House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)

Chapter 6: Review of Decisions

Detailed explanation of new law

Internal review of decisions

6.1 The notifying party in relation to a notification may apply (in writing) to the Commission for an internal review of a reviewable decision if the decision was made by a delegate of the Commission who was not a member of the Commission.

[Schedule 1, item 35, subsection 51ABZZG(2) of the CCA]

6.2 The following are reviewable decisions:

•

in respect of a notification of an acquisition:

-

a decision under subsection 51ABY(1) that a notification of an acquisition should be taken not to have an effective notification date (in response to materially incomplete or misleading notifications)

-

a decision under subsection 51ABZB(2) that the effective notification date is the date on which the Commission becomes aware of a material change of fact or that the phase 1 or 2 determination period should be extended because of a material change of fact

-

a decision under subsection 51ABZD(3) to cease considering a notification if the Commission is satisfied that the parties to the acquisition no longer intend to put the acquisition into effect

-

a decision under subsection 51ABZN(2) to extend the phase 2 determination period if the notification is false or misleading, and

•

in respect of a public benefit application in relation to a notification of an acquisition:

-

a decision under subsection 51ABZQ(1) that a public benefit application in relation to a notification of an acquisition should be taken not to have an effective application date (in response to materially incomplete or misleading public benefit applications)

-

a decision under subsection 51ABZT(2) that the effective application date of the application is the date on which the Commission becomes aware of a material change of fact or that the determination period should be extended because of a material change of fact; and

-

a decision under subsection 51ABZV(3) to cease considering a public benefit application if the Commission is satisfied that the parties to the acquisition no longer intend to put the acquisition into effect

•

a decision under paragraph 51ABZZE(2)(c) to extend a period in relation to making an acquisition determination in respect of a notification of an acquisition.

[Schedule 1, item 35, subsection 51ABZZG(1) of the CCA]

6.3 An application for an internal review must be made within 7 days after the day on which the decision was made.

[Schedule 1, item 35, subsections 51ABZZG(3) of the CCA]

6.4 The Commission must review and either affirm, vary or revoke the decision within 7 days after receiving an application for internal review.

6.5 If the Commission revokes the decision, it must make such other decisions (if any) that the Commission thinks appropriate.

6.6 The Commission must, within 1 business day after making the decision, give the notifying party a written statement of the Commission's reasons for the decision.

[Schedule 1, item 35, subsections 51ABZZG(4) and (5) of the CCA]

6.7 A delegate of the Commission can reconsider the decision and perform the Commission's functions under subsections 51ABZZG(4) and (5). If a delegate is making the internal review decision, the delegate must not have been involved in making the original reviewable decision and must hold a position or perform duties of a higher level than the delegate who made the original reviewable decision.

[Schedule 1, item 35, subsection 51ABZZG(6) of the CCA]

6.8 Both the original reviewable decision made by the Commission itself or a delegate who is a member of the Commission, and the internal review decision can be subject to review by the Tribunal.

[Schedule 1, item 35, subsection 51ABZZG(7) of the CCA]

Merits review of determinations

6.9 Schedule 1, excluding Division 1A, provides for an amended Tribunal review process that adopts the limited merits review process for determinations made by the Commission under the merger authorisation process, with some modifications which are discussed below.

6.10 Paragraphs below outline the limited merits review process applicable only to acquisition determinations. The existing review processes in the CCA will continue to apply to all determinations that are not acquisition determinations.

Tribunal review of applications - general

6.11 Applications for review of certain Commission decisions may be made by a person to the Tribunal. For example, a person may seek review of an internal review decision by the Commission in relation to an effective notification date or effective application date (see above). The Tribunal must review the decision if the application is made according to the relevant requirements and within the time allowed as determined by the Minister via legislative instrument.

[Schedule 1, item 50, sections 100A and 100B of the CCA]

6.12 The Tribunal has specific obligations if a person applies to the Tribunal for review of a reviewable decision made by the Commission or an internal review decision. It must make its decisions within 14 days from when it received the review application and give to the applicant notice of, and a statement outlining the reasons for making, the decision within 1 business day after the decision is made. Such reviews by the Tribunal are a re-hearing.

[Schedule 1, item 50, subsection 100B(2) of the CC A]

6.13 The Tribunal may perform all the functions and exercise all the powers of the Commission.

[Schedule 1, item 50, paragraph 100B(1)(b) of the CCA]

6.14 For the purpose of hearing and determining proceedings, the Tribunal must be constituted by a Division of the Tribunal consisting of a presidential member and two members who are not presidential members. However, if the proceedings are under Division 1A of Part IX, the Tribunal may be constituted by a presidential member sitting alone.

