On 22 June 2015, the Supreme Court of Western Australia delivered its decision in Brockman Iron Pty Ltd v The Pilbara Infrastructure Pty Ltd [2015] WASC 223. The Court considered whether an injunction was available under the Railways (Access) Act 1998 (WA) (Act) to require The Pilbara Infrastructure Pty Ltd (TPI) to amend or replace certain information, which it was required to publish under the Railway (Access) Code 2000 (WA) (Code) concerning the available capacity of its railway line. The Court held that, in the circumstances, injunctive relief was not available. The case illustrates the importance of considering the conduct complained of in light of the regime as a whole when seeking a remedy under the Act or the Code.

TPI’s railway

TPI is a subsidiary of Fortescue Metals Group Limited (FMG), and owns and operates a railway in the Pilbara (TPI Railway). The TPI Railway facilitates the delivery of iron ore product from FMG’s mines to Port Hedland for export.  Brockman Iron Pty Ltd (Brockman), who sought access to part of the TPI Railway under the Code, alleged that TPI had breached the Code by failing to publish up-to-date and accurate information about the available capacity of the TPI Railway. TPI contended that the remedy of injunction was not available to Brockman in the circumstances. The decision concerned the preliminary question of whether the injunction could be granted to Brockman.

Under section 36 of the Act, the obligations imposed by the Code are enforceable either by arbitration under the Code, or under section 37 of the Act, “as the case may require”.

Section 37 of the Act provides:
 

37. Injunctions  

 (1) The Supreme Court may grant an injunction in such terms as the Court thinks fit if it is satisfied that a person:

(a) has engaged in conduct that amounts to a breach of the Code; or
 
(b) is proposing to engage in conduct that would amount to such a breach,
 
other than conduct for which a remedy by way of arbitration is available under the Code.

 
(emphasis added)

Therefore, an injunction under section 37 of the Act can only be granted where arbitration is not available as a remedy under the Code.

Alleged breach of the Code

Section 7A(1) of the Code states that the railway owner (in this case, TPI) must make a publication containing the required information available for purchase.

“Required information” includes1 the information described in Schedule 2 of the Code. Clause 4 of Schedule 2 requires a railway owner to publish the available capacity of the railway. “Capacity” is defined to mean the number of rail operations that can be accommodated on the route during a particular time having regard to the characteristics of the route, the length of the rolling stock comprising a train that can be operated on the route, the speed at which it can be operated, the requirements of the railway owner’s safety standards, the requirements of any written law, and the technical requirements for the relevant rolling stock.2

Section 7C of the Code requires a railway owner to review, and to amend or replace, the information published under section 7A as often as is necessary to ensure that the information remains reasonably up-to-date at all times, and in any case, at not less than 2 yearly intervals.3

Brockman alleged that TPI had breached the Code by failing to comply with section 7C, and sought an injunction under section 37(1) of the Act to compel TPI to amend or replace its information so that the published information as to the available capacity of its railway was accurate and correct.

Brockman supported its allegation with a report by Mr Brock Reynolds of TSG Consulting (Reynolds Report), which concluded that the estimated “choke capacity” of the TPI Railway was between 202 and 221 million tonnes per annum (which was more than the capacity of 175 million tonnes per annum required by Brockman).4 In October 2014, TPI published amended information under the heading “Available Capacity”. That document identified a nameplate capacity of 155 million tonnes per annum, which was fully utilised by TPI. TSG then conducted a supplementary report which concluded that the TPI Railway had an estimated choke capacity of 204 million tonnes per annum.

The Court held that, in substance, what Brockman sought was a determination that the opinion expressed in the Reynolds Report, and the supplementary report, as to the capacity of the TPI Railway should be accepted, and reflected in the information published by TPI under section 7A of the Code.5

The demand by Brockman for TPI to correct its capacity information occurred in the context of Brockman’s proposal for access, following which TPI and Brockman had communicated regarding their differences in opinion about the available capacity. In the course of those communications, TPI had pointed out the requirement for Brockman to satisfy TPI in relation to matters set out under sections 14 and 15 of the Code (discussed below). TPI had also given Brockman notice, under section 18 of the Code, that it was not satisfied that the information in Brockman’s access proposal was sufficient for the purposes of sections 14 and 15.

TPI’s argument: injunction not available

TPI contended that the injunction sought by Brockman was not capable of providing the remedy requested by Brockman for the following reasons:

  • any question of capacity is necessarily a matter of judgment and opinion taking account of the factors identified in the definition of “capacity” in section 3 of the Code;
  • the Code contemplates that opinions may differ, and the information published about the available capacity of the railway is necessarily only the railway owner’s opinion as to available capacity;
  • section 7(1) of the Code enables an entity interested in making a proposal for access to ask a railway owner to provide an “initial indication” of the available capacity of the route;
  • section 15 of the Code provides for the proponent to show that its proposed use can be accommodated on the route “having regard to the capacity of the route and any information provided to the proponent under ss 6 and 7”;
  • section 18 of the Code requires that notice be given to the proponent in the event that the railway owner is not satisfied with “the proponent’s opinion” that the information given under sections 14 and 15 is sufficient. Section 18 then enables the proponent, if it considers that this notice is not justified, to notify the railway owner that there is a dispute; and
  • the existence of that dispute then entitles the proponent to refer the dispute to arbitration.6

TPI relied on these matters to show that questions of capacity are ultimately questions of opinion, and are matters to be determined by arbitration.

Decision: arbitration was available

The Court found that the Act contemplates disputes about capacity, and provides a mechanism whereby the opinions of the railway owner and a proponent for access can be exchanged, and any dispute can be resolved by arbitration.7 Therefore the jurisdiction to grant the injunction sought by Brockman under section 37 of the Act did not arise.8

The Court accepted, however, that if there had been no information published by TPI under section 7A of the Code, it would have been open to Brockman to seek injunctive relief to require the publication of the required information.9

The case highlights the importance of considering the processes set out in the Code as a whole when assessing whether a party may have breached the Code for the purposes of determining the remedies available under the Code and/or the Act. In particular, if a party’s conduct is part of a chain of related events that will or could ultimately lead to arbitration under the Code, then it is unlikely that an injunction will be available under the Act.