Fortescue Metals Group Limited & Ors v The Commonwealth of Australia [2012] HCATrans 239 (3 October 2012)

Last Updated: 4 October 2012

[2012] HCATrans 239

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Canberra No S163 of 2012

B e t w e e n -

FORTESCUE METALS GROUP LIMITED ACN 002 594 872

First Plaintiff

and

CHICHESTER METALS PTY LIMITED ACN 109 264 262

Second Plaintiff

and

FMG PILBARA PTY LIMITED ACN 106 943 828

Third Plaintiff

and

FMG MAGNETITE PTY LIMITED ACN 125 124 405

Fourth Plaintiff

and

FMG NORTH PILBARA PTY LIMITED ACN 125 154 243

Fifth Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Directions Hearing

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON WEDNESDAY, 3 OCTOBER 2012, AT 4.35 PM

Copyright in the High Court of Australia

____________________

MR D.F. JACKSON, QC: If your Honour pleases, I appear with my learned friend, MR B. DHARMANANDA, SC, and MR W.A.D. EDWARDS, for the plaintiffs. (instructed by Corrs Chambers Westgarth Lawyers)

MR D.F.C. THOMAS: If the Court pleases, I appear with MR G.J.D. DEL VILLAR, for the defendant. (instructed by the Australian Government Solicitor)

MR G.R. DONALDSON, SC, Solicitor-General for the State of Western Australia: If your Honour pleases, I appear for the Attorney-General of Western Australia, intervening. (instructed by the State Solicitor (WA))

HIS HONOUR: : I am not sure how you are here yet at the moment.

MR DONALDSON: Thank you, your Honour.

MR W. SOFRONOFF, QC, Solicitor-General for the State of Queensland: May it please the Court, I appear with my learned friend, MR A.D. SCOTT, for the Attorney-General of Queensland, intervening. (instructed by Crown Law Queensland)

HIS HONOUR: Well, there is nothing to intervene in yet until the matter gets more fully on the rails. Yes, Mr Jackson.

MR JACKSON: May I hand to your Honour a document which is an amended summons which takes account of some of the matters that are referred to our learned friends’ submissions and the copy - - -

HIS HONOUR: Yes, they had some suggested alterations, did they not?

MR JACKSON: Yes. Now, your Honour, could I just indicate in relation to that amended summons what we propose? Your Honours will see that in the light of the Commonwealth’s submissions and its explanation of why it has pleaded various matters, we will not move to strike out paragraphs of the defence, and we also move that the ultimate questions identified in paragraph 4 of the amended summons your Honour has should be reserved to the Full Court and, your Honours, that is really on the basis where we have adopted the formulation of those questions that the Commonwealth has suggested. But could I just add though that that is on the basis, as your Honour will see in paragraph 4 at the bottom of the page numbered 2, of the pleadings, the documents referred to in the pleadings, and the matters noted in paragraph 4(a).

HIS HONOUR: Yes, I see.

MR JACKSON: Your Honour, what I was going to say was, in our submission, there is no real factual controversy as I will endeavour to demonstrate in a few moments. Your Honour, it may be best if I seek to proceed by reference to the Commonwealth submissions - - -

HIS HONOUR: Yes, thank you.

MR JACKSON: - - -that have been made. If I could take your Honour to those. Your Honours will see in paragraphs 2 to 7 of those submission we have amended the ultimate questions in the manner suggested by the Commonwealth and, we submit, that the questions as amended raise the relevant ultimate issues.

Your Honour, as to paragraphs 8 to 10, we would ask your Honour to turn to paragraph 4A(a) of the amended summons and, your Honour, in that regard, we invite your Honour to note that we accept the case concerns iron ore and not any so-called royal metals and the ultimate question could be decided on that basis. Your Honour, from paragraph 10 of the Commonwealth submissions, it seems clear that the Commonwealth is not seeking to agitate the point that was raised and left undecided in the Cadia Holdings Pty Ltd v New South Wales. And, there is thus nothing in paragraphs 19A and 48A of the defence which would remain an issue and the ultimate questions - - -

HIS HONOUR: Let me just look at 19A. Yes, and that crops up again in 48?