[Schedule 1, item 20, section 37 of the CCA]

Tribunal review of applications - acquisition determinations

6.15 A person dissatisfied with an acquisition determination by the Commission (hereafter, the applicant) may apply to the Tribunal for a review of the determination:

•

as determined by the Minister by legislative instrument; and

•

before the end of 14 days after the statement of the Commission's reasons for making the determination is included on the acquisitions register.

6.16 An application can be made by the notifying party, or if the Tribunal has otherwise allowed an application for review to be made, another party.

6.17 Considerations the Tribunal must have regard to when considering whether a non-notifying party can make an application include the person's interest in the matter, the efficient administration of the acquisitions provisions, whether there are any reasonable prospects of success, and any other matter that the Tribunal considers relevant. For example, a third-party application for review of a phase 1 Commission decision that an acquisition may be put into effect may have no reasonable prospects of success if there is no competition basis for the review, and should therefore be dismissed.

[Schedule 1, item 50, subsection 100C(1)-(4) of the CCA]

6.18 Under subsection 109(2) of the CCA, the Tribunal may, upon such conditions as it thinks fit, permit a person to intervene in proceedings before the Tribunal.

6.19 A notifying party of a notification is entitled to participate in any proceedings before the Tribunal instituted by another person in relation to an acquisition determination in respect of the notification.

[Schedule 1, item 55, subsection 109(1AA) of the CCA]

6.20 An applicant for review must give the Tribunal the information or documents determined by the Minister via a legislative instrument in relation to the application either when the applicant applies for review or within 30 days. If the information or documents are not given within this time, the application is taken to be withdrawn at the end of the 30-day period.

[Schedule 1, item 50, section 100D of the CCA]

Limited Merits Review

6.21 The purpose of limited merits review is for the Tribunal to stand in the shoes of the original decision-maker, and make its own findings of fact and reach its own decision, based on the information which was before the Commission (unless otherwise permitted in limited circumstances). In doing so, the review body needs the ability to perform all the functions and exercise all the powers of the original decision-maker (to the extent it is permitted to do so).

6.22 These provisions give the Tribunal those powers and functions in relation to acquisition determinations. Accordingly, the Tribunal may affirm, vary or set aside the determination.

[Schedule 1, item 50, subsection 100B(1) of the CCA]

6.23 A determination by the Tribunal affirming, setting aside and remaking the determination, or varying a determination is to be taken to be a determination of the Commission.

[Schedule 1, item 50, subsection 100B(3) of the CCA]

6.24 The presiding Tribunal member may require the Commission to give information, make reports and provide assistance to the Tribunal, as specified. The Tribunal may have regard to any information, documents or evidence given to the Commission in the context of the decision under review.

[Schedule 1, item 50, subsection 100B(4)-(5) of the CCA]

6.25 The Tribunal's review of an acquisition determination is not a re-hearing. This is the same as the existing position for a review of a determination in relation to a merger authorisation application (or minor variation) or merger authorisation revocation and substitution of another merger authorisation. Minor consequential changes are made to:

•

existing section 101 to repeal reference to the review of an application, variation, revocation or substitution of a merger authorisation not being a re-hearing

•

existing section 104 to allow regulations to make provision for all material facts and considerations to be brought before the Tribunal and the Commission.

[Schedule 1, items 52 to 54, subsection 101(2) and sections 102A and 104 of the CCA]

6.26 The Tribunal is empowered to consult with consumer associations or consumer interest groups, and the Tribunal may have regard to their views (in the form of information, documents or evidence) in making its decision. This allows for a greater involvement of consumer groups and consumer advocates in the Tribunal review process, and allows for the Tribunal to conduct proceedings expeditiously, with as little formality as required for proper consideration of the issues. This will help to minimise costs and facilitate participation by consumer groups. Assistance may be given by the Tribunal to consumer associations and consumer interest groups, if necessary or reasonably incidental to the consultation under subsection 100S(1).

[Schedule 1, item 50, subsection 100S(1) of the CCA]

6.27 The Tribunal is empowered, at its discretion, to seek information, documents or evidence from, or ask questions of, a technical expert (such as economic or industry experts), and to have regard to any such evidence, documents or information it receives. The Tribunal may allow a participant in the proceedings, or the Commission, to ask questions of the technical expert.

[Schedule 1, item 50, subsection 100Q of the CCA]

Review

6.28 The Tribunal may require the Commission to provide assistance to the Tribunal as required, including to give information and make reports. The Tribunal is able to have regard to any information, documents or evidence given to the Commission in connection with the making of the determination to which the review relates. The Tribunal cannot have regard to any information, documents or evidence which the Commission could not have regard to in making the determination, except in relation to the circumstances provided for in section 100S, discussed below.

