PORT Botany operator NSW Ports and the NSW government told the full Federal Court yesterday that confidential Port Commitment Deeds signed by NSW Ports and the Port of Newcastle were to allow the government to change container port policy, not to hinder competition.
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Junior counsel for NSW Ports, Dr Ruth Higgins SC, was responding to evidence of the Australian Competition and Consumer Commission on the concluding day of the ACCC's appeal against last year's Federal Court decision by Justice Jayne Jagot.
Justice Jagot found the government was not carrying on a business in privatising the ports and had not breached "anti-competitive" sections of the Competition and Consumer Act.
IN THE NEWS:
She found the government's protection gave NSW Ports "derivative crown immunity", and that confidential Port Commitment Deeds (PCDs) in 2013 and 2014 were intended to maximise the price the state obtained in leasing the ports and were not anti-competitive.
The PCDs remained undisclosed to the public or the parliament until the Newcastle Herald obtained a copy of one in 2016.
Dr Higgins said NSW Ports did not know about the government's intention to privatise Newcastle when it was negotiating to lease Botany and was not cross-examined about its understanding of the intentions of the PCDs.
But ACCC counsel Michael Borsky SC disputed this, citing exchanges in the trial transcript where NSW Ports witnesses were asked about the PCDs.
Despite NSW Ports calling the idea of a Newcastle terminal "delusional", Mr Borsky said it was clear the PCDs related to "duplicative competition".
Mr Borsky said that even if the chances of a Newcastle container terminal were " exceedingly small", it did not mean that the PCDs were not anti-competitive.
But NSW government counsel Stephen Free SC said it was wrong to conclude that the purpose of the deeds was to pass on a liability to Newcastle.
Mr Free used the analogy of an insurance company, taking on an insurance policy, which it might then re-insure with another company later on. He said that on the ACCC's logic, the original purpose was the reinsurance policy, "which is nonsensical in our submission".
From the ACCC's perspective, Mr Borsky said it was "nonsensical" to say that the PCD signed by Botany made no difference to its competitive position but they agreed to sign it nonetheless.
ACCC APPEAL IN FULL:
Mayfield Development Corporation, which had approval to build a container terminal in Newcastle before the state terminated negotiations and leased the port, was allowed to intervene and lodged a written submission.
Brett Walker SC was to have appeared for Mayfield but director Richard Setchell said there was no need after the ACCC submission covered most of their areas.
The judges - Chief Justice James Allsop, Justice Jonathan Beach and Justice David Yates - reserved their decision.
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