MR JACKSON: Yes, it does, your Honour. So, that is why we – that is the first of the notes that we would submit should be added. So far then as paragraphs 11 to 13 of the Commonwealth submissions are concerned, we would ask the Court to turn to paragraph 4A(b) of that amended summons and it is apparent, your Honour, from the Commonwealth submissions in paragraphs 12 and 13 that the Commonwealth does not suggest that section 90 or 92 or 117 of the Constitution has been engaged by the State Mining Acts so far as these proceedings are concerned.

We seek to capture that concession by note 4 – what we call 4A(b) and on that basis the paragraphs numbered 19(b), 48(b) and 52(a) of the defence would not raise any issue that would prevent the ultimate questions being reserved to the Court.

HIS HONOUR: Yes, they seem to touch on section 90, section 92, and section 117.

MR JACKSON: Yes. Now, your Honour, if one goes then to paragraphs 14 to 17 of the Commonwealth’s submissions, we no longer seek to strike out paragraph 53(a), 54(a) and 56(b) of the defence. It appears that the Commonwealth contends that the limits on State constitutional power, which it pleads, are somehow relevant to the Melbourne Corporation point – although one would not, in passing, that the Melbourne Corporation point has always arisen in the context where those powers have been so limited. That, however, would be a matter for the Full Court, in our submission.

Your Honour, as to paragraphs 18 to 23 of the Commonwealth submissions, we do not move to strike out paragraphs 60(d), 62(d), 64(d) and 73(a) of the defence in the light of the Commonwealth submissions and there is no real factual controversy, in our submission, as to those paragraphs of the defence. Our position on this, your Honour, is set out in the submission we filed yesterday, and you will see it is called “plaintiff’s note and submissions” on the summons file – 25 September 2012.

HIS HONOUR: Yes.

MR JACKSON: Your Honour will see in that paragraphs 7.1, 7.2 and 7.3 and, your Honour, we would submit, that as is apparent from our reply in paragraph 18(e), there is no significant dispute as to the making of any of the statements referred to in paragraph 60(d) of the defence. That is the sub-paragraph that goes on through, I think, 27 or 28 sub-paragraphs - - -

HIS HONOUR: Yes.

MR JACKSON: - - - reciting various matters of history. And, any qualifications which are raised by the way in which we have pleaded the matter – and I think once we have referred to the reference so accurately and completely – are simply matters that can be resolved, in our submission, by looking at the documents that are relied on to the extent that they are germane to the issue.

Now, your Honour, that I think deals also with paragraph 24 of the Commonwealth submissions as well. That then takes one to the matters dealt with in paragraphs 25 to 31 of the Commonwealth submissions and we would submit, your Honour, that there is no need for the matter to proceed by way of a case stated. Your Honour will recall that we initially suggested that the matter proceed by way of a case stated but that met with no enthusiasm by the Commonwealth and in the result the facts that were in the draft case stated had been incorporated into the amended statement of claim. Those facts are admitted by the Commonwealth in very substantial part.

Could I deal now with the matters in paragraph 26 of the Commonwealth submissions and seek to demonstrate that there is no underlying factual controversy raised in either paragraph 70 of the amended statement of claim or paragraph 66 of the same document which would prevent the matter being dealt with by the Full Court.

Could I turn first to paragraph 70 of the amended statement of claim? Now, the first thing, your Honour, one notes from the opening words of paragraph 70 is that it is speaking of a result of what is in paragraph 69, and your Honour will see from paragraph 69 that the contention is that the provisions of the two Acts:

have the effect that less MRRT is imposed (all other things remaining the same) in respect of mining for iron ore in States where the rate of royalty imposed by the laws of the State is higher than that imposed by the laws of another State in respect of mining for iron ore.

Now, your Honours, so far as that is concerned, paragraph 69 appears to be really a statement of what the MRRT Act itself says and one can see that from that Act, if one goes to section 60-1 of that Act. I do not know if your Honour has that there. It is page 50. Section 60-1 is one of those what this division is about – provisions which has a – can be used for limited purposes but it is really repeated elsewhere to which I will come. You will see that section 61 says:

Mining royalties paid to the Commonwealth, States and Territories reduce a miner’s MRRT liabilities for a mining project interest.

and then the manner of working it out is then set out. But what is in the first sentence is really repeated in the operative provision of section 60-5(a) where it is said:

The objects of this Division are:

(a) to reduce a miner’s MRRT liability relating to profits relating to taxable resources, to the extent those taxable resources are subject to Commonwealth, State and Territory royalties.

