ACCC v Leahy Petroleum [2004] FCA 1678

FEDERAL COURT OF AUSTRALIA

ACCC v Leahy Petroleum [2004] FCA 1678

TRADE PRACTICES – price-fixing understanding – whether communications between competitors concerning retail petrol price increases constitute evidence of an understanding that provides for the fixing or controlling of prices – whether participation in the communications and increasing the retail price of petrol constitute giving effect to the understanding – consideration of circumstances in which a servant’s or agent’s conduct in making and giving effect to a price-fixing understanding is binding on the principal

COURTS – practice and procedure - submission of no case to answer – whether respondents should not be permitted to make no case submissions at the conclusion of the applicant’s case unless all of the respondents elect not to call evidence

EVIDENCE – whether the Ahern principle applies to persons involved in a contravention of s 45(2) of the Trade Practices Act 1974 (Cth) – consideration of circumstances in which admissions of a servant or agent in relation to past events are admissible against the principal - consideration of circumstances in which false denials may constitute evidence of consciousness of guilt

Trade Practices Act 1974 (Cth) ss 4(1), 45(2)(a)(ii), 45(2)(b)(ii), 45A, 75B(1) and 84(2)

Evidence Act 1995 (Cth) s 57(2), 87(1)(b) and 87(1)(c)

Federal Court Rules O 35 r1

Amadio v Henderson (1998) 81 FCR 149

Yorke v Lucas (1985) 158 CLR 661

Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1982) 44 ALR 557

Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 201 ALR 414

Australian Competition and Consumer Commission v Australian Medical Association Western Australia Branch Inc (2003) 199 ALR 423

News Limited v South Sydney District Rugby League Football Club Limited (2003) 215 CLR 563

Australian Competition and Consumer Commission v Pauls Ltd (2003) ATPR 41-911

Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1983) 48 ALR 361

Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (No 8) (1999) 92 FCR 375

Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 5 FCR 140

Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344

Trade Practices Commission v Service Station Association Limited (1993) 44 FCR 206

Trade Practices Commission v Email Ltd (1980) 31 ALR 53

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 129 FCR 339

Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446

Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236

Ahern v The Queen (1988) 165 CLR 87

Briginshaw v Briginshaw (1938) 60 CLR 336

Trade Practices Commission v George Weston Foods Ltd. (No 2) (1980) 43 FLR 55

Menzies v Australian Iron & Steel Ltd. And Hill (1952) 52 SR (NSW) 62

Hummerstone v Leary [1921] 2 KB 664

James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347

J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (Western Australian Branch) (No 2) (1992) 38 FCR 458

Trade Practices Commission v Allied Mills Industries Pty Ltd (No 3) (1981) 37 ALR 225

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

Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1

Lloyd v Grace, Smith & Co. [1912] AC 716

Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719

Walplan Pty Ltd v Wallace (1985) 8 FCR 27

Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) (2001) 119 FCR 1

Tesco Supermarkets Ltd. v Nattrass [1972] AC 153

Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500

Armagas Ltd v Mundogas S.A. [1986] 1 AC 717

Clayton Robard Management Ltd & Anor v Siu (1988) 6 ACLC 57

Freeman & Lockyer v Buckhurst Park Properties [1964] 2 QB 480

Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 26 ALR 609

Australian Competition and Consumer Commission v Mayo International Pty Ltd (1998) ATPR 41-653

Shears v Chisholm [1994] 2 VR 535

Edwards v The Queen (1993) 178 CLR 193

Challenge Charter Pty Ltd and Ors v Curtain Bros (Qld) Pty Ltd and Others [2004] VSC 1

R v Camilleri (2001) 119 A Crim R 106

Jones v Dunkel (1959) 101 CLR 298

Weissensteiner v The Queen (1993) 178 CLR 217

Tradestock Pty Ltd v TNT (Management) Pty Ltd (1978) 17 ALR 257

Dowling v Dalgety Australia Limited (1992) 34 FCR 109

R v Blake & Tye (1844) 6 QB 126

Tripodi v The Queen (1961) 104 CLR 1

R v Masters (1992) 26 NSWLR 450

Milandinovic v The Queen (1993) 47 FCR 190

R v Associated Northern Collieries (1911) 14 CLR 387

Sheldon v Sun Alliance Limited (1988) 50 SASR 236

Sheldon v Sun Alliance Australia Limited (1989) 53 SASR 97

Italiano v Barbaro (1993) 40 FCR 303

Beach Petroleum NL v Johnson (1993) 43 FCR 1

Coomera Resort Pty Ltd v Kolback Securities Limited [2004] 1 Qd R 1

Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34

Hamilton v Whitehead (1988) 166 CLR 121

Nescor Industries Group Pty Ltd v MIBA Pty Ltd (1997) 150 ALR 633

ACCC v LEAHY PETROLEUM PTY LTD AND OTHERS

V315 OF 2002

MERKEL J

17 DECEMBER 2004

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 315 OF 2002

BETWEEN:	ACCC APPLICANT
AND:	LEAHY PETROLEUM PTY LTD FIRST RESPONDENT LEAHY PETROLEUM - RETAIL PTY LTD SECOND RESPONDENT TRITON 2001 PTY LTD THIRD RESPONDENT J. CHISHOLM PTY LTD FOURTH RESPONDENT JUSTCO PTY LTD FIFTH RESPONDENT APCO SERVICE STATIONS PTY LTD SIXTH RESPONDENT BRUMAR (VIC) PTY LTD SEVENTH RESPONDENT JOHN ROBERT GOURLEY EIGHTH RESPONDENT ROBERT ANDREW LEVICK NINTH RESPONDENT ROBIN HERBERT PALMER TENTH RESPONDENT ANTHONY BRIAN ROSENOW ELEVENTH RESPONDENT JUSTIN MATTHEW BENTLEY TWELFTH RESPONDENT PETER JOSEPH ANDERSON THIRTEENTH RESPONDENT GARRY VICTOR DALTON FOURTEENTH RESPONDENT CAVALLO VOLANTE PTY LTD (FORMERLY KNOWN AS BALGEE OIL PTY LTD) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) FIFTEENTH RESPONDENT PETER ROBERT MULLER SIXTEENTH RESPONDENT
JUDGE:	MERKEL J
DATE OF ORDER:	17 DECEMBER 2004
WHERE MADE:	MELBOURNE

THE COURT DIRECTS THAT within 14 days the parties file minutes of proposed directions for the further hearing in relation to penalty or any other remedies or relief that is appropriate.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 315 OF 2002

BETWEEN:	ACCC APPLICANT
AND:	LEAHY PETROLEUM PTY LTD FIRST RESPONDENT LEAHY PETROLEUM - RETAIL PTY LTD SECOND RESPONDENT TRITON 2001 PTY LTD THIRD RESPONDENT J. CHISHOLM PTY LTD FOURTH RESPONDENT JUSTCO PTY LTD FIFTH RESPONDENT APCO SERVICE STATIONS PTY LTD SIXTH RESPONDENT BRUMAR (VIC) PTY LTD SEVENTH RESPONDENT JOHN ROBERT GOURLEY EIGHTH RESPONDENT ROBERT ANDREW LEVICK NINTH RESPONDENT ROBIN HERBERT PALMER TENTH RESPONDENT ANTHONY BRIAN ROSENOW ELEVENTH RESPONDENT JUSTIN MATTHEW BENTLEY TWELFTH RESPONDENT PETER JOSEPH ANDERSON THIRTEENTH RESPONDENT GARRY VICTOR DALTON FOURTEENTH RESPONDENT CAVALLO VOLANTE PTY LTD (FORMERLY KNOWN AS BALGEE OIL PTY LTD) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) FIFTEENTH RESPONDENT PETER ROBERT MULLER SIXTEENTH RESPONDENT
JUDGE:	MERKEL J
DATE:	17 DECEMBER 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

Page No.

1. Introduction 5-6

2. The Ballarat Petrol Market 6-16

(a) Background 6-8

(b) The competitors 8-13

(i) Triton – Wholesaler 8-10

(ii) Leahy Petroleum, Chisholm and Balgee –

Wholesalers and Retailers 10-11

(iii) Leahy Retail, Justco, Brumar – Pure Retailers 12

(iv) Apco – Discounter 12-13

3. Price-fixing Arrangements and Understandings 16-23

(a) The Act 16-18

(b) The cases 18-23

4. The ACCC’s Case Under ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Act 24-32

(a) The existing arrangements 24-28

(b) The June 1999 arrangement 28-29

(d) Categories of evidence 29-32

5. The Defences 32-34

6. The No-Case Submissions 34-38

7. Authority of Anderson, Dalton and Rosenow 38-48

(a) The law 39-43

(b) The facts 43-46

(i) Dalton 43-44

(ii) Rosenow 44-46

(i) Dalton 48

(ii) Rosenow 48

8. Evidence Relating to the Existing Arrangements 48-53

9. Evidence Relating to the Price-Fixing Understanding During the

Relevant Period 53-128

(a) Apco/Anderson 55-68

(i) Zala-Anderson 55-56

(ii) Bentley-Anderson 56-63

(iii) Palmer and Carmichael-Anderson 63-65

(iv) Apco Franchisees-Anderson 65-66

(v) Conclusions 66-68

(b) Brumar/Dalton 69-77

(i) Evidence of Brumar/Dalton’s role in the price-fixing

understanding 70-76

(ii) Conclusions 76-77

(i) Rosenow’s role in the existing arrangements 77-80

(ii) Evidence of Triton’s and Rosenow’s role in the

price-fixing understanding 80-95

Zala 81-82

Levick 83-84

Dow 84-85

Bentley 85-86

Edwards 86

Triton’s s 155 responses 87-89

Rosenow’s s 155 examination 89-92

Rosenow’s diary 92-95

(iii) Conclusions 95-96

(d) False denials 96-106

(i) The law 96-98

(ii) Brumar’s and Dalton’s statements 98-104

(iii) Rosenow 104-106

(e) Jones v Dunkel 106-107

(f) Meetings 107-113

(i) Meeting at John Gourley’s house (June 1999) 107-108

(ii) Meeting at Zala’s office (August 2000) 108-109

(iii) Meeting at the Olive Grove Cafe (December 2000) 109-111

(iv) Other meetings 111-112

(v) Conclusion 112-113

(g) Annexure A and Exhibit DA 13 113-117

(h) Evidence of giving effect to the price-fixing understanding during

the relevant period 117-128

(i) The ACCC’s case 117-122

(ii) Triton 122-123

(iii) Rosenow 123

(iv) Brumar 123-124

(v) Apco 124-125

(vi) Conclusion 125-128

10. Ahern 128-144

(a) The law 128-131

(b) The price-fixing understanding 132-133

(i) Apco/Anderson 134-135

(ii) Brumar/Dalton 135-136

(iii) Triton/Rosenow 136-138

(d) The Ahern evidence 138-144

(i) Apco/Anderson 138-140

Levick’s testimony 138-139

Zala’s testimony 139

Palmer’s testimony 139-140

(ii) Brumar/Dalton 140-143

(iii) Triton/Rosenow 144

11. Contraventions of ss 45(2)(a)(ii) and 45(b)(ii) 144-150

(a) Triton and Rosenow 145-146

(b) Apco and Anderson 147-148

(d) Balgee 150

12. Conclusions 150-151

1. Introduction

1 The applicant (“the ACCC”) has applied to the Court for declarations, injunctions, pecuniary penalties and other relief in relation to conduct alleged to have been engaged in by the corporate respondents in contravention of ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) (“the Act”).

2 The ACCC’s claims are as follows. The corporate respondents arrived at a price-fixing arrangement or understanding (“the price-fixing understanding”) to which they gave effect between 22 June 1999 and 8 December 2000 (“the relevant period”). Under the price-fixing understanding the individual respondents, acting on behalf of their respective corporate principals, brought periods of discounted retail petrol prices to an end by fixing or controlling, or providing for the fixing or controlling of, increases in the retail prices of unleaded liquid petroleum and super grade petrol (“petrol”) in the wider Ballarat area of Victoria. Pursuant to s 75B(1) of the Act the individual respondents were persons involved in the contraventions of the Act by their respective corporate principals, who were the corporate respondents.

3 The parties to the price-fixing understanding were the eight corporate respondents, each of which was engaged in the business of supplying petroleum within the Ballarat retail or wholesale petrol market during the relevant period. Those respondents were Leahy Petroleum Pty Ltd (“Leahy Petroleum”) and Leahy Petroleum - Retail Pty Ltd (“Leahy Retail”) (which together are referred to as “the Leahy Companies”); Triton 2001 Pty Ltd (“Triton”); J. Chisholm Pty Ltd (“Chisholm”); Justco Pty Ltd (“Justco”); Apco Service Stations Pty Ltd (“Apco”); Brumar (Vic) Pty Ltd (“Brumar”); and Balgee Oil Pty Ltd (“Balgee”) (which recently changed its name to Cavallo Volante Pty Ltd).

4 The relationship between the eight individual respondents ‑ John Robert Gourley (“Gourley”), Robert Andrew Levick (“Levick”), Robin Herbert Palmer (“Palmer”), Anthony Brian Rosenow (“Rosenow”), Justin Matthew Bentley (“Bentley”), Peter Joseph Anderson (“Anderson”), Garry Victor Dalton (“Dalton”), Peter Robert Muller (“Muller”) and an individual Brendan Zala (“Zala”), who is not a respondent ‑ and the corporate respondents was as follows:

Corporate Respondent	Brand	Representative	Position
Leahy Petroleum	BP	Palmer	General Manager
Leahy Retail	BP	Palmer	General Manager
Triton	Shell	Rosenow	Ballarat Area Manager
Chisholm	Ampol/Caltex	Zala	Ballarat Manager
Justco	Swift	Bentley	Director and General Manager
Apco	Apco	Anderson	Director and General Manager
Brumar	Shell	Dalton	Retail Area Manager
Balgee	Mobil	Gourley Muller Levick	General Manager Ballarat Operations Manager Ballarat Area Sales Representatives

5 The Leahy Companies, Chisholm, Justco and some of the individual respondents (Palmer, Bentley, Gourley, Levick and Muller) admitted to the contraventions of the Act alleged against them. Balgee did not admit, but did not contest, the ACCC’s claims against it. The remaining corporate respondents (Triton, Brumar and Apco) and the individual respondents who acted on their behalf (Rosenow, Dalton and Anderson), who I compendiously refer to as “the contesting respondents”, contested the ACCC’s claims against them although they did not seriously challenge the ACCC’s case against the Leahy Companies, Chisholm, Justco and Balgee. Nonetheless, there were scarcely any points of law and fact that were not taken by one or other of the contesting respondents. In order to ensure that these reasons are not unacceptably long, I have confined them to the significant and consequential issues that are capable of affecting the outcome of the ACCC’s claims: see Amadio v Henderson (1998) 81 FCR 149 at 175.

2. The Ballarat Petrol Market

(a) Background

6 The Ballarat petrol market was alleged to encompass the area in and around Ballarat. However, the evidence focused primarily on the retail and wholesale supply and sale of petrol in Ballarat itself. In that market petrol was purchased by consumers during the relevant period primarily on the basis of price, rather than brand name. Because of the significance of price, retailers prominently posted their prices (“board prices”) at their sites. Also, during the relevant period, Ballarat had a large number of retail outlets with the consequence that the retail market in Ballarat was intensely competitive and was so highly price sensitive that even a difference in price of less than one cent per litre (“cpl”) could significantly influence the volume of petrol sold at a particular retail outlet.

7 In addition to the outlets of the corporate respondents there were other retail petrol outlets in Ballarat which were owned by entities which are not parties to the present proceeding. The outlets were United, Safeway Plus, Alien, Ampol Road Pantry (a Caltex franchisee), and Liberty (IGA/Jewel). While the ACCC has not alleged that the entities conducting those outlets contravened any provision of Pt IV of the Act, the price movements of the outlets were influenced by the price-fixing understanding alleged by the ACCC.

8 The price of petrol in Ballarat was usually determined by the board price at the high visibility sites, which are large multi-bowser sites located on major roads with significant passing traffic. Such sites, which include the sites of companies that operate as petrol discounters, turn over a high volume of petrol due to their prominent locations and their capacity to accommodate a large number of customers. A reduction in the board price at the high visibility sites can have a significant impact on the volume of petrol sold at other sites operating in Ballarat if an equivalent price reduction is not also made at the other sites. The high visibility sites included sites operated by the Leahy Companies (BP), Apco (Apco), Chisholm (Ampol/Caltex), Justco (Swift), Brumar (Shell), United (United), and Balgee (Mobil).

9 In general, retailers who are independent of their petrol suppliers purchase petrol from the distributors at the posted lessee price (“PLP”). The PLP is treated as a nominal price because distributors offer their independent retailers price support to enable the retailers to maintain market share and competitiveness. Price support is given by way of a rebate to the retailer. Thus, during a period of discounting, price support enables the retailer to remain competitive by discounting to below the PLP in order to match the prices of its competitors, but making a gross profit which is usually 3 cpl.

10 The low visibility sites are generally smaller sites that are not located on main roads and are usually operated in conjunction with another business such as an automotive repair business. While these sites also need to be price competitive, they tend to follow the market price at high visibility sites although, being lower volume sites, they are not as dependent on sales volumes for their economic sustainability. In Ballarat the low visibility sites included sites of independent Shell retailers supplied by Triton and the sites selling the Liberty (IGA/Liberty) and Alien (Alien) brands. In addition, the Leahy Companies (BP) and Chisholm (Ampol/Caltex) operated a number of low visibility sites in Ballarat.

11 Finally, petrol pricing in Ballarat followed a cyclical pattern of falling and rising retail prices. The pattern involved prices being discounted to relatively low levels by stepped decreases over a period until they bottomed out, after which the discounting came to an abrupt end with a substantial price increase. If that increase took effect in the market (ie by “sticking”) the discounting period terminated until the discount cycle re-commenced.

(b) The competitors

12 Each of the corporate respondents operated as a wholesale distributor or retailer of petrol in Ballarat. The corporate respondents’ respective purchase arrangements influenced the extent to which they had the capacity to compete with the other corporate respondents during a discount cycle.

(i) Triton - Wholesaler

13 Triton was a wholesale distributor which supplied Shell branded petrol to the independent retail outlets known as Brown Hill, Sunset Strip, Barkly Street, B & G Beaufort and Taxi Co-op (“the independent Shell retailers”). Although the retailers determined the retail prices of the petrol they sold, the ACCC contends that during discount cycles Triton, through its PLP and price-support system, effectively determined the retail price of petrol sold by the independent Shell retailers.

14 Triton received price support from its supplier, Shell, and provided price support to the independent Shell retailers during discount cycles. The two price-support systems differed substantially. As between Shell and Triton an in-principle level of support was set on an annual basis, based on Triton’s entire business across all geographic markets. Due to the small size of the Ballarat market relative to Triton’s overall business, periods of discounting in Ballarat did not tend to significantly impact the overall level of support that Triton received from Shell.

15 Under Triton’s price-support system Triton provided a guaranteed 3 cpl margin to the independent retailers on all petrol sold. In situations where the retail price of petrol exceeded the PLP by at least 3 cpl, resellers were able to make their 3 cpl margin without price support being provided. To the extent that the independent retailers could not achieve that margin, for example when the market price of petrol was lower than the PLP price, Triton made up the difference by offering price support sufficient to enable the retailers to achieve their 3 cpl margin. Although price support was given as a rebate, its effect was to reduce the PLP payable by the independent retailers to Triton.

16 The purpose of price support was to enable the independent Shell retailers, which were low volume sites in Ballarat, to survive in the highly competitive market. Consequently, Triton’s supported price was usually the current discounted market price. In practice, although the independent Shell retailers were under no obligation to set their board prices at the supported price, the independent Shell retailers adjusted their board prices to that price. The reason for that can be understood from the following example.

17 If Triton’s PLP was 80 cpl but the Ballarat market had discounted the retail price to 75 cpl, price support was usually given by Triton to its retailers to 75 cpl. As the supported price was calculated to guarantee the retailer a 3 cpl margin, the rebate of 8 cpl meant the effective PLP was reduced to 72 cpl in respect of the petrol sold at the supported price. If the retailer dropped below the supported price, as it was entitled to do, it would bear the cost of doing so. Thus, if its retail price was 74 cpl it would only be receiving a gross profit of 2 cpl as the rebate of 8 cpl remained constant, thereby reducing the effective PLP to 72 cpl. While, in theory, dropping below the supported price may increase volume by pricing below the market, the reality was that competitors were likely to quickly match the lower board price so as to defeat any temporary advantage to be gained by a decrease in price. In any event, it was generally accepted that the independent retailers required a margin of 3 cpl to maintain the profitability of their petrol sales. As a result, there was little incentive for the independent Shell retailers to drop below the supported price.

18 If a retailer rose above the supported price, as it was entitled to do, it might earn more than 3 cpl but it would be likely to lose volume because its price would be above the market. Further, as price support was designed to enable Triton and its independent retailers to maintain market share, Triton may not have taken a favourable view of a retailer seeking to gain additional profit at the cost of losing market share. As a result, there was also little incentive for the independent Shell retailers to sell above the supported price.

19 Without price support, in order to make the 3 cpl margin that was considered by the retailers as the benchmark for their board pricing, the independent Shell retailers would have had to increase their board prices to PLP plus 3 cpl.

20 In practice, Triton offered price support during the discount cycle to enable its independent Shell retailers to follow the market down but retain their 3 cpl profit. When price support was reduced or withdrawn, the price set by the independent Shell retailers generally rose to the higher supported price or, in the absence of support, to the price that was necessary to secure the 3 cpl margin.

21 While Triton argued that it was not a competitor in the retail market, it is clear that in the usual course of events any reduction in, or withdrawal of, the price support provided by Triton to its retailers would be likely to enhance its profitability. Thus, Triton had a commercial interest in price increases occurring as they enabled it to withdraw or reduce price support without Triton or its independent retailers losing market share or competitiveness. Of course, the price support provided by Shell to Triton better enabled Triton to support its retailers. However, any additional price support given by Shell during a discount cycle could be expected to be reduced or withdrawn when prices increased.

(ii) Leahy Petroleum, Chisholm and Balgee – Wholesalers and Retailers

22 Leahy Petroleum supplied BP branded petrol as a wholesale distributor to independent retail outlets and sold BP branded petrol to the public at sites that it owned and operated as well as at consignment sites that it owned but did not operate. Leahy Petroleum controlled the retail price of petrol at its company-owned and consignment sites.

23 Chisholm was a wholesale distributor of petrol to Caltex and Ampol branded service stations and, on rare occasions, Chisholm would distribute petrol to Caltex franchisees on behalf of Caltex. Chisholm also retailed Ampol/Caltex branded petrol to the public at sites that it owned and operated, as well as at consignment sites that it did not operate. Chisholm had direct control over the retail price of petrol at both its company-owned and its consignment sites.

24 Finally, Balgee also had wholesale and retailing arms that distributed Mobil branded petrol to independent resellers for sale to the public and sold Mobil branded petrol to the public via company owned and operated sites and commission agents. Balgee set the retail price of petrol at the latter two types of sites.

25 It is unnecessary to consider the detail of the pricing mechanisms employed by the Leahy Companies, Chisholm, Justco and Balgee to ensure that petrol price increases took effect pursuant to the price-fixing understanding at the sites for which they were responsible. It is sufficient to observe that it is likely that the discount cycle was a costly exercise for these respondents, and therefore they had a substantial incentive to increase their prices in order to restore profitability. Thus, one or more of those respondents (“the initiating respondents”) sought to bring the discount cycle to an end by triggering, or participating in, a coordinated price increase during the relevant period by increasing board prices to a targeted retail price. The proposed price increase was often initiated by a price-increase call (see below) between Levick (Balgee) and Zala (Chisholm) and the proposed increase was usually made without delay by the intiating respondents. The mechanism usually employed was that one or more of the initiating respondents would initiate the proposed price increase by taking the necessary steps to ensure that notice of the increase (“a price-increase call”) was given to the other corporate respondents and by increasing retail prices to the proposed price. The price increase would not “stick” unless all of the high visibility sites in the Ballarat petrol market increased their retail prices to match the increase of the initiating respondents. If that did not occur within a relatively short period the price increase would collapse and the prices at the various retail outlets controlled by the initiating respondents, and any other respondents that had increased their prices, would return to the discounted levels they were at before the increase.

(iii) Leahy Retail, Justco, Brumar – Retailers

26 Three of the corporate respondents operated exclusively as retailers. Leahy Retail sold BP branded petrol, Justco sold Swift branded petrol and Brumar sold Shell branded petrol. Leahy Retail and Justco, who were initiating respondents, retailed petrol to the public at company owned and operated sites, while Brumar was a Multisite Shell Franchisee (“MSF”).

27 Brumar’s position was different. It received price support from Shell which guaranteed a 3 cpl margin on petrol sold. Shell’s price support to Brumar was designed to enable it to compete in the Ballarat market. Thus, the level of price support Brumar received from Shell generally determined Brumar’s retail price during a discount cycle. Similarly, a reduction in, or withdrawal of, Shell’s price support would be likely to result in a corresponding increase in Brumar’s retail price. In addition, profit support was given by Shell to a MSF on a monthly basis to cover any shortfall or loss. Of the 86 sites that Brumar operated, some made a profit but many made a loss. The combined site profits and losses were calculated and any net loss was to be paid to the MSF by Shell in the form of profit support. While Shell’s price and profit support are likely to have shielded Brumar from the losses it would otherwise have incurred during discounting cycles it was obviously in Shell’s interest for a discount cycle to be brought to an end. Although it is not altogether clear that Brumar had a direct interest in the cycle coming to an end, it is likely that it saw its interest and Shell’s interest as coinciding in that regard.

