FEDERAL COURT OF AUSTRALIA

Jones v Australian Competition and Consumer Commission [2002] FCA 1054

TRADE PRACTICES – application by chicken meat processors to Australian Competition and Consumer Commission for authorisation under s 88 of the Trade Practices Act 1974 (Cth) – application opposed by chicken meat growers on whose behalf purportedly made – whether processors have standing – whether applicant for authorisation must be at risk of contravening s 45 – whether s 45 applies to vertical conduct – derivative liability under s 75B

ADMINISTRATIVE LAW – judicial review – decision by Australian Competition and Consumer Commission to grant authorisation pursuant to s 88 of the Trade Practices Act 1974 (Cth) – standing to seek authorisation – meaning of “by or on behalf of a corporation” – whether application can be brought by corporation not at risk of contravening s 45 – derivative liability under s 75B – member of Commission said to be affected by apprehended bias – waiver - whether claim of prejudgment waived – availability of alternative remedy

WORDS & PHRASES – “by or on behalf of a corporation”

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5

Trade Practices Act 1974 (Cth) ss  45, 45A, 75B and 88

Broiler Chicken Industry Act 1978 (Vic)

Re Applications by Australasian Performing Rights Association (1999) ATPR 41-701 at 42,937 referred to

Re Queensland Co-operative Milling Association Ltd; Re Defiance Holdings Ltd (1976) 25 FLR 169 at 180 referred to

Re Applications by Concrete Carters Association (Victoria) (1977) 31 FLR 193 at 245-246 referred to

R v Portus, Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 at 435 referred to

Re Ross, Ex parte The Attorney-General for the Northern Territory of Australia (1980) 54 ALJR 145 at 149 referred to

Digby Brown & Co v Lyall 1995 SLT 932 referred to

Trade Practices Commission v Queensland Aggregates Pty Ltd (1982) 44 ALR 391 referred to

Walplan Pty Ltd v Wallace (1985) 8 FCR 27 referred to

Snyman v Cooper (No 2) (1990) 25 FCR 470 referred to

Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431 referred to

R v Toohey; Ex parte the Attorney-General for the Northern Territory (1980) 145 CLR 374 referred to

Citizens Airport Environment Association Inc v Maritime Services Board (1993) 114 ALR 473 referred to

Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] FCA 824 at par 92 considered

South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120 at 135 per Hely J referred to

South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 at 680 per Finn J referred to

South Sydney District Rugby League Football Club Ltd v News Ltd (2001) 111 FCR 456 at 481 and 517-518 per Heerey , Moore and Merkel JJ considered

Australian Competition and Consumer Commission v Visy Paper Pty Ltd (2002) 186 ALR 731 at 749 considered

Australian Competition and Consumer Commission v Visy Paper Pty Ltd (2001) 112 FCR 37 discussed

Sayce v Coupe [1953] 1 QB 1 referred to

Livesey v The New South Wales Bar Association (1983) 151 CLR 288 at 293 referred to

Webb v the Queen (1994) 181 CLR 41 referred to

Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd (1996) 65 FCR 215 at 226-230 referred to

Johnson v Johnson (2000) 201 CLR 488 at 492-493 referred to

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 referred to

R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553 referred to

Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352 referred to

Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 538, 549 and 564-565 referred to

Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 100 referred to

Gascor v Ellicot [1997] 1 VR 332 at 348 considered

Stollery v Greyhound Racing Control Board (1972) 128 CLR 509 considered

Stead v State Government Insurance Commission (1986) 161 CLR 141 considered

Nguyen v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1996) 68 FCR 463 at 478 referred to

Vakuata v Kelly (1989) 167 CLR 568 at 572, 577 and 587 considered

Halsbury’s Laws of Australia at 42-1085

Aronson and Dyer, Judicial Review of Administrative Action, 2^nd edition, at 478

CHRISTOPHER JAMES JONES (as President of the VICTORIAN FARMERS FEDERATION CHICKEN MEAT GROUP) v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION and A & G MARVEN PTY LTD (ACN 005 541 748)

(formerly known as MARVEN POULTRY PTY LTD)

V749 of 2001

WEINBERG J

27 AUGUST 2002

MELBOURNE

THE COURT ORDERS THAT:

1.         The application be dismissed.

2.         The applicant pay the first respondent’s costs of and incidental to the application.

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

REASONS FOR JUDGMENT

INTRODUCTION

1                     This is an application for judicial review by Mr Christopher Jones, who is the President of the Victorian Farmers Federation Chicken Meat Group (“VFFCMG”), of a decision made by the first respondent, the Australian Competition and Consumer Commission (“the ACCC”), to grant an authorisation under s 88 of the Trade Practices Act 1974 (Cth) (“the Act”) and the Competition Code for a term of five years.  The application for review is brought pursuant to s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”).  The decision under challenge is what was described by the ACCC as a “Determination” and enabled the applicant for that authorisation, and those on whose behalf that application was brought, to engage in conduct which might otherwise contravene ss 45 and 45A of the Act. 

2                     The Determination was issued in response to an application for authorisation lodged by the second respondent, Marven Poultry Pty Ltd (“Marven”) (now A & G Marven Pty Ltd), for itself and on behalf of five other chicken meat processing companies operating in Victoria.  They were Inghams Enterprises Pty Ltd, Bartter Enterprises Pty Ltd, Eatmore Pty Ltd, Hazeldene Chicken Farm Pty Ltd, and La Ionica Farming Operations Pty Ltd, and current and future contract growers to those processors. 

3                     The application for authorisation was originally lodged on 21 September 2000 under the name “Victorian Chicken Meat Council, (Processors)” representing the named processors, and was said to be made on behalf of current and future growers of those processors.  It was subsequently amended to be in the name of “Marven Poultry Pty Ltd for itself and on behalf of Victorian Chicken Meat Processors and Chicken Growers” (defined as current and future contract growers of those processors).

BACKGROUND TO VICTORIAN CHICKEN MEAT INDUSTRY

4                     The Victorian Chicken Meat Industry comprises processors, who supply day old hatchlings, and growers, who raise the chickens on an outsourcing basis,  until they reach the broiler stage.  The growing process takes some seven to eight weeks.  The chickens remain at all times the property of the processors.  After the completion of the growing process they are returned by the growers to the processors. 

5                     Victoria has approximately 200 contract grower farms which account for about 92% of broiler chickens grown in that State.  The VFFCMG is a body which represents the growers.  For the past 25 years the industry in Victoria has utilised a contract system of chicken growing.  Under that system, growers are independent contractors.  They are not employees of processors.  It should be noted that growers are typically located in close proximity to processors, generally within one hour’s drive, in order to ensure that transport costs are kept to a minimum.  Growers are also linked, through contractual arrangements, with particular processors.

6                     The Victorian market is primarily supplied by six processors.  They are the processors by, and on whose behalf, the application for authorisation was sought.  The four largest have a combined market share of approximately 80%. 

