Full Federal Court upholds validity of examination notices issued to Paul and Moses Obeid and dismisses appeal

20 November 2014

The Full Federal Court has today dismissed the appeal of Paul and Moses Obeid and upheld the decision that compulsory examination notices issued by the Australian Competition and Consumer Commission to Paul and Moses Obeid are valid.

The notices were issued under Section 155 of the Competition and Consumer Act 2010 (CCA) and require Paul and Moses Obeid to attend the ACCC offices, give evidence before the ACCC, and produce documents.

“The proposed examinations are part of the ACCC’s investigation into allegations of cartel conduct in relation to the 2009 tender process conducted by the NSW Department of Trade and Industry for an exploration licence over the Mount Penny coal tenement in the Bylong Valley,” ACCC chairman Rod Sims said.

On 8 August 2014, Justice Farrell dismissed Moses and Paul Obeid’s application seeking a declaration that these notices are invalid. Moses and Paul Obeid appealed the decision and the appeal was heard before the Honourable Chief Justice Allsop, Justice Mansfield and Justice Middleton on 30 October 2014.

Moses and Paul Obeid appealed the decision of Justice Farrell, arguing that the right to apply for the necessary approvals for mining activities was not the acquisition of a “service”, as defined in the CCA. Further, it was argued that the provision of services was an exercise or potential exercise of statutory power and does not have a trading or commercial character, as required in the CCA.

The Court rejected this argument and found that the competitive Expression of Interest (EOI) process is commercial in character. This EOI process is what led to the issue of exploration licences. The appellants’ argument that the focus should only be on the activities of the supplier of the services was also rejected.

In their judgment, the Honourable Chief Justice Allsop, Justice Mansfield and Justice Middleton stated:

“Further, the substantive provisions do not compel a conclusion that the relevant commercial activities are those of the provider of the ‘services’ considered in isolation of the acquirer. In fact, they indicate the contrary intention. We agree with the ACCC’s submission before the primary judge that such a requirement would be artificial and would undermine rather than promote the object of the legislation and give it an interpretation ‘perilously close to capricious’.”

The ACCC’s investigation follows the report produced by the NSW Independent Commission Against Corruption in Operation Jasper concerning this tender process.

As this matter is subject to ongoing investigation, the ACCC will not make any further comment.

Release number: 
MR 284/14
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