(iv) Apco-Discounter

28 Apco sold Apco branded petrol to the public through commission agents who received a commission of between 1.1 and 1.5 cpl on petrol sold. Apco purchased petrol direct from oil companies at significantly discounted rates but, in return, Apco had no entitlement to seek price support. It operated as a discounter with the consequence that when the price cycle was at the higher levels it was able to discount and still make significant profit. On the other hand, when the cycle was at the lower price levels its margins were reduced and in many instances, subject to income it earned from store trading, it traded at a loss. Accordingly, it was generally in Apco’s commercial interest for the discount cycle to be brought to an end so that it could continue its role as a petrol discounter but at higher, rather than lower, price levels. However, the royalties payable on store sales and Apco’s petrol sales in other areas alleviated the losses that were being incurred at the Ballarat sites at the lower end of the cycle.

(c) The Ballarat Price Cycle

29 Board prices at retail sites during the relevant period in the Ballarat petrol market followed a price cycle that was characterized by gradual decreases in price followed by a sudden and significant increase. The Ballarat price cycle commenced with board prices being at about the same level at most sites. The discounters in the market would reduce their board prices by up to 2 cpl, thus offering petrol at prices that were lower than at most of the other sites. In response, other sites in the market would reduce their board prices to approximate the new lower price. After the market price had moved to the lower price, the discounters would again reduce their board prices by up to 2 cpl. Other sites would again follow. Significant reductions were less frequent at the lower end of the cycle reflecting the fact that the lower prices were more difficult to sustain.

30 When petrol prices were at the lowest end of the cycle one or more sites would increase their board prices suddenly and significantly by up to 8 to 10 cpl. When the high visibility sites matched the increase by raising their board prices to the same price or a similar price, the new higher price took effect or, as was put by the ACCC, the new price “stuck.” Some time after the increase, the discount cycle would recommence, but from the higher, rather than the lower, levels in the cycle.

31 For a price increase to “stick” it was critical for all of the key sites to increase their price within a short period of time. Generally speaking the discounters, such as Apco and United, endeavoured to be the last to increase, and first to decrease, their board prices. If the discounters did not increase their board prices within a relatively short period, the price rise would not “stick” and board prices at most sites would fall back to the pre-increase level. Likewise, if the high visibility sites did not follow the rise, the increase would not “stick.”

32 The duration of the Ballarat petrol price cycle altered over time. In the period prior to 1999, when competition in the Ballarat petrol market was not fierce, cycles endured for periods of at least four to six weeks. During this period, there were occasions when the retail price of petrol remained constant for as long as three months.

33 When the United branded service station entered the Ballarat market in March 1999, price competition increased and the price cycle accelerated dramatically, with the discount cycle becoming more frequent. This happened because United, a discounter, aggressively challenged Apco’s position as the discount leader. During this period, if United’s board price fell below that of Apco, Apco would quickly reduce its price and vice versa. The rest of the retail sites followed the discounters down in order to maintain market share. In this extremely volatile market, price cycles could occur over periods of one to two weeks.

34 Professor Philip Williams, an economist, gave evidence about whether, in terms of economic theory, the Ballarat price cycle reflected a highly competitive market or, rather, reflected collusion among retailers in that market. Professor Williams’ evidence may be summarised as follows. Discounters attempt to gain volume by undercutting the prevailing market price. The stepped decreases in the Ballarat market evidenced the fact that discounters had an incentive to reduce the retail price by only as much as was necessary to increase their sales volume. Since the market was extremely price sensitive, even a small decrease in price could provide the benefit of increased volume to discounters. In order to protect their market share, other retailers were forced to follow the discounters’ stepped decreases.

35 The upward cycle in the Ballarat petrol market was characterised by sudden and significant increases that brought the discount cycle to an end. Professor Williams explained the market forces at work in respect of such increases as follows:

“So if the Maskin and Tirole explanation is correct, each service station would be hoping that somebody - perhaps somebody else in particular - would increase the price, because the current level was unsustainable in a long-run sense. The reason somebody may not wish to increase the price is because it’s risky; if you increase the price, then it may not be followed. But I guess the risk may be lessened if there was some pattern to the price increases, and so a particular pattern of price increases, or a particular periodicity, may give somebody who’s going to initiate a price increase a little bit of faith that it might be followed – a bit more faith that it might be followed, than if it was undertaken perhaps sooner than a price increase had previously been undertaken.

…

HIS HONOUR: Professor Williams, I just wanted to ask you one or two questions. You were taken before to the chart that sort of showed ‑ from the ACCC's, I think, records. Yes, that chart there. It showed that there were steps on the way up occurring over some days, sometimes?

PROFESSOR WILLIAMS: Yes.

HIS HONOUR: Certainly not within a day, and a number of steps on the way down. One of the pieces of evidence in this case which - just assume it for the moment, there may be some debate about it later but just assume it - that on the price rise days in this case there's an absence of any step. Just a significant rise up within a fairly short period of time. I asked Mr Holland this morning, who has been in the market, could he explain why different competitive forces would be at work on the way down and not to those that are on the way up. He thought about it and couldn't really give any answer. Can you suggest an explanation?

PROFESSOR WILLIAMS: Yes, I was in ‑ ‑ ‑

HIS HONOUR: In terms of economic theory?

PROFESSOR WILLIAMS: Yes, I was in court at the time and I was surprised at his answer. I'll tell you why. When you increase - sorry. If your competitor across the road nominates a price you have no incentive at all to charge a price - just to set your price subsequently a little bit above theirs. Why? Because if you set your price a little bit above theirs, they're going to get all the market. So you're going to have no advantage at all. The only reason why you might want to set your price above theirs is that you hope that other people are going to follow you up. So you wouldn't set your price knowingly a little bit above theirs. You'd try to bump it up as high as you thought it could go. So if the price fluctuates generally between 80 and 90 and the price has fallen down to 80, you wouldn't try 81 because there would be no conceivable advantage you would get from that. The conceivable advantage that you may get, however, if it's down at 80, is if you push it back up to 90 and people, even if they don't follow you, they at least charge 89. So that even if you're not making many sales at least you're getting a much fatter margin.

…

HIS HONOUR: I want to ask you another question which is associated with that. I noted, but it may not have been accurate because I didn't pick it up from your exact words, but you seem to suggest something along the lines that a price increase in this kind of market is risky if it's not followed. I noted that what you seemed to be getting at is that therefore the confidence that competitors have in a pattern of price rises can give a degree of comfort about the increase. Now, they are probably more my words than yours but is that in substance what you were suggesting?

PROFESSOR WILLIAMS: Yes, Maskin and Tirole, but other authors as well speak about trust. That is, even if you're not overtly talking to your competitors about the price, if you increase the price you want to have some confidence that other people are going to follow you. Now, what might lead to that confidence?”

36 The gravamen of Professor Williams’ evidence is that it is inherently unlikely that a competitive petrol retailer in a highly competitive market would initiate a significant price increase without being confident that the major competitors in the market would match the increase. The evidence in relation to the Ballarat market during the relevant period establishes that the high risk involved in a significant price increase, of which Professor Williams spoke, would clearly be reduced if the party or parties increasing the price were confident that other competitors in the market would become aware of the increase and would be likely to match it. There was no real contest about that fact. The real contest between the parties related to whether the quick awareness and matching of the increases during the relevant period arose from independent observation of board prices of competitors (ie of competitive market forces at work) or rather, from ongoing collusion between competitors about the price increases (ie of anti-competitive market forces at work).

3. Price-fixing Arrangements and Understandings

(a) The Act

37 The price-fixing understanding is alleged to have contravened ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Act which provide:

“(2) A corporation shall not:

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

(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; or

(b) give effect to a provision of a contract, arrangement or understanding … if that provision . . .

(ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition.”

38 Section 45A declares price-fixing contracts, arrangements and understandings to be illegal per se. Section 45A(1) provides:

“Without limiting the generality of section 45, a provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be deemed for the purposes of that section to have the purpose, or have or to be likely to have the effect, of substantially lessening competition if the provision has the purpose, or has or is likely to have the effect, as the case may be, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, the price for, … goods … supplied … or to be supplied … by the parties to the contract, arrangement or understanding, or by any of them, or by any bodies corporate that are related to any of them, in competition with each other.”

39 Section 4(1) of the Act states that a “provision” in relation to an understanding, means any matter forming part of the understanding. The sub-section also states that “give effect to” in relation to a provision of a contract, arrangement or understanding, includes “do an act or thing in pursuance of or in accordance with or enforce or purport to enforce.” Section 4F(1) provides that for the purposes of the Act a provision of a contract, arrangement or understanding shall be deemed to have had, or to have, a particular purpose if the purposes of the provision include that purpose and that purpose was or is a “substantial purpose.”

40 With respect to the contraventions alleged against the individual respondents, s 75B(1) of the Act provides:

“A reference in this Part to a person involved in a contravention of a provision of Part IV … shall be read as a reference to a person who:

(a) has aided, abetted, counselled or procured the contravention;

(b) has induced, whether by threats or promises or otherwise, the contravention;

(d) has conspired with others to effect the contravention.”

41 For liability under s 75B(1) to be made out the person must have knowledge of the essential ingredients of the contravention: see Yorke v Lucas (1985) 158 CLR 661 (“Yorke v Lucas”) at 670.

42 The Act provides for the imposition of pecuniary penalties pursuant to s 76(1). The sub-section provides that if the Court is satisfied that a person has contravened a provision of Pt IV, or has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision:

“… the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters …”

43 Sections 76(1A) and (1B) provide:

“(1A) The pecuniary penalty payable under subsection (1) by a body corporate is not to exceed:

(a) for each act or omission to which this section applies that relates to section 45D, 45DB, 45E or 45EA—$750,000; and

(b) for each other act or omission to which this section
applies—$10,000,000.

(1B) The pecuniary penalty payable under subsection (1) by a person other than a body corporate is not to exceed $500,000 for each act or omission to which this section applies.”

44 Section 80(1) of the Act empowers the Court to grant an injunction restraining conduct that constitutes or would constitute a contravention of a provision of Pt IV of the Act. The section also empowers the Court to grant an injunction restraining any person from “being in any way, directly or indirectly, knowingly concerned in, or party to, a contravention by a person of such a provision.”

45 Finally, s 84(2) of the Act provides:

“(2) Any conduct engaged in on behalf of a body corporate:

(a) by a director, servant or agent of the body corporate within the scope of the person’s actual or apparent authority; or

(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, servant or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, servant or agent;

shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate.”

(b) The cases

46 In Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1982) 44 ALR 557 (“Radio 2UE”) at 565-566 Lockhart J observed in respect of s 45A:

“Section 45A was introduced into the Act by Act No. 81 of 1977 and came into operation on 1^st July, 1977. To my knowledge this is the first time the section has been considered by a court. The section renders price fixing (I use this term for convenience to encompass also controlling or maintaining price) among competitors unlawful per se. It applies to any contracts, arrangements or understandings between competitors which in purpose or effect inhibit price competition.

The court’s task is to characterize the conduct before it in a given case. Care must be taken in performing that task because, by its very nature, the violation of s. 45A is deemed, for the purposes of s. 45, to substantially lessen competition per se. Such a finding may have far reaching consequences to the competitors concerned.

It is important to distinguish between arrangements (I use this expression for convenience to encompass also contracts and undertakings) which restrain price competition and arrangements which merely incidentally affect it or have some connexion with it. Not every arrangement between competitors which has some possible impact on price is per se unlawful under the section.”

47 When regard is had to the different and separate roles alleged by the ACCC to have been played by each of the initiating respondents, and by Triton, Brumar and Apco, it is more appropriate to consider the issues arising under ss 45(2) and 45A in terms of a price-fixing “understanding”, rather than a price-fixing “arrangement.” Also, it is unnecessary to consider any specific price-fixing “provisions” of the alleged understanding as s 4(1) provides that a “provision” in relation to an understanding means any matter forming part of the understanding. Gleeson CJ, McHugh, Gummow and Hayne JJ in Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 201 ALR 414 at 416 [7] observed that the word “provision” in Pt IV of the Act invites attention to the content, rather than the form, “of what has been, or is to be, agreed, arranged or understood” and stated that the definition in relation to a provision in s 4(1) emphasises that point. In any event, the understanding alleged was solely concerned with providing for the fixing or controlling of petrol prices in Ballarat. I say that as, although the ACCC put its case on the basis that the price-fixing understanding fixed or controlled prices and provided for the fixing and controlling of prices, the alleged understanding provided a process by which price increases may be fixed or controlled. In those circumstances it is more apposite to consider the present case in terms of an understanding that provides for the fixing or controlling of prices.

48 Finally, as it is not in dispute that most of the parties to the alleged understanding were in competition with each other in the Ballarat retail petrol market it is not to the point that some of the parties, for example Triton, may not have been a direct competitor in that market. The reason for that is that s 45A(1) only requires that at least two parties to the understanding, or their related companies, be in competition with each other.

49 Thus the critical issue is whether, during the relevant period, Triton, Brumar or Apco were parties to, or gave effect to, an understanding that had the purpose, or had or was likely to have the effect, of providing for the fixing or controlling of the price of petrol in Ballarat. Although little may turn on the point in the present case, in the context of s 45A purpose is to be viewed subjectively: see Australian Competition and Consumer Commission v Australian Medical Association Western Australia Branch Inc (2003) 199 ALR 423 (“ACCC v AMA”) at 471-472 and News Limited v South Sydney District Rugby League Football Club Limited (2003) 215 CLR 563 at 573 [18], 577-581 [32]-[46], 584-587 [59]-[65], 636-637 [211]-[212] cf Australian Competition and Consumer Commission v Pauls Ltd (2003) ATPR 41-911 (“ACCC v Pauls”) at 46-622.

50 In Radio 2UE Lockhart J (at 567) considered price “fixing”:

“The Shorter Oxford English Dictionary defines the verb ‘fix’ as: ‘To fasten, make firm or stable; … to attach firmly; … to settle permanently.’ The Macquarie Dictionary defines the word as: ‘1. To make fast, firm, or stable. 2. To place definitely and more or less permanently. 3. To settle definitely; determine: to fix a price.’

In my view the fixing of a price for the purpose of s. 45A does not necessarily connote an element of permanency but generally suggests the settling or determining of a price for a period of time that is not instantaneous or merely ephemeral. A person may fix a price for his goods knowing that he may wish to vary it at some future time, but generally not so soon as would to business people be regarded as merely momentary or transitory.”

51 On appeal in Radio 2UE Sydney Pty Ltd v Stereo FM Pty Ltd (1983) 48 ALR 361 at 363 a Full Court, in upholding the decision of Lockhart J, observed that “price-fixing” requires an element of intention or likelihood to affect price competition.

52 The natural or ordinary meaning of the term “control” is “to exercise restraint or direction over” (The Macquarie Dictionary) or “to exercise restraint or direction upon the free action of” (The Oxford English Dictionary) a person or thing. There are degrees of control and there may be control although the “restraint” or “direction” is not total. Thus, an arrangement or understanding has been found to have had the effect of “controlling price” if it restrains a freedom that would otherwise exist as to a price to be charged: see Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (1999) 92 FCR 375 (“ACCC v CC”) at 413 [168] per Lindgren J and ACCC v Pauls at [123]. In ACCC v AMA at 461-462 [193]-[195] Carr J stated that, in the context of s 45A, the word “control” indicates “a degree of control towards the higher end of the scale.”

53 It is clear from the evidence of the initiating respondents, who admitted to the contraventions alleged by the ACCC, that the increases pursuant to the understanding were coordinated and substantial increases to prices that substantially matched the price proposed or targeted by one or more of the initiating respondents and the purpose, and the likely effect, of the understanding was for that price to “stick” even though the parties were at liberty to recommence the discount cycle when they wished to do so: cf Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 5 FCR 140 at 143. Also, the purpose and likely effect of the understanding was to exercise restraint and direction over the retail prices by seeking to bring the discount cycle to an end through the coordinated and substantial increase in retail prices to prices that substantially matched the price proposed or stipulated by one or more of the initiating respondents.

54 It is well established that, for the purposes of ss 45(2) and 45A, the term “understanding” is apt to describe something less than a binding contract or arrangement. An understanding will usually, but may not necessarily, involve some reciprocity of obligation: see Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 (“ACCC v Amcor”) at 360, Trade Practices Commission v Service Station Association Limited (1993) 44 FCR 206 at 230-231 and Trade Practices Commission v Email Ltd (1980) 31 ALR 53 (“Email”) at 66. At the least, there must be a meeting of minds of those said to be parties to the understanding and a consensus as to what is to be done; not merely a hope as to what might be done or might happen. Thus, ordinarily, an understanding involves communication between the parties arousing expectations in each party that the other party/parties will act in a particular way: see Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 129 FCR 339 (“Australian Safeway Stores”) at 426 [409]. However, as was stated by Fisher J in Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446 (“David Jones”) at 463-464:

“In Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 22-26 Franki J referred to the cases arising under s 45 and judicial consideration of the section’s requirements. As with Franki J, I also favour the views expressed by Smithers J which are referred to in the following paragraph of the former’s reasons for judgment at 25:

‘I lean with respect to the views expressed by Smithers J in L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 89 where he said: ‘I have to remember that the concept of an understanding is broad and flexible. It may arise merely where the minds of the parties are at one that a proposed transaction proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct.’’

As Franki J also said, on that page of his reasons, judicial consideration has tended to equate ‘arrangement’ with ‘understanding’. In indicating that he proposed to proceed on that basis he said in relation to s 45 prior to its amendment in 1977:

‘… I would not necessarily reject a proposition that the requirements for entering into an understanding may be somewhat different and more easily satisfied than the requirements for making an arrangement.’

In their joint judgment in Commissioner of Taxation (Cth) v Lutovi Investments Pty Ltd (1978) 140 CLR 434, Gibbs J (as he then was) and Mason J said at 444 of the requirements of an arrangement in the context of s 80B(5) of the Income Tax Assessment Act 1936 (Cth):

‘It is, however, necessary that an arrangement should be consensual, and that there should be some adoption of it. But in our view it is not essential that the parties are committed to it or are bound to support it.

An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it.’”

55 In Email at 56-57 Lockhart J considered the circumstances in which parallel conduct may constitute evidence from which the Court can infer the requisite arrangement or understanding:

“Parallel conduct may constitute circumstantial evidence from which an arrangement or understanding may be inferred. It depends on the facts of each case. In the present case, the respondents point to a large number of matters in support of their contention that the inference of an arrangement or understanding cannot be supported. Plainly, when a credible explanation is given by a defendant it may be sufficient to negate the inference of an arrangement or understanding: see TPC v Nicholas Enterprises Pty Ltd (1979) 26 ALR 609 at 631…

In the United States there is powerful authority for the proposition that, while parallel business conduct may provide circumstantial evidence from which an inference as to the existence of an unlawful agreement may be drawn, it is not sufficient by itself to support an allegation of conspiracy under the Sherman Act and it may be the result of independent decisions of competitors or other economic forces: see for example Theatre Enterprises Inc v Paramount Film Distributing Corporation (1954) 346 US 537; Esco Corporation v United States (1965) 340 F (2d) 1000; US v FMC Corporation 1969 Trade Cases 87,405;Bogosian v Gulf Oil Corporation 1975 Trade Cases 60,284, p 66,104.

Instances where parallel prices in respect of homogenous products has resulted, not from parallel business conduct, but from independent decisions of competitors and intense competition are Pevely Dairy Co v US (1949) 178 F (2d) 363; US v Ward Baking Co. (1965) 243 F Supp 713; and US v National Malleable & Steel Castings Co (1957) Trade Cases 68,890, affirmed on appeal (1958) US 38.”

56 In ACCC v CC at 408 Lindgren J stated:

“The cases require that at least one party ‘assume an obligation’ or give an ‘assurance’ or ‘undertaking’ that it will act in a certain way. A mere expectation that as a matter of fact a party will act in a certain way is not enough, even if it has been engendered by that party.”

57 See also Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at 257-258. While the above statements of principle are helpful, they can be difficult to apply in a case such as the present where the parties are numerous, the roles alleged to have been played by each party differ, and the alleged understanding involves a process for the fixing or controlling of prices, rather than the direct fixing or controlling of prices. Ultimately, one must return to the words of the statute and determine whether the parties “arrived at” an understanding of the kind identified in s 45A and proscribed by s 45(2)(a). If the parties reach a consensus as to a particular course of conduct or where their minds are at one as to the adoption of a particular course of conduct and they adopt that course of conduct (see David Jones at 463-464) there are strong grounds for contending that the requisite meeting of minds has been established.

58 The major area of contest at trial related to whether the ACCC established that there was the requisite meeting of minds in relation to a price-fixing understanding that involved Triton, Brumar or Apco. In particular, the contesting respondents denied that there was any consensus at any time as to what was to be done by any of them in relation to the fixing or controlling of petrol prices in Ballarat. In order to resolve that contest it will be necessary to carefully consider the evidence that is admissible against each of those parties and to determine whether that evidence establishes that they were parties to the price-fixing understanding alleged by the ACCC.

4. The ACCC’s Case Under ss 45(2)(a)(ii) and 45(2)(b)(ii) of the Act

59 The ACCC alleges that the price-fixing understanding is deemed to have the purpose or effect of substantially lessening competition in a market by virtue of s 45A(1) of the Act. The price-fixing understanding was said to have been constituted by the continuation of the pre-June 1999 arrangements (“the existing arrangements”), an arrangement made in June 1999 (“the June 1999 arrangement”) and coordinated price increases on approximately 69 days during the relevant period (“the 1999-2000 arrangements”).

(a) The existing arrangements

60 The ACCC contends that in or about June 1999 there were arrangements or understandings which contained a provision or provisions that had the purpose, or had or was likely to have the effect, of fixing or controlling or providing for the fixing or controlling of the retail price of petrol in the Ballarat petrol market at service stations controlled or supplied by the corporate respondents. Specifically, it contends that arrangements existed whereby:

· any one of the corporate respondents that wished to increase its prices for petrol at the service stations controlled or supplied by it could telephone or contact one or more of the other corporate respondents to communicate the amount of the increase, the approximate time of the increase or the fact of the price increase proposed or in progress. The communication was alleged to have either been made expressly or indirectly by means of expressions such as “Go for a drive”, “Have you been for a drive”, “The market has changed”, “ The majors have moved” or “The market is starting to change.” The ACCC called these calls “board price calls” but I refer to them in these reasons as “price-increase calls”;

· any corporate respondent receiving such a call would telephone or contact the sites controlled or supplied by that corporate respondent in order to implement a similar board price increase at about the same time (in the case of sites controlled by the relevant corporate respondent) or to use its best endeavours to do so (in the case of other sites);

· any corporate respondent which became aware that a service station controlled or supplied by another corporate respondent had not implemented the price increase, could inform a corporate respondent of that fact and the corporate respondent which was best placed to communicate with the respondent that had not increased its price would use its best endeavours to have that respondent’s service station implement the board price change. The ACCC called those calls “complaint calls” but I refer to them in these reasons as “follow-up calls”;

· any corporate respondent which became aware of any service station controlled or supplied by it that had not put the price increase into effect, would also make a follow up call to that service station.

61 The ACCC alleges that the existing arrangements evolved over a period of years before 1999 by a combination of individuals acting on behalf of the corporations that had been carrying on business within the Ballarat petrol market. Those individuals and corporations included combinations of the following:

· Balgee, which carried on the business of a distributor and retailer under the Mobil brand from at least the early 1990’s. Lindsay Evans (“Evans”) acted on behalf of Balgee until about mid 1990. Muller acted on behalf of Balgee from about mid 1990 to at least about early 1997. Levick acted on behalf of Balgee from about early 1997 onwards.

· Leahy Petroleum, which carried on the business of a distributor and retailer under the BP brand from on or about 1 July 1997 to about December 2000. Palmer and/or Ian Carmichael(“Carmichael”)acted on behalf of Leahy Petroleum in this period.

· Leahy Retail, which carried on the business of a distributor and retailer under the BP brand under the name Leahy Petroleum Pty Ltd from at least late 1991 to about June 1997 and after that on about 1 July 1997 to about December 2000 it carried on the business of a retailer under the BP brand under its current name. Palmer and/or Carmichael acted on behalf of Leahy Retail in this period.

· Central Petroleum Pty Ltd (“Central Petroleum”), which carried on the business of a distributor and a retailer under the Shell brand from at least the mid 1980’s until about late 1994. Denis Manton (“Manton”) and/or Kieran Davison (“Davison”) acted on behalf of Central Petroleum from at least early 1991 to about late 1994.

· Beasam Pty Ltd (“Beasam”), which carried on the business of a distributor under the Shell brand from about late 1994 to about 31 August 1998. Rosenow acted on behalf of Beasam in this period.

· Triton, which carried on the business of a distributor under the Shell brand from on or about 1 September 1998 to about December 2000. Rosenow acted on behalf of Triton in this period.

· Central Petroleum (Retail) Pty Ltd (“Central Petroleum Retail”), which carried on the business of a retailer under the Shell brand from at least the late 1980’s to about late 1994. Manton and/or Davison acted on behalf of Central Petroleum Retail in this period.

· Provincial Fuels Pty Ltd (“Provincial”), which carried on the business of a retailer under the Shell brand from about late 1994 to about August 1997. Davison acted on behalf of Provincial from about late 1994 to about May 1997.

· Friway One Pty Ltd (“Friway One”), which carried on the business of a retailer under the Shell brand from on or about August 1997 to on about September 1998. Dalton acted on behalf of Friway One in this period.

· Brumar, which carried on the business of a retailer under the Shell brand from on or about September 1998 to about December 2000 and commenced operating in the Ballarat petrol market in November 1998. Dalton acted on behalf of Brumar in this period.