7                     The industry in Victoria is regulated by the Broiler Chicken Industry Act 1978 (Vic)(“the BCI Act”) and the Broiler Chicken Regulations 1992.  The BCI Act is administered by the Victorian Department of Natural Resources and Energy (“the Department”).  That Act prescribes certain conduct relating to the supply of broiler chickens in that State.  It establishes a regulatory body, the Victorian Broiler Industry Negotiation Committee (“the VBINC”) which represents the interests of both processors and growers.  The VBINC consists of an independent Chairman, four grower representatives, four processor representatives, and two independent members with commercial expertise.  It is empowered, inter alia, to determine the standard growing fee for broiler chickens across the industry, and to recommend terms and conditions of contracts. 

8                     In determining the standard growing fee, the practice is for grower representatives to confer in order to formulate a common position.  The same is true of the processor representatives.  The independent members than determine the standard growing fee within the parameters set by the collective positions of the two representative groups.

THE NATIONAL COMPETITION POLICY REVIEW OF THE BCI ACT

9                     In late 1998 or early 1999, the Department commissioned KPMG to conduct a review of the BCI Act (“the KPMG Review”).  That review resulted in a report published in November 1999, and headed “National Competition Policy Review of the Broiler Chicken Industry Act 1978” (“the KPMG Report”).

10                  The KPMG Report expressed concern regarding conduct of members of the VBINC operating under the BCI Act.  It concluded that those members were at risk of breaching ss 45 and 45A of the Act when they determined the grower fee and contract conditions.  That was because the individual members of the VBINC, who were in competition with each other in a market, met to determine and agree on a price.  That conduct was said, prima facie, to breach the Act in one of four ways:

·                     growers acting collectively to agree on a fee to be charged for their services;

·                     processors acting collectively to agree on fees to be paid for grower services;

·                     growers acting collectively to boycott the supply of services to one or more processors; and

·                     processors reaching an agreement to divide up the market for the purchase of growing services.

11                  The report noted that the conduct did not attract “Crown Immunity”.  Moreover, it was not “specifically authorised” in accordance with s 51(1)(b) (which provides that “anything done in a State, if the thing is specified in, and specifically authorised by an Act passed by the Parliament of that State” is to be disregarded when considering whether a person has contravened Pt IV).

12                  Although, the report did not come to any final conclusion regarding these matters, it did conclude that the BCI Act created restrictions on competition that were not necessary to achieve the stated objectives, and imposed costs on the community that were likely to exceed the benefits.  It recommended that the BCI Act and the Regulations “be repealed because the case for the retention of the broiler chicken legislation [was] not established by its proponents”. 

THE RELEVANT LEGISLATIVE PROVISIONS

13                  Before dealing with the issues raised in this proceeding, it is necessary to set out in some detail certain provisions of the Act which are of critical importance. 

14                  Section 88, which empowers the ACCC to grant an authorisation, is the pivotal provision. Sub-section (1) deals with the question of standing to bring an application for authorisation.  It provides, inter alia, that the ACCC may, upon application “by or on behalf of a corporation grant an authorisation to the corporation”:

“(a)     to make a contract or arrangement, or arrive at an understanding, where a provision of the proposed contract, arrangement or understanding . . . would have the purpose, or would have or might have the effect, of substantially lessening competition within the meaning of section 45; or

(b)       to give effect to a provision of a contract, arrangement or understanding where the provision . . . has the purpose, or has or may have the effect, of substantially lessening competition within the meaning of section 45 …”

15                  Section 45(2) which creates the relevant proscribed conduct referred to above provides that:

“…      A corporation shall not:

(a)               make a contract or arrangement, or arrive at an understanding, if:

(i)            …

(ii)               a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition …”

16                  Subsection (3) provides a definition of the term “competition” for the purposes of s 45.  Subsection (5)(c) provides that s 45 does not apply to, or in relation to, a provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, insofar as the provision relates to conduct that contravenes s 48 (resale price maintenance).  Similarly, subsection (6) provides that the making of a contract, arrangement or understanding does not contravene s 45 “by reason that the contract, arrangement or understanding contains a provision the giving effect to which would” contravene s 47 (exclusive dealing).

17                  It is also important to note s 88(6), which deals with the effect of an authorisation once granted.  That subsection is in the following terms:

“An authorisation granted by the Commission to a person under any of the preceding provisions of this section to:

(a)               make a contract or arrangement or arrive at an understanding;

(b)               give effect to a provision of a contract, arrangement or understanding;

(c)               ...

(d)               ...

has effect as if it were also an authorisation in the same terms to every other person named or referred to in the application for the authorisation as a party to the contract, arrangement or understanding or as a proposed party to the proposed contract, arrangement or understanding ...”

the application for JUDICIAL review

18                  As noted earlier, the applicant seeks review, under s 5 of the ADJR Act, of the “Determination” made by the ACCC to grant an authorisation subject to certain specified conditions, under s 88 of the Act.  That Determination was made on 28 June 2001. 

19                  The applicant claims to be “a person aggrieved” by that decision, within the meaning of s 3(4)(a)(i) of the ADJR Act because, as a chicken grower, he is “a person whose interests are adversely affected by the decision”.  Moreover, in his capacity as President of the VFFCMG, he represents the interests of other growers who are members of that group.

20                  Section 5 of the ADJR Act sets out a number of grounds of review.  In substance the applicant relies upon the following four grounds:

“5(1) . . .

(a)     that a breach of the rules of natural justice occurred in connection with the making of the decision;

...

(d)     that the decision was not authorised by the enactment in pursuance of which it was purported to be made;

(e)     the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made;

(f)      that the decision involved an error of law, whether or not the error appears on the record of the decision …”

21                  The grounds which are set out in pars (d), (e), and (f) are all related, and involve essentially the same point.  They involve a challenge to the validity of the application for authorisation on the basis that the processors had no standing, pursuant to s 88(1), to bring that application. 

22                  The ground set out in par (a) raises a discrete point arising out of the fact that Dr David Cousins, the member of the ACCC responsible for dealing with that application, had previously been the director at KPMG principally responsible for the preparation of the KPMG Report.  

THE CHALLENGE TO THE VALIDITY OF THE AUTHORISATION – GROUNDS (d), (e) AND (f)

The Basis for the Application under s 88

23                  The application for authorisation under s 88 of the Act was based upon the proposition that, under the BCI Act, members of the VBINC, and the growers and processors may have engaged in conduct which contravened s 45.  That view was said to be supported by the KPMG Report, and by legal advice subsequently obtained by the processors. 

24                  It was claimed that the arrangements under which the industry operated were unsatisfactory, and that the members of the VBINC, and the growers and processors, could not continue to operate in accordance with the requirements of the BCI Act “for fear of prosecution” under s 45.  It was argued that, unless authorisation under s 88 was granted, the  processors would be compelled to negotiate on an individual basis with the growers.

The VFFCMG submissions to the ACCC in opposition to the grant of an authorisation

25                  The VFFCMG filed a submission with the ACCC opposing the grant of the authorisation.  It first argued that the application for the authorisation, lodged by Marven, did not comply with the requirements of s 88.  That was because Marven, and the other five processors on whose behalf the application had been made, were not parties to any arrangement or understanding which might contravene s 45, and therefore lacked standing to seek an authorisation. 