Now, your Honours, I could go if your Honour wanted me to go through the detail of how one gets to all that but the short fact is that it says there is a reduction by reference to the amount of the royalties. One sees that also, your Honour, in section 10-5 which is at page 8 where you see the manner of calculation of the MRRT liability, one integer of that is the deduction of MRRT allowances which include royalties from the amount of money and profit. So, your Honour, with that – it was paragraph 69 – one comes in mind – one comes then to paragraph 70, the statement of claim and it says:

As a result of the matters . . .

(a) the imposition of the MRRT on miners producing iron ore in a State where the higher rate of royalty is imposed has a lesser effect upon the costs of mining such ore, than would be the case if the MRRT were imposed at a uniform rate in each State –

Your Honour will see that paragraph 26(a) of the Commonwealth’s submissions says that there is a question:

whether the MRRT has a “lesser effect” on the “costs of mining” iron ore –

Your Honour, could we just say this. That so far as paragraph 26(a) is concerned, we will accept that the MRRT is not a direct cost of extracting iron ore and is expressed to be a tax upon profits but we would contend that it is yet properly described as a “cost of mining the iron ore” and contend that it is a tax which the miner must pay because of mining iron ore. That is what the Act operates upon. Your Honour, our contention in paragraph 70(a) is no more than that. We do not suggest that it is an actual cost of mining the ore but is a cost which occurs because one mines the ore.

Your Honour, we would submit that the no need for the Full Court to consider evidence of the general costs of mining is not the allegation we make in paragraph 70(a) and our allegation is simply a combination of paragraph 69 and paragraph 70(a) and it is a matter of construction of the Act. That is the first thing, your Honour. The second thing concerns paragraph 26(b) of the Commonwealth’s submissions and that concerns paragraph 70(b) of the statement of claim which again is one dependent on paragraph 69.

Now, so far as that is concerned, your Honour, the competitive advantage for which we contend is simply that the miners, whom we have first mentioned in paragraph 70(b), pay less by way of MRRT compared to miners in other States and, your Honours, as is apparent from paragraph 70(b) it refers to a competitive advantage being given by reason of the matters referred in subparagraph (a). Nothing more is intended and nothing more is contended for and in our submission there is no factual controversy inherent within paragraph 70 of the amended statement of claim.

Could I come then to paragraph 26(c) of the Commonwealth submissions and, your Honour, paragraph 26(c) relates to a contention that is found in the defence, rather than the amended statement of claim. It is to be found, your Honour, in the defence in paragraph 70(d). It is on page 28.

HIS HONOUR: Yes, I have it.

MR JACKSON: Now, your Honour, in relation to that your Honour will see that the paragraph in question:

says further that, by reason of the matters in paragraphs 70(b) – 70(c) of the Defence –

which immediately precede it –

the MRRT is not an input into the price at which taxable resources can be sold;

Your Honour would see that paragraph 70(d) is based on the matters set out in that paragraph which refer back to various other paragraphs of the defence and none of the matters, so referred to, is contested as a matter of fact in the plaintiff’s reply. Your Honour, once that is understood where there is, we would submit, no factual controversy it is simply a matter whether what is relied on in the earlier paragraphs make out the proposition in 70(d). Your Honour would understand that our case is, as I have submitted earlier, simply that the liability of the miner to MRRT will be different in different States and that that difference is the only matter to which we are referring, in our pleading in 70(d) of the amended statement of claim.

We rely on the differential imposition of MRRT in different States to give rise to the preference of section 99 purposes and we make that contention in paragraph 72 and 73 of the statement of claim.

HIS HONOUR: Is it just section 99 or is it 99 plus 51(ii)?