· Anderson Petroleum Company Pty Ltd (“Anderson Petroleum”), which carried on the business of a distributor and a retailer under the Ampol brand from at least 1994 to about late 1996. Zala acted on behalf of Anderson Petroleum in this period.

· Chisholm, which carried on the business of a distributor and a retailer under the Ampol or Caltex brand from at least early 1997 to about December 2000. Zala acted on behalf of Chisholm in this period.

· Apco, which carried on the business of a retailer under the Apco brand from at least the early 1990’s to about December 2000. Anderson acted on behalf of Apco in this period.

· Justco, which carried on the business of a retailer under the Swift brand from at least about mid 1996 to about December 2000. Bentley acted on behalf of Justco in this period.

62 There was little dispute about the evidence concerning the existing arrangements that did not involve the contesting respondents, although there was considerable dispute over the relevance of that evidence, which I will deal with later in these reasons. The evidence, which I generally accept, establishes the following. The existing arrangements developed from calls in the early 1990’s between Evans, the principal of the Mobil distributor Balgee and a school friend of his, Manton, who was the managing director of Central Petroleum (which operated the Shell wholesale distribution in Ballarat) and Central Petroleum Retail. Manton and Evans made price-increase calls to each other and to other competitors in the Ballarat petrol market over the phone about coordinating price increases. In the mid 1990’s Evans’ role was taken over by Muller and, around August of 1997, Manton delegated his responsibilities with respect to setting Shell board prices to Davison.

63 During the 1994 to 1997 period: (1) Muller at Balgee made price-increase calls to Zala at Anderson Petroleum who in turn passed the information about the increase on to Peter Anderson at Apco; (2) Muller at Balgee made price-increase calls to Palmer at Leahy Retail and Davison at Provincial; and (3) Davison at Provincial made price-increase calls to Rosenow at Beasam and Zala at Anderson Petroleum. In order to ensure that the price increases sought to be achieved took effect there were follow-up calls and site visits.

64 In the period from about 1997 to about mid-1999, an established pattern of communication evolved to accommodate various industry and personnel changes. In particular, during this period: (1) Levick at Balgee assumed Muller’s role and made price-increase calls to Zala at Chisholm, Palmer or Carmichael at the Leahy Companies, Rosenow at Beasam (which later traded as Triton Petroleum) and Bentley at Justco; (2) Zala at Chisholm, ceased passing on price-increase information to Anderson at Apco; (3) Levick at Balgee sought to pass on price information to Anderson at Apco by making the calls to Palmer or Carmichael at the Leahy Companies; (4) Carmichael sought to pass on price information to Anderson at Apco; (5) Zala at Chisholm made price-increase calls to Rosenow at Beasam and similar calls to Bentley at Justco; (6) Rosenow at Beasam sought to make price-increase calls to Bentley at Justco and Dalton at Friway One (later Brumar) at Zala’s request; and (7) Levick at Balgee made follow-up calls to Zala at Chisholm, and received similar calls from him. The follow-up calls related to the failure of a particular competitor or competitors to increase prices.

65 Putting to one side for the moment the role of the contesting respondents, and the question of whether they were parties to the existing arrangements, the evidence about those arrangements establishes that a price-fixing understanding involving the initiating respondents and others evolved throughout the 1990’s with adjustments being made from time to time to meet changes in personnel and market forces.

(b) The June 1999 arrangement

66 The June 1999 arrangement is contentious. The ACCC’s claims are as follows. The existing arrangements served as the foundation for a price-fixing understanding made or arrived at between the corporate respondents in or about June 1999 whereby they agreed to implement the existing arrangements on a more frequent and more efficient basis. The catalyst for the June 1999 arrangement was United’s entry into the Ballarat petrol market in February 1999, which had the effect of significantly increasing the frequency of the discount cycle by driving petrol prices down and increasing the level of competition in Ballarat.

67 The June 1999 arrangement was partly oral and partly to be implied. Insofar as it was oral, the ACCC asserts that Gourley or Levick at Balgee, Zala at Chisholm, and Bentley at Justco made the arrangement at a meeting at Gourley’s house in about June 1999 (“the Gourley meeting”). The arrangement made at the Gourley meeting was communicated orally to Palmer and/or Carmichael at the Leahy Companies, Rosenow at Triton, Anderson at Apco, and Dalton at Brumar.

68 In so far as the June 1999 arrangement is to be implied, it is to be implied from the corporate respondents giving effect to the existing arrangements and/or the June 1999 arrangement, and from the coordination and timing of telephone calls and price increases. The existence of the June 1999 arrangement may also be inferred from (1) the fact of a meeting at Zala’s office in about August 2000 and (2) the fact of a meeting at the Olive Grove Cafe in about December 2000. Levick at Balgee, Rosenow at Triton, Zala at Chisholm and Bentley at Justco allegedly attended these meetings, at which the retail price of petrol was discussed. In particular, it is alleged that at the Olive Grove Cafe meeting participants discussed whether they should vary the existing arrangements by more frequently coordinating their price increases to match the discounts being offered by Safeway.

69 The ACCC claimed that the June 1999 arrangement contravened s 45(2)(a)(ii) of the Act in that it contained a provision which, by virtue of s 45A(1) of the Act, is deemed to have had the purpose, or had or was likely to have the effect, of fixing or controlling or providing for the fixing or controlling of the retail price of petrol in the Ballarat petrol market at the service stations controlled or supplied by the corporate respondents. The ACCC also claimed that the individual respondents were involved in the contravention of s 45(2)(a)(ii).

(c) The 1999-2000 arrangements

70 The alternative case of the ACCC is that the corporate respondents made an arrangement or arrived at an understanding to fix or maintain the retail price of petrol on each separate occasion between June 1999 and December 2000, when the price-fixing conduct occurred. The ACCC also alleges that each of the individual respondents was involved in each of the contraventions.

71 The ACCC alleges that the 1999-2000 arrangements were partly oral and partly to be implied. Insofar as they were alleged to be oral, they were made by price-increase and follow-up calls between respondents. The pattern of the calls is alleged to be similar to the pattern that developed during the 1997 to 1999 period. In so far as the arrangements were alleged to be implied, they were to be implied from the corporate respondents allegedly giving effect to the existing arrangements and the June 1999 arrangement during the relevant period on about 69 occasions, although not by every corporate respondent in each instance. Details of the dates relied upon by the ACCC are set out in Revised Annexure A (“Annexure A”) to the Further Amended Statement of Claim.

72 Although the ACCC relied upon the June 1999 arrangement and the 1999-2000 arrangements in their own right as contraventions of s 45(2)(a)(ii) of the Act, the evidence was more consistent with a continuing price-fixing understanding which had to adapt from time to time to changes in personnel and market forces. The real issue is whether the contesting respondents were parties to or were involved in that understanding during the relevant period and, if so, whether the resulting contraventions of s 45(2) of the Act fall within the case pleaded by the ACCC.

(d) Categories of evidence

73 The ACCC sought to prove its case through direct and circumstantial evidence as well as by inference. The ACCC’s case relies primarily on three categories of evidence:

· direct evidence by the adoption of witness statements and oral testimony of individuals operating in the Ballarat petrol market before and during the relevant period, including individuals who have admitted to the contraventions of the Act alleged by the ACCC;

· circumstantial evidence, which includes evidence of the making of numerous phone calls between respondents, which calls were said to correlate with increases in the retail price of petrol; and

· hearsay statements made by witnesses, which are argued by the ACCC to be admissible under, among other things, the principle established in Ahern v The Queen (1988) 165 CLR 87 (“Ahern”).

74 The circumstantial evidence comprised two key documents that summarise, in chart form, voluminous source data. The first document, Annexure A, is a chart and graphical representation of telephone activity and price increases on 69 non-consecutive days during the period from 22 June 1999 to 8 December 2000 (“price-increase days”). The 69 days are the occasions on which the ACCC alleges that it can establish that there were both telephone communications between the respondents and price increases. The source data for the telephone calls summarized in Annexure A were the relevant telephone accounts of the respondents, which were provided by them to the ACCC pursuant to s 155 of the Act. However, save for the period from 1 February to 30 April 2000, the telephone records were incomplete. Also, although certain of the corporate respondents own or operate more than one retail petrol site in the Ballarat petrol market, the ACCC did not request price data from all of the sites. Rather, the ACCC’s methodology was to choose a “representative” site for each corporate respondent and gather telephone account and price information that was relevant to an increase in the retail price of petrol sold at the site. Although Annexure A does not reveal the content of the telephone conversations, the ACCC relies on the direct and hearsay evidence, as well as inference, on that matter.

75 The analysis in Annexure A is linked to a second key ACCC document, Exhibit DA-13, which is a comprehensive and complete record and graphic representation of telephone activity between the respondents for each day in the three months between 1 February 2000 and 30 April 2000. Exhibit DA-13 also contains the price-increase information in Annexure A for that period. Unlike Annexure A, Exhibit DA-13 is based on a complete record of call charges during a period of three months. Thus, during that period, every call on every day between respondents is listed, regardless of whether the call coincided with a petrol price increase. The ACCC seeks to have the inference drawn from Annexure A and Exhibit DA-13 that there was a correlation between the corporate respondents’ telephone calls with each other, and increases by them in the retail price of petrol. More specifically, the inference is based on the above two documents which are said to establish that on days when the price of petrol did not change there were few or no telephone calls between the corporate respondents, but on the days when the initiating respondents sought to increase the price of petrol there was an established pattern of telephone calls between the corporate respondents. The ACCC alleges that in the latter case, the only reasonable inference is that the calls were primarily price-increase and follow-up calls. The price-increase calls were said to communicate that a price increase was proposed or was in progress. The follow-up calls were said to be an endeavour to ascertain whether the price increase was being or would be matched by competitors. In addition, there were site calls, by which a corporate respondent communicated with its sites concerning board prices or, in Triton’s case, price support.

76 The ACCC made the following response to the suggestion of the contesting respondents that, because the competitors’ current prices were available for all to see, there was no need for calls of the kind alleged by the ACCC:

“At various times, parties have suggested that the market is one where prices are available for all to see. To an extent that is true, but it does not answer the case. The implication is that the competitors did not need to exchange price information; but if that is the suggestion, it leaves unanswered the question: Why all the telephone contact, over so long a time? We submit that the answer lies in the need for increases to be well co-ordinated so as to maximise the prospects of the increase sticking. If word of an increase did not get to all competitors quickly, the first to rise would lose market share rapidly, and no-one would get the benefit of a non-competitive price. It emerges clearly from the evidence that:

· petrol is price-sensitive

· everyone wanted prices to increase whenever possible

· unless all sites (or all bar a few minor ones) increased within a short time of each other, the increase was less likely to stick

· the first to increase took a risk, unless it had the comfort of knowing that the competitors would match the increase.”

77 Finally, the ACCC accepted that the standard of proof discussed in Briginshaw v Briginshaw (1938) 60 CLR 336 (“Briginshaw”) was applicable. The standard was stated by Heerey and Sackville JJ (with whom Emmett J agreed) in Australian Safeway Stores at 432 [438] to be as follows:

“… the so-called Briginshaw standard, …requires the trier of fact, in determining what inferences to draw from the primary facts, to have regard to the seriousness of the allegations and the gravity of the consequences flowing from an adverse finding. But Briginshaw does not require a court to exclude all alternative possibilities before drawing an inference from the primary facts adverse to one of the parties. The question is whether the Court is reasonably satisfied that the fact in issue has been established, having regard to ‘the nature and consequences of the fact or facts to be proved’: Briginshaw at 362 per Dixon J. In this connection, the Court must take into account not only the seriousness of the allegation made and the gravity of the consequences of an adverse finding, but ‘the inherent unlikelihood of an occurrence of a given description’: Briginshaw at 362.”

5. The Defences

78 The contesting respondents denied that any of them were parties to the existing arrangements, the June 1999 arrangement or the 1999-2000 arrangements. They claim that the case pleaded against them had not been established by the evidence. They also strongly contested the adverse inferences the ACCC sought to draw from Annexure A and Exhibit DA-13.

79 All of the contesting respondents asserted that, in so far as they were concerned, their price increases in the Ballarat petrol market during the relevant period were the result of competitive market forces. In particular, they point to the highly competitive and price sensitive nature of the market and to the fact that competitors’ board prices were openly advertised and were constantly checked and re-checked by them to enable them to remain competitive. It was not disputed that in Ballarat communications between competitors such as “Take a drive” or “The market has moved” signified that a price increase was in progress. However, the contesting respondents claim that there is nothing sinister in such communications, as they do no more than state publicly available knowledge, which was either known, or would have become known.

80 The contesting respondents also claimed that there was no consensus as to what was to be done by the parties to the alleged price-fixing understanding and that the mere hope as to the role to be played by them, as opposed to a commitment or expectation as to that role, could not constitute contravening conduct under s 45(2).

81 Triton denied that Rosenow had authority to make it a party to any price-fixing arrangement or understanding or to give effect to any such arrangement or understanding. It also contended, inter alia, that due to its status as a wholesaler at no relevant time was it a “competitor” with any of the other corporate respondents. Triton maintains that it merely supplied petrol to independent retailers of Shell branded petrol who made their own retail pricing decisions based upon their particular commercial circumstances.

82 Rosenow, who did not give evidence on his own behalf or on behalf of Triton, claims that the elements of s 75B(1) have not been established. Specifically, he argues that he had no knowledge of the essential elements of the alleged contravention and that he was not a participant in any price-fixing arrangement or understanding. Rosenow also submits that he had no capacity to control, fix or maintain prices as Triton’s policy of price support, which was implemented by him, did not restrain the freedom of the independent Shell retailers to set their own prices for petroleum products.

83 Apco and Anderson argue that Apco’s strict policy of independence and its business strategy of matching United’s retail prices establish its innocence. They claim that, rather than Apco being a party to any arrangement or understanding, it was actually in vigorous competition with the other respondents as it was a discounter that could, and often would, foil attempted price increases by them. In addition, Apco and Anderson claim that Anderson had valid business reasons to speak over the phone with Carmichael at the Leahy Companies and Bentley at Swift, and they contend that any conversations in which prices were mentioned merely conveyed known price movements and not planned increases. They also argue that the pattern of Carmichael’s and Bentley’s calls to Anderson was no different on price-increase days than on non-increase days and that no inference adverse to them can properly be drawn from Annexure A and Exhibit DA-13.

84 Brumar and Dalton, who did not give evidence on his own behalf or on behalf of Brumar, deny wrongdoing and assert that the evidence relied upon by the ACCC does not relate specifically to Brumar or Dalton and, as such, does not establish the case pleaded against them. There is also an issue about whether Dalton had any authority to act on Brumar’s behalf in relation to any price-fixing arrangement or understanding. In addition, Brumar and Dalton claim that Brumar’s pricing policy was generally to match Swift’s prices, subject to the restrictions placed upon Brumar by the price support provided by Shell. Accordingly, they contend that Brumar’s price increases and decreases were a result of competitive market forces.

6. The No-Case Submissions

85 At the conclusion of the ACCC’s case a number of the contesting respondents applied to make no-case submissions which raised some important issues in respect of Pt IV cases.

86 The ACCC tendered statements by a large number of witnesses and adduced voluminous documentary evidence in support of its claims. A number of the witnesses gave additional evidence in chief and were cross-examined. Credit issues were raised by some of the contesting respondents against certain of the ACCC’s witnesses, some of whom were other respondents who had admitted to the contraventions claimed against them.

87 The contesting respondents requested that the Court adjourn the matter for two to three days to enable them to put detailed and comprehensive submissions explaining why the ACCC’s evidence was not sufficient to establish the contraventions claimed. They claimed that they should not be required to elect whether to adduce evidence as a condition of submitting there was no case to answer.

88 The ACCC claimed that the contesting respondents should not be permitted to put no-case submissions unless they elected not to call evidence and that if any respondent was not prepared to make that election, the no-case submissions of the other respondents who were prepared to make that election should not be permitted to be made until all of the evidence that might be relevant to the no-case submissions was before the Court.

89 After some of the contesting respondents indicated to the Court that they proposed to adduce evidence if their no-case submissions failed, I outlined my concerns about a no-case submission being made prior to all of the evidence that might be relevant to the submission being before the Court. Subsequently those respondents, correctly in my view, indicated that they had decided not to proceed with their no-case submissions. It is appropriate to briefly set out my reasons for concluding that no-case submissions were not appropriate in the present matter unless all respondents elected not to call evidence that could be of relevance to the no-case submission.

90 The power to entertain a no-case submission finds its source in O 35 r 1 of the Federal Court Rules, which gives the power to the Court at any stage of the proceedings, on the application of any party, to pronounce such judgment or make such orders as the nature of the case requires, notwithstanding that the applicant does not claim such an order in the originating process: see ACCC v Amcor at 356-357 [58]-[60] per Sackville J. In ACCC v Amcor at 357-358 [61]-[64] Sackville J discussed the principles which have been applied by the Court in determining whether the moving party should be required to elect not to call evidence.

91 Special problems arise when no-case submissions are sought to be made in a matter, such as the present case, where multiple respondents are alleged to be parties to an unlawful arrangement or understanding. The first problem involves the difficulty inherent in making factual findings when all the relevant evidence is not yet adduced. For example, the evidence against a particular party may be sparse or weak at the close of the applicant’s case but if further evidence is given by any of the other respondents the strength of the evidence against that party may well change. Thus, it is undesirable that the case against a respondent be dismissed prior to the reception of all the evidence that might be relevant to that case: see Trade Practices Commission v George Weston Foods Ltd. (No 2) (1980) 43 FLR 55 at 61-62, (“George Weston”), Menzies v Australian Iron & Steel Ltd. And Hill (1952) 52 SR (NSW) 62 at 64-65, Hummerstone v Leary [1921] 2 KB 664 at 667, James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 at 401-403 and J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (Western Australian Branch) (No 2) (1992) 38 FCR 458 at 462-465. A number of the above cases are concerned with the situation where only some of the respondents wished to make a no-case submission. The problem of a no-case submission being resolved at an interlocutory stage against only some of the respondents will necessarily arise where any particular respondent, whose evidence might be relevant to the claims against the other respondents, is unwilling to elect not to call evidence as a condition of making a no-case submission.

92 The second problem relates to the issue of trial management. In the present case, a 25 day hearing was fixed to commence on 3 May 2004 and to conclude on 4 June 2004. The represented respondents indicated that their no-case submissions would require a detailed examination of all aspects of the ACCC’s claims. Thus, the no-case submissions and the time that would be required to consider and deal with them had the potential to dislocate the conduct of the hearing and could have led to the trial not being completed within the allocated period if the no-case submissions were unsuccessful. That may have given rise to problems about the delay in any resumed hearing, which is a particular problem where issues of credit have been raised. An associated difficulty is that, if the no-case submission failed, the lengthy no-case submissions would inevitably be repeated, with appropriate modification in light of further evidence and the different criteria to be applied in closing submissions. Under these circumstances, there is a very real risk that much of the same evidence would be required to be considered twice.

93 The third problem concerns evidence that has been admitted subject to an objection that was to be dealt with at the close of the evidence. That problem is particularly acute in the present case where a significant body of hearsay evidence has been admitted into evidence subject to the objection of the contesting respondents that the hearsay evidence is not admissible against their clients because it did not meet the Ahern criteria. One of the criteria in issue was whether the acts and declarations of one of the respondents alleged to be party to the price-fixing arrangement, in the absence of the other respondents, are admissible against the other respondents because there is “reasonable evidence” (excluding those acts and declarations) of the existence of the unlawful arrangement or understanding involving the persons in question. The parties, quite correctly in my view, accepted that a ruling on the Ahern issue could not be expected to be made until the Court had before it the entirety of the evidence that was relevant to that ruling. While it is a matter of discretion for the Court to determine the appropriate time at which that ruling is to be made, there is obviously a sound reason why the ruling ought not to be made prior to all of the evidence that might be relevant to the ruling being before the Court. In the present case any evidence that might be adduced by a respondent who is unwilling to elect not to call evidence as a condition of putting a no-case submission could plainly be relevant to the determination of the Ahern issue.

94 While the problems I have addressed in relation to the Ahern issue would not prevent a no-case submission being made on the assumption that the Ahern evidence is admissible against the respondents against whom it is tendered, the requirement to consider the detail of that evidence at an interlocutory stage only serves to emphasise the complexity and difficulty of the task that would be required to be undertaken by the Court in order to deal with a no-case submission.

95 In George Weston Davies J had to consider similar issues. His Honour stated at 58-62:

“Generally, justice is not done by considering the state of the evidence before all the parties have closed their case. It is inconvenient to the judge to form conclusions of fact during the course of the trial; the drawing of inferences from sparse evidence is often a very difficult and fallible method of arriving at the truth of the matter, argument on the submission often delays the hearing and the consideration of the submission and perhaps appeal on the interlocutory order may further delay it. Generally, it is better that a judge should come to his conclusions of fact only at the close of the evidence and for the purpose of giving judgment. In those cases where the discretion not to put a defendant to an election has been exercised, there has generally been a sound reason why justice would best be done by considering the submission and, if allowing it, by bringing the action to a premature end. Such a case may arise where the issue does not depend on the resolution of a subtle state of facts or where the evidence for the plaintiff is so palpably inadequate that it would appear to be an unnecessary waste of time and money to continue the trial.

…

In my view, it would be unsatisfactory to determine the issues involved in this case upon the evidence which is presently before the court. To come to a conclusion at the present time would involve the drawing of inferences from meagre facts, facts which arguably call for an explanation and which have not been explained. I do not wish to indicate that I have formed any view that they should be explained or that necessarily any inference will be drawn against the defendants if they are not explained. I have no view on that matter. Nevertheless, I think that Mr Masterman might reasonably put an argument that the increases which took place on the particular days call for an explanation. I am further of the view that, if the facts alleged in the statement of claim are established, the plaintiff will have an arguable case on the law. I have not attempted to form any concluded view as to whether, if those facts are established, the plaintiff will succeed. It is sufficient at the present time that I think that the plaintiff will have an arguable case.

In my view, justice would best be done by calling upon the defendants to elect whether or not to call evidence so that the submission of no case to answer, if it is made, proceeds upon the whole of the evidence which is to be taken into account in this action. …

If direct evidence of the circumstances in which the increases in price came about is given, the nature of the case will change from one in which inferences are drawn from sparse facts to one in which direct evidence as to the events which occurred is considered. It is true that an election will be a matter of very considerable significance to the defendants but I do not think that that is a particular reason why they should not be put upon their election. In my view, it is preferable that evidence be obtained from persons who have direct knowledge of material facts rather than that inferences be drawn from meagre publicly known facts. …

The evidence against some defendants is weaker than the evidence against others. However, if further evidence is given, the strength of the evidence against a particular defendant may well alter. In Menzies v. Australian Iron & Steel Ltd.and Hummerstone v. Learyit was established that in such a circumstance it is undesirable that one or more of the defendants should be dismissed from the action prior to the reception of all the evidence.”

96 I have set out his Honour’s observations at some length as I regarded them as applicable to the present case at the time the parties applied to make no-case submissions. His Honour’s observations may also be applicable to many other cases which allege breaches of Pt IV of the Act. I would only add that generally, unless all the respondents whose evidence might be relevant to the no-case submission elect not to call evidence relevant to the no-case submission, the appropriate procedure is to defer hearing the no-case submission of the other respondents until all of the relevant evidence is before the Court: cf Trade Practices Commission v Allied Mills Industries Pty Ltd (No 3) (1981) 37 ALR 225 (“Allied Mills”) at 230-231 and 254. Of course, at that stage there may be no point in making a no-case submission as the case would have then moved to final submissions. That, however, will not usually involve any injustice to the parties. Rather, justice will have been done by ensuring that the claims and defences of the parties have been determined on the basis of all of the evidence that is relevant to those claims and defences.

7. Authority of Anderson, Dalton and Rosenow

97 The ACCC alleges that Anderson, Dalton and Rosenow had authority to bind Apco, Brumar and Triton respectively, and that statements regarding past events made by these individuals in the context of the s 155 examinations are admissible as admissions against their respective employers. Additionally, the ACCC contends that the s 155 admissions of Dalton and Rosenow are admissible, pursuant to the Ahern principle, against Triton and Brumar respectively. The following issues arise for decision: (1) in so far as the individual respondents were involved in the price-fixing understanding, was their involvement authorised by their corporate employers; and (2) are admissions or representations made by the individual respondents in their respective s 155 examinations admissible against their respective employers and other corporate respondents?

98 These issues were only seriously disputed with respect to Dalton and Rosenow. Apco did not contend that Anderson lacked authority to bind the company or that his s 155 statements were not admissible against it. Anderson was a director of Apco and during the relevant period he was responsible for acting for and on behalf of Apco with respect to all aspects of Apco’s petrol retailing business. In addition, as at the time of his s 155 examinations, 14 March 2002 and 24 April 2002, Anderson was still a director of Apco and was the person who was responsible for acting on its behalf in relation to dealings with the ACCC. In accordance with the principles stated below, there can be little doubt that Anderson was authorised to act on behalf of Apco in relation to all matters concerning its petrol pricing and that statements or representations made by him in the course of his s 155 examinations are admissible against Apco.

