FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Eurong Beach Resort Ltd [2005] FCA 1134

TRADE PRACTICES – whether there is utility in a grant of bare declaration of past contraventions of the Trade Practices Act 1974 (Cth)

EVIDENCE – privilege against exposure to penalty – where one set of respondents entitled to claim privilege against giving certain evidence and the other respondents not entitled to such a privilege – whether respondents not having privilege excepted from their obligation to identify the evidence they will rely upon

Statutes

Trade Practices Act 1974 (Cth) ss 45, 46, 76, 77

Cases

Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (1997) 77 FCR 217 Cited

Minister for Immigration and Multicultural Affairs v Ozmanian (1996) 71 FCR 1 Cons

Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1993) 41 FCR 89 Cons

Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 Dist

Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90 Dist

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v EURONG BEACH RESORT LTD, AIGEAR PTY LTD, OSER PTY LTD, SIDNEY ALBERT MELKSHAM and ANGELA KAY BURGER

QUD 147 of 2002

KIEFEL J

BRISBANE

18 AUGUST 2005

THE COURT ORDERS THAT:

1.         Paragraphs 2, 3, 4 and 5 of the order made by the Deputy District Registrar on 8 March 2005 be vacated.

2.         The fourth and fifth respondents file and serve any affidavits upon which they propose to rely at trial, other than affidavits by expert witnesses, within 45 days of the date of this order.

3.         The first, second and third respondents file and serve any affidavits upon which they propose to rely at trial other than affidavits by expert witnesses, within 45 days of the date of this order.

4.         No affidavit filed by the respondents after the time referred to in pars 2 and 3 of this order may be relied upon without the leave of the Court first being obtained.

5.         The respondents pay the applicant’s costs of the motion.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     These proceedings concern the provision of barge services between Inskip Point on the Queensland mainland and Hook Point on Fraser Island.  It is alleged that the corporate respondents engaged in conduct involving breaches of ss 45 and 46 of the Trade Practices Act 1974 (Cth) (‘the Act’) and the individual respondents counselled or procured that conduct or were knowingly concerned in it.  The conduct in question involved predatory pricing and arrangements with respect to charges for barge services.  The conduct was engaged in at various periods from about September 1987 to October 1998.

2                     The applicant (‘the ACCC’) sought declarations as to the contraventions and injunctions against future conduct.  Since the bringing of the proceedings in 2002, the respondents have ceased their business and the injunctions are no longer sought.  Pecuniary penalties are not sought under s 76 of the Act.  In the case of many of the periods of alleged contravening conduct, penalties could not be sought as s 77 of the Act limits the bringing of proceedings for penalties to six years from the date of the contravention.

3                     The respondents seek orders striking out those parts of the application which are outside the period in which penalties may be sought.  Included amongst those parts of the application are periods which combine time barred conduct and conduct which is not.  In this regard the respondents submit that the applicant be at liberty to replead to limit the period.

4                     The respondents’ point is that what is sought are bare declarations with respect to past conduct involving no statement of legal rights and no resolution of a controversy.  They rely upon my decision in Minister for Immigration and Multicultural Affairs v Ozmanian (1996) 71 FCR 1 at pages 30-32 (‘Ozmanian’).  There the primary Judge had made a declaration that a breach of the rules of natural justice had occurred in connection with the decision under the Migration Act 1958 (Cth).  It was my view that the declaration was not appropriate, in particular because it was productive of no effect.  It did not belong to the special category of cases where declarations were appropriate to be made.

5                     In Ozmanian there was no suggestion that there was any wider public interest in the making of the declaration.  The ACCC submits that it is a regulatory authority which brings proceedings in the public interest and that the proceedings and the relief given in them are of that nature.  Declarations in relation to conduct by competitors in the market would be of general importance.  They show that the conduct will not be condoned and serve to educate the public.  This submission finds support in the decision of a Full Court in Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1993) 41 FCR 89.  Sheppard J (at page 94) considered it appropriate to make declarations that the appellant had engaged in misleading and deceptive conduct as it gave formal effect to the court’s conclusion and the litigation involved the public interest.  The latter was especially influential to his Honour’s decision.  Hill J put the matter in even stronger terms, (at page 110):

‘There can be little doubt that a declaration might be obtained by a regulatory authority that particular conduct is in breach of a statutory provision, whether or not injunctive relief is appropriate: cf Australian Softwood Forests Pty Ltd v Attorney-General (NSW) (Ex rel Corporate Affairs Commission) (1981) 148 CLR 121 at 125.  It has never been suggested that no power exists to grant such declaratory relief merely because the consequence of a declaration is to declare the existence of a wrong.  The declaration that an offence has been committed is the concomitant of the non-existence of a right.  Semantically, it may be said to be the declaration of a negative right.  It is appropriate, in my view, to refer to it as a declaration of right.’