26                  It next claimed that the processors had lodged an application the effect of which was to seek authorisation for the contracted growers to collectively negotiate a standard growing agreement, and to appoint representatives to enter into negotiations.  The growers had not been consulted about the proposed collective negotiation model.  Nor had they been consulted about the proposed Code of Conduct adopted in the Determination as a condition of authorisation which, they contended, was objectionable and lacked detail on important elements. 

27                 Finally, the VFFCMG contended that the bargaining power of growers was inherently weak given the vertically integrated nature of the industry, and the limited ability of growers to switch processors.  It claimed that the application for authorisation did not address the power imbalance between processors and growers, and argued that there would be minimal public benefit if the authorisation were granted. 

28                 It is only the first of these arguments that is relevant to the challenge to the validity of the authorisation before this Court.  

29                 However, before considering the arguments put on behalf of the ACCC in response, it is necessary to note one additional matter.  The applicant specifically drew attention to the fact that the Determination stated that the Victorian Government, which was still considering its response to the KPMG Review, had indicated a preference that any possible breaches of the Act be dealt with by the grant of an authorisation, under s 88, rather than by any other means. The Government considered that that approach would allow collective negotiation at an enterprise level and would provide for the on-going stability of the industry.  This was said to be a key plank of the Government’s response to the KPMG Review.

The ACCC’s response

30                 The ACCC noted that the application brought by Marven related to a proposal by the processors under which participating groups of contracted growers would be able to collectively negotiate with individual processors for standard growing agreements, including the agreement of a common fee, if the growers so chose.  Such negotiations would be conducted in accordance with a Code of Conduct.  The proposed arrangements did not seek an authorisation for any form of “industry wide negotiation” as occurred under the auspices of the VBINC.  Growers who chose not to negotiate collectively would be able to opt out of that process, and negotiate individually.

31                  The ACCC rejected the VFFCMG submission that Marven, and the processors on whose behalf it purported to act, lacked standing to seek an authorisation under s 88.  It concluded that the section could be invoked by a person who was not a party to the conduct for which authorisation was sought.  That conclusion was based, in part, upon the fact that, under the section, an application could be made “on behalf of a party”. 

32                  Having said that, the ACCC went on to conclude that Marven was, in fact, a party to, and/or knowingly concerned in, the proposed arrangements.  That was because the proposed arrangements involved both growers and processors in negotiating standard growing agreements, in accordance with guidelines stipulated by a Code of Conduct, a process to which they would all relevantly be parties.   

33                  The ACCC noted that, in its application under s 88, Marven had named both present and future contract growers, as parties, or proposed parties, to the arrangement or understanding for which authorisation was sought.  In granting that authorisation, it referred to s 88(6) and concluded that the effect of that subsection was to enable Marven, and any “other person named or referred to in the application for the authorisation as a party … or as a proposed party ” to the “proposed contract, arrangement or understanding” to take the benefit of that authorisation.  The ACCC concluded that, in accordance with the requirements of s 90(1), it was obliged to “make a determination in writing granting such authorisation” as it considered appropriate.  Although, there was opposition to the grant of authorisation from a “considerable number of growers” who were “potential parties to the proposed arrangements”, that did not entitle the ACCC to avoid its statutory obligation.  It noted that the grant of an authorisation operated only as an immunity, and did not require any person who fell within its terms to engage in the conduct authorised.

The applicant’s submission to this Court

34                  In this Court the applicant argued that Marven, and the other five processors on whose behalf the authorisation was sought (purportedly on behalf of “current and future contract growers” of those processors) were not entitled, pursuant to s 88, to apply for the grant of an authorisation. 

35                  There were two distinct bases upon which that submission rested. 

36                  The first was that, upon its proper construction, s 88(1) could not be invoked by or on behalf of a corporation which was not itself at risk of contravening s 45.  That argument was developed in various ways.  It was submitted that the underlying purpose of that subsection was to enable a corporation to enter and/or give effect to a contract, arrangement or understanding, even if it was anti-competitive and might otherwise contravene s 45, provided that the ACCC determined that the public benefit outweighed the anti-competitive detriment.  It followed that if a corporation was not at risk of contravening that section, it had no standing to seek an authorisation.

37                  The argument that the processors were not at risk of contravening s 45 by engaging in the proposed arrangements turned upon a submission that the section concerned solely arrangements between firms which operated at the same level of a particular product market, and not arrangements between firms at different levels of the distribution chain.  That argument in turn depended upon whether it was correct to say that s 45 concerned solely “horizontal” combinations or cartels, or whether it applied also to what are sometimes described as “vertical” combinations. 

38                  The applicant drew attention to the fact that ss 47 and 48 of the Act, which relate to exclusive dealing and resale price maintenance respectively, concern anti-competitive conduct involving traders at different levels of the chain of distribution, that is, “vertical conduct”.  Given that conduct which falls within either of those sections is expressly excluded from the ambit of s 45 by ss 45(5)(c) and (6), s 45 had to be confined to “horizontal” conduct. 

39                  The conduct for which authorisation was sought was characterised as “vertical” rather than “horizontal”.  It followed, so it was submitted, that the processors were not at risk of contravening s 45, and accordingly Marven had no standing, on their behalf, to seek an authorisation under s 88(1). 

40                  The applicant challenged that part of the reasoning of the ACCC which relied upon the fact that s 88(1) permits an application to be made for an authorisation “by or on behalf of a corporation”.  It will be recalled that the ACCC concluded that this expression meant that an application could be brought by a person who is not a party to the arrangements for which authorisation is sought.  The applicant submitted that the ACCC had erred in its construction of that expression which should be read down so as to make it clear that only a party at risk of contravening s 45 had standing.

41                  The second limb of the applicant’s argument regarding invalidity was simply that the processors had no standing to bring an application on behalf of “current and future contract growers to those processors”, at least in circumstances where the evidence was clear that the overwhelming majority of the growers opposed the making of such an application. 

The ACCC’s submissions to this Court

42                  The primary submission advanced on behalf of the ACCC, was that the processors had standing to seek an authorisation because they were at risk of contravening s 45.  That argument was developed in two ways. 

43                  It was first submitted that the proposed arrangements were not confined to what might be described as “the ultimate arrangement or understanding” between the growers and the processors.  They extended to anterior arrangements or understandings among the processors themselves.  These arrangements or understandings involved “horizontal” conduct, and fell squarely within s 45. 

44                  Alternatively, it was submitted that even if the arrangements or understandings did not involve horizontal conduct, and fall within s 45, the processors could be liable for a contravention of that section by the operation of s 75B.  That was because, by their actions the processors were “aiding and abetting” or “directly or indirectly, knowingly concerned in, or party to” any contravention by the growers of s 45. 

45                  The ACCC also relied upon s 88(6) which, it submitted, made it clear that, as a matter of construction, the expression “by or on behalf of”, in s 88(1), extended to persons who may not themselves be directly at risk of contravening s 45, but are involved in some way with conduct that may contravene that section. 

Findings regarding validity of the authorisation

46                  I propose to deal firstly with the applicant’s argument that the ACCC erred in determining that a person who is not a party to a proposed arrangement that might contravene s 45 may still have standing to apply for an authorisation.  That argument was based upon the meaning which the ACCC accorded to the expression “on behalf of”, in s 88(1).  I am of the opinion that, as a matter of construction, the applicant’s argument is correct, and that the ACCC erred in that regard. 