(a) The Law

99 The law concerning a servant’s or agent’s authority to bind a corporate principal in relation to conduct that contravenes the Act is well established. In Trade Practices Commission v Queensland Aggregates Pty Ltd (1982) 44 ALR 391 (“Queensland Aggregates”) Morling J considered whether a servant or agent had authority to engage in exclusive dealing by including in the offers made by him to various contractors a condition that they acquire certain equipment from a particular third-party supplier. The principal denied that its servant or agent had authority to include the condition that constituted exclusive dealing and claimed that, as a result, it did not contravene s 47(6) of the Act. Morling J, after noting that: (1) the agent essentially managed this aspect of the principal’s business; and (2) the manager was in effect given complete authority to negotiate and settle terms and conditions with various contractors; held that the principal had become answerable for the manner in which the agent conducted himself in performing its business, notwithstanding that the directors of the principal were not aware of the imposition of the condition. Morling J concluded (at 403) that, as the servant or agent had authority to make contracts of the kind or type in question, he had actual authority under common law principles to bind his principal. It was not to the point that he did not have actual authority to impose the offending condition. See also Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 (“TNT Management”) at 14-15 and Lloyd v Grace, Smith & Co. [1912] AC 716 (“Lloyd v Grace”).

100 Similarly, in Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719 (“Tubemakers”) it was again pointed out that the agent’s authority was not determined by whether the agent was authorised to enter into a particular illegal transaction but, rather, was determined by whether, in general, transactions of the sort in question were within the scope of the agent’s employment. Toohey J, in rejecting a submission that an agent’s authority is limited to lawful conduct, observed at 742:

“It may be assumed to be an implied term in every contract of employment that the servant or agent will not act unlawfully. And that will have consequences between employer and employee. Yet unlawful conduct has not been held inevitably to be outside the scope of employment.

On the contrary, if a servant or agent has authority to enter into transactions of the sort in question, it is no answer for a principal to say that in the particular circumstances the servant or agent acted wrongfully. Australasian Brokerage Ltd v Australia and New Zealand Banking Corporation Ltd (1934) 52 CLR 430 at 451–2.”

101 Toohey J (at 739) also considered the application of s 84(2) of the Act and agreed with the opinion of Morling J in Queensland Aggregates at 404 that the sub-section was intended to “extend, rather than limit, the liability of corporations for the actions of others.” See also Walplan Pty Ltd v Wallace (1985) 8 FCR 27 at 36-37. Toohey J based his conclusion on the agent in question possessing actual authority to bind the principal on common law principles of agency. However, his Honour stated (at 741) that the same conclusion would have been reached pursuant to s 84(2) which, relevantly for present purposes, deems the conduct of any director, servant or agent of the corporate principal to be conduct of the principal if the conduct was engaged in “on behalf of” the principal and was within “the scope of the person’s actual or apparent authority.” Toohey J observed at 739-740:

“It is unnecessary to attempt an exhaustive statement of the meaning and operation of s 84(2) of the Act. However, some propositions may be advanced with reasonable confidence. To treat the phrase as implying benefit to the body corporate is to place an unwarranted restriction on the words used and is to ignore the general context of s 84 which otherwise shows an intention to extend the liability of corporations. In Re Ross (1980) 54 ALJR 145 at 149, Stephen, Mason, Murphy and Aickin JJ stressed the many possible relationships to which the words ‘on behalf of’ may be applied, saying of the expression: ‘… it may be used in conjunction with a wide range of relationships, all however in some way concerned with the standing of one person as auxiliary to or representative of another person or thing.’ And the words ‘do not necessarily imply that the transaction was with the actual authority of the person represented’ (Otzen v Beabout (1947) 75 CLR 116 at 122).

Sub-section (2) of s 84 is concerned with the conduct of persons representing a body corporate and of others acting at the direction or with the consent or agreement of those persons. It makes that conduct the conduct of the body corporate. The terminology of s 84(2), the reference to conduct by ‘a director, agent or servant … or by any other person at the direction or with the consent or agreement … of a director, agent or servant …’ is not the terminology of Tesco with its directing mind and will. It is more the conventional language of agency.

In my view s 84(2) is an extension of the principles expressed in Tesco and, where proceedings are brought under Pt IV of the Trade Practices Act, a corporation may be held liable either in accordance with the principles in Tesco or by the application of s 84(2). In the latter case questions of the nature and scope of the authority of the representative will arise. The answers will depend upon the particular circumstances. And this is so although proceedings under Pt IV are not criminal proceedings.”

102 More recently, in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3)(2001) 119 FCR 1, Goldberg J considered the relationship between the common law principles of agency and s 84(2) of the Act. His Honour (at 186-189) compared the previously accepted “directing the mind and will” approach of Tesco Supermarkets Ltd. v Nattrass [1972] AC 153 (“Tesco”) to the “authorized employee” approach of Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 (“Meridian”), which was relied upon by the ACCC. The Tesco approach is to ask whether the relevant employee functioned as part of the directing mind and will of the company in relation to the transaction in question. Goldberg J (at 188-189) described the different Meridian approach as follows:

“A different approach was taken in Meridian Global Funds Management Asia Ltd v Securities Commission[1995] 2 AC 500. The question arose whether the knowledge of a company's investment managers that the company was a substantial security holder in a listed public company and that it had not given a notice which it was required to give under securities legislation was to be attributed to the company. The Privy Council answered the question in the affirmative. Lord Hoffman approached the matter by considering what should be the position where the law was intended to apply to companies but a company's primary rules of attribution would defeat that intention. Lord Hoffman continued (at 507):

‘In such a case, the court must fashion a special rule of attribution for the particular substantive rule. This is always a matter of interpretation: given that it was intended to apply to a company, how was it intended to apply? Whose act (or knowledge, or state of mind) was for this purpose intended to count as the act etc. of the company? One finds the answer to this question by applying the usual canons of interpretation, taking into account the language of the rule (if it is a statute) and its content and policy.’

Lord Hoffman concluded [at 511] that the company’s knowledge was to be found in the knowledge of the employee who had the authority to undertake the transaction which required notice to be given by the company.”

103 Goldberg J observed (at 191):

“The amendment of s 84(2) to include conduct engaged in within the scope of a person’s ‘apparent’ authority, as well as conduct engaged in within the scope of a person’s ‘actual’ authority leads, in my view, to a narrowing of any difference between the application of the common law principles, such as are found in Tescoand Meridianand the application of s 84(2).”

104 Although the conclusion of Goldberg J that the agent in question lacked authority to act on behalf of his employer was overturned on appeal because his Honour had erred by applying a more rigorous standard of proof than was necessary to the facts of the case (see Australian Safeway Stores at 430-432), the Full Court did not express any disapproval of the discussion by Goldberg J of the law of agency or of s 84(2).

105 In the context of the Act the different approaches in Tesco and Meridian may be of little significance as s 84(2) provides the statutory answer to the issue of attribution.

106 In so far as s 84(2) refers to ostensible authority the principles in that regard are also well established. Apparent authority can arise where the employer by words or conduct has represented that the employee, who has purported to act on behalf of the employer, is authorised to do what he is purporting to do: see Armagas Ltd v Mundogas S.A. [1986] 1 AC 717, 783; Clayton Robard Management Ltd & Anor v Siu (1988) 6 ACLC 57 (“Clayton Robard”); Lloyd v Grace; Freeman & Lockyer v Buckhurst Park Properties [1964] 2 QB 480 per Diplock LJ at 643-646. In Clayton Robard Kirby P (at 60) explained the rule as follows:

“The basis of our law on ostensible authority is fundamentally that of estoppel by representation. See Pearson L.J. in Freeman & Lockyer (supra) at p 498. The intermediary professes to act on behalf of the principal. He thereby impliedly represents and warrants that he has authority from the principal to do so. The principal must be shown to know of and to acquiesce in the intermediary's professing to act on its behalf to become bound by such profession. Thereby it impliedly represents that he has the principal's authority to act as he does. In these circumstances, the principal is considered to have made the representation or to have caused it to be made or ‘at any rate to be responsible for it’, Freeman & Lockyer, loc. cit.:

‘Accordingly, as against the other contracting party, who has altered his position in reliance on the representation, the company is estopped from denying the truth of the representation.’

The principles stated in Freeman & Lockyer were approved and applied by the High Court of Australia in Crabtree-Vickers Pty. Ltd. v Australian Direct Mail Advertising & Addressing Co Pty. Ltd. (1975) CLC 40-244 at p. 28,474; (1975) 133 CLR 72 at p 78.”

(b) The facts

(i) Dalton

107 Dalton was the senior retail area manager of Brumar. During the relevant period Dalton was responsible for 30 Brumar sites located in country Victoria. Five of the sites were located in the Ballarat city area. Dalton had authority to determine the prices at which Brumar sites would retail petrol and regularly authorised and directed personnel at Brumar’s sites to alter the retail price at which the stations’ petrol was being sold. Dalton ultimately reported to Mr Bruce Holland (“Holland”), managing director of Brumar.

108 In his role as senior retail area manager Dalton had complete discretion to determine the manner in which, and the process by which, the retail price of petrol at service stations operated by Brumar in Ballarat was to be determined in order to enable Brumar to retain market share and profitability. While the evidence suggests that there was a general directive to Brumar employees not to discuss fuel prices with other retailers, there is no evidence that Dalton was specifically informed of the policy. Further, having regard to the discussion in Queensland Aggregates and Tubemakers set out above, such a directive cannot, alone, be relied upon to contend that Dalton’s conduct could not bind Brumar in relation to a contravention of s 45(2) of the Act.

109 It was within the scope of Dalton’s employment to increase Brumar’s prices in order to match those of the other competitors in Ballarat, particularly when he was confident that the price increase was likely to be matched by all of Brumar’s competitors. Brumar effectively delegated to Dalton control over its retail pricing in Ballarat and it was plainly within the scope of Dalton’s employment to take such steps as he deemed appropriate to ascertain whether the increased prices were likely to “stick.” To the extent that those steps involved communications with competitors about price increases, such communications were within the scope of Dalton’s employment. When Dalton took any steps in relation to Brumar’s retail prices he did so on behalf, and for the benefit, of Brumar. Brumar, by delegating authority to Dalton over retail prices, held him out as having authority to act on behalf of Brumar in relation to the prices and any steps he deemed appropriate to take in order to establish those prices.

110 Indeed, but for ss 45(2) and 45A of the Act, I doubt that it would be seriously contended that Dalton did not have actual authority to make such enquiries as he saw fit, including communicating with competitors, in order to raise retail prices to more profitable levels. As explained above, the fact that such communications may contravene those sections, and the fact that the employee was not authorised by his employer to engage in conduct that contravened the sections, does not result in the conduct of the employee not being attributed to the employer. Thus, Dalton’s conduct in relation to Brumar’s retail pricing in Ballarat is to be attributed to Brumar on common law principles and under s 84(2) of the Act.

(ii) Rosenow

111 From August 1998 to July 2001, Triton employed Rosenow as Ballarat area manager. His responsibilities were as follows:

“Core purpose:

Management and responsibility for sales and customers activities within your designated territory, whilst ensuring compliance to [T]riton’s business ethics, statutory regulations and all HS & E policies.

Role accountabilities:

1. Selling:

· Achieve the volume and margin budgets for your territory….”

112 Rosenow was responsible for the administration of Triton’s price-support system in the Ballarat area. Communication to each of the independent Shell retailers of the support levels down to which, and by reference to which, price support would from time to time be provided to them by Triton was integral to the administration of Triton’s price-support system. Generally, Rosenow was not required to seek prior approval of his price-support decisions from anyone at Triton. Until September 1999, the only constraint upon Rosenow’s decision-making power about price support was that he could only lower Triton’s support levels to a point that would enable the independent Shell retailers to match the prevailing market price and achieve their guaranteed 3 cpl margin. Subsequently, a limitation was imposed on Rosenow’s discretion to provide price support that was more than 6 cpl below the retailer’s purchase price, but there was no similar limitation on his power to withdraw or reduce price support when petrol prices were increasing.

113 Rosenow’s position is analogous to that of Dalton, save that Rosenow’s control over the independent Shell retailers’ price increases was indirect and could only be exercised by use of the price-support system. Rosenow was effectively given complete authority to ensure the price competitiveness of the independent Shell retailers. He executed this task by selling fuel to the retailers at a nominal PLP and by providing them with price support to a level that allowed them to remain competitive and retain a gross profit of 3 cpl in respect of the petrol sold. Thus, at all relevant times Rosenow was authorised to provide, withdraw or reduce price support and thereby cause, albeit indirectly, the retail price of the retailers to decrease or increase accordingly. Aside from the limitation on price support over 6 cpl, Rosenow was not required to seek approval of his price-support decisions from anyone at Triton.

114 Although Triton strenuously argued that retail prices were set by the independent retailers, and not by it or by Rosenow, that argument ignores the fact that the supported price generally became the price at which the retailers sold their petrol. Indeed, a purpose of price support was to achieve that outcome.

115 While there may have been a time lag in some of the retailers making the increase, the evidence establishes that they eventually did so. As the Triton sites were not high visibility sites the time lag did not appear to prevent the high visibility sites matching the proposed or targeted increases. If the Triton sites had failed to increase their prices and, as a result gained market share, it is likely that the high visibility sites would have become more concerned about Triton. That situation did not arise because the retailers’ prices generally increased to the new supported price.

116 Thus, the only relevant distinction between Dalton’s and Rosenow’s authority was that any involvement by Rosenow in arranging for price increases was by means of implementing the price-support scheme to achieve the proposed increase rather than by directly increasing the price. While it can be accepted that Rosenow was not authorised to enter into illegal arrangements or understandings, it was within the scope of Rosenow’s employment by Triton for Rosenow to take such steps as he deemed appropriate to determine Triton’s supported price in order to match the current market price. To the extent that those steps involved communications with competitors about price increases, such communications were also within the scope of Rosenow’s employment by Triton. When Rosenow took those steps, with the consequential impact on retail prices, he did so on behalf and for the benefit, of Triton. Triton, by delegating authority to Rosenow over price support, held him out as having authority to so act on behalf of Triton.

117 Accordingly, under both the common law principles of agency and s 84(2) of the Act Rosenow’s actions are to be attributed to Triton.

(c) Admissions in the s 155 examinations

118 Although s 84(2) of the Act does not extend to admissions (see TNT Management at 19 and Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 26 ALR 609 at 633 (“Nicholas Enterprises”)), there are a number of circumstances in which the admissions of a servant or agent in relation to past events may be admissible against the principal. A servant or agent may have authority to make admissions about past events by virtue of the servant’s or agent’s general or specifically delegated authority to answer inquires of a particular nature: see TNT Management at 18. The inquiries may include dealing with investigating authorities in any matter concerning the business: see Nicholas Enterprises at 632.

119 More relevantly for present purposes, s 87(1)(b) of the Evidence Act 1995 (Cth) (“the Evidence Act”) provides:

“For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that:

when the representation was made, the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person’s employment or authority.”

120 Section 87(1)(b) has been applied in the context of cases brought pursuant to the Act. In Australian Competition and Consumer Commission v Mayo International Pty Ltd (1998) ATPR 41-653 (“Mayo International”), a case involving the retail price maintenance of hair care products, the issue was whether a statement by a company’s sales representative was to be taken as an admission by the company. The case involved allegations that a director of Mayo International Pty Ltd (“Mayo International”) sought to have one of its franchising companies direct or persuade its franchisees not to sell Mayo International’s products at a discount. It was further alleged that this directive was accompanied by a threat to withdraw the discount that franchisees received from Mayo International if the franchisees were noncompliant. The statement in issue was made by a Mayo International sales representative in the course of responding to a franchisee’s inquiry regarding why her purchasing discount had been withdrawn. The sales representative advised the franchisee that her discount had been withdrawn in part because Mayo International had discovered that certain other franchisees had been discounting. In Mayo International, it was not disputed that the employee in question had at least some authority to act for the company, however, the company argued that the particular representation went beyond the scope of his authority. The court, after noting that (1) it was the sales representative’s duty to answer franchisee questions; and (2) company representatives were often informed of the rationale behind changes to trading terms; held that the sales representative had authority to make the statement and, as a result, the admission was admissible against the company under s 87(1)(b).

121 Finally, under the Ahern principle, s 155 admissions of one corporate respondent’s agent may constitute admissible evidence against another corporate respondent where both of the corporate respondents and the agent are party to the same illegal enterprise and the admissions were made in furtherance of the illegal enterprise. A similar issue to the one presented here was considered in Shears v Chisholm [1994] 2 VR 535 (“Shears”) in the context of the admissibility of oral evidence given at an earlier trial. At the trial in Shears JD Phillips J stated that the oral evidence was admissible against co-conspirators as admissions only if the declarations were done or uttered in furtherance of the conspiracy: see Shears, transcript of proceedings, 7 April 1992, at 2198. Specifically, at transcript 2198 his Honour stated:

“To my mind, that means that the alleged co-conspirators must have contemplated, as part of their conspiracy, the giving of this evidence (or at least evidence having such content) as distinct from merely the giving of evidence. And, as earlier remarked, the two are quite different. It might be easier in the case of an affidavit to show that the conspirators did have in contemplation the giving of such evidence. It must surely be the more difficult when the evidence is given orally and in the course of cross-examination.”

(i) Dalton

122 At the time of his s 155 examination, Dalton was still employed by Brumar as its senior retail area manager. However, there is no evidence that dealing with the ACCC in respect of matters arising under Pt IV of the Act was within the scope of Dalton’s position or was in furtherance of the price-fixing understanding. As a result, any s 155 admissions by Dalton are not admissible against Brumar under the common law principles stated above. But Dalton’s s 155 admissions are admissible against Brumar pursuant to s 87(1)(b) of the Evidence Act. At the time when the statements were made, Dalton was an employee of Brumar and his statements plainly related to matters within the scope of his employment.

123 I would add that I accept the submission on behalf of Brumar and Dalton that self-serving aspects of Dalton’s s 155 evidence that contradict or explain the admissions, and are therefore favourable to Brumar and Dalton, may be tendered: see Cross on Evidence, 7^th Australian Edition at [33420] and [33455]. However, it is for the Court to determine the weight to be attached to the s 155 examination evidence and Brumar accepted that any consideration of the different aspects of the s 155 evidence may reflect the fact that the self-serving aspects of the evidence might not be given the same weight as the admissions: see Cross on Evidence at [33455].

(ii) Rosenow

124 Any s 155 admissions by Rosenow are not admissible against Triton. I am not satisfied that any admissions were within the scope of Rosenow’s employment or in furtherance of the alleged price-fixing understanding. Also, Rosenow was not an employee of Triton at the time of his s 155 examination and was not authorised by Triton to make any admissions. Accordingly, s 87(1)(b) of the Evidence Act does not apply.

8. Evidence Relating to the Existing Arrangements

125 In the period leading up to June 1999, Central Petroleum, Beasam, Provincial, Balgee, the Leahy Companies, Anderson Petroleum, Chisholm and Justco were parties to the existing arrangements. The evidence establishes that the representatives of these companies communicated with each other regularly for the purpose of initiating and maintaining coordinated price increases in the Ballarat petrol market.

126 The existing arrangements developed from calls in the early 1990’s between Evans, acting on behalf of Balgee, and a school friend of his, Manton, who was the managing director of two companies - Central Petroleum, which operated the Shell wholesale distribution in Ballarat and Central Petroleum Retail. Manton stated that during this period he engaged in price-increase calls with Evans and Muller (representatives of Balgee) as well as with Palmer (a representative of the Leahy Companies). According to Manton, Evans said to him that if he moved board prices in Ballarat the other retailers in the market would follow. On some occasions, Manton made follow-up calls if certain sites had not increased their petrol prices.

127 At the end of 1994, Central Petroleum was dissolved and its wholesale distribution business was sold to Beasam and the retail side of the business was taken over by Provincial, which was controlled by Manton. Triton, which was unrelated to Beasam, was not incorporated until August 1998 and did not commence business until September 1998. Beasam, however, used “Triton Petroleum” as a business name prior to August 1998.

128 Davison followed Manton to Provincial while Rosenow remained in the wholesaling side of Beasam’s business, and later continued his employment with Triton. Manton stated that when he left the Ballarat area in August 1997, the situation was such that when he wanted prices to rise, he would phone either Evans or Muller at Balgee and from that point he had confidence that all the boards in Ballarat would go up.

129 After Manton’s departure, Davison assumed responsibility for setting board prices at all Provincial sites and the existing arrangements continued in much the same form. Davison stated that it was his usual practice to arrange price increases with at least one representative of at least one other distributor or retailer prior to increasing Provincial’s board prices. He said that his customary contact was Muller, as he considered Muller to be “the ringmaster.” In addition, during the pre-June 1999 period, Davison had price-increase calls with Palmer, Rosenow and Zala, an employee of Anderson Petroleum and later Chisholm.

130 Additionally, Davison said that he received follow-up calls from Muller, Palmer and Zala when certain sites had not increased their boards. Davison testified that his goal in making price-increase calls was to help the other retailers know when to increase their prices so the increase would stick. Davison said that when he left the business in May 1997, these types of calls were still taking place.

131 Palmer, a representative of the Leahy Companies, stated that from the start of his employment with Leahy Petroleum Pty Ltd he was aware that representatives of suppliers of petrol conducting business in Ballarat communicated with each other about coordinating increases in the retail price of petrol. Palmer testified that he participated in price-increase calls with Muller (during the 1990 to mid 1997 period) and Levick (from mid 1997 to December 2000), both representatives of Balgee. In addition, Carmichael, Palmer’s subordinate who was the operations/transport manager in Geelong, stated that he also participated in the existing arrangements on behalf of the Leahy Companies. Specifically, Carmichael stated that, at Palmer’s request, he had advised Anderson at Apco of retail price increases in Ballarat. Carmichael said his calls to Anderson took place from about mid 1997 until at least the end of 2000.

132 Zala, a representative of Anderson Petroleum and later Chisholm, also testified that during the pre-June 1999 period he made price-increase calls to, and received price-increase calls from, Evans and Muller at Balgee. Zala said that while he was an employee of Anderson Petroleum, he would pass any price-increase information he received on to Anderson. Zala said that when he left Anderson Petroleum in December 1996 and started working at Chisholm in January 1997, the price-increase calls continued in much the same form, except that he no longer passed price-increase information on to Anderson. Zala said that after he was employed by Chisholm he telephoned Anderson and told him there was a board price movement on in Ballarat but Anderson told Zala that he no longer wanted to talk to him about board pricing or to take his calls. Zala made no further calls to Anderson.

133 Anderson did not dispute Zala’s evidence and said he could only recall telling Zala not to ring him. Anderson said that he took that course with Zala because he was now with a competitor of Apco’s and wanted “to keep my arms length from somebody like Chisholms.” Anderson explained that he took a different approach in respect of Bentley (Justco) because there had been a longstanding family relationship and although he was a competitor he saw Bentley “as a friend and ally and there was nothing wrong in the information that he was giving me.”

134 Once at Chisholm, Zala said he began receiving calls from Levick, a sales representative of Balgee. Zala testified that he made price-increase calls to Bentley and Rosenow. Zala stated that his purpose in participating in these calls, which continued on a regular basis until the end of 2000, was to ensure that board price increases stuck. Levick and Bentley both acknowledged that they participated in the price-fixing understanding during this period as representatives of Balgee and Justco respectively.

135 In particular Levick, who was in charge of retail pricing at Balgee sites, stated that during the pre-June 1999 period he talked pricing with Zala and Palmer on a regular basis and that he was aware that other people and brands in the Ballarat petrol market were also talking about their petrol pricing.

136 Evidence was also adduced of meetings from time to time in relation to the existing arrangements.

137 Putting to one side for the moment the position of the contesting respondents, the evidence establishes that:

· the existing arrangements constituted a price-fixing understanding that was arrived at and given effect to in the pre-June 1999 period by Central Petroleum, Balgee, the Leahy Companies, Anderson Petroleum, Chisholm, Beasam, Provincial and Justco;

· the understanding was one whereby the parties to it initiated and implemented coordinated price increases in the Ballarat petrol market;

· the arrangement evolved throughout the 1990s to accommodate business and personnel changes in the Ballarat petrol market;

· although the parties to the understanding changed over time it remained operative as at June 1999; and

· as at June 1999 Balgee, the Leahy Companies, Justco and Chisholm were parties to the understanding.

138 While I will consider the situation of the contesting respondents in the context of the price-fixing understanding during the relevant period, it is relevant to observe that it is highly unlikely that experienced participants in the Ballarat petrol market who made pricing decisions concerning the retail price of petrol in Ballarat during the 1990’s would not have been aware of the understanding. As explained earlier, the process of stepped price decreases with a sudden and significant price increase by one or more outlets was risky unless the parties increasing their prices were confident that the increases would be matched by their major competitors. The existing arrangements, which successfully achieved the objective of coordinated price increases to bring a discount cycle to an end, provided the basis for that confidence. While some participants in the market might have believed that free-market forces, rather than collusion, were the reason for the increases, experienced participants, such as Rosenow and Anderson who were informed of the increases and had wide and long standing experience in the Ballarat market, would have been aware that there was collusion in relation to the increases. This would certainly have been the case with Rosenow, who was directly involved in the communication process.

139 Anderson’s involvement was not as direct as that of Rosenow. However, Anderson was the recipient of price-increase information prior to the relevant period from Zala, and before and during the relevant period, from Bentley and Carmichael. When he received the price-increase information from Bentley and Carmichael, Anderson was aware that the purpose of the communication of that information was to induce or persuade him to cause Apco to match the increases that had occurred or were in progress in Ballarat.

140 The main relevance of the above findings is that I am satisfied that as at June 1999 Rosenow and Anderson were well aware of the existing arrangements and of the purpose of the price-increase and follow-up calls that were being made to them. To the extent that Rosenow (in his s 155 examination) and Anderson (in his evidence) gave evidence that is inconsistent with these findings, I do not accept that evidence. Their evidence is inconsistent with the evidence of the ACCC’s witnesses, which is set out above and also later in these reasons, which I accept. Any inconsistent evidence of Rosenow in his s 155 examination is self serving and does not carry sufficient weight for me to act on it in preference to the other evidence. As I later explain in respect of Anderson, his endeavours to put a version of events consistent with his innocence led him to present his recollection of many of the relevant events in a manner that was not reliable and that was also inconsistent with other evidence that I have accepted as reliable.