6.29 The Tribunal may allow a person to provide new information, documents or evidence that the Tribunal is satisfied was not in existence at the time the Commission made the determination to which the review relates. This will allow the Tribunal to take account of a change in circumstances that has occurred since the Commission's determination. For example, if there is new entry to the relevant market after the Commission's determination is made, the Tribunal may allow a person to provide new information about the entrant so this change in circumstances can be taken into account in the Tribunal's review.

6.30 The Tribunal may also permit the notifying party to provide new information, documents or evidence if the Tribunal is satisfied that:

•

the information, documents or evidence are relevant to the grounds on which the Commission made the determination and

•

the person was not given a reasonable opportunity to make submissions to the Commission in relation to those grounds, or the evidence or other material on which those grounds were based, before the Commission made the determination (including because the person was not informed of the grounds, evidence or other material).

6.31 The Commission may not have done so in order to protect the confidentiality of commercially sensitive information provided by third party stakeholders, while seeking to provide due process through the disclosure of the substance of the evidence or other material.

6.32 These amendments recognise the need to facilitate continued cooperation and engagement from third party stakeholders in merger reviews including those that might have commercially sensitive and confidential information that may be relevant to the review. The Tribunal has rules and processes that can be used to protect confidential third-party information. This provision is not intended to reduce the incentive for such stakeholders to provide information in the future. Rather it is intended to ensure the Tribunal is empowered to exercise discretion in limited circumstances to provide parties with appropriate procedural fairness while at the same time being able to balance a desire to avoid harm to the interests of third party stakeholders and the need to ensure that third parties continue to participate in merger reviews.

[Schedule 1, item 50, section 100R and subsection 100S(2) of the CCA]

6.33 The Tribunal must not have regard to any information, documents or evidence other than specified. Limitations on the information that may be considered by the Tribunal appropriately balance the interests of all parties to the review. In particular, they are intended to ensure that notifying parties in relation to a notification of an acquisition provide the Commission with all relevant material at the time of the notification, and do not delay the production of that material until later in the process or until the Tribunal review takes place. The limitations also facilitate the Tribunal conducting its review expeditiously given the time-sensitive nature of acquisitions.

[Schedule 1, item 50, section 100T of the CCA]

Functions and Powers of the Tribunal

6.34 Section 100N empowers the Tribunal to review determinations made under Division 1B of Part IX in relation to an acquisition determination that has been made by the Commission in respect of a notification of an acquisition.

6.35 The Tribunal may make a determination to affirm, set aside or vary the acquisition determination and the decision of the Tribunal is taken to be a determination of the Commission. The Tribunal may also perform all the functions and exercise all the powers of the Commission.

[Schedule 1, item 50, subsections 100N(1) and (4) of the CCA]

6.36 The Tribunal may make an acquisition determination by consent if the applicant, the notifying party and all other parties who have intervened agree to the acquisition determination. The Tribunal may make the determination, even if the Tribunal is not satisfied that the acquisition would or could have the effect, or be likely to have the effect, of substantially lessening competition in any market, or would be of public benefit.

[Schedule 1, item 50, subsections 100N(1) and (3) of the CCA]

Time within which Tribunal must make determination on review

6.37 The Tribunal must not make a determination on a review of an acquisition determination under Division 1B until 45 days after the Commission makes its acquisition determination.

6.38 The Tribunal must make a determination on a review within 90 days of the later of:

•

the last day when an application for review could have been made; and

•

the day the applicant gave the Tribunal additional information or documents as prescribed by any legislative instrument made under subsection 100D(1).

[Schedule 1, item 50, subsections 100P(1) and (2) of the CCA]

6.39 The Tribunal may, in writing, extend by 60 days the period in which it must make a determination of a review. Such an extension must be made before the determination on the review is due, including if there is a period of extension under subsection 100P(5), and can only be made once.

[Schedule 1, item 50, subsection 100P(3) and (4) of the CCA]

6.40 The Tribunal may, in writing, extend by 90 days the period in which it must make a determination of a review if it is satisfied that the matter cannot be dealt with properly within the period because of any of the following:

•

the complexity of the matter;

•

the volume of information, documents and evidence before the Tribunal relating to the matter;

•

the Tribunal has allowed new information, documents or evidence; or.

•

other special circumstances.

6.41 Such an extension must be made before the determination on the review is due, including if there is a period of extension under subsection 100P(3), and can only be made once.

