THE Port of Newcastle told the Federal Court yesterday that compensating Port Botany as well as paying its own costs would make it "virtually impossible" to operate a Newcastle container, with the subsequent hindering of competition a "practical reality".
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Opening the third day of evidence yesterday, the port's counsel, Garry Rich SC, summarised the main points of the port's submission before Stephen Free SC spoke to the NSW government's case.
They were followed by Noel Hutley SC for NSW Ports, who told the three Federal Court justices that major parts of the appeal case brought by the Australian Competition and Consumer Commission were irrelevant because there was "no real chance" of a Newcastle container terminal being built even without the Port Commitment Deeds obliging Newcastle to compensate NSW Ports, operator of Port Botany and Port Kembla.
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Port of Newcastle has said repeatedly in public that it has the funding to build the terminal should the compensation problem be settled, and the original proponent of a Newcastle terminal - Mayfield Development Corporation, now half-owned by a subsidiary of Danish shipping giant Maersk - has lodged a cross-claim in this case and has since confirmed its interest in proceding.
In the court, however, Mr Hutley said Justice Jayne Jagot in her June decision against the ACCC last year had variously found the idea of a Newcastle terminal "fanciful" and a "mirage" and with "no viable business case", none of which, he said, had been subsequently challenged.
The appeal judges - Chief Justice James Allsop, Justice Jonathan Beach and Justice David Yates - questioned Mr Hutley at length about the NSW Ports case in its reliance on various precedent cases that are seen as setting parameters for the operation of the Competition and Consumer Act.
The ACCC argues that the arrangements by which Newcastle would have to pay Botany a costs-based amount estimated at about $100 a container for business it took from the existing monopoly provider breaches "anti-competitive" provisions of the competition act.
Port of Newcastle agrees with this in its cross-claim, whereas NSW Ports says privatising the ports was not "carrying on a business" of operating the ports, and so it was exempt from the federal competition law.
Mr Hutley was also questioned on the Ports Assets (Authorised Transactions) Act, which was introduced in 2012 and amended in 2013 to include the lease of Newcastle.
The government says the powers to make a Newcastle terminal compensate Botany are given to the state Treasurer in this legislation.
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