9. Evidence Relating to the Price-Fixing Understanding During the Relevant Period

141 In order to appreciate the role, if any, played by the contesting respondents in relation to the price-fixing understanding during the relevant period it is necessary to consider in detail the witnesses’ evidence concerning the respective roles of those respondents in any price-fixing understanding pre- and post-June 1999. The analysis which, in part, is necessary in order to determine the application of Ahern to hearsay evidence, must necessarily exclude such evidence at this stage. However, where hearsay statements are admissible for the fact of having been made (rather than for the truth of the matter asserted), or as statements by parties which are admissions against interest, the statements are included in the analysis in respect of the relevant party. Thus, for example, a statement made by Rosenow to Zala about a price-increase call Rosenow made to Dalton may be admissible against Rosenow, but it is not admissible against Dalton unless Ahern is found to apply to the statement.

142 Before turning to the evidence it is appropriate to make certain observations about the ACCC’s witnesses. Certain criticisms were made about some of the ACCC’s witness statements, which were said to reflect the views of the person drafting the statement rather than the evidence of the witness. I do not regard those criticisms as well founded. In a case such as the present it is not surprising that some of the witness statements may employ language that is more familiar to the drafter than to the witness, but I am satisfied that the statements were drafted in a manner that sought to reflect the evidence of the witnesses. Further, the trial proceeded on the basis that any contentious evidence about significant conversations would be required to be given orally, rather than by the tender of the relevant parts of the witness statement, if that was requested by a party against whom the evidence was to be tendered. Thus, there was little risk of an ACCC witness statement being tendered that did not truly reflect the views of the witness.

143 Subject to the specific observations I make concerning Bentley and particular evidence given by other witnesses, I am satisfied that, generally, the ACCC’s witnesses gave their evidence honestly and to the best of their recollection. Those observations apply particularly to witnesses such as Davison, Palmer, Carmichael, Timothy Dow (“Dow”), Zala, Levick and Manton who gave evidence of their roles from time to time in relation to price-increase and follow-up calls. I would add that to the extent that witnesses such as Palmer and Carmichael might have given evidence at their s 155 examinations that differed from their evidence to the Court I am satisfied that their evidence to the Court is reliable and is to be preferred.

144 Specific criticism was made of Levick on the ground that his evidence on oath at trial was totally in conflict with his evidence on oath at his s 155 examination, at which he denied having participated in price-increase or follow-up calls. Levick explained that he gave false evidence at the time because he was following the company line. I am satisfied that the evidence Levick gave at trial, rather than the evidence he gave in the s 155 examination, was reliable and should generally be accepted as it reflected his honest recollection of the relevant events and conversations. I would add that Levick’s evidence at trial was consistent with and was also corroborated by the evidence of the other ACCC witnesses who gave evidence about their conversations with him. Levick’s s 155 evidence was inconsistent with that other evidence, which I have found to be reliable, and was plainly untruthful.

145 Bentley needs to be considered separately. He appeared to be a reluctant ACCC witness who did not wish to give evidence that implicated Anderson, and to a lesser extent Rosenow, in the price-fixing understanding. I had the distinct impression from the manner in which Bentley gave his evidence that he was seeking to be protective of Anderson in particular. Also, Bentley appeared to be less than fully frank and honest concerning his conversations with Anderson and Rosenow and, in particular, he endeavoured to play down his role in relation to conversations about retail prices with Anderson and Rosenow. Also, his evidence in that regard sat uncomfortably with the clear and uncontradicted evidence of other witnesses about Bentley’s role as a willing, active and ongoing participant in the price-fixing understanding. It is clear that Bentley, acting in his own financial interest, used his conversations with Anderson and Rosenow to induce or influence them to cause Apco and Shell sites to match the proposed or actual price increases of the initiating respondents so that the increases would not collapse. I am in no doubt that, given the importance to Bentley of those sites matching the increases, and therefore of Bentley’s communications with Apco and Rosenow, he was as forthright as the circumstances permitted in imparting sufficient information to Anderson and Rosenow to encourage them to match the increases and, in Rosenow’s case, to influence him to communicate the increases to Brumar. Thus, some of the comfort that might otherwise have been derived by Apco, Anderson, Triton and Rosenow from the lack of specificity of Bentley’s evidence is considerably diminished by his general unreliability as a witness.

(a) Apco/Anderson

146 It was generally accepted by Apco’s competitors in the market that if Apco’s sites did not increase their prices to generally match (albeit with some discount) the prices at the other high visibility sites in Ballarat, the price increase would not stick. Consequently, it was critical to the success of the price-fixing understanding, and therefore of particular importance to the initiating respondents (or their predecessors), that Anderson at Apco be made aware of and participate in coordinated price increases.

(i) Zala-Anderson

147 Prior to January 1997, when Zala was at Anderson Petroleum, Zala was the link to Apco and Anderson. Zala stated that after receiving price-increase calls from Muller, he would ring Anderson in Geelong and let him know that prices were going to go up. He also confirmed that he made follow-up calls to Anderson. Zala stated that Anderson would inform him if specific sites of competitors had not yet moved.

148 Anderson acknowledged that he received price calls from Zala during this period but said that the information Zala communicated to him had no bearing on the decisions he made about Apco’s price because it was information that he already knew due to the fact that his own franchisees regularly kept him informed of what was happening in the Ballarat market. Anderson stated that he did not consider pricing discussions between him and Zala to be forbidden communications between competitors because, as director of both companies (ie Apco and Anderson Petroleum), Anderson believed he was entitled to know Anderson Petroleum’s proposed prices. In addition, Anderson stated that Zala never gave him any reason to believe he was talking to competitors about prices. Zala, on the other hand, stated that he did mention to Anderson that he was speaking with competitors. In view of the credit findings I make in these reasons in relation to Zala and Anderson, and also of the relevance and likelihood of Zala informing Anderson of his conversations with competitors, I accept Zala’s evidence on this issue. Zala also stated that he was unable to predict whether, on any given occasion, Anderson would or would not follow the rise.

149 As explained above, when Zala left Anderson Petroleum in December 1996 and starting working for Chisholm in January 1997, Anderson told him that he would no longer take his calls. As a result, the initiating respondents (or their predecessors) needed a new means of communicating their proposed price increases to Anderson. Because Anderson was independent, and was regarded as difficult to deal with, the initiating respondents (or their predecessors) sought to channel price-increase communications through persons that Anderson trusted. It was in that context that Bentley and Carmichael became the link to Anderson.

(ii) Bentley-Anderson

150 Anderson and Bentley were family friends. Bentley stated that he was thankful to Anderson for the guidance which he provided when Justco was establishing its business. Bentley confirmed that he spoke with Anderson frequently regarding business matters having nothing to do with the retail price of petrol, but also admitted that sometimes he would pass on market information to Anderson. Bentley said that he only ever passed on to Anderson information regarding competitors’ current retail prices and past movements in competitors’ retail prices. He testified that he did not relay to Anderson information about future prices.

151 Bentley said that he recognised Anderson’s sensitivity to receiving price information and acknowledged that there was “some risk involved” in communicating the information to Anderson. Bentley said that he took the risk because he wanted prices to go up. He noted that he was careful not to “cross that line” with Anderson because he feared that Anderson would become agitated and would cease providing him with the business advice, which he greatly valued. To that end, Bentley testified that he usually “slipped the information into conversation”, rather than stating it directly, and that he used coded language like “Go for a drive” to indicate to Anderson (who was located in Geelong) that prices in Ballarat were on the rise. Bentley stated that Anderson did not react to the information given to him and never solicited price information. He also stated that he was not able to predict whether Anderson, on any given occasion, would follow the rise.

152 Anderson did not dispute that he received calls from Bentley in which Bentley gave “hints” that the Ballarat petrol market was moving. Anderson confirmed that when Bentley said things like “Go for a drive” he understood it to mean that prices in Ballarat were on the rise. Anderson testified that he was reluctant to receive this type of information from Bentley, but admitted that he never asked Bentley to stop giving him the information. Anderson confirmed on cross-examination that he received this information reluctantly:

“BURNSIDE: You said in your section 155 examination, didn't you, that you had taken calls like that reluctantly?

ANDERSON: Yes.

BURNSIDE: Would you tell his Honour why it is - is it the fact that you took the calls reluctantly?

ANDERSON: Took that information reluctantly, yes. I never - - -

BURNSIDE: You did take it reluctantly?

ANDERSON: Yes, I wasn't - - -

BURNSIDE: Okay. Will you tell his Honour why you took that information reluctantly when you say there was nothing at all wrong with it? ---

ANDERSON: It wasn't information that I wanted because it was something that I already knew in the marketplace, but Justin being - his father and my father being friends for the last 30-odd years, or 20 years anyway, he was telling me probably because he was concerned that I wasn't aware that there had been a move, probably I hadn't moved my [signs] and he was just dropping a little hint. Now, I didn't want the information. I didn't tell him not to. But I was just happy to just move along with the conversation as I did. I didn't acknowledge him, I didn't ask him to give it to me. He just did and I didn't acknowledge it in any way, shape or form and it was always in the past tense, like the prices had moved when he rang me and told me to go for a drive, sort of thing. I already knew the prices had moved because of the franchisees earlier in the day I'd been in contact with.

BURNSIDE: If there's nothing at all wrong with what he told you and if you've been family friends for ages, why would you be at all reluctant to receive that information?

ANDERSON: If he doesn't know what I'm going to do, and I never told him what I was going to do, you keep sort of at arm's length away from people, you create that independence. I was an independent. I had my own information from my own franchisees and that's all I required.

BURNSIDE: You've told his Honour you didn't think there was anything wrong?

ANDERSON: There's not.

BURNSIDE: With what he was saying?

ANDERSON: No.

BURNSIDE: Why would you be reluctant to hear it?

ANDERSON: I didn't encourage him to do it.

BURNSIDE: Why would you be reluctant?

ANDERSON: Well, I probably used a different word at the time, at the 155.

BURNSIDE: No, you've already acknowledged today that you were in fact reluctant to hear his information. Why?

ANDERSON: I didn't need the information.

BURNSIDE: I don't want to make it boring, but why would you be reluctant to hear it?

ANDERSON: I don't know.

BURNSIDE: You can't explain it, can you?

ANDERSON: No, I can't explain it, no. I really can't explain it.”

153 Initially, Anderson denied that the information he received from Bentley was useful, stating that in all cases his franchisees would have already supplied him with the same information. Under cross-examination, however, Anderson conceded that the information which he received from Bentley was useful because it helped him to know precisely when to tell his franchisees to check prices, which helped him to ascertain the appropriate time to raise Apco’s prices. Anderson also testified that the information was helpful information in that it allowed him to confirm that his franchisees were “doing the right thing” (ie providing price-increase information in a timely and accurate fashion). Anderson was aware that if he raised his prices to generally match the price increase, that would probably prevent the price increase from collapsing. Anderson said he knew that Bentley’s purpose in sharing this information was to get him to increase his price and that he understood that unless Apco went up, the price rise would not stick. Anderson testified:

“BURNSIDE: That's why you were reluctant to have the call, wasn't it, because Bentley was telling you something you didn't already know?

ANDERSON: Wrong, I disagree.

BURNSIDE: When you asked the franchisees to go out and report back to you, did you know what they were going to report back?

ANDERSON: No, I didn't.

BURNSIDE: So until they reported back you didn't know they would come back saying the market's risen?

ANDERSON: Until they came back I didn't know what happened.

BURNSIDE: If they came back and said the market's risen, that was interesting?

ANDERSON: Yes.

BURNSIDE: But you already knew that from Mr Bentley?

ANDERSON: Yes.

BURNSIDE: You've said at all times up until now that Bentley never told you information that you didn't already have?

ANDERSON: Correct.

BURNSIDE: Is that right?

ANDERSON: Correct.

BURNSIDE: But you agree now that Mr Bentley did tell you of price increases that you didn't already know of?

ANDERSON: No, I don't agree with that.

BURNSIDE: You didn't know about the increase from your franchisees until after Bentley's call, do you agree?

ANDERSON: No. You've got me confused here. My franchisees had already informed me about an increase. I already knew when Bentley had called me.

BURNSIDE: Well, if that's so, why were you waiting for them to call you back?

ANDERSON: To give me further updates. Not everybody was up in the market when they rang me the first time. United mightn't have been up. So I've said, ‘Give me another ring in an hour, two hours. Check United again, give me a ring.’

BURNSIDE: So what you're saying is that Mr Bentley was sort of filling in a bit more of the picture about whether the market was rising or not?

ANDERSON: He was hopeful that I would take his information on board.

BURNSIDE: No, no. What he was telling you added to what you knew?

ANDERSON: Yes.

BURNSIDE: And then what the franchisees told you after that added even more to what you knew?

ANDERSON: Yes.

BURNSIDE: The picture you formed from that gave you the confidence to decide to increase with the market?

ANDERSON: Only the franchisees' information.

BURNSIDE: Sometimes after Mr Bentley spoke to you did you ring the franchisees back straightaway and ask them to check the market?

ANDERSON: I could have done so.

BURNSIDE: You would do that because Mr Bentley had given you the hint?

ANDERSON: He had said the market had moved, yes.

BURNSIDE: That hint has you getting the franchisees to go and check?

ANDERSON: It does.

BURNSIDE: It's useful, isn't it, if Mr Bentley gives you the hint because you know to do a price check right then?

ANDERSON: Not necessarily.

BURNSIDE: Well, forget about whether it's necessary. It is useful isn't it?

ANDERSON: Well, yes, okay, it's useful.

BURNSIDE: Because if you do a price check right away and move your boards, you improve the chances of the increase sticking?

ANDERSON: Yes, it would.

BURNSIDE: Whereas if you wait for the franchisees to do their next routine price check the increase may come and go and not stick?

ANDERSON: Correct.

BURNSIDE: So Mr Bentley was able to help you with the timing of your price checks?

ANDERSON: No.

BURNSIDE: In the sense that you've already told us, that it gave you the nod to ring your franchisees and get them to check straightaway?

ANDERSON: Not all the time.

BURNSIDE: Not all the time, no?

ANDERSON: No.

BURNSIDE: When you felt like it?

ANDERSON: When I was aware that the market was moving in Ballarat.

BURNSIDE: Aware from what - from the hint Mr Bentley gave you?

ANDERSON: From my franchisees. From my franchisees.

BURNSIDE: Aware from the hint Mr Bentley gave you. Correct?

ANDERSON: I could have, yes.

BURNSIDE: When he gave you the hint you could ask the franchisees to check?

ANDERSON: Yes, sometimes.

BURNSIDE: That would help avoid the price rise from collapsing?

ANDERSON: It could.

BURNSIDE: You wanted the price rises to stick for as long as they could?

ANDERSON: Of course.”

154 Anderson also testified in his s 155 examination that Bentley sometimes rang him in circumstances where the rest of the market had moved but Anderson’s sites had not yet moved. Anderson said that under the circumstances it was “obvious” to him that Bentley was ringing because he thought that Apco’s sites had not moved. Anderson maintained, however, that, regardless of the calls which he received from Bentley, he always made his own decisions with regard to Apco’s retail prices:

.” . .I have accepted the information. I have taken the information on board, okay? But I will make my own decision as to what I put on the price board. They won’t influence my decision. I don’t have any deals in relation to price movements.”

155 Anderson presented as an astute, tough, knowledgeable and experienced participant in the retail petrol market. However, as the above passages demonstrate, he endeavoured to present communications with him concerning the price-increase or follow-up calls that were made to him in a manner that was inconsistent with collusion notwithstanding that I have found that he was aware that such communications were being made as part of a collusive process. He stated, but could not explain why, he was the reluctant recipient of price-increase information from Bentley. His refusal to take such information from Zala was an acknowledgement of his awareness of the obvious risks in being involved in collusion with competitors concerning retail prices. Bentley was also a competitor who was plainly passing on similar information for the purpose of persuading or influencing Anderson to match the price increases. In my view Anderson’s “reluctance” to receive the information was because he knew of the risks involved in receiving price-increase calls but was prepared to take those risks because he trusted Bentley (because of the family relationship) and because the information was “useful” to him.

156 The passages also reveal that Anderson’s claim that he was not told anything by Bentley that he did not already know was reluctantly conceded by him to be incorrect. Anderson’s knowledge of Bentley’s purpose, of the significance to others in the market of Apco matching the increase and his willingness to continue receiving price-increase calls implicated him in the process in a manner that is inconsistent with the impression he sought to convey. It is correct that he made his own enquiries regarding price before making any decision, and that it was he alone who made that decision, but that is not inconsistent with the ACCC’s case that Apco, acting through Anderson, became a party to the price-fixing understanding by receiving and acting upon the price-increase calls which Anderson received from Bentley and Carmichael.

(iii) Palmer and Carmichael-Anderson

157 Palmer testified that when he received board price calls from Levick, Levick would request that Palmer contact Anderson of Apco. Palmer said that he asked Carmichael to pass the information along to Anderson. Palmer said that he “always” used words to the effect of: “Ian, can you ring Anderson, Ballarat is moving to “x” cents at “x” o’clock.”

158 Carmichael testified that he knew Anderson for approximately fifteen to twenty years and had an established relationship with him. According to Carmichael he spoke to Anderson frequently throughout the relevant period, often on a daily basis, about various commercial dealings, including wholesale fuel prices and cartage. Carmichael testified that he had price-increase calls with Anderson from about mid 1997 until at least the end of 2000.

159 According to Carmichael, the price-increase calls were along the following lines:

“I said: ‘We have moved in Ballarat, what are you going to do?’ or I said: ‘The market has moved in Ballarat, what are you going to do?’

Mr Anderson said: ‘I’ll look at it.’”

160 Carmichael also testified that he made follow-up calls to Anderson. Carmichael testified that the conversations were to the following effect:

“I said: ‘You haven’t moved yet Peter, what are you going to do?’

Mr Anderson said: ‘I said I will look at it.’ Sometimes Mr Anderson added: ‘Anyway, Shell (or Swift or Bentley) has not moved yet.’”

161 Carmichael said that most of the retail price information he communicated to Anderson regarded changes that had taken place within the market as opposed to proposed changes. He also stated that while he may have relayed information about future prices, he had no specific recollection of ever having done so. Finally, Carmichael said that Anderson never made price-increase or market-information calls to him and testified that Anderson was always noncommittal about whether he would increase Apco’s prices.

162 Carmichael stated that after his s 155 interview, he mentioned to Anderson that the ACCC knew through phone records that they (Carmichael and Anderson) had been talking. Carmichael testified that while he did not remember the detail of Anderson’s response or the remainder of the discussion, he did recall that he and Anderson discussed alternative reasons for the calls other than the communication of petrol price increases. Although the ACCC relied on that evidence, I do not regard it as helpful to its case as plainly there were alternative reasons for the calls.

163 Anderson confirmed that he had a good working relationship with Carmichael and that he spoke with Carmichael frequently regarding a number of business issues other than the retail price of petrol in Ballarat. At first, Anderson stated that he could not recall receiving price information from Carmichael but, when pressed, he denied that Carmichael had told him about retail prices.

164 Carmichael was an honest witness and there is no reason to reject his evidence. Also, I have some difficulty with Anderson’s failure to recall that Carmichael provided price-increase information to him. The information was similar to that given by Bentley and therefore would have been “useful” to Anderson for the same reason that Bentley’s information was “useful.” However, Carmichael’s information was passed on more regularly as he was the conduit utilised by Balgee and the Leahy Companies, which were both competitors of Apco, to ensure that Anderson was aware of the increase. It is inherently unlikely that Anderson would have no recollection of such calls. In my view, his evidence on that matter is another example of Anderson’s unwarranted reluctance or refusal to acknowledge or accept anything that might implicate him as a party to the price-fixing understanding. Anderson sought to reconstruct any implicating events, possibly even believing in his own reconstruction, irrespective of the accuracy of the reconstruction.

165 Finally, as with Bentley, Anderson’s preparedness to receive the information arose because it was useful to him and because he believed that the risk element in receiving the information was significantly reduced by reason of his close working relationship with Carmichael.

(iv) Apco Franchisees-Anderson

166 Anderson stated that the Apco franchisees were his source for pricing information such that he did not need information from competitors. Various Apco franchisees outlined their communication patterns with Anderson during the relevant period. Shirlene Dobson, Apco’s Main Road Ballarat franchise owner from 1 June 2000 until October 2001, stated that Anderson seemed to know when prices were on the rise. She said that when Anderson called to check price information, he seemed to be just confirming what he already knew - that prices were on the rise. Likewise, Donna Pelchen, Apco’s Main Road Ballarat franchisee prior to Ms Dobson (from October 1991 to May 2000), stated that her conversations with Anderson led her to believe that Anderson had sources other than his franchisees for retail price information.

167 Steven Pelchen, Ms Pelchen’s husband, also testified that from his calls with Anderson he too believed that Anderson had sources other than the Apco franchisees for pricing information. Mr Pelchen stated that he believed this because Anderson had information that the franchisees did not have. Mr Pelchen testified that when Anderson would call and ask him to do price checks he would say things like (a) “see if everyone has gone up”; or (b) “they’re going up at two o’clock”; or (c) “go and do a price check‑I believe they might be up by now.”

168 Janet and John Carroll, Apco’s Skipton Street Ballarat franchise owners, also testified regarding their communications with Anderson and the other Apco franchisees during the 1999 to 2000 period. Both stated that at no time did Anderson mention, or seem to have, a source other than the franchisees for pricing information. Mr Carroll testified that he believed there was tension between Anderson and the Pelchens and that Mr Pelchen had told him that he had been advised that if the ACCC won against Apco, he could take legal action against Apco. While Mr Carroll could not recall specifically what Mr Pelchen had said, Mr Carroll stated that it was his impression that Mr Pelchen intended to sue Apco. Mr and Ms Pelchen testified that they felt no ill will towards Apco or Anderson.

169 While there was said to be some conflict between the evidence given by the Pelchens on the one hand, and the Carrolls on the other, I doubt that anything turns on that issue. I have already found that Anderson regarded the price-increase information which he received from Bentley and Carmichael to be useful and that he acted on that information by requiring his franchisees to monitor the prices in Ballarat in order to better enable him to decide whether to match the increase. Thus, it is inherently likely that on some of those occasions Anderson communicated with his franchisees he did so in a manner that indicated that a price increase had occurred or was occurring.

170 There was also an issue as to whether Anderson was told that the increase had occurred, was in progress or was about to occur. The evidence is to the effect that Anderson was usually called when the increase had been made by one or other of the initiating respondents and had been matched or was in the process of being matched by other respondents. It is therefore unlikely that Anderson was told of a future increase that had not yet been made at any of the Ballarat sites.

(v) Conclusions

171 I am satisfied that Anderson was the recipient of price-increase calls from Bentley and Carmichael and follow-up calls from Carmichael and that he acted upon those calls by instructing his franchisees in Ballarat to inform him of price increases by Apco’s main competitors so that he could determine whether and, if so, when to match the increases, albeit with some discount. Overall, I am of the view that it is likely that on some occasions when Anderson was being asked by Carmichael (albeit indirectly) to look at a price increase that Anderson said he would look at it or that others in the market had not yet gone up. Such a response is consistent with Anderson’s understanding of the purpose of the price-increase and follow-up calls and also with his policy of being one of the last to go up.

172 Anderson was aware that the purpose of the price-increase and follow-up calls was to persuade or influence him to match the increase and that if he did not do so the price increase would collapse. In cross examination Anderson gave the following answers on that issue:

“BURNSIDE: You would sometimes try to hold the price rise back a little bit to get the benefit of increased volume?

ANDERSON: Yes, I could.

BURNSIDE: I think you said at the section 155 examination that you would hold it back until the Indians [got] restless?

ANDERSON: Yes, I could.

BURNSIDE: Who are the Indians who would get restless?

ANDERSON: Well, it would be the locals in the town because if I didn't move up they'd come back down to match me.

BURNSIDE: Yes?

ANDERSON: There was always a period of time you knew you could stretch it to before it would fall over.

BURNSIDE: The Indians then were your competitors?

ANDERSON: Yes, competitors.

BURNSIDE: If they got restless then you knew it was time for you to increase?

ANDERSON: No.

BURNSIDE: Because if you didn't increase the increase wouldn't stick?

ANDERSON: It was just an expression that I used at the time.

BURNSIDE: I understand?

ANDERSON: I knew I could stretch it to a certain length of time when the market had moved up and then I'd have to move.

BURNSIDE: That's right. You have to move because if the Indians got restless they would bring their price back down?

ANDERSON: Yes.

BURNSIDE: You wanted to time it so that you got your increase just before the Indians got restless?

ANDERSON: Yes.”

173 While Anderson may not have been aware of the details of all of the parties involved in the process by which the proposed price increase was to be secured, I am satisfied that he was aware that the process was longstanding (ie a continuation of the existing arrangements) and included the Leahy Companies and Justco, and probably Chisholm. The reason for the last observation was that Anderson was aware that Zala was with Chisholm when he refused to allow Zala to continue to convey price-increase information to him and would have been generally aware of the longstanding correlation between the price-increase calls he was receiving and increases in price at the sites of all of the initiating respondents including Chisholm. Also, Zala’s evidence, which I have accepted, is that he told Anderson that he was talking to competitors. Anderson’s awareness of the process is also supported by his observations to Carmichael about sites that had not yet gone up. Finally, because Anderson was aware of the collusion that was occurring between competitors, he would have been aware that the sudden and significant price increases relied upon by the ACCC were occurring as a consequence of that collusion, rather than as a consequence of free market forces.

