Competition law, adjudication and the High Court

Melbourne University Law Review, Dec, 2006 by Kathryn McMahon

[This article explores the statutory interpretative practices and debates in recent competition law cases considered by the High Court. While these debates appear to centre on 'textual/literal' versus 'contextual/purposive' interpretative practices, further examination reveals that these theoretical differences do not adequately predict outcomes. Instead, these practices often mask undisclosed policy decisions that give preference to particular economic and political outcomes concerning the role of the state and the market over other desirable goals. This raises important practical and jurisprudential issues concerning legislative supremacy and judicial accountability, which have significance that extends beyond competition law adjudication.]

CONTENTS

I    Introduction
II   The Debate in Context: Visy
         A The Approach of Kirby J
         B The Majority Joint Judgment
III  The Literal Interpretation of Competition Statutes
         A 'Textualism' and Competition Statutes
         B From 'Contract' to 'Market'
         C Interpretation as an 'Attack with Scissors'
IV   Legislative Purpose, Economic Theory and Foreign Judgments
         A The Goals of Competition Law
         B Economic Analysis as Authority
         C 'Judicial or Other Glosses'
V    Boral
         A Cost-Based Tests and Legislative Purpose
         B The Recoupment Approach and Judicial Precedent
         C Choice of Economic Theory
         D The Australian Market Context
VI   Rural Press
VII  NT Power Generation
VIII Conclusion

I INTRODUCTION

Since 2001, there have been more decisions of the High Court of Australia dealing with competition law than in the previous 27-year history of the Trade Practices Act 1974 (Cth) ('TPA'). (1) These decisions have been the subject of detailed analyses of their contribution to the law's treatment of a range of anti-competitive conduct. (2) These judgments have also been notable for a fascinating and strident debate between High Court judges on a potentially more important issue to competition law, but one which has received little academic attention. This debate centres on what Kirby J describes as 'the proper interpretation and application of provisions of the Trade Practices Act 1974'. (3) While the judgments contain multiple and complex approaches to statutory interpretation, they can be broadly characterised as either 'textual/literal' or 'contextual/purposive'. These different approaches are mirrored in a debate which has pitted the views of Kirby J against those of other members of the High Court. While dissenting judgments by Kirby J are not uncommon, (4) it is the force with which these opinions are offered that is extraordinary. Two examples embody the scope and nature of this judicial debate. In the first, Kirby J concludes his judgment in Visy with the observation that '[o]ut of politeness, I would not have said this but for the criticism addressed to my endeavour, to which I adhere.' (5) In the second instance, and with similar directness, Kirby J in Rural Press stated:

   This is the third recent decision of this Court ... in which a
   majority has adopted an unduly narrow view of s 46 of the Act ...

   In my view, the approach taken by the majority is insufficiently
   attentive to the object of the Act to protect and uphold market
   competition ... It is unrealistic, bordering on ethereal ... The
   outcome cripples the effectiveness of s 46 of the Act ... Judicial
   lightning strikes thrice ... Effective anti-competitive threats can
   be made without the redress which s 46 appears to promise. Once
   again I dissent. (6)

Judicial debates about statutory and constitutional interpretation occur frequently in the current High Court. (7) As in the case of debates in other jurisdictions, they often mask fierce ideological differences regarding the judicial function in a liberal democracy. In a competition law context, these debates are of fundamental importance because they problematise the justiciability of the competition provisions of the TPA and the TPA's role in the regulation of economic activity. In practice, competition law is often understood as primarily concerned with the achievement of 'open-ended' and 'result-oriented' purposes--such as 'competition in a market', 'efficiency' and 'consumer welfare'--in complex economic situations where inferences about illegal conduct must be drawn from facts on the basis of often conflicting and evolving economic theories. A rigid adherence to 'textualism' and the 'plain meaning' of statutory words may result in the defeat of these open-ended legislative purposes. At the same time, others argue that deference to the achievement of such open-ended purposes may too readily result in a misconstruction of the literal and plain meaning of statutory words, thereby raising questions of the nature of the judicial role and of the rule of law in a parliamentary democracy. Both approaches, 'literal' and 'purposive', can also mask undisclosed policy decisions to prefer one set of economic and political outcomes concerning the role of the state and the market over other desirable and plausible goals.