MR JACKSON: It is both, your Honour, discrimination 51(ii) and preference 99. Your Honour, could I go then to paragraph 26(d). That refers to paragraph 66 of the amended statement of claim, and paragraph 66, your Honour, contains the contention – I will not read it out because it is rather lengthy – at the bottom of page 28, but your Honour will see the notion that is there set out. Paragraph 26(d) of the Commonwealth submissions says that:

whether the MRRT legislation equalises “the economic burden referable to” the mining of iron ore in different States –

that is a contention –

unlikely to be resolved in the absence of evidence as to the economic burden on miners and the manner in which the MRRT legislation is said to “equalise” that burden;

Your Honour, could we just say that the particulars to - paragraph 66 makes the simple point that, given the inverse relationship between the amount of State royalties and the MRRT as imposed in different States, each State no longer has the ability to – or such ability is curtailed to use changes in royalty. There is a lever to incentivise, if I may use that word, your Honour, investment in the State.

Your Honour, the particulars in paragraphs i. and ii. of paragraph 66, to which reference is made in paragraph 26(d) of the Commonwealth submissions, need to be read with paragraph 66 itself and understood as referring to effects arising by reason of the inability to use State royalties as a lever. The particulars are not directing attention to the many other economic burdens that a miner may have. They are not the subject of the particular at all. Your Honour, could I go also to paragraph 26(e) which deals with, in effect, particular ii. of paragraph 66 where it is said that:

whether the MRRT legislation prevents, impairs or curtails . . . cannot be resolved in the absence of evidence . . . and the manner in which they allegedly arise from the MRRT;

Your Honour, could we just say that we would submit, with respect, our case has been a little misunderstood in that response. We do not contend that the imposition of the MRRT affects the States economically or competitively, the States personally economically or competitively. It is that the differential imposition of the MRRT and it is the inverse relationship with the quantum of State royalties affects the States’ ability to use the royalties as a lever to bring about investment in the States’ resources. There is no occasion, in our submission, for evidence of the economic or competitive effects of the MRRT as contended by the Commonwealth in paragraph 26(e) of the Commonwealth submissions.

Your Honours, in this regard, if I could come then to paragraph 26(f), your Honour will see that it does not really deal with any particular paragraph of the statement of claim, but what we would say is that the ultimate questions that we seek to have before the Court, are not based on a hypothetical or an unreal formulation. The plaintiff’s claim is that the differential imposition of the MRRT is unconstitutional. The pleading in, for example, paragraphs 61, 63 and 69 of the amended statement of claim, uses the expression that “all other things remaining the same or being equal”.

The way in which the legislation works is to impose tax differently in different states in an unconstitutional manner. And, the purpose of pleading, explicitly, that there is a difference in MRRT depending on the State royalties’ rates, all other things being the same, is to isolate the real point of the controversy and the issue is not hypothetical. It is not about how much a miner pays in one state or in another. It is, instead, about how the MRRT is imposed discriminately in different States depending on the impact of State royalty rates – or the amount of State royalty rates – and the point can be isolated only by postulating that all other things remain the same.

Now, your Honour, we would submit there is no factual controversy which would prevent the matter being reserved to the Full Court. We would submit the ultimate questions, as we have sought to reformulate them in the document I handed your Honour earlier, should be reserved to the Full Court on the pleadings and on the other documents referred to in the pleadings. Your Honour, finally, we would say there is no – if one looks at paragraph 31 of the Commonwealth submissions – we would submit there is no need for the further question there referred to, to be referred to the Full Court.

HIS HONOUR: Now, looking at the amended summons, paragraph 4(i) - - -

MR JACKSON: I am sorry, your Honour, I just did not catch the paragraph number.

HIS HONOUR: Paragraph 4(i), section 51(ii), section 99, and what one might call “Melbourne Corporation.”

MR JACKSON: Yes, your Honour, yes.

HIS HONOUR: Then, separately, as it were, section 91. Do any of these factual matters that are said to be involved touch the 91 arguments?

MR JACKSON: I do not think so, your Honour, a little difficult to see that. The reason why the provisions are separated is because, as your Honour would appreciate, section 91 refers to “other metals” and the MRRT Act refers to “coal and iron ore”. Coal is not a metal, iron ore is, and so that is where the difference arises.

HIS HONOUR: Yes. When 91 says “nothing in this Constitution”, how do you read that?

MR JACKSON: Well, that is the important issue in the case, your Honour.

HIS HONOUR: Yes.