174 However, it is correct that the initiating respondents did not know whether Apco would match any increase until it did so and it is also clear from Annexure A and Anderson’s evidence, which I accept on this point, that he made his own decision on price increases based on his commercial interest. The fact that Anderson was prepared to receive and did receive price-increase calls did not justify any expectation on Carmichael’s or Bentley’s part that Apco would increase its prices. However, the fact that Anderson was prepared to receive, received and acted on the calls (eg by instructing franchisees to obtain price information and by making observations about other sites not rising from time to time) was likely to have led Anderson, and the parties to the price-fixing understanding who were linked to him, to conclude that:

· the calls to Anderson were a significant aspect of any price-fixing arrangements;

· the calls increased the likelihood of Apco increasing its prices in that they enabled Anderson to be confident that if he matched an increase it was likely to stick;

· the calls made it more likely that the price increase would be taken up by Apco, and would therefore “stick”, than if the calls had not been made;

· if Apco matched the increase it was likely that it would stick.

175 I will return to the significance of my findings later in these reasons when I turn to consider whether Apco contravened s 45(2) as is alleged by the ACCC and, if so, whether Anderson was involved in that contravention.

(b) Brumar/Dalton

176 Before considering the evidence in relation to Brumar and Dalton it is helpful to outline the origins of Brumar’s business and identify what role it and Dalton had in the existing arrangements.

177 Brumar was formed on 15 October 1998 for the purpose of taking over the operation of certain Shell sites in Victoria. The companies from which the sites were taken over were Friway One and West Fuels. The Friway One sites were taken over by Brumar in October 1998 while the West Fuels sites were taken over in November 1998. Brumar continued to employ all existing staff at these sites. In particular, Dalton, previously at Friway One, commenced work with Brumar as operations manager for Ballarat in October 1998 and Purtell, previously at Provincial and West Fuels, commenced work with Brumar as the Geelong operations coordinator in November 1998.

178 Purtell gave evidence of price-increase calls concerning prices in Geelong that involved Brumar and Shell. Purtell said that on his last day of employment with Brumar in late January 1999 he gave Dalton a verbal briefing regarding the practices, policies and procedures of the Geelong area coordinator’s role because Dalton was absorbing the role as part of his position. Purtell stated that at the time of the briefing he was aware that Dalton was a senior manager at Brumar, responsible for setting the boards at Brumar’s Ballarat area sites. He further said that as part of the briefing he advised Dalton that Heikkila from United would be calling him regularly regarding board prices for the Geelong area. Purtell testified that he also told Dalton that he had been instructed by Holland to pass any price information he received from Heikkila to Brown at Shell and to await instructions from Brown as to Brumar’s pricing.

179 The ACCC relied upon Purtell’s evidence that suggested that Brumar personnel were involved in price fixing in Geelong, but the evidence does not relate to any involvement by Dalton in the existing arrangements in Ballarat in the pre-June 1999 period. I am not satisfied that the evidence relied upon in relation to the Geelong market is sufficiently probative of the existing arrangements in the Ballarat market to enable it to be relied upon to support the ACCC’s case in relation to the price-fixing understanding in Ballarat.

(i) Evidence of Brumar/Dalton’s role in the price-fixing understanding

180 As was the case with Apco, the participation of Brumar’s high volume Shell branded sites in coordinated price increases was critical to the ultimate success of any price-fixing understanding in Ballarat. The evidence clearly establishes that the initiating respondents regarded it as necessary that Brumar be informed about the increases and that Rosenow was to be the main contact and conduit for Dalton’s sites.

181 Levick stated that in the handful of follow-up calls he made to Rosenow, the topic of discussion was Dalton and the Shell sites. Levick also said that he did not regard the price-increase calls as involving any sort of commitment or undertaking. He stated that, with regard to fuel pricing, Dalton “played his own game.” Levick further testified that as far as Dalton was concerned, any price increase “was to a very large extent based on hope.”

182 Zala testified that at some point in 1998 Levick asked him to take over the job of ringing Rosenow. Zala also had no expectation that calls by Rosenow would result in Brumar increasing its prices.

183 Zala said that he would call Rosenow when he saw that a particular Brumar site had not increased its boards.

184 The evidence of Levick and Zala describes the role assigned to Rosenow but, subject to Ahern, it is not admissible against Dalton or Brumar in so far as it is relied upon to infer that price-increase or follow-up calls were made by Rosenow to Dalton.

185 During the relevant period, Dow worked at Triton in the office next to Rosenow’s. A glass window separated the two offices. Dow said that if he listened he could sometimes overhear what Rosenow said. Dow testified that on some occasions he picked up the phone when Bentley, Dalton, Levick and Zala were attempting to speak to Rosenow. Dow testified that after he transferred these calls to Rosenow, he sometimes overheard Rosenow comment that prices were at ridiculous levels or state that he was aware of price movements. Dow said that he also heard Rosenow ask whether Dalton had been for a drive up Sturt Street or Hertford Street.

186 Dow stated that he also took calls for Rosenow from Dalton when Rosenow was not in the office. He said that, generally, if Dalton rang for Rosenow, Dalton would just leave a note for Rosenow to return the call. However, Dow said that occasionally Dalton would ask him whether there had been any price movements in Ballarat. Dow testified that, in those situations, he would tell Dalton of price movements if he were aware of any.

187 Brumar claimed that the conversations which Dow overheard were with “Garry”, and that it was mere speculation as to whether the person referred to was Gary Dalton from Brumar or Gary Treloar, the manager of Ballarat Taxi Co-op which was one of Triton’s independent resellers. While there may be some doubt about that matter, I have concluded that it is appropriate to infer that the calls referred to by Dow were likely to have been with Gary Dalton. The reason is that there is other evidence of Dalton communicating with Rosenow about retail prices and the limited evidence as to the content of the calls suggests that they were likely to be on that topic. Thus, the context of the calls is consistent with the calls being with Dalton. I would add that there was little specific evidence to support Brumar’s submission, although it is clear that Rosenow would have talked from time to time to Gary Treloar about price support. Finally, Dalton’s failure to give evidence on that issue entitles me to be more confident in drawing the inference that the calls were with him.

188 Dow also gave evidence about times when Zala called Rosenow but Rosenow was not in the office to take the call. Dow said that Zala would tell him when particular sites had not changed prices. According to Dow, the sites that Zala generally mentioned were Brumar sites. Occasionally, after such calls from Zala, Dow said that he would call Dalton and mention this information to him.Dow testified that Dalton, in response, would say, “Okay.” Dow also said that he observed Dalton and Rosenow meeting in Rosenow’s office approximately twice a month during the 1999 to 2000 period. Dow testified that, whilst the two were meeting, he overheard a discussion about the retail price of petrol being at ridiculous levels (ie very low levels).

189 Dow acknowledged that Dalton might have rung Triton about purchasing lubricants. Dow also said that Dalton made numerous calls and was jumping up and down in Triton’s offices about Triton drivers dropping off small amounts of fuel at Brumar service stations. Dow said that Dalton rang from time to time to arrange for Triton to deal with small customers who wanted a quantity of lubricants and that Dalton also appeared at the Triton depot and spoke to Dow about freight differentials for different locations around Ballarat.

190 Mark Edwards (“Edwards”), head of Triton’s sales division during the relevant period, testified that while Brumar and Triton may have needed to communicate on occasion regarding things generic to the businesses, such as Shell signage or shelving for shops, it was unnecessary for Rosenow to discuss petrol pricing in any shape or form with representatives of Brumar.

191 Holland testified that Dalton told him that he had conversations with Rosenow from time to time where Rosenow would say things like:

· “Have you noticed the market’s moved?”

· “I’m going to move my price.”

· “Have you noticed the prices have moved?”

192 Dalton did not testify at trial, however, certain of his statements at his s 155 examination pertaining to the period in question are relevant. Dalton acknowledged that he had occasional conversations with Rosenow. Dalton said that in these conversations Rosenow would sometimes say, for example, “I’m going to move my sites tomorrow.” Dalton agreed that it was his recollection that most of Rosenow’s calls were about Rosenow moving his price upwards. Dalton stated that Rosenow never mentioned whether other brands would be moving and said that in response to this information from Rosenow he would simply say, for example, “Fine. It makes no difference to me.”

193 Dalton’s s 155 testimony was equivocal regarding whether he associated Rosenow’s calls with price increases in the market:

“BURNSIDE: Yes. So that you would have come to associate his calls about his proposed movement with actual movements in the market.

DALTON: This [is] probably something I’ve been grappling with, yes. It wasn’t something - - -

BURNSIDE: It is a connection that you noticed at the time.

DALTON: Well, I didn’t notice it at the time, but with the benefit of hindsight I’m starting to notice it now.”

194 In addition, Dalton acknowledged that the information which Rosenow provided was interesting and useful. He agreed that that is why he never told Rosenow to stop providing the information:

“BURNSIDE: It is interesting information to know that when he says something is going to happen at his sites, that the same thing happens along Sturt Street.

DALTON: Yes, you could probably say it was interesting, yes.

BURNSIDE: And it is useful information. Regardless of what you do with it, it is useful information.

DALTON: Yes.

BURNSIDE: And because it is useful information, you never told him that you did not want that sort of conversation with him again.

DALTON: No, I didn’t. I should have, but I didn’t.

BURNSIDE: And I am suggesting to you the reason you did not was because it was useful information to have.

DALTON: I didn’t make that connection, but I know what you’re saying.

BURNSIDE: Well, you may not, actually.

DALTON: Okay.

BURNSIDE: But you agree it was useful information, and I am suggesting that that is the reason that you did not tell him to stop talking like that.

DALTON: When you put it like that, yes.”

195 Dalton also stated in his s 155 examination that he believed that a call from Palmer, where Palmer said, “we should” in relation retail petrol prices, “concerned” him. Dalton testified that because Palmer’s words concerned him, he “stopped [Palmer] in his tracks.”

196 In my view Dalton was an experienced retailer who was responsible for Brumar’s retail prices in his area and, as I have found with Anderson, would clearly have understood the connection between price-increase information provided to him by Rosenow and the sudden and significant price increases occurring in the market at that time. He also understood that the information was useful to him for the same reason Anderson did. It enabled Dalton to make his decision on a price increase with the knowledge that it was likely that he was being informed of it as part of a process by which the increase was occurring in the market. There is no other reason for Rosenow’s price communications with him. He was plainly aware of the risk of price collusion as a result of being involved in price-increase calls between competitors, as he said that he rejected a similar call from Palmer. While Triton may not strictly be a “competitor” of Brumar, its ability to control prices at its Shell sites, which were competitors in the Ballarat market, made its role akin to that of a competitor for the purposes of receiving price-increase or follow-up calls. In his s 155 examination Dalton acknowledged that Triton was a competitor “in a way” but not a direct competitor.

197 I infer that a person in Dalton’s position, and with his background and responsibilities in the market, knew the message being conveyed to him by Rosenow when he made calls about increasing prices at Triton’s sites, and would also be aware that sudden and significant price increases occurring in the market were likely to be related to those calls. I have already explained why that is so with Anderson and I do not regard Dalton to be in any significantly different position in that regard. The main differences between the positions of Dalton and Anderson is that the evidence of Dalton’s involvement in the price-increase process is more ambivalent, less specific and arises primarily from Holland’s and Dow’s evidence and from Dalton’s reluctant admissions in his s 155 examination. However, I can more confidently draw the inferences set out above in light of Dalton’s absence from the witness box.

198 At trial Brumar and Dalton also tendered portions of Dalton’s s 155 examination. The following matters emerged from that material:

· Dalton regarded his competitors as Swift on Sturt Street and, to a lesser extent, Apco on Main Road and the Mobil outlets. However, Swift was the main competitor;

· Brumar’s strategy on pricing was to identify its competitors and match their board price. Essentially, Brumar followed Swift. It checked Swift’s boards two or three times per day and sometimes more. Brumar matched Swift whenever it could, whether going up or down;

· Dalton regarded Swift as a direct competitor and, as it was Swift that decided his prices, he was not in contact with them “in any way, shape or form”;

· Dalton regarded Triton as a competitor “in a way” but not a direct competitor. The Brumar sites were predominantly on the main street of Ballarat whereas Triton’s sites were usually smaller traditional service stations with mechanics;

· on occasions when the market moved but Brumar did not, Dalton said he did not recall Rosenow ringing him to ask why Brumar had not moved;

· Dalton said that the information which Rosenow gave to him about his intention to increase the price of fuel at his sites did not influence him. He did agree, however, that the information could provide at least a temporary advantage; Dalton said that he continued to monitor his competitors and moved when they moved;

· when Rosenow gave information about his sites, he did not mention a specific price or figure.

199 I regard Dalton’s self-serving s 155 statements as being of limited weight. While it is true that he was cross-examined, the fact remains that the material available to the ACCC at the time was substantially different to the material now available to the ACCC. Thus, the self-serving evidence was not able to be tested in the manner that would have occurred at trial. The statements might have been entitled to greater weight if they were supported by the witnesses who gave evidence and were subjected to cross-examination at the present hearing. On the important issue of the content of price communications that has not occurred. Also, I do not accept that price-increase calls did not influence Brumar’s price-increase decisions. In saying this I accept that, ultimately, pricing decisions were likely to have been made by Dalton for reasons that he thought were in Brumar’s interest, but I do not accept that the fact that he was told of the increase occurring in the market did not influence him. While the evidence does not disclose the frequency of the calls between Rosenow and Dalton, as I later explain, Annexure A and Exhibit DA 13 show a pattern of calls between them on price-increase days. In that regard the submission of the ACCC at [76] above is soundly based. The evidence establishes that price increase calls were influential for at least two reasons. First, they gave the parties the confidence they needed to increase their prices by removing or significantly reducing the risk of any of the parties being above the market price and losing market share. Second, they were part of the process that enabled the price increases to “stick” by ensuring, as best the parties were able to, that the increases occurred quickly, thereby avoiding the collapse of the increase.

200 Also, although Dalton’s statement that Brumar generally followed Swift’s prices was supported by Zala and Levick, the fact of Brumar generally matching Swift’s prices is not inconsistent with collusion if Swift was a colluding party and Brumar was aware of the collusive process. If those matters are established then when Brumar matches Swift’s prices it may be doing so in the knowledge that the increase is part of a coordinated process involving the main competitors in the market, with the consequence that the risk in any operator being above the market, and losing market share (eg to Apco or Swift), is removed or substantially reduced.

(ii) Conclusions

201 To summarise, the non-hearsay evidence against Brumar and Dalton lacks specificity but, nonetheless, I am satisfied that it establishes that:

· Dalton received price-increase calls from Rosenow, knowing that such calls were related to the sudden and significant increases in price occurring in the market;

· the information that Rosenow communicated to Dalton in the calls was interesting and useful to Dalton;

· Dalton never asked Rosenow to stop calling;

· Rosenow communicated with Dalton regularly and over the telephone and on occasions at Rosenow’s office;

· on some occasions when Rosenow was not available, Dalton asked Dow whether there had been any price movements in the Ballarat market;

· on some occasions when Brumar sites had not increased, Dalton received a follow-up call from Dow;

· in response to Dow’s follow-up call Dalton would say, “Okay”; and

· there was no business need for Dalton and Rosenow to speak about retail prices.

202 Although Brumar and Triton were not direct competitors, Dalton was aware that Triton was connected with potentially competing Shell sites and that there was a risk of collusion being alleged if price information was being exchanged between them. However, save for Holland’s evidence, there was limited evidence before the Court of the precise content of the conversations between Rosenow and Dalton as they both elected not to give evidence. Although Dalton’s s 155 examination throws some light on that subject, much of that evidence is self-serving and, as explained above, I have discounted the weight to be given to it. In particular, I regard the s 155 examination evidence that sought to downplay the role of price-increase calls as inherently unlikely given my conclusions in relation to the significance of those calls.

(c) Triton/Rosenow

(i) Rosenow’s role in the existing arrangements

203 In the pre-1999 period, Rosenow’s role in the existing arrangements varied. Initially, while working for Davison at Central Petroleum, it appears that Rosenow was only tangentially involved in the arrangements. However, by the end of that period he fulfilled two important functions. First, he was able to provide, reduce or withdraw price support to the independent Shell retailer sites. Second, he was the initiating respondents’, or their predecessors’, link to Dalton at Brumar, the company that controlled the high visibility Shell branded sites in Ballarat.

204 Davison testified that in the 1992-1994 period, Rosenow took over his duties with respect to the price-fixing arrangement when he was on holidays:

“Strong: What happened in this 92 to 94 period when you were on holidays?

DAVISON: It was that Tony took over my role.

Strong: What instructions did you give him about what was involved in your role?

DAVISON: That he was to contact Peter Muller at Mobil and that Peter would be in contact with him. In fact I rang Peter and told him that Tony was taking my role over whilst I was away on leave or away at a course or something.

Strong: Did you say anything to Tony Rosenow about the circumstances in which he should contact Peter Muller?

DAVISON: That he was only to call Peter Muller and that Peter would get or try to get everything in place, and that he would call him back - that Peter would call him back.

Strong: Why did you say to him, ‘Only call Peter Muller’?

DAVISON: I was very aware of the sensitivity of the calls, and that I wanted Tony only to talk to Peter Muller.

Strong: When you say ‘the sensitivity’, what do you mean?

DAVISON: Well, we were open to interpretations, and dealing with too many people made the job even more difficult. So if he spoke to one person whom I trusted, that I thought that that was the best way of handling it.

Strong: When you said this to Mr Rosenow, what did he say to you?

DAVISON: He'd say, ‘Okay, that's fine. I'll do it.’

…

HIS HONOUR: Can you just recall as best you can what was the conversation you had or what conversation did you have with [Rosenow]?

DAVISON: The ones that would come to mind would be the ones where the price didn't increase and the difficulties associated with that, and there might have been phone calls to and from, you know, over a period of days without an outcome. So Tony could relate that back to me - those problems.

STRONG: Can you recall anything else that Mr Rosenow told you about what happened while you were on holidays?

DAVISON: Only about price decreases, but, no, I don't think so.”

205 Although Rosenow was aware of a price-fixing arrangement during the 1992 to 1994 period, his involvement in it was fairly limited, merely substituting for Davison when he was on holiday.

206 Following the dissolution of Central Petroleum in 1994, Rosenow’s role in the arrangement changed. According to Davison, during this period he made price-increase calls to Rosenow at Beasam. Davison testified that the new multi-site franchise system in place meant that he no longer had direct influence over the secondary network of independent Shell retailer sites. Davison stated that, as a result, he needed Rosenow’s help to get the boards at these sites to a specific price at a specific time. As explained above, during a discount cycle Rosenow, through the price-support mechanism, was able to effectively determine the retail price of petrol sold at the independent Shell retailers. Even though the independent Shell retailer sites were not considered “key sites”, their participation in the coordinated price increases to end the discount cycle was nonetheless regarded by the participants in the price-fixing arrangement as relevant to its overall success.

207 Regarding Rosenow’s reaction to Davison’s price-increase calls, Davison testified that Rosenow said he would “see what he could do” and would call back with information as to whether the specified price was achievable or not. Additionally, Davison said that he had made follow-up calls to Rosenow when certain sites had not increased their boards. On the other hand, Rosenow stated in his s 155 interview that he could not recall whether Davison rang him during this period.

208 Davison testified that during the late 1994 to mid-1997 period he had occasional price-increase calls with Dow, an employee of Beasam, when Rosenow was unavailable.

209 In addition to influencing the retail price of petrol sold at the independent Shell retailer sites, Rosenow was also the initiating respondents’ link to the high visibility sites controlled by Brumar. Zala testified that he made price-increase calls to Rosenow at Levick’s request. Rosenow, in his s 155 examination, said that he could not confirm whether Levick rang him prior to 1999 or when exactly Zala’s calls to him began.

210 Regarding the price-increase calls Zala made to Rosenow during this period, Zala testified as follows:

“BURNSIDE: Now, before the time United came into the market and the cycle speeded up, you continued to receive board price calls from Mr Levick, and what did you do in response to his board price calls after he'd suggested that you ring people? What did you do after you got a board price call?

ZALA:At times he would say he’d rung everybody, and at other times he asked me if I’d ring Bentley and Rosenow.

BURNSIDE: Did you ring Mr Rosenow and Mr Bentley in response to that request?

ZALA: Yes.

…

BURNSIDE: When Mr Levick rang you with a board call, and you rang Mr Rosenow, what would you typically say to him, and what would he say to you?

ZALA: Typically I would say to him exactly what had been said to me. I'd say to him that I'd had a phone call from Levick, and that there was a price movement going at a particular time, and at times, to a particular price. They didn't necessarily always tie in.

BURNSIDE: What typically would he say to you when you told him this?

ZALA: Sometime during my meeting with Tony on those two occasions, he explained to me that the high-volume Shell sites in Ballarat weren't under the same control or owned by the same company as the sites that he supplied fuel to. In fact, he didn't supply fuel to those, that they were run quite separately from his sites, and the basis of the conversation was, ‘I'll pass it on.’

BURNSIDE: Did he tell you who he was going to pass it on to?

ZALA: No, at that stage I had no idea who he would pass that information on to and I didn't ask. It was only at some time later that I became aware of who that person was.”

211 Brumar owned the high visibility Shell sites in the Ballarat petrol market. Without price increases at the Brumar sites, a coordinated price increase would not “stick.” Thus, it was important to the initiating respondents that Brumar be aware of the proposed price increases. In the pre-June 1999 period, Rosenow provided the link to Brumar.

(ii) Evidence of Triton’s and Rosenow’s role in the price-fixing understanding

212 As from September 1998, when Rosenow commenced his employment with Triton, its role in the existing arrangements was defined by Rosenow’s conduct as he was an authorised employee acting within the scope of his employment. While Triton cannot be bound by its predecessor’s role in relation to the price-fixing understanding in so far as Rosenow was involved in that understanding and continued that involvement in his capacity as an employee of Triton, Triton is fixed with Rosenow’s knowledge of the understanding.

Zala

213 Several witnesses testified regarding Rosenow’s participation in the price-fixing understanding during the relevant period. Zala testified that Levick asked him to make price-increase calls to Bentley at Justco and Rosenow at Triton. Zala stated that it was his understanding that both he and Levick made price-increase calls to Triton. Zala said that while he usually spoke to Rosenow, on occasion he spoke to Dow.Zala said that the calls he had with Dow were similar to the calls he had with Rosenow. Zala said:

“Triton only supplied a small number of low visibility sites in the Ballarat region. It did not supply the high visibility Shell branded sites in Ballarat, such as those in Sturt Street. I became aware of this shortly after I began making board price and follow-up calls to Mr Rosenow, when Mr Rosenow informed me in words to the following effect: ‘They’re not operated by me. I’ll pass the message on.’ Based on this conversation, I understood that Mr Rosenow was also the contact point for these Shell branded sites even though he did not have a role in operating the sites. While I did not discuss the matter further, I assumed that the sites were operated on a similar basis to Caltex franchisees. I subsequently became aware that a separate business, Brumar, operated several Shell branded high visibility sites in the Ballarat region. On some occasions when I drove past Brumar operated sites that had not increased their board prices at about the time referred to during board price calls I made follow-up calls to Mr Rosenow and asked him if the Brumar sites would be increasing their board prices. On other occasions I received follow-up calls from Mr Levick about these sites . . .and passed on Mr Levick’s message to Mr Rosenow.”

214 While Zala said that he generally did not receive calls from Rosenow, he did recall one time when Rosenow called him and said, “Go for a drive, something is happening.” Zala said that he also made follow-up calls to Rosenow:

“BURNSIDE: Okay. Can I ask you about follow-up calls that you received or made when you were at Chisholm, okay? First of all, did you ever make follow-up calls to Mr Rosenow?

ZALA: When I was at - sorry, Chisholms or Andersons, did you say?

BURNSIDE: When you were at Chisholm?

ZALA: Chisholms, yes.

BURNSIDE: As best you can recall, when you made a follow-up call to Mr Rosenow, what did you say and what did he say?

ZALA: On the occasions that I rang Mr Rosenow it was to say that one of the high visibility Shell sites had not gone, and ‘Did you pass the message on?’ and he would say, ‘Yes, I have’ or ‘Yes, look, I've passed the message on. I'll ring him and remind him.’

BURNSIDE: That happened on?

ZALA: A number of occasions. But, again, not a lot of occasions, because Shell would generally follow the lead of the others.

BURNSIDE: Who operated those high visibility sites that he referred to?

ZALA: Well, after we took over the lease in June of 2000 of the Hertford Street site, I then became aware - I dealt with Mr Dalton, and I then became aware that the company that operated the high volume sites that were branded Shell in Ballarat were run by a company by the name of Brumar.

BURNSIDE: Could you tell us, please, whether you ever received - when you made a follow-up call to Mr Rosenow, in the terms you have described, did you ever hear back from him?

ZALA: Occasionally Mr Rosenow rang me back and said, ‘Yes, they're on their way,’ or, ‘They're in the process of going,’ or, ‘Yes, the message didn't [get through] at the original call,’ or whatever, but yes, occasionally Mr Rosenow would ring me back and say, ‘Yes, they're on their way.’

BURNSIDE: Did you make observations of the board prices at the Brumar sites after you had made a follow-up call to Mr Rosenow?

ZALA: Yes, at times, if I - it was during the course of my duties, with going to the bank and going to the post office and going to sites or whatever, I would drive past a Brumar site, just to see that that's what happened, but I would say that when Mr Rosenow rang and said that, ‘Yes, they're on their way,’ or something, I would take it that that would always happen.

BURNSIDE: Did you check, and when you checked, did it happen?

ZALA: Yes.

BURNSIDE: Yes to both, is it?

ZALA: Sorry.

BURNSIDE: Did you check?

ZALA: Yes, I did check.

BURNSIDE: And had it happened?

ZALA: Yes, it had.”