47                  In my opinion, s 88(1) does not entitle a corporation, not itself at risk of contravening s 45, to make an application for the grant of an authorisation with regard to the conduct of another, unless it does so “on behalf of” that other, and that “other” is itself at risk of contravening the section. 

48                  I am conscious of the fact that there are statements in several cases in which the Trade Practices Tribunal and the Australian Competition Tribunal have suggested that the test for standing under s 88 is subjective, and that all that is necessary is that the applicant believes on what appears to him to be good grounds that, without an authorisation, he would contravene s 45: Re Applications by Australasian Performing Rights Association (1999) ATPR 41-701 at 42,937.  There are also statements to the effect that the ACCC is not justified in refusing an authorisation upon the basis that the application might appear to it to be unnecessary: Re Queensland Co-operative Milling Association Ltd; Re Defiance Holdings Ltd (1976) 25 FLR 169 at 180 and Re Applications by Concrete Carters Association (Victoria) (1977) 31 FLR 193 at 245-246. 

49                  Notwithstanding the language in which the test has been formulated in these cases, it seems clear to me that there is an objective element which must be satisfied when determining the issue of standing.  I am fortified in that conclusion by the fact that in Re Australasian Performing Rights Association the Tribunal, constituted by von Doussa J, and two other members, referred to the earlier authorities, and went on to say at par [31]:

“In the present case there were reasonable grounds for APRA to apprehend that its conduct if not authorised might be in breach of the TPA …”

50                  That observation by the Tribunal suggests that the test for standing is not purely subjective, but has an objective element.  As a matter of basic principle, the power conferred upon the ACCC to grant an authorisation could not have been intended to be used in circumstances where that body concluded that there was clearly no risk of any contravention of s 45. 

51                  I understand that the ACCC, in this part of its reasons, plainly considered the expression “on behalf of”, in s 88(1), to be one of great amplitude.  Nonetheless, there are limits upon the width to be accorded to that expression. 

52                  In R v Portus, Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 at 435, Latham CJ observed that the expression “on behalf of” is “not an expression which has a strict legal meaning”.  In the same case, Dixon J said that the expression “on behalf of the Crown” meant “for the purposes of, as an instrument of, or for the benefit and in the interest of the Commonwealth”.  It is plain, as his Honour noted, that the phrase has no single and constant significance.  Instead it may be used in conjunction with a wide range of relationships.  However, they are all in some way “concerned with the standing of one person as auxiliary to or representative of another person or thing”: Re Ross, Ex parte The Attorney-General for the Northern Territory of Australia (1980) 54 ALJR 145 at 149.

53                  In Digby Brown & Co v Lyall 1995 SLT 932 a firm of solicitors had signed a letter of obligation in a conveyancing transaction.  The letter stated that the obligations therein were undertaken “on behalf of our above named clients”.  Lord Cullen observed that the expression “on behalf of” signified more than the fact that the defendants were agents for the sellers.  It meant that the undertaking which had been given was one given by the defendants as agents of the sellers, and hence was their undertaking.

54                  The expression “on behalf of” has been considered by this Court on a number of occasions: see for example, Trade Practices Commission v Queensland Aggregates Pty Ltd (1982) 44 ALR 391, Walplan Pty Ltd v Wallace (1985) 8 FCR 27, Snyman v Cooper (No 2) (1990) 25 FCR 470, and Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431.

55                  The same expression was considered by the High Court in R v Toohey; Ex parte The Attorney-General for the Northern Territory of Australia (1980) 145 CLR 374, and by the New South Wales Court of Appeal in Citizens Airport Environment Association Inc v Maritime Services Board (1993) 114 ALR 473.  In the latter case it was held that although the expression extended beyond the relationship of servant or agent, it did not extend to an activity which served the interests of another. 

56                  These authorities seem to me to establish that although the expression “on behalf of” lacks precision, it requires a degree of formal connection, and of obligation, which in general, precludes a party from acting on behalf of another when that party acts contrary to the express wishes of that other. 

57                  I accept that there are circumstances in which a person may be said to act on behalf of another without the consent of the other.  For example, a person may act on behalf of another who lacks legal capacity.  Similarly, it might be said that a person acts on behalf of another as an agent, where the doctrine of ostensible authority applies.  Neither of those examples has any bearing upon the present case. 

58                  As a matter of ordinary language, and upon the evidence before the Court, neither Marven nor the other processors acted “on behalf of” the growers, or at least the overwhelming majority of them, when they sought the authorisation.  Not only did the growers not consent to that course, they opposed it, both strenuously and vociferously.  It follows that, to the extent that the ACCC based its decision to grant the authorisation upon the proposition that the processors were acting “on behalf of” the growers, that conclusion was wrong. 

59                  That means that the application for authorisation was made by Marven for itself, and on behalf of the other processors.  It was not made on behalf of the growers who did not consent.  However, it does not follow that the authorisation was necessarily invalid.  That depends upon whether or not the second limb of the ACCC’s reasoning, namely that the processors themselves were at risk of contravening s 45, was correct.  If so, the application and the decision to grant the authorisation may still have been valid. 

60                  The question of whether the processors were relevantly at risk is by no means an easy one to resolve. 

61                  There has long been uncertainty about whether s 45 is concerned solely with what is sometimes described as “horizontal conduct”, or whether that section also applies to “vertical conduct”.  In that regard, it should be noted that ss 47 and 48 are concerned with “vertical conduct”, and have no application to “horizontal conduct”.  Given that conduct which falls within either ss 47 or 48 is expressly excluded from the ambit of s 45, the question is whether it follows that s 45 must be construed as being confined to “horizontal conduct”. 

62                  In Halsbury’s Laws of Australia at 42-1085 it is suggested that where the supplier and acquirer are also competitors in respect of the goods or services supplied, s 45 may have some limited scope in relation to “vertical conduct”.  However, if that conduct also falls within s 47, s45(6) provides that the exclusive dealing provisions in s 47 will take priority.

63                  In Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] FCA 824 at par [92], Goldberg J referred to “the traditional view of s 45” which is that it does not apply to “vertical exclusive dealing arrangements” which are regulated by s 47.  His Honour cited South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120 at 135 per Hely J: and South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 at 680 per Finn J, both judgments at first instance, as authority for that proposition.  He noted that the proposition that “vertical agreements” were excluded from the operation of s 45 appeared to have been accepted as well on the appeal from Finn J: South Sydney District Rugby League Football Club Ltd v News Ltd (2001) 111 FCR 456 at 481 per Heerey J and at 517-518 per Merkel J. 

64                  In Australian Competition and Consumer Commission v Visy Paper Pty Ltd (2002) 186 ALR 731 at 749, Sackville J noted that it was generally accepted that s 45(6) was intended to prevent overlap between ss 45 and 47 and, in particular, to subject the practice of exclusive dealing to the regime created by s 47 rather than that imposed by s 45.  His Honour described s 45(6) as having a “bipartite structure”.  He observed that the first part of the subsection specified circumstances in which the making of a contract, arrangement or understanding did not constitute a contravention of s 45(2)(a) and therefore removed from the prohibition contained in that subsection conduct that otherwise would contravene the prohibition.  The second part of s 45(6) specified circumstances in which conduct that would otherwise, or might, contravene s 45(2)(b) was taken outside the scope of that provision.  It directed attention to conduct that had actually occurred.  His Honour held that the respondent in that case had contravened s 45, but was entitled to rely on the defence contained in s 45(6).  That meant that the matter should have been brought under s 47, if at all.

