The Newcastle Herald reported last week that Mayfield Development Corporation (MDC) had applied to lift a stay of proceedings in its Federal Court action against NSW Ports, the consortium that entered into a 99-year lease of Botany and Kembla on May 31, 2013.

The Botany and Kembla "port commitment deed" includes a controversial provision that the government will compensate NSW Ports if a rival entity develops a container terminal in Newcastle.

The government, in turn, later leased Newcastle to the Port of Newcastle consortium under an agreement which includes financial penalties if Port of Newcastle develops a container terminal.

The Newcastle Herald has obtained MDC's statement of claim (see in full below) setting out its argument for damages from NSW Ports under the Competition and Consumer Act.

Section 82 of the Act says a "person who suffers loss or damage by conduct of another person that was done in contravention of [the Act] may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention".

The statement of claim says MDC would have developed and operated cargo-handling facilities, including a container terminal, at the Mayfield site had NSW Ports not entered into an agreement with the government that contravened restrictive trade practices provisions in the Act.

Alternatively, it argues MDC, which was negotiating with the government to build a Newcastle container terminal before the ports were privatised, would have had the valuable commercial "chance" of developing and operating a terminal.

Under the Act, a corporation must not "make a contract or arrangement, or arrive at an understanding, if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition".

The government kept the container fees secret from the public and Parliament. They were revealed by the Newcastle Herald in 2016.

The Act sets a statute of limitations of six years for starting legal action. MDC launched its action against NSW Ports on May 31, 2019, before agreeing to a stay of proceedings in August while the court dealt with a parallel action being brought by the Australian Competition and Consumer Commission.

Maersk's chief legal counsel, Michael Villi Moller, was appointed as an MDC director on June 7.

MDC would not comment on why it had pushed to lift the stay of proceedings, an application which will start with a procedural hearing in the Federal Court on Wednesday.

The MDC statement of claim traces the history of the dispute back to 2003, when former Labor premier Bob Carr announced that Newcastle would be developed into a major container terminal once Botany had reached capacity.

It says that by 2010 the state-owned Newcastle Port Corporation had identified MDC, then known as Newcastle Stevedores Consortium, as the preferred proponent to build and operate a container terminal.

The statement of claim says that by October 2011 the two parties had negotiated "proposed project agreements", but the state government was "aware" in April 2012 that the prospect of a Newcastle container terminal could "negatively affect perceived value to potential bidders" for Botany and Kembla.

The MDC claim also refers to a document titled "Project Cook Investment Review", allegedly prepared in March 2013 for IFM Investors, a member of the NSW Ports consortium, which allegedly said the compensation provision in the lease agreement provided "additional protection on diversion of container throughput".

MDC says this document was considered by IFM's investment review committee on April 2, 2013, 10 days before the government announced NSW Ports as the successful bidder for Botany and Kembla.

Its claim argues that without the compensation provisions the state would have approved the project agreements with MDC to develop the Mayfield site, or MDC would have entered into similar agreements with Port of Newcastle post-privatisation.

Maersk subsidiary APM Terminals and Sydney-based Anglo Ports each own 50 per cent stakes in MDC.

The government leased the three ports for a total of almost $7 billion in 2013 and 2014 without informing Parliament about the container fees.

The ACCC, in its similar action, argues the container fees are "illegal and anti-competitive" and is seeking pecuniary penalties and injunctions restraining the operators of Botany and Kembla from seeking compensation.

In that case, NSW Ports has filed a cross-claim against the government, which is now a respondent to the ACCC action.

Justice Jayne Jagot, who is hearing both matters, has ordered the ACCC, NSW Ports and NSW government to start mediation before April 3.

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