[Schedule 1, item 50, subsection 100P(5) and (6) of the CCA]

6.42 If the Tribunal makes a time extension under this section, the Tribunal must give a copy of the extension to each participant in the proceedings for a review and to the Commission.

[Schedule 1, item 50, subsection 100P(7) of the CCA]

Withdrawing and dismissing applications

6.43 These amendments set out the circumstances in which an application may be withdrawn or the Tribunal can dismiss an application. This includes where the applicant withdraws, or the participants consent to the application being dismissed, if fees (if any) are not paid or if the application is frivolous or vexatious, misconceived, lacking in substance, has no reasonable prospects of success, or is otherwise an abuse of the process of the Tribunal. It also sets out in what circumstances an application can be reinstated after it is dismissed.

Applicants or participants may withdraw

6.44 The applicant may, at any time, withdraw in writing the application for review of the Commission's decision.

[Schedule 1, item 50, subsection 100E(1) of the CCA]

6.45 Other than the applicant, a participant to the proceedings may give written notice to the Tribunal that it wishes to cease being a participant and, if so, the Tribunal may order that that participant ceases to be a participant to the proceedings.

[Schedule 1, item 50, section 100K of the CCA]

Tribunal may dismiss application if the parties consent

6.46 The Tribunal may dismiss an application for review of the Commission's decision at any time if it has the consent of the participants to the proceedings for review. This includes the applicant for review.

[Schedule 1, item 50, section 100F of the CCA]

Tribunal may dismiss application if fee is not paid

6.47 The Tribunal may dismiss an application for review if a fee (if any) payable by the applicant in respect of the application is not paid by the time prescribed.

[Schedule 1, item 50, section 100G of the CCA]

Tribunal may dismiss an application if the applicant fails to comply with an order etc.

6.48 The Tribunal may dismiss an application if the applicant fails to comply with the requirements of the Act, for example, providing the information or documents in relation to the application by the 30 day period under paragraph 100D(3)(b), or an order of the Tribunal in relation to the proceedings relating to the application.

[Schedule 1, item 50, section 100H of the CCA]

Tribunal may dismiss an application if frivolous, vexatious etc.

6.49 The Tribunal may dismiss an application for review if the Tribunal is satisfied that the application is frivolous, vexatious, misconceived, lacking in substance, has no reasonable prospects of success, or is otherwise an abuse of the process of the Tribunal.

[Schedule 1, item 50, section 100J of the CCA]

Tribunal may reinstate an application

6.50 If the application is withdrawn, a participant in the proceedings for review (other than the applicant) may apply to the Tribunal for reinstatement of that application within 7 days after the participant receives notice that the application is withdrawn (or such longer period as the Tribunal, in special circumstances, allows).

[Schedule 1, item 50, subsection 100E(2) of the CCA]

6.51 If a participant applies to the Tribunal for reinstatement of the application and the Tribunal believes it to be appropriate to reinstate the application for review, the Tribunal may do so and make such orders as appear to the Tribunal to be appropriate in the circumstances.

[Schedule 1, item 50, subsection 100E(3) of the CCA]

Tribunal giving notice of withdrawals and dismissals

6.52 If an applicant withdraws an application, or the Tribunal dismisses an application, the Tribunal must give the Commission and each participant to the proceedings notice of the withdrawal or dismissal.

[Schedule 1, item 50, section 100L of the CCA]

Public Benefit Applications

6.53 Public benefit applications affect the timing of applications for review of acquisition determinations.

6.54 If a public benefit application has been made to the Commission following an acquisition determination made under subsection 51ABZE(1) and the Commission has not:

•

decided to cease considering the public benefit application (because the notifying party to the notification requested the Commission cease considering the application; or the Commission was satisfied that the parties to the acquisition no longer intend to put the acquisition into effect); and

•

made a determination in respect of the public benefit application,

•

then a person must not apply to the Tribunal for a review of the acquisition determination.

6.55 This ensures that there is no concurrent Tribunal review of an acquisition determination made under subsection 51ABZE(1) and Commission consideration of a public benefit application in relation to the same acquisition. For the avoidance of doubt, either the parties to the acquisition or third parties can seek Tribunal review following a Commission determination on the public benefit application.

[Schedule 1, item 50, subsection 100M(1) of the CCA]

6.56 In relation to such an application for review, a day is not counted for the purposes of the 14-day time limit in which applications must be made if the day occurs:

•

on or after the day a public benefit application is made in relation to the notification; and

•

before either the day on which the Commission ceases considering the public benefit application (because the notifying party has requested in writing that the Commission do so; or the Commission is satisfied the parties to the acquisition no longer intend to put the acquisition into effect); or makes a determination on the public benefit application.