65                  On appeal, in Australian Competition and Consumer Commission v Visy Paper Pty Ltd (2001) 111 FCR 37, the Full Court held that the respondent had contravened s 45 and could not rely on s 45(6) to exclude the operation of that section.  The majority (Hill and North JJ) held that although the words “by reason that” in s 45(6) operated to apply the provisions of s 47 to the exclusion of s 45(2)(a)(i), to the making of a contract that contained a provision falling within s 47, s 45(2)(a)(i) would apply to prohibit the making of that contract if it had an exclusionary provision to the extent that provisions of that contract fell outside s 47.  Conti J dissented, and would have upheld the reasoning of Sackville J. 

66                  On 31 May 2002 Visy Paper Pty Ltd, the respondent in that matter, succeeded in obtaining special leave to appeal to the High Court.

67                  There is a degree of uncertainty as to the precise nature of the relationship between ss 45 and 47.  However, resolution of that uncertainty is not pivotal to the disposition of the application before this Court.  Irrespective of whether s 45 is confined entirely to “horizontal conduct”, I am satisfied that, in the absence of an authorisation made under s 88(1), Marven and the other processors are at risk of contravening s 45. 

68                  The position under the BCI Act, and also in relation to the “proposed arrangements”, is that the processors are permitted, if not required, to agree among themselves the price to be paid to growers for the services which they provide.  That, prima facie, constitutes an “arrangement or understanding” which has the purpose, or would have or be likely to have the effect, of substantially lessening competition, particularly when one has regard to the extended definition of “purpose”, in cases of price fixing, pursuant to s 45A. 

69                  It follows that the processors are, or may be, parties in their own right to a contravention of s 45.  Accordingly, they have standing to seek an authorisation in order to avoid having the consequences of such a contravention visited upon them.

70                  Even if I am wrong in holding that this anterior arrangement or understanding among the processors is, prima facie, a contravention of s 45, they are also at risk of contravening that section in a different way.  Section 75B creates what may be described as “derivative liability”.  It provides, inter alia, that a reference in Pt VI of the Act (which deals with enforcement and remedies) to a person involved in a contravention of a provision of Part IV shall be read as a reference to a person who has “aided, abetted, counselled, or procured the contravention”, or “has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention”. 

71                  It can be argued that by participating in the arrangements prescribed by the BCI Act, or by engaging in the “proposed arrangements”, the processors may themselves be derivatively liable for any contravention of s 45 by the growers.  In particular, it may be said that by negotiating and entering into contracts with the growers, knowing that they have agreed amongst themselves to fix prices, the processors have been, or will be, “knowingly concerned” in any contravention of that section by the growers.  Moreover, it is arguable that such derivative liability makes the processors relevantly “parties” to the arrangement or understanding reached by the growers, in contravention of the section.  

72                  It should be noted that this approach is consistent with that taken in the criminal law in relation to illegal sales, and the doctrine of complicity.  The offence of illegal sale generally incriminates the vendor as the principal.  In this circumstance, courts have always imposed liability upon the purchaser as an accessory, provided that the purchaser possessed the requisite mens rea:  Sayce v Coupe [1953] 1 QB 1.

73                  Once it becomes clear that Marven and the other processors are at risk of contravening s 45, whether directly, as parties to their own arrangement or understanding, or derivatively, as parties to an arrangement or understanding arrived at amongst the growers, they have standing to seek an authorisation in order to protect themselves. 

74                  Section 88(6) then operates, of its own force, to confer upon the growers, who are “… named or referred to in the application for the authorisation as [parties] to the contract, arrangement or understanding or as proposed [parties] to the proposed contract, arrangement or understanding …” what, from their perspective, may be regarded as an unwanted indemnity.  However, that is a consequence of the operation of the Act.  It matters not that the persons protected by the subsection do not want that protection.  

75                 A corporation faced with the prospect of incurring a large pecuniary penalty (of up to $10 million) for contravening s 45 of the Act would normally welcome a decision by the ACCC to grant it an authorisation.  It is somewhat ironic that in this case the applicant, and those growers whom he represents, are aggrieved by just such a decision.  Nonetheless, in my view s 88(6) confers upon those parties the protection which they do not seek.  Once it becomes clear that Marven and the other processors had standing to seek an authorisation to protect themselves from the risk of contravening s 45, the growers gained that protection, unwanted though it may have been.  The processors were entitled to seek authorisation.  It was granted to them in order to provide them with protection from the operation of s 45.  However, the consequence of that authorisation, whether expressly stated or not, is that the growers, who are “named or referred to in the application for authorisation as a party to the … arrangement or understanding” now find themselves indemnified as well. 

76                 It is plain that a majority of the growers are dissatisfied not merely with the fact that an authorisation has been granted without their consent, but also with a number of the conditions attached to that authorisation.  However, it must be borne in mind that even though the growers are “beneficiaries” of an unwanted indemnity which includes unwanted conditions, they are not required by that indemnity (nor could they be so required), to comply with those conditions.  Of course, if they do not comply with those conditions, they will not be able to gain the benefit of that authorisation.  Nonetheless, the growers are not required by the authorisation to do any act, or to refrain from doing any act.  The authorisation merely ensures that if they engage in the conduct which is now “authorised”, they will not be in breach of s 45. 

BREACH OF NATURAL JUSTICE – GROUND (a)

77                  The applicant’s challenge to the validity of the authorisation was also based upon a claim that there had been a breach of the rules of natural justice.  It was submitted that the decision to grant the authorisation should be set aside because there was an apprehension of bias, based upon prejudgment, arising out of the involvement of Dr Cousins in the decision making process.

Factual basis for the claim of apprehended bias

78                  Dr Cousins joined KPMG in February 1976.  He eventually became a Director and established a Competition Policy Group (“the CPG”) within that firm.  One of the functions of the CPG was to conduct reviews of legislation under National Competition Policy (“NCP”).  During his time with KPMG, the CPG conducted approximately twelve to fifteen such reviews.  As noted earlier, in late 1998 or early 1999, the Department issued a tender seeking expressions of interest in relation to a review of the BCI Act.  KPMG was selected to conduct that review.  Dr Cousins was the Director in charge. 

79                  In July 1999, Dr Cousins was appointed a full time member of the ACCC.  By that stage a draft copy of the KPMG Report had already been provided to the Victorian Government for its consideration.  The final version of that report was submitted in November 1999. 

80                  John Clarke, the Executive Officer of the VFFCMG, and its immediate past President, gave evidence in this proceeding.  He referred to the KPMG Review which he said had been conducted by a team led by Dr Cousins.  He referred to a conversation which both he and Mr Jones had had with Timothy Grimwade, the Acting General Manager of the ACCC, on 24 October 2000.  He said that Mr Jones said words to the effect:

“Is there not a conflict of interest with Dr Cousins being on the Commission and also being responsible for the NCP review for KPMG?”