MR JACKSON: Well, your Honour, would appreciate these issues were touched upon in a sense in the Seamen’s Union Case, but dealing with the second part of section 91. But, your Honour, what we would say is that first of all one is speaking in relation to provisions of the Constitution like this, are not just as to matters of exact form but matters of substance. The second thing though is that where the Constitution contains words such as “nothing in this Constitution” it means, relevantly, what it says, and that is, nothing in this - - -

HIS HONOUR: That includes section 51(ii), laws made in reliance on 51(ii).

MR JACKSON: Yes, indeed, your Honour. When one says “nothing in the Constitution” one has to look to see what provisions might be involved. One sees, your Honour, section 51(ii), section 51(iii), “bounties”, and one see, of course, section 90, and a question which, agitated by the Commonwealth, contended for the other way by us, is that section 91 refers only to – operates only as a qualification for section 90. But, your Honour, it is a substantial issue, in our submission, and one that the Court really has not decided. Your Honour, those are the submissions we would make.

HIS HONOUR: Yes, thank you. So you would seek an order reserving those questions, in effect?

MR JACKSON: Yes, your Honour. We have not sought to change the numbering of the actual order in the amended summons, but we would seek orders in terms of what is currently paragraph 4, and paragraph 4A, and your Honour, no doubt something will need to be done about the costs of this application.

HIS HONOUR: Yes, Mr Thomas.

MR THOMAS: Your Honour, we maintain our opposition to the course proposed by Mr Jackson, and perhaps I can explain why and deal with each of the points he sought to make. Can I deal first with the section 91 point, which is the last point your Honour and Mr Jackson touched on?

If your Honour goes to paragraph 77 of the statement of claim, your Honour sees this is the foundation, as we read it, of the ultimate contention in 78 that the MRRT Act and the Imposition Acts are not valid, and what the plaintiffs rely on is an asserted illusory or inefficacious effect brought about causally by the MRRT legislation. The foundational point I wish to make today is that each of the contentions made by the plaintiffs concerns not the operation of the Act, but its effect in practice or on particular matters - - -

HIS HONOUR: Well, Mr Jackson has been taking some steps around that, has he not?

MR THOMAS: He has. In my submission those steps, which we have not seen in writing which may inevitably be required before we can reach a view about them, cannot resolve that difficulty. It is clear from this section that the Court would embark upon an assessment of what the effect of the Act was, and how it was said to be illusory or inefficacious. “Inefficacious” means that it had a deleterious effect in practice, not in theory. That is a real world inquiry which is fact-rich inherently, and in our submission, is one that would require significantly further particularisation.

HIS HONOUR: If Mr Jackson is prepared to nail his flag to a shorter mast than that that is for him, is it not?

MR THOMAS: Then we will inevitably revisit our position. That has not happened yet. Some attempts have been made to nail the flag to a lower mast, but it could not be expected that the Commonwealth would be in a position, having heard those statements made orally, to - - -

HIS HONOUR: Well, maybe the solution is for Mr Jackson to be given a chance to re-plead in the light of what he has said today. That should not take much effort.

MR THOMAS: That would be my principal submission, in light of what Mr Jackson said, and we will be able to give further consideration to those matters and reach a view.

HIS HONOUR: Just pardon me a minute, though. We are really fixing on paragraph 26 of your submissions.

MR THOMAS: Yes, your Honour.

HIS HONOUR: So you would be inviting, what – an amendment to those paragraphs in the amended statement of claim that are listed there?

MR THOMAS: And any paragraphs consequential which make reference to those paragraphs to the extent necessary.

HIS HONOUR: Yes, then you would have to have a chance to re-plead to that, I guess?

MR THOMAS: Yes, your Honour.

HIS HONOUR: I just have the feeling, Mr Thomas, that at the end of the day this case is going to be fought out in the way Mr Jackson has indicated it. I know the Commonwealth is deeply suspicious without an amended pleading but at the end of the day I think that is what is going to happen.

MR THOMAS: I should say not only are we concerned about the position of the Commonwealth, understandably, but we do have some concern about the practical way in which the Court would resolve some of these questions. Competitive advantage raises a number of issues. I do not need to go into them now, I do not think, in light of what has fallen from your Honour as a proposed course but I otherwise would and seek to demonstrate why costs of mining, economic burden, competitive advantage by reason of this Act in particular circumstances is amenable on one view to a single judge in the Federal Court as opposed to seven judges of the High Court.