[Schedule 1, item 50, subsection 100M(2) of the CCA]

6.57 Public benefit applications also affect the timing of Tribunal reviews of acquisition determinations. If a review of an acquisition determination made under subsection 51ABZE(1) is underway and a public benefit application is made, the Tribunal must cease proceedings until either:

•

the Commission ceases considering the public benefit application (because of a request from the notifying party; or the Commission was satisfied that the parties to the acquisition no longer intend to put the proposed acquisition into effect); or

•

the Commission makes a determination in relation to the public benefit application.

[Schedule 1, item 50, subsection 100M(3) of the CCA]

6.58 For the purposes of the time within which the Tribunal must make a determination of such a review of an acquisition determination made under subsection 51ABZE(1), a day is not counted if the day occurs on or after the day a public benefit application is made and on or before the day on which the Commission either:

•

ceases considering the public benefit application (because the notifying party has requested in writing that the Commission do so or because the Commission is satisfied the parties to the acquisition no longer intend to put the acquisition into effect); or

•

makes a determination in respect of the public benefit application.

[Schedule 1, item 50, subsection 100M(4) of the CCA]

Order for costs

6.59 The Tribunal may order that a participant in proceedings for review under Division 1A or 1B pay all or a specified part of the costs of another participant in the proceedings if the Tribunal is satisfied that it is appropriate to do so. This could be, for example, if the Tribunal is satisfied that the application is frivolous or vexatious. What constitutes a frivolous or vexatious application is not specified in Schedule 1 to the Bill. It is intended that the Tribunal will exercise this discretionary power having regard to established legal precedent. For the avoidance of doubt, the Commission or consumer associations or consumer interest groups cannot be the subject of a cost order.

6.60 If the Tribunal makes a costs order against a participant, the Tribunal may make further orders that it believes appropriate in relation to the assessment or taxation of the costs.

6.61 The Minister may, by legislative instrument, make provision for and in relation to fees payable for the assessment or taxation of costs ordered by the Tribunal to be paid.

6.62 If a participant is ordered to pay some or all of the costs of another participant in the proceedings, the amount of the costs may be recovered in the Federal Court as a debt due by the participant against the other participant. For example, if a costs order is made against the applicant in favour of the Commission, the Commission may seek recovery in the Federal Court.

[Schedule 1, item 56, section 111 of the CCA]

Tribunal may charge fees

6.63 This amendment allows the Tribunal to charge fees on behalf of the Commonwealth as determined by the Minister, by legislative instrument.

6.64 The determination made under the legislative instrument may provide for fees to be paid if a person makes an application to the Tribunal, in Tribunal proceedings generally (such as in relation to production of documents under summons), and if the Tribunal undertakes a taxation of costs in relation to such proceedings.

6.65 The determination may prescribe things such as the circumstance in which a fee must be paid, who should pay it, when payment must be made, and any remittal, refund or waiver of fees that should apply.

6.66 The instrument can:

•

prescribe fees in respect of a particular class or classes of applications, costs, or proceedings,

•

prescribe different fees in respect of different classes of applications, costs or proceedings,

•

prescribe the amount of, or method for working out the amount of, a fee,

•

make provision in relation to the whole or a part of a fee, and

•

provide for the Tribunal to make orders relating to the payment of a fee in relation to a proceeding.

6.67 The fees are administrative in nature and are included in delegated legislation so that they may be amended from time to time to ensure fees remain appropriate.

6.68 Fees may not be prescribed in a way that would amount to a tax. This is because it is inherent in the concept of a fee that the liability does not amount to taxation.

6.69 Any fees imposed under these provisions are a debt owing to the Tribunal (on behalf of the Commonwealth) and can be recovered by the Tribunal (on behalf of the Commonwealth) in a court with jurisdiction to hear the debt recovery matter.

[Schedule 1, item 56, section 112 of the CCA]

Standing of Commission to Seek Judicial Review

6.70 This amendment extends the meaning of the term "person aggrieved" in the Administrative Decisions (Judicial Review) Act 1977 to include the Commission. The extension applies in relation to:

•

a decision made by the Tribunal under Part IX

•

a failure to make a decision under Part IX

•

conduct engaged in for the purposes of making a decision under Part IX.

6.71 This means that participants to a proceeding, and the Commission, may seek judicial review of a Tribunal determination where they consider an error of law has been made.

6.72 All other terms used in this section and the Administrative Decisions (Judicial Review) Act 1977 have the same meaning.

[Schedule 1, item 56, section 113 of the CCA]