81                  Mr Grimwade replied:

“I do not think he has a conflict of interest.  He does not own a chicken farm.”

82                  Both Mr Grimwade and Dr Cousins also gave evidence in this proceeding.  Mr Grimwade said that the conversation which he had had with Mr Jones on 24 October 2000 was to the following effect:

Q “Would David Cousins be involved in the Commission’s deliberations on this matter?”

A “Yes”

Q “Don’t you think David Cousins has a conflict of interest given his role in the NCP review?”

A “No – I would only have thought that he would have a conflict of interest if he had a financial interest in the chicken industry, and I am pretty sure he doesn’t.”

83                  Dr Cousins said that once he joined the ACCC, he had no further role in the conduct of the KPMG Review.  From the time of his appointment, he was given special responsibility for matters relating to the “New Tax System”, which included the GST.  On 20 October 2000, he was nominated as the Commissioner with responsibility for adjudication matters.  That included responsibility for the application for authorisation lodged by Marven in September 2000.  His role involved liasing with ACCC staff, presiding at pre-decision conferences, and occasionally being present at meetings with various parties.  Actual adjudication decisions were made by the full Commission. 

84                  Dr Cousins said that in relation to the Marven application, he recalled attending various meetings with representatives of the VFFCMG.  He did not recall attending any meeting with the processors, apart from a pre-decision conference on 8 March 2000, at which processors and grower representatives were present.  He said that at the pre-decision conference, Mr Clarke had said to him words to the following effect:

“The National Competition Policy review of the Broiler Chicken Industry Act 1978 did not consider social issues.  The Commission has to consider such issues in assessing authorisation applications.  Therefore, the Commission should not have relied on the findings of the NCP review in assessing the Marven application.”

Dr Cousins replied:

“… the Commission did not rely on the findings of the NCP review in conducting its analysis.  The criteria considered by the Commission in its draft determination were different from the criteria considered in an NCP review, and the Commission looked at the application afresh.  The public benefits and detriments in each case are different because the conduct is different.”

85                  Dr Cousins went on to say that at no time did any representative of the VFFCMG, or any chicken grower, suggest to him that he had a “conflict of interest” arising from his involvement with the KPMG Review.  Nor had he ever been asked to stand aside from consideration of the authorisation application.

86                  The minutes of the pre-decision conference were tendered before the Court.  They record that both the growers and the processors made extensive submissions.  However, at no stage was Dr Cousins asked to excuse himself from the authorisation process on the basis that he had previously been involved in preparing the KPMG Report, or that he had prejudged any issue.  It was not suggested that there was any bias, actual or apprehended, in his being the Commissioner responsible for the carriage of the application for authorisation. 

87                  The minutes further record, that the KPMG Report considered that the conduct prescribed under the BCI Act was likely to contravene s 45.  Dr Cousins was reported, in those minutes, as having said that the ACCC agreed with the findings of the report.

The applicant’s submissions

88                  It was submitted, on behalf of the applicant, that in many instances in the course of its Determination, the ACCC had adopted and relied upon the recommendations contained in the KPMG Report.  An annexure to the applicant’s written submissions set out a number of examples of this reliance.  It was argued that, given the involvement of Dr Cousins in both the preparation of the KPMG Report and the ACCC Determination, a fair minded observer would entertain a reasonable apprehension of bias on his part, and therefore that of the ACCC.  It was submitted that, “wearing his ACCC hat”, it was difficult to imagine that Dr Cousins would disagree with the very report that he had helped to prepare while “wearing his KPMG hat”.

89                  It was noted that the KPMG Report had recommended that the parties to the collective bargaining process, carried out under the BCI Act, seek an authorisation from the ACCC for their conduct. 

90                  The applicant submitted that, contrary to the ACCC’s contention, there had been no waiver of his right to object to the involvement of Dr Cousins on the ground of apprehended bias.  It was submitted that Mr Jones had raised the question of prejudgment with Mr Grimwade, albeit somewhat elliptically, on 24 October 2000, when he referred to Dr Cousins’ “conflict of interest”.  It was contended that Mr Grimwade had “deflected”, what was in substance an “objection” to Dr Cousins’ continued involvement in the authorisation process. 

91                  It was submitted that although the minutes of the pre-decision conference did not record a formal application that Dr Cousins be disqualified, they did record a statement on his part to the effect that he did not consider that the ACCC had relied on the findings of the KPMG Report in conducting its analysis.  By implication, it was submitted, Dr Cousins was alive to the issue of the propriety of his continuing involvement in the authorisation process, but had determined to proceed regardless.  Accordingly, the applicant contended, the question of apprehended bias had been raised, not once, but twice, and had never been waived. 

The ACCC’s submissions

92                  The ACCC submitted that the applicant had not made out a case of apprehended bias.  It referred to a number of passages in the minutes of the pre-decision conference in which it was recorded that Mr Grimwade made it abundantly clear that the ACCC would conduct its investigation independently, and that its decision would depend upon the weight of:

“public benefit and anti-competitive issues as per the test set out in the TPA, rather than the NCP review criteria”. 

93                  The ACCC also referred to the criteria contained in the KPMG Report which, it submitted, differed from the criteria considered by it in determining whether to grant an authorisation.  The minutes record that it assured the growers that it “had looked at the application afresh”.

94                  The ACCC observed that its Determination contained approximately sixteen references to the KPMG Review.  However, there were only five such references in chapter nine which contained the final evaluation.  They were:

(a)               reference to the fact that the KPMG Review considered that the existing legislative arrangements may be in breach of s 45, a conclusion with which the ACCC agreed.

(b)               reference to the fact that the KPMG Review concluded that retention of the existing legislative arrangements was not established to be of net benefit to the community and a recommendation that the BCI Act be repealed.

(c)               reference to the fact that the Victorian Government was still considering its response to the KPMG Review.

(d)               reference to the KPMG Review as having been a source of much of chapter two (“Background to Industry”) in the Determination, and also a source for the table of distribution of buyers and sellers of growing services in Victoria.

(e)               the fact that both the applicant for authorisation and the VFFCMG had referred to issues raised by the KPMG Review.

95                  The ACCC submitted that, viewed objectively, these five references did not support the applicant’s contention that the ACCC, in its Determination, had simply “endorsed” the KPMG Report.  It also submitted that the applicant had had numerous opportunities over the course of some eight months to object to Dr Cousins’ continued involvement in the authorisation process.  However, the applicant had failed to do so.  That meant that the issue of Dr Cousins’ apprehended bias had not been raised, either sufficiently or at all.  It also meant that, in the circumstances, any right to object had been waived. 

96                  It was noted, in support of the claim of waiver, that on approximately ten occasions the applicant had provided extensive, elaborate and detailed written submissions to the ACCC.  Indeed, on three separate occasions the applicant had provided to the ACCC copies of legal advice which he had obtained concerning the authorisation process.  That advice was of a highly technical nature, and reflected the considerable care and attention which had been given to this subject by the applicant and his legal advisers.  Yet, the applicant never raised any issue of prejudgment on the part of Dr Cousins in any of this written material. 