Levick

215 The testimony of Levick is consistent with that of Zala. In particular, Levick stated that during the relevant period he had occasional price-increase calls with Rosenow of Triton. Levick viewed Rosenow as a conduit to pass messages to Dalton. Levick stated:

“Mr Rosenow was the main contact for Dalton’s sites. On the odd occasion that I had price move and reminder calls with him, he told me that he would pass or had passed the message through to Mr Dalton in words to the effect ‘I’ll pass it on to Dalton’ or ‘I’ve passed it on to Garry.’ On a few occasions, Mr Rosenow added in effect ‘Garry plays his own game, but I’ll pass the information on’. . . .”

216 Levick said that he remembered making reminder calls to Rosenow regarding Dalton’s sites:

“BURNSIDE: Did you ever make any reminder calls to Mr Rosenow?

LEVICK: On the odd occasion, yes.

BURNSIDE: Doing the best you can, would you tell his Honour what you said and what he said?

LEVICK: The only time I'd ring Mr Rosenow is when I couldn't get on to Mr Zala, and I would say to Tony that - what was happening with Sturt Street and with the Shell sites.

BURNSIDE: What did Mr Rosenow say?

LEVICK: He would say, ‘Leave it with me’.

BURNSIDE: Did you ever hear back from him after you'd left it with him?

LEVICK: On the odd occasion, yes.

BURNSIDE: When he rang back what did he say?

LEVICK: That he'd either spoken to Garry and it was going to happen, or that Garry had cracked the shits and wasn't going to do anything.

BURNSIDE: Who did you understand Garry was?

LEVICK: I understand Garry to be Mr Dalton, who my understanding was he ran the major Shell sites in Ballarat.

BURNSIDE: Was there one time you can recall when Mr Rosenow rang back and told you of a particular reaction of Garry Dalton on that occasion?

LEVICK: As I said in the last paragraph, that he'd cracked the shits and was going to play his own game.”

217 Levick said that Zala rang him regarding the Shell sites on Sturt Street. Levick stated that Zala said, “Rosie wasn’t there, so I spoke to [Dow].” Levick also testified that at a meeting at Zala’s office, a coordinated price increase was discussed:

“BURNSIDE: Can you remember what was said about a price move?

LEVICK: ‘Time to go up.’

. . .

BURNSIDE: Tony Rosenow turned up at Mr Zala's office?

LEVICK: Mr Zala's office, yes.

BURNSIDE: After he arrived, what was said about prices?

LEVICK: We discussed between us a move in the marketplace later on that afternoon - come to some sort of level… .”

Dow

218 The evidence of Dow also has some relevance. As outlined in the evidence relating to Brumar and Dalton, Dow testified that on some occasions he picked up the phone when Bentley, Dalton, Levick or Zala were attempting to speak to Rosenow. Dow testified that after he transferred these calls to Rosenow, he sometimes overheard Rosenow comment that prices were at ridiculous levels or state that he was aware of price movements. Dow said that he also took calls for Rosenow from these individuals when Rosenow was not in the office. He said that, generally, if Dalton rang for Rosenow, he would just leave a note for Rosenow to return the call. However, Dow said that occasionally Dalton would ask him whether there had been any price movements in Ballarat or would comment that prices were at ridiculous levels. Dow testified that, in those situations, he would tell Dalton of price movements if he was aware of any. Dow also said that he observed Dalton and Rosenow meeting in Rosenow’s office approximately twice a month during the 1999 to 2000 period. Dow testified that, whilst the two were meeting, he overheard a discussion about the retail price of petrol being at ridiculous levels, which was a reference to very low levels.

219 Dow testified that generally Levick and Bentley would simply leave a message for Rosenow to call them back, as opposed to having more substantive conversations. Dow also said that occasionally Zala would call and mention that a site in Ballarat had not changed its prices. Dow said that most of the time he did nothing in response to this type of comment from Zala, however, at other times he called Dalton and mentioned it to him.

Bentley

220 Additionally, Bentley testified that during the 1999 to 2000 period he engaged in price-increase calls with Rosenow of Triton. Bentley said that his calls with Rosenow were different to the calls he had with representatives of other petrol retailers. He said they were more along the lines of asking if something had happened in the market. Bentley testified that when he noticed that Shell sites had not moved, he rang Rosenow:

“BURNSIDE: When you noticed that some Shell sites hadn't moved, did you notice big ones or small ones or both, not moving?

BENTLEY: It could be - depends on what - it could be either. It could be both, one or the other or none.

BURNSIDE: When you had noticed that, did you telephone someone?

BENTLEY: On some occasions, yes.

BURNSIDE: Who was that?

BENTLEY: Tony Rosenow.

BURNSIDE: When you rang Tony Rosenow - - -

HIS HONOUR: Sorry, who was that?

BENTLEY: Sorry, Tony Rosenow.

BURNSIDE: When you rang him, in those circumstances, what would you say to him and what would he say to you?

BENTLEY: Yes, I could simply say that ‘You notice that the market has moved?’ and yes, I'm not sure what Tony would say. Maybe just ‘Yes, thanks for the call’, or he would have a look at - yes, I don't know what the response was, clearly, but yes.

BURNSIDE: After you had made a call of that sort, did you go and check the boards of other sites again?

BENTLEY: Yes. We continuously checked, particularly in these - yes, fluctuating price times or whatever. We checked all day everyday, so yes, we would check afterwards.

BURNSIDE: Did you ever notice anything about the board prices at the Shell sites, after you had made a call to Mr Rosenow like that?

BENTLEY: To generalise, yes - no, I suppose I couldn't generalise as such that it was the same each time that a call had been made.

BURNSIDE: When you had noticed a particular site - a Shell site - hadn't moved and you rang Mr Rosenow, did you ever make any observations about that same site after you had spoken to him?

BENTLEY: Yes, I would have observed that.

BURNSIDE: Did you go and check on that site?

BENTLEY: Yes, I would go and do the loop or check on all sites again. Yes, That happened - - -

BURNSIDE: Did you ever notice anything about the board prices at that Shell site, that had made you ring him in the first place?

BENTLEY: Yes, sure. On different instances it may have been up. Other instances it may not have changed - yes, it would be very difficult to generalise exactly.”

221 Bentley also testified that Rosenow made follow-up calls to him and vice versa.

222 Davis, an independent Shell retailer, stated:

“41. On occasion, more than three hours passed since Mr Rosenow had advised me that the retail price to which Triton Petroleum paid price support had increased and I had overlooked increasing the board prices at my service stations. On some of these occasions, I received a telephone call from Mr Rosenow and we had conversations in words to the following effect:

Mr Rosenow said: ‘Someone has rung me. You’d better change or I won’t be able to support you.’

I said: ‘No worries Tony. I’ve given my customers a go.’”

Edwards

223 As outlined above, Edwards confirmed that it was unnecessary for Rosenow to receive any calls about retail prices from any employees of any other petrol retailers.

Triton’s s 155 responses

224 Triton’s written s 155 responses to questions 9 and 10 were as follows:

Question:

“9. State whether in the period from 1 January 1999 to the date of this Notice, any person employed by Triton had any communication (whether oral or written) concerning a retail price of petrol with any employee or other representative of any other Petrol Distributor.”

Answer:

“9. Yes.”

Question:

“10. In relation to each such communication identified in response to Item 9 of this Schedule state:

(i) the name of the person employed by Triton who engaged in the communication;

(ii) the name of the other person or persons who engaged in, or was present during, the communication (including the name of the company or business they represented);

(iii) the date of the communication;

(iv) whether the communication was engaged in by means of telephone, in the presence of each of the participants or otherwise (and if so how);

(v) the substance of what was said by each party to the communication;

(vi) what action the person employed by Triton took following the communication and which related to the matter which was the subject of the communication;

(vii) whether any document relating to the communication was created or received, and if so, also identify each such document.”

Answer:

“10. The response to item 10 is made under two sub-headings for ease of reference. The first sub-heading deals with the topic of observations made or to be made of prices at service stations whilst the second deals with Safeway discount vouchers.

Communications regarding observations made or to be made or prices at service stations:-

(i) Tony Rosenow;

(ii) Brendon Zala of Chisholm Petroleum and Rob Levick of Balgee Oil on separate occasions;

(iii) The dates are not presently able to be recalled but the communications occurred at irregular intervals throughout the subject period;

(iv) Yes, on almost all occasions by means of separate telephone conversations Tony Rosenow had with Brendon Zala and with Rob Levick and on the other occasions by means of conversations Tony Rosenow had with Brendon Zala in the presence of each other;

(v) The substance of what was said on each occasion by Brendon Zala and Rob Levick respectively was, variously, as follows, or words to the following effect:-

· A specified service station has moved its price up to a specified price; or

· Have a look at a specified service station’s price this afternoon; or

· Take a drive down Sturt Street this afternoon.

The response given by Tony Rosenow during the course of each such communication was to the effect of merely acknowledging receipt of the information communicated to him.

(vi) Tony Rosenow as part of his normal daily practice in fulfilling his responsibilities as Triton’s Ballarat Area Manager drove by competitor sites to ascertain, by way of observation of prices displayed on service station price boards, whether the retail price of petrol at competitor sites had increased or decreased. This practice was routinely followed regardless of any communication referred to in the preceding sub-paragraph.

(vii) No.

Communications regarding petrol discount vouchers offered by Safeway:-

(i) Tony Rosenow;

(ii) On one occasion (‘the first discussion’) Brendon Zala of Chisholm and Rob Levick of Balgee Oil. On a later occasion (‘the second discussion’), Brendon Zala of Chisholm Petroleum and Rob Levick of Balgee Oil, in the presence also of Justin Bentley whose interest in the discussion was as the operator of a number of service stations in Ballarat which traded under the Swift brand;

(iii) The first discussion was held on a date not presently able to be recalled but thought to be in or about August 2000. The second discussion was held on or about 7 December 2000;

(iv) The first discussion occurred in the office of Brendon Zala at Chisholm Petroleum, Latrobe Street, Ballarat. The second discussion occurred in The Olive Grove Café in Sturt Street, Ballarat;

(v) The substance of the first discussion was that each of the parties to the discussion said to the others that vouchers offered by Safeway to its customers, which enabled customers who qualified to purchase petrol from Safeway’s retail outlets at discounted prices, were found to be having a negative impact upon the volume of sales in their respective businesses, or words to that effect.

The substance of what was said during the second discussion was as follows, or words to the following effect:-

· Justin Bentley: the discount vouchers offered by Safeway to its customers had been in place for quite some time now, with the available rate of discount being six cents per litre of petrol purchased from Safeway outlets. Safeway is large enough to absorb any losses it might suffer from such discounting.

· Rob Levick: in all likelihood the Safeway discount voucher system would remain in place for some considerable time to come.

· Brendon Zala: it may be worthwhile to suffer a loss in margins for a month or so so that lower retail prices can be offered in a bid to win back customers who had been lost to Safeway.

· Tony Rosenow: Safeway had eventually withdrawn its similar discount vouchers in Geelong and they may yet do so in Ballarat.

The second discussion concluded with the parties expressing the view that due to Safeway’s large size and its determination to gain substantial share of the petrol market it was unlikely there would be any change to the Safeway discount voucher system in the foreseeable future.

(vi) None, besides Tony Rosenow’s routine daily observation of the retail prices of petrol as displayed on the price boards of competitors’ service stations and thereby ascertaining whether the retail price of petrol at those sites had increased or decreased;

(vii) No.”

Rosenow’s s 155 examination

225 As explained earlier, evidence at Rosenow’s examination is not admissible against Triton. Rosenow admitted during his s 155 examination that throughout the relevant period, Zala, Levick and, to a lesser extent, Bentley contacted him regarding board price movements that had happened or were going to happen. Rosenow said that most of the calls conveyed information that he was not already privy to:

“BURNSIDE: Can I suggest to you that most of the calls that you received from Mr Zala and Mr Levick were to warn you of a move that was about to happen, rather than a move that had already happened?

ROSENOW: There was some of both, yes.

BURNSIDE: Yes. And the ones that weren’t about warning you, of what was about to happen, were following you up to see why your sites hadn’t followed?

ROSENOW: Some may be, yes.

BURNSIDE: Yes. And can I suggest that none of the calls that involved you were calls telling you something that you had already seen for yourself?

ROSENOW: Some of them would have been.

BURNSIDE: But very few?

ROSENOW: Yes.”

226 In addition, in his s 155 examination Rosenow said that sometimes Zala and Levick identified specific prices and times for future movements. Other times, according to Rosenow, Zala would say, “Take a drive.” Rosenow said that, in those circumstances, he understood that he was being told to look at a particular site. He said that if he later checked the site, most of the time he noticed that it had increased and that usually it was the first site to increase. Rosenow confirmed that the information that Zala and Levick relayed to him concerned both Shell and non-Shell branded sites and that it was useful information because it allowed him to keep Shell board prices competitive with other brands. He also stated that he knew from conversations with Levick and Zala that board price information was being communicated to Swift.

227 Rosenow also stated that, following the receipt of price information from Zala or Levick, he would make calls to both the independent Shell retailers supplied by Triton as well as to Dalton at Brumar. Rosenow said that when he heard of price increases he would almost always adjust the price support supplied to the independent Shell retailers by Triton to match the market increase. Regarding his calls to Dalton, Rosenow estimated that during the year 2000 he spoke with Dalton about board prices a dozen times. While at one point Rosenow said that he only ever passed on to Dalton information regarding past price movements, he later confirmed that he passed on information regarding past and future board price movements. He stated that it would be wrong to say that he passed the information to Dalton every time, however, he also said that he could not think of a reason why he would not contact Dalton and tell him about a new price that he had been informed of or had noted.

228 In addition, Rosenow said that during price increases, if certain Shell sites did not follow the rise he received follow-up calls from Zala and Levick. He noted that these calls usually related to Brumar sites. Rosenow stated that after these types of calls he usually called Dalton:

“BURNSIDE: And are you able to say generally what you would say to him in those circumstances and what he would say to you?

ROSENOW: I would just, I suppose, ask him whether he’s noticed that the price has moved and that would be basically it, pretty much.

BURNSIDE: Well, before you made that call to him, you have previously rung him to tell him that the market is moving; isn’t that right?

ROSENOW: Sometimes.

BURNSIDE: Isn’t that what you did each time you got a board price call from Mr Levick or Mr Zala or Mr Bentley?

ROSENOW: Not all the time, but sometimes, yes.

BURNSIDE: Well, most of the time, wasn’t it?

ROSENOW: Yes.”

229 Rosenow described that he also made follow-up calls to independent Shell retailer sites that had not followed a rise. He stated:

“BURNSIDE: So if Mr Zala rang you and said that a particular Shell site had not moved in accordance with the other brands, you would speak to that site?

ROSENOW: Depending if it was one of my sites, yes.

BURNSIDE: If it was one of your sites you would certainly ring them and find out what was going on?

ROSENOW: Well, I would just question whether they had received the message of price support, understand maybe why they hadn’t moved, and sometimes it didn’t move at all.”

230 Rosenow acknowledged that the system of advance warning of price increases which he described pre-dated Triton but also that it continued after Triton’s incorporation. He said that while he could not remember for sure, he presumed that he was involved in implementing the system at his previous job before Triton.

231 Rosenow also said that he could not remember telling Dalton about the Zala office or Olive Grove Cafe meetings. Finally, Rosenow said that Edwards at Triton would have been aware that he was talking to Zala and Levick but has no specific recollection of discussing the matter with him. He stated:

“BURNSIDE: Okay. Did you ever discuss with Mark Edwards the fact that Zala and Levick would tell you of forthcoming changes to the board price?

ROSENOW: I would think he would be aware.

BURNSIDE: Did you ever discuss it with him?

ROSENOW: Not that I could recall.

BURNSIDE: Why do you say [that] he would be aware – that Zala and Levick would ring you about changes to board prices that were about to happen?

ROSENOW: I would presume that I would probably mention something, I can’t definitely say I did or I didn’t.

BURNSIDE: Well, why do you presume that you would have mentioned something to him?

ROSENOW: Well, he is my boss so I suppose that I have mentioned it, yes.”

Rosenow’s diary

232 At trial, there was some controversy about Rosenow’s diary for the years 1999 and 2000. The diary opens like a book and displays three days (from top to bottom) on the left page (ie Monday, Tuesday, Wednesday) and four days (also from top to bottom) on the right (ie Thursday, Friday, Saturday, Sunday). Within each day, horizontal lines mark the hours from 8 am (top of day) to 5 pm (bottom of day). On certain of the alleged price-fixing days the diary contains notations regarding prices, locations and times. Sometimes a specific time, price and location is noted. Other times, no time is written and merely a price is noted opposite a particular hour line (with or without a stated location).

233 The ACCC claimed that the prices noted in Rosenow’s diary represent the targeted or proposed prices that were communicated to him by Zala, Levick or Bentley on price-increase days. It pointed out that (1) the price listed in Rosenow’s diary almost always matched the price to which support was offered to the independent Shell retailers (as documented in Exhibit “Triton 1” “Price Support Comparisons Table”); and (2) the price to which support was offered almost always matched the new market price (as documented in Annexure A). The ACCC argued that the price-support figure written by Rosenow demonstrates that he utilized the price-support system to implement the targeted or proposed price increases at the reseller sites. Moreover, the ACCC contended that the noted price did not reflect Rosenow’s observation of the market because the price notation was often made early in the day, before the market increase had taken effect.

234 Triton and Rosenow contended that the notations in Rosenow’s diary reflect Rosenow’s observations of increases within the market. Triton asserted that the fact that many of the entries appear early in the day (eg 8:00 am or 9:00 am) is of no consequence for two reasons. First, it was argued that the time of the entry did not necessarily correspond to the time at which Rosenow observed the market. Second, it was said that, even if Rosenow’s observations were made early in the day, other key sites had risen so as to alert him to the fact that the market was changing. It was also contended that the similarity between market price, supported price and Rosenow’s diary price reflected nothing more than the operation of the price-support system in a competitive market.

235 Rosenow was questioned about his diary during the course of his s 155 examination. Relevantly, Rosenow stated that the price entries reflected the prices to which Triton offered support to the independent Shell retailers. He indicated that his practice was to observe the price, call the resellers and make a notation in his diary:

“BURNSIDE: And will you notice that the entry and the previous entry both have times associated with them?

ROSENOW: Yes.

BURNSIDE: Can I suggest that those also suggest times when you were told that there would be price movements, is that right?

ROSENOW: I would say observations.

BURNSIDE: Do you mean to say that those are observations that you have made of prices at particular times?

ROSENOW: Normally if I had [entered] a notice it would be that I have actually rang the dealers at those times, so hopefully I have observed them, yes.”

236 According to Rosenow, in situations where no specific time is written, the location of the price notation on the page is indicative of the time he rang his resellers. He also said that most of the time he would attempt to adjust price support early in the morning. He reiterated a number of times that, to the extent that specific times were noted in his diary, those times are likely to have reflected the approximate time of day when he rang the resellers with support information. However, Rosenow did not deny that it was possible that the times may reflect information that Zala had communicated to him:

“BURNSIDE: It is possible, Mr Rosenow, that the two entries that we are talking about, are simply a reflection of what you were told by Mr Zala would be the new prices at 12 o’clock on the 14^th and 1:30 on the 21^st?

ROSENOW: I couldn’t say that that is definite, no.

BURNSIDE: No, no, you can’t say it is definite, but certainly possible, would you agree?

ROSENOW: I would presume, based on the other entries made, that they are entries ringing my resellers on that time.

BURNSIDE: But can you deny the possibility that it records what Mr Zala told you – that there would be a particular move at a particular time[?]

ROSENOW: No, I probably couldn’t, but I mean, phone records I suppose would give you a better indication of that.”

237 When asked whether he typically noted in his diary the board prices of other brands, Rosenow stated that it was not his typical practice until the start of 2001. He said that because he did not think there was anything wrong with receiving the information that Zala communicated to him, he saw no reason not to make a note of it. Finally, Rosenow acknowledged that, because the Triton retailers typically received price support for the entire day, it was not necessary to note the specific time he notified the resellers of price-support changes. Rosenow denied, however, the implication that the “real reason” some of the entries had times associated with them was because he was noting the time at which he had been told that prices were going to increase.

238 The ACCC’s primary submission that the prices noted by Rosenow generally matched the price increases on price-increase days in Annexure A is correct. There is also a general correlation between the diary entries and the targeted or proposed price rises on those days. No evidence was presented regarding how Rosenow viewed or defined the market price that he was recording. For example, there is nothing to suggest that his strategy was to follow Brumar, Swift or some other retailer. There was also no evidence that Rosenow had a process in place for determining the market price. There is also no evidence that the location of Rosenow’s entry on the page did not correspond with the time he received the information he recorded. It is also not clear on the days when Rosenow received price-increase or follow-up calls how the correlation of Rosenow’s diary entries and Annexure A price increases would be solely the result of his observations. Also, the “connection” between market price, supported price and Rosenow’s diary price is at best neutral evidence as it could be relied upon to support either side’s contentions.

239 On the other hand, the evidence of Zala, Levick and Bentley established that they rang Rosenow during the relevant period and communicated to him the proposed price increases or the fact that an increase was in progress. That occurrence meant that, to better enable the increase to take effect in the market, which was the objective of the call to Rosenow, Rosenow was to reduce or withdraw price support to the Triton supplied sites. Thus, even if entries were based on market observation, as well as on the calls, that does not assist Triton’s or Rosenow’s claims, as such observations were a necessary aspect of the steps that had to be taken to ascertain whether the increases were being matched and, if they were, whether price support was to be reduced or withdrawn accordingly. What is important is that one of the causes for the entries on price-increase days is likely to have been the fact that Rosenow was made aware that there was to be a coordinated increase on that day and that, as a consequence, he was to withdraw or reduce price support to the increased price which, as explained above, was generally the recorded price.

240 In the circumstances, which include Rosenow’s failure to give evidence, attaching little weight to Rosenow’s self-serving s 155 evidence when it is not supported by other evidence, and the probability of the notations being related to the price-increase calls, I infer the following. The relevant entries were, in part, a result of communications to Rosenow by Zala, Levick or Bentley and in that way directly or indirectly reflect information communicated to him by participants in the price-fixing understanding, rather than just his independent observations of the “market price.”

(iii) Conclusions

241 The ACCC’s case against Rosenow and Triton is compelling. In my view the evidence that is admissible against both Rosenow and Triton establishes that Rosenow was an active participant in the existing arrangements (which included Triton as from about September 1998) and in the price-fixing understanding. During the relevant period Rosenow, acting on behalf of Triton, received price-increase calls from Zala, Levick and Bentley. He acted on those calls by regularly:

· reducing or withdrawing price support at the independent Shell retailer sites to the targeted or proposed price;

· passing on the fact of the increase to Dalton at Brumar for the purpose of persuading or influencing Brumar to match the increase;

· participating in follow-up calls to Dalton and the independent Shell retailer sites, which were made for the purpose of better enabling the price increase to “stick.”

242 Rosenow’s use of price support has been discussed earlier in these reasons. Also the discussion concerning Rosenow’s diary entries in respect of retail prices establishes that, in general, the entries relate to the level of price support given or proposed to be given at the time of the entry. The figures in the entries were probably a product of both a notification by Zala, Levick or Bentley of a price increase and of observations of the prices of the initiating respondents. Nonetheless, I am satisfied that Rosenow’s role in relation to whether Brumar would match the increase was pivotal to the success of the proposed increase. Rosenow’s active participation in the existing arrangements and the price-fixing understanding made him fully aware of the role of the various participants, possibly save for Apco, and of the processes by which the price increases were to be secured. Triton’s involvement in the understanding also includes conduct from time to time by Dow who was the conduit on those occasions when Rosenow was absent.

243 The s 155 examination evidence that is only admissible against Rosenow affords further corroboration of the above findings.

(d) False denials

(i) The law

244 The ACCC contended that certain statements made by Anderson, Brumar, Dalton and Rosenow constituted false denials and evidenced a consciousness on their part of being parties to the price-fixing understanding.

245 The relevant principles were stated by Deane, Dawson and Gaudron JJ in Edwards v The Queen (1993) 178 CLR 193 (“Edwards”) at 208-209:

“Ordinarily, the telling of a lie will merely affect the credit of the witness who tells it. A lie told by an accused may go further and, in limited circumstances, amount to conduct which is inconsistent with innocence, and amount therefore to an implied admission of guilt. In this way the telling of a lie may constitute evidence. When it does so, it may amount to corroboration provided that it is not necessary to rely upon the evidence to be corroborated to establish the lie. …

But not every lie told by an accused provides evidence probative of guilt. It is only if the accused is telling a lie because he perceives that the truth is inconsistent with his innocence that the telling of the lie may constitute evidence against him. In other words, in telling the lie the accused must be acting as if he were guilty. It must be a lie which an innocent person would not tell. That is why the lie must be deliberate. Telling an untruth inadvertently cannot be indicative of guilt. And the lie must relate to a material issue because the telling of it must be explicable only on the basis that the truth would implicate the accused in the offence with which he is charged. It must be for that reason that he tells the lie. To say that the lie must spring from a realization or consciousness of guilt is really another way of saying the same thing. It is to say that the accused must be lying because he is conscious that ‘if he tells the truth, the truth will convict him’.”

246 At 210-211 their Honours stated:

“A lie can constitute an admission against interest only if it is concerned with some circumstance or event connected with the offence (i.e. it relates to a material issue) and if it was told by the accused in circumstances in which the explanation for the lie is that he knew that the truth would implicate him in the offence. Thus, in any case where a lie is relied upon to prove guilt, the lie should be precisely identified, as should the circumstances and events that are said to indicate that it constitutes an admission against interest. And the jury should be instructed that they may take the lie into account only if they are satisfied, having regard to those circumstances and events, that it reveals a knowledge of the offence or some aspect of it and that it was told because the accused knew that the truth of the matter about which he lied would implicate him in the offence, or, as was said in Reg. v. Lucas (Ruth), because of ‘a realization of guilt and a fear of the truth’.”

