Has the tide turned for Fortescue?

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3 November 2011

Last Friday, Pilbara Infrastructure Pty Ltd (a wholly owned subsidiary of Fortescue Metals Group) was granted special leave by the High Court to appeal a decision of the Federal Court which had seemingly put paid to its hopes of securing access to key railway lines in the Pilbara region operated by BHP Billiton and Rio Tinto. The High Court’s decision paves the way for a reconsideration of the general access regime in Part IIIA of the Competition and Consumer Act which will be of interest to the owners of essential facilities and those who seek access to those facilities.

Chief Justice French and Justices Hayne and Keifel granted Fortescue special leave to appeal the decision of the Federal Court in Pilbara Infrastructure [1] on 28 October 2011.[2] Fortescue successfully argued that the High Court should consider the proper construction of two of the five declaration criteria, as well as the scope of the Minister’s discretion to declare services under Part IIIA of the Competition and Consumer Act 2010 (Cth). The High Court indicated its interest in arriving at a coherent overall construction of these criteria in the context of Part IIIA, having regard to the economic issues and the legislative history of the section.[3]

The decision will be welcomed by access seekers, as the Federal Court’s decision effectively raised the bar for obtaining access in stark contrast to the other leading Federal Court authority on the declaration criteria, Sydney Airport.[4] Given the tension between these decisions, it is unsurprising that the High Court took the opportunity to consider the matter and indicated that it may give broader guidance on the regime as a whole.

The High Court will now determine whether the threshold for declaration under Part IIIA has been set too high in considering the proper application of the ‘uneconomic to duplicate’ and public interest criteria. The High Court indicated that it is likely to consider the issues more broadly in the statutory context, which has implications for various industry specific and State specific infrastructure access regimes that use a similar statutory framework.

Indications are that the proceedings will be heard in the first half of 2012, as the High Court has set an aggressive timetable for submissions. Potential access seekers and infrastructure owners and operators will be keenly awaiting the High Court’s consideration of these matters.


[1] Pilbara Infrastructure Pty Ltd d v Australian Competition Tribunal & Ors (2011) 193 FCR 57; [2011] FCAFC 58.
[2] Pilbara Infrastructure Pty Ltd & Anor v Australian Competition Tribunal & Ors [2011] HCATrans 300 (28 October 2011).
[3] “Merits apart, would you accept that the interaction of these criteria and the residual discretion raises a point of general principle.” per French CJ and “...is not the point that a coherent overall construction must be arrived at?” per Hayne J, Pilbara Infrastructure Pty Ltd & Anor v Australian Competition Tribunal & Ors [2011] HCATrans 300 (28 October 2011).
[4] Sydney Airport Corporation Ltd v Australian Competition Tribunal & Ors (2006) 155 FCR 124; [2006] FCAFC 146.


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


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