97                  By way of example, the ACCC referred to a letter dated 13 October 2000 written on behalf of the applicant.  That letter complained that the original application for authorisation was ultra vires, misleading and deceptive, and might give rise to legal rights under the Act.  The letter was accompanied by a legal advice prepared by Nevett Ford, solicitors for the VFFCMG.  Likewise, there was a letter dated 2 November 2000 attaching submissions in support of a rejection of the application for authorisation which was accompanied by another legal advice from Nevett Ford.  Finally, there was a letter dated 16 May 2001, this time enclosing legal advice obtained from counsel.  On none of these occasions was any question of apprehended bias raised. 

The legal principles governing apprehended bias

98                  The legal principles governing apprehended bias by prejudgment are well established.  The test was stated by the High Court in Livesey v The New South Wales Bar Association (1983) 151 CLR 288 at 293.  Although that case dealt with the circumstances in which a judge should not sit to hear a case (“if ... the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it”) the statement of principle is one of general application. 

99                  Apprehended bias is determined on an objective basis: Webb v The Queen (1994) 181 CLR 41, Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd (1996) 65 FCR 215 at 226-230, Johnson v Johnson (2000) 201 CLR 488 at 492-493 and Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337.

100               The test of apprehended bias is less stringent than that of actual bias.  However, it must still be “firmly established”: R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553, and Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352.  It is not sufficient if the reasonable bystander “has a vague sense of unease or disquiet”.  Rather, something more is required: Minister for Immigration and Multicultural Affairs v Jia Legang (2001) 202 CLR 507 at 549 per Kirby J. 

101               The following comment from Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 100, per Gaudron and McHugh JJ, demonstrates the scope of the test for apprehended bias, at least in relation to prejudgment:

“A reasonable bystander does not entertain a reasonable fear that a decision-maker will bring an unfair or prejudiced mind to an inquiry merely because he has formed a conclusion about an issue involved in the inquiry.  …When suspected prejudgment of an issue is relied upon to ground the disqualification of a decision-maker, what must be firmly established is a reasonable fear that the decision-maker’s mind is so prejudiced in favour of a conclusion already formed that he or she will not alter that conclusion irrespective of the evidence or arguments presented to him or her.” (emphasis added)

Was the apprehended bias test met?

102               In my opinion, the evidence does not establish, “firmly” or otherwise, that Dr Cousins should be regarded as having, in the relevant sense, prejudged the issue before him.  The fact that the ACCC referred in its Determination on a number of occasions to the KPMG Report and, in particular, to the view expressed in that report that the existing arrangements under the BCI Act might contravene s 45, does not give rise to a finding of apprehended bias. 

103               There is little doubt that the KPMG Report was correct in concluding that those arrangements might contravene that section, as the VFFCMG itself conceded in its correspondence with the ACCC.  In other words, the report was simply stating the obvious.  That means that there is little scope for an argument regarding “prejudgment” of that issue.

104               Moreover, the criteria applicable to the KPMG Review, and the issue facing the ACCC under s 88, were in truth quite different.  The task which confronted KPMG was identified in its report.  It was not the “statutory test” for authorisation which the ACCC was required to address.  The fact that Dr Cousins was responsible for a review which ultimately recommended, inter alia, that the BCI Act be repealed, does not demonstrate prejudice in favour of a conclusion already formed, on a different issue, relating to the exercise of a statutory power under s 88, that he would not alter irrespective of the evidence or arguments presented to him. 

105               The issue to be considered under s 88 was whether the public benefits likely to result from the “proposed arrangements” were sufficient to outweigh any anti-competitive detriment that may arise, and therefore warranted the grant of an authorisation.  No reasonable bystander, properly informed as to the nature of the process under s 88, would regard Dr Cousins as having relevantly prejudged that issue.  Although there was a degree of overlap between some of the matters considered by the KPMG Review, and some of the matters incidental to the ultimate decision taken by the ACCC, there was “no conclusion already formed ... irrespective of the evidence or arguments presented” in relation to that ultimate decision. 

106               There seems to me to be another difficulty with the applicant’s contention that Dr Cousins’ involvement in the authorisation process should be vitiated upon the ground of apprehended bias.  It is suggested by Aronson and Dyer, Judicial Review of Administrative Action, 2^nd edition, at 478 that the “prejudgment principle” applies only where issues of fact or credibility are involved.  It follows that a judge’s ruling in an earlier case on the same point of law as arises in the instant case is no ground for disqualification.  That view finds support in Gascor v Ellicot [1997] 1 VR 332 at 348 where Ormiston JA said:

“... it is by no means clear that, if a judge, arbitrator or tribunal member had decided the very same factual issue in the past, that that necessarily must lead to a finding of reasonable apprehension of possible bias which would result in disqualification on that ground in a subsequent dispute. . . . [W]hat kind of findings will lead to relevant apprehension of bias must depend upon their significance and nature.  Findings as to credibility or ultimate findings as to alleged misbehaviour may more easily be seen as leading to disqualification than incidental findings of fact (and certainly law) or findings which depend upon expert evidence and which may be common to many disputes.”

107               Yet another difficulty confronting the applicant is that the powers exercised under s 88 are reposed in the ACCC, and not in Dr Cousins, personally.  The authorisation granted in this instance was considered by all five Commission members, and the Chairperson, and approved by them all.  

108               It is true that in Stollery v Greyhound Racing Control Board (1972) 128 CLR 509 the High Court held that the presence of the accuser during the deliberations and decisions of the Board, when exercising disciplinary functions, rendered the proceedings invalid.  That was so, notwithstanding the fact that he did not participate in those deliberations.  However, it must be borne in mind that Stollery concerned a body exercising what may be regarded as “quasi-judicial” functions, and not, as in the present case, “administrative” functions.  Moreover, the person whose presence vitiated the decision of the Board in Stollery seems to have been regarded as having displayed actual bias, and not as in this case merely apprehended bias. 

109               It must be also borne in mind that the application of the principles of apprehended bias to decision makers other than judges may differ because the task committed to the decision maker itself differs: Jia Legeng (supra) at 564-565 per Hayne J:

“In the case of a court, it will usually be self-evident that the issue, if an issue of fact, is one which ought to be considered afresh for the purposes of the particular case by reference only to the evidence advanced in that case.  Other decision-makers, however, may be under no constraint about taking account of some opinion formed or fact discovered in the course of some other decision.  Indeed, as I have already pointed out, the notion of an ‘expert’ tribunal assumes that this will be done.”

110               Gleeson CJ and Gummow J agreed at 538 with the observations on this subject made by Hayne J.

111               The ACCC, when considering whether to grant an authorisation under s 88, is exercising a statutory function which is analogous, in some respects, to the function performed by the Director of Public Prosecutions in deciding whether or not to grant an undertaking under s 9(6) or 9(6D) of the Director of Public Prosecutions Act 1983 (Cth). Of course an authorisation under s 88 operates prospectively, whereas an undertaking, which is an indemnity from prosecution, operates retrospectively.  The nature of the power being exercised by the ACCC differs significantly from an exercise of judicial power, or even an exercise of administrative power which is “quasi-judicial”.  In accordance with Jia Legeng,that fact is relevant when determining whether or not there is a reasonable apprehension of bias based upon prejudgment. 