That was a point to some degree made or adopted by this Court in Betfair recently that this is a question of fact and degree. Having said all that, if Mr Jackson is in a position to re-plead we would, of course, reconsider those matters and re-plead ourselves and to the extent we can narrow the issues in this dispute we will do so.

HIS HONOUR: Yes, Mr Jackson.

MR JACKSON: Your Honour, could I just say this, two things. That there has been no previous suggestion that paragraph 77 caused the slightest problem really and if one looks at paragraph 77 what it says is, it is a contention, the other side do not have to accept it, but it is simply a contention that the provisions of the Act:

render illusory and efficacious, the grant by the State . . . by increasing –

by the manner that is set out there. Now, we may be right, we may be wrong, but there is no factual matter in contention there. The whole purpose of the MRRT Act is that the amount of the reduction of a royalty is immediately taken up by the MRRT.

HIS HONOUR: Is 77 complained about in 26 of the Commonwealth written submissions?

MR JACKSON: No, it is not there.

MR THOMAS: No, it was not, your Honour, but it was an issue that fell but I will not interrupt Mr Jackson further.

HIS HONOUR: Just trying to find out.

MR JACKSON: That is the first thing, your Honour. The second thing is that your Honour will appreciate that we only received these submissions late yesterday, of course, as the other side received ours. So, when one comes to paragraph 26(e) – paragraph 26, one has to deal with the various contentions and what I was going to say was, your Honour, if one looks at the allegations in the statement of claim, they do not, in our submission, give rise to the factual issues that are contended for. Now, your Honour, we can deal with it by adding to what we made of paragraph 4A some further clarifications of the pleading if one likes without the need to amend the pleadings.

HIS HONOUR: I think it would be better to amend them, Mr Jackson. I understand what you say but these things can end up in the Full Court and there can be different views about what could be done.

MR JACKSON: We should do that by the end of tomorrow and no doubt the other side could respond by - - -

HIS HONOUR: Yes, I was thinking of coming back. I have spoken to the Chief Justice about this – coming back on Monday November 5 at 2.15 in Canberra. Does that seem a suitable time? Do you want to say anything further, Mr Thomas?

MR THOMAS: No, your Honour.

HIS HONOUR: All right, just pardon me a minute. The first thing I should say is that the amended summons, initialled and dated by me, handed up in Court this afternoon, can be filed with the papers and be treated as having been filed in an ordinary fashion. How soon could this be done, Mr Jackson?

MR JACKSON: The amendments, your Honour?

HIS HONOUR: Yes.

MR JACKSON: Well, perhaps, realistically, I should say if this matter is not coming on again until 5 November, perhaps one week from today.

HIS HONOUR: The amended defence?

MR THOMAS: Could I ask for two weeks, your Honour, from that date?

HIS HONOUR: And reply, I suppose.

MR JACKSON: Reply, yes, I am just not sure how the dates are going but, perhaps - - -

HIS HONOUR: Well, at the moment we are up to 24 October.

MR JACKSON: Perhaps, a week, your Honour?

HIS HONOUR: Yes, the 31st. This is what I propose. Upon the amended summons filed in Court on 3 October:

1. Grant leave to the plaintiffs to further amend their statement of claim so as to clarify the allegations as presently pleaded and as identified in paragraph 26 of the Commonwealth submissions dated 2 October, together with paragraph 75 of the present amended statement of claim and any incidental allegations in the amended statement of claim.
   
2. The further amended statement of claim be filed and served on or before 10 October.
   
3. The Commonwealth file and serve its amended defence on or before 24 October.
   
4. The plaintiffs file and serve their amended reply on or before 31 October.
   
5. Otherwise stand over the amended summons to 2.15pm on 5 November 2012 in Canberra.
   

6. Costs of today be costs of the summons.

MR JACKSON: Your Honour referred, in relation to the amended statement of claim, to paragraph 75. I think it was paragraph 77.

HIS HONOUR: I said 77, I should have said 75.

MR JACKSON: I think your Honour said 75, I think it should have been 77.

HIS HONOUR: Yes, 77. Let me just check that again. Yes, thank you. Is there anything else, gentlemen?

MR JACKSON: No, your Honour.

HIS HONOUR: I thank counsel for their assistance. We will now adjourn.

AT 5.20 PM THE MATTER WAS CONCLUDED