6                     The statement of principle in that case should be followed in cases involving the public interest.  Clearly this litigation is in that class.  It follows that declarations would not lack utility.

7                     It does not however follow that declarations will be made.  They are of course a discretionary remedy and factors such as the effects of delay in the bringing of proceedings may be considered.  The nature of and strength of the evidence itself may suggest whether they are warranted and the respondents may re-agitate the question of whether the making of them is in the circumstances in the public interest, after evidence is taken.

8                     The other matter raised by the notice of motion concerns the individual respondents’ privilege against exposure to penalties.  The ACCC does not deny that they have such a privilege and does not require the provision of statements by them if they maintain that privilege.  It is proposed by those respondents that they be subject to a direction to provide statements within a short period after the close of the ACCC’s case against them, when they can better assess their position.  It is said that the provision of affidavits by the ACCC is not sufficient for this purpose and cross examination is required.

9                     The problem the respondents identify arises from the fact that the corporate respondents do not have the privilege.  If they are obliged to file statements of the evidence upon which they would rely at trial, or be shut out from the provision of that evidence as they presently are, this would necessitate the individual respondents giving evidence and therefore effectively destroying their privilege.

10                  In Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (1997) 77 FCR 217, Heerey J gave directions for the filing and service of witness statements by a corporation.  His Honour noted that there would not be a breach of the direction by the corporation if it failed to file and serve a statement by a proposed witness where that witness claimed the privilege.  With respect that is plainly correct.  The situation is not dissimilar to that where a party is not able to adduce all of its evidence because a witness requires to be summoned.

11                  In Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90 (‘Arnotts’), Beaumont J was considering a position where it was considered that a company held a privilege.  The subpoena against directors to produce documents was set aside by his Honour because otherwise it would destroy the company’s privilege against self incrimination.  It would, his Honour said ‘be doing indirectly what cannot be done directly.  The process of the court cannot be used to deprive [the company] of its proper claim of privilege against self incrimination.’

12                  The ACCC refers to the decision of Burchett J in Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 at 116 (‘Abbco Iceworks’).  His Honour was concerned with whether a corporation should be obliged to make discovery and potentially expose its officers.  His Honour said:

‘It has been argued that this conclusion [as to the absence of privilege in a corporation] indirectly diminishes the value of the privilege for individuals.  Where both a corporation and its officers are at risk of prosecution, to require discovery of the corporation is to make available documents which may accuse its officers.  But their privilege has never been, nor should it be, a shield against the use of incriminating evidence – only a right to decline to be themselves the authors of their destruction by producing the evidence.  If evidence produced by the corporation condemns them, the relevant law is vindicated without any breach of the principle against self incrimination.’

Neither Abbco Iceworks nor the Arnotts case has direct application to these proceedings.  I think it may be accepted that a Court would not make orders which would deny a person’s privilege.  But that has not occurred in this case.  There has been no order requiring the individual respondents to file statements and thereby waive their privilege.  The situation is simply that the corporate respondents have a decision to make about what evidence they will rely upon.  If they determine not to put on affidavits of the individual respondents within the time limited for doing so, they will need the leave of the Court to do so at a later time.  The present direction made by the Deputy District Registrar reads:

‘5.        No affidavit filed by the respondents after 15 July 2005 may be relied upon without the leave of the Court first being obtained.’

13                  The approach suggested by the respondents is to expressly except, from their obligation to identify the evidence they will rely upon, the evidence of the individual respondents.  To make such an order is effectively to grant leave in advance and without consideration of all the relevant facts at the time reliance is sought to be placed upon any additional evidence.  Decisions as to whether to claim privilege and apply for leave may sometimes be difficult in the context of litigation, but I do not think it appropriate for the Court to assist a party in delaying a decision, particularly when it is not aware of all the facts.  I consider the present mechanism does not prejudice the corporate respondents.  They may apply for leave if privilege first taken is later waived.  The same reasoning should apply to the individual respondents’ evidence.  If they wish later to adduce evidence, they may apply for leave to do so.  Obviously if they did so at the close of the ACCC’s case they would need, at the least, to be in a position to proceed without delay.

14                  There will be orders extending the time for the provision of affidavit material.  The respondents will pay the ACCC’s costs of the application.

Associate:

Dated:              18 August 2005