112               The ACCC, in exercising its power under s 88, acts through its members.  They are all persons who are qualified for appointment, pursuant to s 7(3)(a).  They must have “knowledge of, or experience in, industry, commerce, economics, law, public administration or consumer protection ...”.  In Bertrand Russell’s terms, they are persons who are expected to have open minds, but not ones which are empty.

113               It should also be noted that the ACCC had previously granted three authorisations in cases involving the collective negotiation of chicken grower contracts (two in South Australia and one in Tasmania).  As best as one can determine, the circumstances in those cases were analogous to the present case.  Those decisions were all made before Dr Cousins joined the ACCC.  That suggests that, even if, contrary to the conclusions expressed above, Dr Cousins should not have continued to participate in the authorisation process, his involvement did not in any way affect the outcome of that process. 

114               In Stead v State Government Insurance Commission (1986) 161 CLR 141 the High Court held that where there has been a breach of the rules of natural justice, but it is clear that this had no effect on the outcome of the deliberations of the ultimate decision maker, it may be appropriate for the Court to refuse a remedy in the exercise of its discretion.  See also Nguyen Thanh Trong v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1996) 68 FCR 463 at 478.  Accordingly, this is yet another basis upon which the applicant’s claim in the present case should be refused.

The waiver issue

115               I have concluded that the claim for apprehended bias on the basis of prejudgment is not made out.  I have also concluded that even if that claim were made out, the relief sought should be refused in the exercise of the Court’s discretion.  That is because it is clear that Dr Cousins’ involvement in the authorisation process had no bearing upon the ultimate outcome.

116               In view of those findings, it is not strictly necessary to consider the ACCC’s alternative submission that the applicant waived any right which he might have had to object on the ground of apprehended bias.  Nonetheless, I propose to briefly address that issue. 

117               In Vakuata v Kelly (1989) 167 CLR 568, which is the leading authority on this point, Brennan, Deane and Gaudron JJ said at 572:

“Where such comments which are likely to convey to a reasonable and intelligent lay observer an impression of bias have been made, a party who has legal representation is not entitled to stand by until the contents of the final judgment are known and then, if those contents prove unpalatable, attack the judgment on the ground that, by reason of those earlier comments, there has been a failure to observe the requirement of the appearance of impartial judgment.  By standing by, such a party has waived the right subsequently to object.  The reason why that is so is obvious.  In such a case if clear objection had been taken to the comments at the time when they were made or the judge had been asked to refrain from further hearing the matter, the judge may have been able to correct the impression of bias which had been given or alternatively may have refrained from further hearing.  It would be unfair and wrong if failure to object until the contents of the final judgment were known were to give the party in default the advantage of an effective choice between acceptance and rejection of the judgement and to subject the other party to a situation in which it was likely that the judgment would be allowed to stand only if it was proved to be unfavourable to him or her.”

118               Dawson J said at 577:

“I do not mean to suggest an objection would be waived if it is not made in formal or even explicit terms.  The circumstances may be such that it is plain, without it being put into words, that a judge is being asked to consider his position having regard to the requirement of impartiality.”

119               Toohey J said at 587:

“That is not say that the litigant in such a position must expressly call upon the judge to withdraw from the case.  It may be enough that Counsel make clear that objection is taken to what the judge has said, by reason of the way in which the remarks will be viewed.”

120               As noted earlier, the ACCC submitted that the applicant had ample opportunity to object to Dr Cousins’ involvement in the authorisation process on the basis of prejudgment, but had not done so.  It submitted that this failure to object amounted to a waiver.

121               It will be recalled, that the applicant submitted that, in a conversation on 24 October 2000, between Mr Clarke, Mr Jones and Mr Grimwade, an “objection”, albeit one couched in lay terms, was voiced by Mr Jones to Mr Grimwade.  The “objection” was said to consist of the query, by Mr Jones to Mr Grimwade as to whether Dr Cousins had a “conflict of interest” owing to his involvement in the KPMG Review. 

122               On the applicant’s own submission, the extent of the “objection” was limited to that single query, raised at the end of the meeting.  To that query, Mr Jones received an apparently responsive answer to the effect that, given that Dr Cousins did not own a chicken farm, and appeared to have no financial interest in the chicken industry, he had no “conflict of interest”.  That answer appears to have satisfied Mr Jones, as he did not press the matter further.

123               It must be noted that although Mr Grimwade was a senior manager of the ACCC, he was not a member of the Commission.  He was plainly not the appropriate person to deal with an objection to Dr Cousins’ continued involvement in the application for authorisation.  Any such objection should have been made directly to Dr Cousins, or alternatively to the Commission itself. 

124               The evidence makes it clear that the applicant had numerous opportunities to raise such an objection with the ACCC, both orally, and in writing.  However, he did not do so.  In my opinion, the question put to Mr Grimwade by Mr Jones did not amount to an “objection” to Dr Cousins’ continued involvement in the authorisation process.  There is of course no requirement that an applicant complain of apprehended bias in “formal” terms.  However, if that is not done, the circumstances must be plain, without it necessarily being put into words, that the body being asked to consider the question of apprehended bias is adequately apprised of the fact that that issue is being raised. 

125               In my opinion, the applicant never adequately apprised the ACCC of such an objection, let alone the basis upon which it rested.  His query about a possible “conflict of interest” was not sufficient, in the circumstances, to amount to such an objection. 

126               The applicant had available to him legal advice from both solicitors and counsel.  He raised with the ACCC specific and highly technical objections to the validity of the authorisation, including an elaborate argument based upon the construction of s 88.  It would have been a matter of no great difficulty to spell out, with some degree of precision, an objection to Dr Cousins’ continued involvement in the authorisation process, and to address that objection to the appropriate person.  His failure to do so, in my view, constituted a waiver.

ALTERNATIVE REMEDY

127               The ACCC submitted that the application for review should be dismissed, in the exercise of the Court’s discretion, because the applicant had available to him an alternative remedy which he had not pursued.  He could have applied to the Australian Competition Tribunal, pursuant to s 101 of the Act, for a merits review of the decision to grant an authorisation but had elected not to do so.  It was submitted that such an application was an alternative remedy for the purposes of s 10(2)(b) of the ADJR Act, and led to the conclusion that the relief sought should be refused. 

128               The applicant submitted that the primary basis upon which he sought judicial review was that the ACCC did not have power to grant the authorisation because the application had been made by a party who lacked standing.  A review on the merits by the Australian Competition Tribunal would not have cured that deficiency and was, in any event, inappropriate.  Such a review would have been both lengthy and expensive, whereas judicial review could resolve the issue far more expeditiously.

129               Having regard to my earlier findings, it is unnecessary to resolve this issue.  However, without finally determining the matter, I am inclined to the view that had the applicant made good either of his claims in this proceeding, I would not have denied him relief upon this ground. 

CONCLUSION

130               For the reasons set out above, the application for review must be dismissed.  The applicant must pay the ACCC’s costs.  The second respondent, Marven, did not appear in the proceeding, and it is therefore unnecessary that any order for costs be made in relation to it.

Associate:

Dated:              27 August 2002