a “potent item”) for entry to the market. This did not deny the potential new entrant the ability to enter the market by applying for its own licence. However, the purpose was to make sure, as far as was possible, that this licence could not be used for facilitating any unrestricted market entry, now, or in the future" (883).

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2021/720.html