247 Although Edwards was a criminal matter, the principles discussed are applicable in a civil matter: see Challenge Charter Pty Ltd and Ors v Curtain Bros (Qld) Pty Ltd and Others [2004] VSC 1. Of course, as was emphasised in R v Camilleri (2001) 119 A Crim R 106 at 117 per Phillips CJ and Brooking JA and at 140 per Ormiston JA, a lie that exhibits consciousness of guilt, and therefore is probative of guilt, must be weighed together with all of the other evidence in determining whether the prosecution has made out its case to the requisite standard of proof.

248 Thus, the ACCC must establish that the statement it relies upon was deliberate, related to a material issue and sprang from a “realisation or consciousness of guilt.” Although the ACCC relied upon a number of statements, the only statements that in my view are capable of satisfying the above criteria are:

· Brumar’s written s 155 response denying any communication with the respondents, other than Palmer, during the relevant period “concerning a retail price of petrol”;

· Dalton’s statement to Brumar’s lawyers that Brumar’s s 155 response was correct;

· Rosenow’s statement to Dow that the meeting he had with some of the respondents at the Olive Grove Cafe related to “HS & E matters” (ie health, safety and environmental matters).

(ii) Brumar’s and Dalton’s statements

249 Questions 10 and 11 of the ACCC’s notice to Brumar pursuant to s 155(1) of the Act, and Brumar’s answers to those questions, were as follows.

Question:

“10. State whether in the period 1 January 1999 to 31 December 2000 any person employed by Brumar had any communication (whether oral or written) concerning a retail price of petrol with any employee or other representative of any of the following companies or with the following persons:

Balgee Oil Pty. Ltd. (ACN 006 697 052)

J. Chisholm Proprietary Limited (ACN 004 383 135)

Leahy Petroleum Pty. Ltd. (ACN 078 819 431)

Leahy Petroleum – Retail Pty. Ltd. (ACN 005 248 144)

Triton Petroleum (Vic) Pty. Ltd. (ACN 083 676 242)

Apco Service Stations Pty Ltd (ACN 007 229 898)

Justco Pty Ltd (trading as ‘Swift Petroleum’). (ACN 072 232 190)

Mr Robert Levick

Mr Peter Muller

Mr John Gourley

Mr Ian Carmichael

Mr Michael Warner

Mr Robin Palmer

Mr Justin Bentley

Mr Brendan Zala

Mr Tony Rosenow

Mr Tim Dow

Mr Peter Anderson.”

Answer:

“10. During the period 1 January 1999 to 31 December 2000, to the best of Brumar’s knowledge and with the exception of the matter set out in response to Item 11 below, no person employed by Brumar had any communication concerning a retail price of petrol with any employee or other representative of any of the companies or with the other retailers listed in Item 10.”

Question:

“11. In relation to each such communication identified in response to Item 10 of this Schedule state:

(i) the name of the person employed by Brumar who engaged in the communication;

(ii) the name of the other person or persons who engaged in, or was present during, the communication (including the name of the company or business which they represented);

(iii) the date of the communication;

(iv) whether the communication was engaged in by means of telephone, in the presence of each of the participants or otherwise (and if so how);

(v) the substance of what was said by each party to the communication;

(vi) what action the person employed by Brumar took following the communication and which related to the matter which was the subject of the communication;

(vii) whether following the communication the person employed by Brumar took action to cause the retail price at which Brumar sold petrol to be changed;

(viii) whether any documentation relating to the communication was created or received, and if so, also identify each such document.”

Answer:

“11. Mr Robin Palmer

Mr Dalton knows that Mr Palmer operated a BP petrol station in the relevant geographic area. Mr Dalton contacted Mr Palmer once, which to the best of Mr Dalton’s recollection occurred during or about mid 1998 (on a date which Mr Dalton is unable to recall) to ask him about the availability of an electrician. On a later occasion, which to the best of Mr Dalton’s recollection occurred during or about the end of 1998, Mr Palmer telephoned Mr Dalton to complain about the pricing of fuel in the Ballarat area. Mr Dalton told him that he did not wish to discuss pricing issues.”

250 During the trial Holland, a director of Brumar who was responsible for responding to the ACCC’s s 155 notice, was cross-examined concerning Brumar’s answers to questions 10 and 11:

“BURNSIDE: Did you have a conversation with Mr Dalton about what the answers would be?

HOLLAND: Yes, I did.

BURNSIDE: And did you discuss with him question 10?

HOLLAND: Which is - which is question 10?

BURNSIDE: It begins at page 301?

HOLLAND: Yes.

BURNSIDE: And did you understand that that was asking about whether anyone employed at Brumar had any communications concerning a retail price of petrol with employees of any of the listed companies?

HOLLAND: Yes, I understood that.

BURNSIDE: Or with the people noted there?

HOLLAND: Yes.

BURNSIDE: And did you recognise some of the names?

HOLLAND: No, I didn't.

BURNSIDE: Did you discuss with Mr Dalton whether he had had any conversations of that sort with any of those parties or people?

HOLLAND: Yes, I did.

BURNSIDE: What did he tell you?

HOLLAND: He said that he knew of no price fixing arrangement, firstly. Secondly, he said that he had had conversations with or contact with Tony Rosenow of Triton. He said that retail price was not discussed in particular. He said from time to time Mr Rosenow would say, ‘Have you noticed the market's moved?’ or ‘I'm going to move my price,’ which had no effect on - he explained had no effect on our policy or our prices at all. He said that from time to time he had occasion to ring Triton regarding various operational issues, and he also spoke to Tony on a personal basis, and that was it.

BURNSIDE: When he said that he'd spoken to Mr Rosenow, who had said from time to time, ‘I'm going to move my price,’ did that occur to you as being a discussion of a retail price?

HOLLAND: No, it didn't.

BURNSIDE: What did you think he was talking about?

HOLLAND: That he was going to move his price.

BURNSIDE: His price not being a retail price?

HOLLAND: No, his price generally. If he said, ‘I'm going to move my prices,’ I don't see that specifically as a retail price. It doesn't affect our retail price, the Triton prices.

BURNSIDE: Leave aside whether it affects your retail prices, Mr Holland. Are you saying to his Honour that when Mr Dalton told you that Mr Rosenow said to him, ‘I'm going to move my price,’ that you did not understand that as a communication concerning a retail price?

HOLLAND: No, because it wasn't a specific price.

BURNSIDE: I see, so you read question 10 as meaning reference to a specific price in dollars and cents?

. . .

HOLLAND: Yes. I read that to mean that if somebody – Rosenow or Mr Brown or whatever - said, ‘I'm going to move to 89.9,’ then that would be under question 10.

BURNSIDE: So you read question 10 fairly narrowly. You'd agree with that?

HOLLAND: I read it as it's written.

BURNSIDE: You chose to understand the reference to retail price as being a reference to a specific number of cents?

HOLLAND: To a specific retail price, yes.

. . .

BURNSIDE: Did you ask [Dalton] about that he'd - any conversations he'd had with Mr Palmer?

HOLLAND: He volunteered that Robin Palmer had - who I don't know - had rang him once to talk, some years ago.

BURNSIDE: Yes?

HOLLAND: He recalled the conversation, that Robin Palmer had rang him up and said to him - started to talk about pricing within the Ballarat area, and my understanding is - or Garry advised me - Garry Dalton advised me that he ceased the communications.

BURNSIDE: Yes. Now, Mr Dalton didn't tell you that Mr Palmer mentioned a specific retail price in either of those conversations?

HOLLAND: No.

BURNSIDE: So on your understanding of the question, that contact with Mr Palmer also did not meet what the question was asking about. Is that right?

HOLLAND: The contact with - - -

BURNSIDE: Is that right?

HOLLAND: I can't answer that. I don't know. I don't see where one phone conversation that was finished before it even got to fruition could come under that.

BURNSIDE: Well, just a minute. A moment ago you said to his Honour that conversations with Mr Rosenow in which Mr Rosenow said, ‘I'm going to move my price,’ did not strike your mind as being within the scope of question 10, correct?

HOLLAND: That's correct.

BURNSIDE: That's because he didn't mention a specific price. Correct?

HOLLAND: Yes, that's right.

BURNSIDE: You've told his Honour that Mr Dalton also said that he had two conversations with Mr Palmer: one concerning an electrician and one in which he started to talk about how bad prices were, and Mr Dalton cut him off?

HOLLAND: That's right.

BURNSIDE: No reference to a specific retail price?

HOLLAND: That's right.

BURNSIDE: So those conversations also would not have fallen within the reach of question 10 as you understood it. Is that right?

HOLLAND: That's right.”

251 Also, Holland testified that at the time he was preparing Brumar’s s 155 response Dalton had told him about conversations he had had with Rosenow in which Rosenow discussed price movements.

252 In his s 155 examination Dalton stated that, although he told Brumar’s lawyers that its answer to question ten was correct, he admitted that in fact it was inaccurate. He said:

“BURNSIDE: Just a minute. Did you tell the Brumar lawyers that the answer, as it stands, was correct?

Dalton: Yes.

BURNSIDE: And had you discussed with them what the question meant?

Dalton: I think so, yes.

BURNSIDE: And you understood it was a question about any discussion between any Brumar person and any of the people listed in the question concerning a retail price of petrol?

Dalton: Yes, I – it is concerning the retail – I understood that to be discussing a price. I guess I did not understand it to be a movement. I do not discuss price at all.

BURNSIDE: In any event, I take it from the way you answered that, that you agree that answer 10 is inaccurate because it does not refer to these conversations with Rosenow?

Dalton: That is correct.”

253 In my view, Brumar’s response to question 10 satisfied the criteria in Edwards. I am satisfied that both Holland and Dalton were aware that Question 10 related to communications about “retail prices” and was not confined to a specific price in terms of cpl. The context in which the question was asked and the ordinary and natural meaning of the question support that view, as does the answer given to question 11 which assumed that question 10 was not confined to a specific “cpl” retail price. I do not accept Holland’s evidence to the contrary. I regarded Holland’s evidence on this issue as unsatisfactory and reflecting adversely on his credit. In the cross-examination set out above, Holland failed to satisfactorily explain the inconsistent approach he took to questions 10 and 11. He was an astute businessman who was well aware of the risks involved in any admission that the respondents had discussed petrol prices and he decided not to make that admission.

254 Put simply, at the time the s 155 questions were answered, Holland and Dalton were aware that Dalton had conversations with Rosenow about retail prices. Brumar’s false response to Question 10 was deliberate and related to the material issue of communications between competitors concerning the price of petrol in Ballarat. I am also satisfied that Brumar’s false response sprang from a consciousness of guilt in the sense that it sprang from an awareness on the part of Holland, acting on behalf of Brumar, that the truth would implicate Brumar in the contravention suspected by the ACCC. Of course, had the question been answered truthfully that may not necessarily have resulted in establishing the contravention. That matter is relevant to the weight to be given to the false denial, but not to whether there was a false denial that constituted a consciousness of guilt.

255 Dalton’s statement to Brumar’s lawyers that Brumar’s answer to question 10 was correct falls into the same category. Dalton said in his s 155 examination that he interpreted the question as asking whether he had had any conversations discussing price, as opposed to market movements generally but he also stated “I do not discuss price at all.” However, Holland testified that, at the time he and Dalton were conferring about what the answer to question 10 should be, Dalton told him, among other things, that Rosenow had called him to say “I’m going to move my price.” Further Dow’s evidence, which I accept, is to the effect that Dalton and Rosenow did discuss the retail price of petrol. If Dalton had an explanation for his false statement it was open to him to proffer it to the Court but he chose not to do so. For similar reasons to those given in respect of Brumar I do not accept that Dalton believed question 10 only related to a specific cpl price.

256 I am satisfied that Dalton’s statement to Brumar’s lawyers was deliberate and false, related to a material issue, and sprang from a consciousness of guilt in the sense that it sprang from a consciousness on his part that if he told the truth that would implicate him in the contravention suspected by the ACCC.

(iii) Rosenow

257 With regard to Rosenow, the ACCC contended that his statement to Dow that a meeting at the Olive Grove Cafe related to HS & E matters was a lie. Relevantly, Dow testified:

“MIDDLETON: I suggest to you that where in that statement at paragraph 52 you say, ‘Mr Rosenow said to me that the meeting was about HS and E matters, may I take that to mean ‘health, safety and environmental’ matters. Is that correct?

DOW: Correct.

MIDDLETON: Your recollection is wrong about that?

DOW: Sorry?

MIDDLETON: Your recollection is wrong about that statement?

DOW: I don't understand.

MIDDLETON: I suggest to you that the meeting at the Olive Grove Cafe was about the Safeway Plus site opening. That's what the topic was about with those representatives?

DOW: I've got no idea.

MIDDLETON: No idea?

DOW: No.

MIDDLETON: And you do say however that Mr Rosenow told you it was about HS and E matters?

DOW: Correct.

MIDDLETON: And I suggest to you that you were not correct about that. Your recollection is wrong about that. I suggest to you that that wasn't what you were told by Mr Rosenow in relation to the topic of that meeting?

DOW: I don't think we ever discussed the topic of the meeting.

MIDDLETON: You didn't?

DOW: No.

MIDDLETON: You never discussed with Mr Rosenow the topic of that meeting?

DOW: No.”

258 However, on re-examination by counsel for the ACCC Dow stated:

“BURNSIDE: In that last answer to Mr Middleton you said you never discussed the topic of the Olive Grove Cafe meeting with Mr Rosenow. How did he tell you about what they had been discussing?

DOW: Tony told me that it was an HS & E meeting.

BURNSIDE: Did you have any discussion about it apart from that?

DOW: No, no.”

259 As I later explain, the meeting at the Olive Grove Cafe was concerned with how the parties attending the meeting might deal with the impact of Safeway’s shopper dockets on the Ballarat petrol market and at the meeting there was both a discussion and consensus about a price increase that took effect later on that day. There is no evidence that it related to “HS & E matters” or that those matters were discussed. I accept Dow’s evidence that Rosenow stated to him that the Olive Grove Cafe meeting related to HS & E matters. In the absence of any evidence to the contrary from Rosenow I infer that he deliberately and falsely told Dow the meeting related to HS & E matters because he did not want Dow to be aware of the fact that the meeting was a face-to-face meeting between competitors about how a coordinated approach to retail prices might be employed to address the impact of Safeway’s shopper dockets. The topic of the meeting relates to a material issue and the statement sprang from a consciousness of guilt on Rosenow’s part in the sense that he believed that if he told Dow the truth it would implicate him in unlawful price-fixing arrangements with retailers or other suppliers in the Ballarat market.

(e) Jones v Dunkel

260 In the present case Rosenow and Dalton were not called upon by their counsel to give evidence. The ACCC accepts that their failure to give evidence does not provide positive evidence in relation to the matter but contends that the failure may leave the Court in a position where it can more confidently draw inferences adverse to the respondents who could have been expected to have called them: see Jones v Dunkel (1959) 101 CLR 298 per Kitto J at 308. Those respondents are Rosenow and Triton in respect of Rosenow’s failure to give evidence and Dalton and Brumar in respect of Dalton’s failure to give evidence.

261 It was contended that a distinguishing feature in the present case is that Rosenow and Dalton were subjected to s 155 examinations and the ACCC has tendered and relied upon the evidence they gave at the examinations. In my view the distinction sought to be drawn is not soundly based. The s 155 examinations were part of the ACCC’s investigatory process and were conducted at a time when the evidence and material available to the ACCC was necessarily incomplete. Further, Rosenow and Dalton were required to attend those examinations. The situation at trial was quite different. The evidence and material available to the ACCC had materially altered and at the trial Triton, Rosenow, Brumar and Dalton were entitled to decide, after the close of the ACCC’s case, upon the witnesses they proposed to call in order to advance their respective cases or to explain or contradict the evidence adduced against them. In those circumstances the observations of Mason CJ, Deane and Dawson J in Weissensteiner v The Queen (1993) 178 CLR 217 at 227 are apposite:

“…it has never really been doubted that when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence. It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence. That is almost a truism. It is because doubts about the reliability of witnesses or about the inferences to be drawn from the evidence may be more readily discounted in the absence of contradictory evidence from a party who might be expected to give or call it.”

262 In my view, the failure to call Rosenow and Dalton entitles me to more confidently draw inferences adverse to Rosenow and Triton (in respect of Rosenow’s failure to give evidence) and Dalton and Brumar (in respect of Dalton’s failure to give evidence), and to more readily discount the doubts raised by those respondents about aspects of the ACCC’s evidence in the absence of the contradictory evidence that might have been expected to have been given by or on behalf of those respondents.

(f) Meetings

263 In addition to telephone communications, the ACCC relied upon certain face-to-face meetings held between certain of the individual respondents from time to time.

(i) Meeting at John Gourley’s house (June 1999)

264 Several witnesses gave testimony regarding a meeting at Gourley’s house on Exeter Street, Ballarat in about June 1999 (“the Gourley meeting”). At the meeting the attendees discussed the petrol industry in general and the impact that United branded service stations were having on the market in particular. Specifically, problems with reducing margins and shorter price cycles caused by United’s entry were discussed as well as the possibility of asking United to be part of the price-fixing understanding. According to Levick, it was suggested by someone at the meeting that Bentley speak with Frank Jacobson (“Jacobson”) at United regarding the price-fixing understanding. Bentley testified that subsequent to the Gourley meeting he contacted Jacobson at United.

265 Gourley, Levick, Zala and Bentley attended this meeting. At first Zala stated that Rosenow had also attended the meeting, however, on cross-examination he accepted that Rosenow might not have attended. Bentley testified that he could not recall whether Rosenow was at the Gourley meeting. In his s 155 examination Rosenow denied that he was at the meeting. I am not satisfied that the ACCC has established that Rosenow attended the meeting.

266 There is no evidence that Dalton or Anderson attended the Gourley meeting or that the Gourley meeting was ever mentioned to them or to Rosenow.

(ii) Meeting at Zala’s office (August 2000)

267 Sometime after Safeway began offering shopper docket discounts to petrol customers in the Ballarat market, Zala, Levick, Bentley and Rosenow met at Zala’s office (“the Zala office meeting”). Zala testified that he believed the meeting was about pricing but had no other recollection of the discussion. Bentley likewise testified that he could not remember what was discussed at the Zala office meeting.

268 Rosenow stated in his s 155 examination that he did recall the Zala office meeting. He said that when he arrived at Zala’s office, Levick was there but he is unsure of what Levick and Zala were discussing. Rosenow said that upon his arrival the discussion turned to Safeway’s shopper dockets and how it was hurting their respective businesses. Rosenow denied that there was a discussion regarding what they were going to do about prices.

269 On the other hand, Levick testified as follows:

“BURNSIDE: Sometime after they came in, did you drop in on Brendan Zala at his office?

LEVICK: Yes, I did.

BURNSIDE: Whilst you were there, did someone else arrive?

LEVICK: Justin Bentley rolled up.

BURNSIDE: What was said by each of you in that informal get-together in Brendan Zala's office?

LEVICK: We started talking about Safeway and talking about a price move upwards.

BURNSIDE: Can you remember what was said about a price move?

LEVICK: ‘Time to go up.’

BURNSIDE: Did Mr Zala make a phone call?

LEVICK: Mr Zala made a call to Tony Rosenow while we were in his office and told Tony that we were discussing a price move and about five or 10 minutes later Tony rolled up.

BURNSIDE: Tony Rosenow turned up at Mr Zala's office?

LEVICK: Mr Zala's office, yes.

BURNSIDE: After he arrived, what was said about prices?

LEVICK: We discussed between us a move in the marketplace later on that afternoon - come to some sort of level. Brendan wrote the prices out on a piece of paper and off we went.

BURNSIDE: What did he do with the piece of paper? Do you remember?

LEVICK: Well, he gave a piece to each and every one of us.

BURNSIDE: Right. After you left Brendan Zala's office, did you ring someone?

LEVICK: I rang Robin Palmer.

BURNSIDE: What did you say to him?

LEVICK: I informed him of the price move that was to occur later that afternoon.

BURNSIDE: What did he say?

LEVICK: ‘I'll take it on board. Thank you very much’.”

270 While Levick clearly recalled receiving a piece of paper with a price on it, he conceded that he had no specific recollection of Rosenow being handed a piece of paper. I have no reason to reject Levick’s evidence concerning the meeting and therefore accept his evidence as to his recollection of it. To the extent that Rosenow’s s 155 evidence differs it is self-serving and is not sufficient to outweigh Levick’s evidence on oath before me. There is no evidence that Dalton or Anderson attended or later learned of the Zala office meeting.

(iii) Meeting at the Olive Grove Cafe (December 2000)

271 In December of 2000, Zala, Levick Bentley and Rosenow met together at the Olive Grove Cafe located on Sturt Street, Ballarat (“the Olive Grove Cafe meeting”). Zala testified:

“BURNSIDE: What time of the morning did you arrive there?

ZALA: It was 8 am and we – I arrived at that cafe at 8 am and so too did Mr Levick, Mr Bentley and Mr Rosenow. I remember it because the site was closed, or the cafe was closed and it didn't open until 8.30, and the owner or whoever at the cafe said, ‘Look, you know, if you just want coffee, that's fine. We're still setting up but we can make coffee.’ We said, yes, that's what we wanted, so we went into the coffee shop and sat there and had coffee.

BURNSIDE: As best you can remember it, who said what during the conversation over coffee?

ZALA: Again it was - Balgee were keen to increase the price.

BURNSIDE: When you say Balgee, you mean Mr Levick?

ZALA: Beg your pardon, Mr Levick said that Balgee were keen to increase the price. Mr Bentley indicated that so too were they. I again said to them that it was my thought that we should sit it out for a bit longer and just keep the market down so that hopefully the 6 cent a litre shopper docket would be withdrawn. Mr Rosenow, as I remember, was sympathetic to my thinking and the discussion went along those lines. The result of that was that there was [a] price increase later on that day.

HIS HONOUR: Sorry, I don't understand that. You said Mr Rosenow was sympathetic to your line - - -?

ZALA: Sorry, Mr Rosenow agreed that we should sit it out and put pressure on Safeway and that they would hope [Safeway would] withdraw the 6 cent a litre.

HIS HONOUR: How did the discussion finish?

ZALA: The discussion finished that we would increase the price later on that day.

HIS HONOUR: Can you remember what was said, as best you can, by whom?

ZALA: Other than [what] I've just explained, no. Mr Levick and Mr Bentley were keen for the price to increase later that day and I was a bit keen to maybe not do it. Mr Rosenow tended to think that that wasn't a bad idea but in the end we decided that, okay, we would go to the top of the cycle again and that's what happened.

BURNSIDE: Did you make observations - - -?

ZALA: My record shows – my diary notes show that later on that day there was a price increase to the top of the cycle again. I'm fairly sure that Mr Levick said, ‘Well, you know, we're going anyway’, and we then followed as was our habit.

BURNSIDE: Did you yourself make any observation of the Shell prices later that day?

ZALA: To the best of my knowledge everybody went to the - yes, to the best of my knowledge everybody went to the top of the cycle again, or shortly after.”

272 Bentley also testified that the meeting at the Olive Grove Cafe concerned what to do about the Safeway shopper dockets. He said that different people had different thoughts about what to do and stated that the attendees discussed increasing prices in the near future. Levick gave no evidence regarding the Olive Grove Cafe meeting.

273 Rosenow stated at his s 155 examination that he attended the meeting at the Olive Grove Cafe and that the topic of conversation was Safeway’s discount vouchers. He said he did not recall whether the attendees discussed whether to match Safeway’s discounted price.

274 I have no reason to reject Zala’s evidence concerning the meeting and therefore accept his evidence as to his recollection. To the extent that Rosenow’s s 155 evidence differs it is self-serving and is not sufficient to outweigh Zala’s evidence on oath before me. There is no evidence that Dalton or Anderson attended or were subsequently informed of the Olive Grove Cafe meeting.

(iv) Other meetings

275 Zala testified that during the 1999 period he and Levick occasionally met outside the front of the United service station in Ballarat. He stated:

“On one such occasion in about 1999 (shortly after United had opened in Ballarat) I recall stopping my car and getting into the front passenger seat of Mr Levick’s car. I also recall that a short time later Mr Bentley drove up, stopped his car and got into the back seat of Mr Levick’s car. I recall that while we were in Mr Levick’s car he said words to the effect, ‘I’m watching United’s boards’. I cannot otherwise recall the substance of the conversation between Mr Levick, Mr Bentley and I.”

276 Levick and Andrew Cartledge, who operated the Ampol Road Pantry on Howitt Street, also testified that they met with Zala in front of the United service station as Zala described. Regarding what was discussed at the meeting, Levick said that somebody asked whether Bentley had spoken to anybody at United. According to Levick, Bentley said, “Yes, I have. I'll make another call.”

277 Zala also testified that he sometimes visited the offices of Balgee, Justco and Triton and met with Levick, Bentley and Rosenow respectively. He stated that at these meetings board prices were discussed. With respect to the times he visited the offices of Triton, Zala stated:

“BURNSIDE: Did you ever call into Mr Rosenow's office on any occasion other than you've told us about already?

ZALA: As I said, I called into Mr Rosenow's office to discuss the emergency response trailer with him, and I called in there and bought some oil off him. On a small number of occasions, if I was driving past or in my car in the area and received a price call from Mr Levick, there were a small number of occasions, as I was in the area, I called in and passed the information on to Mr Rosenow directly, as opposed to telephoning him. But I probably haven't been in Mr Rosenow's office more than maybe four times, and two of those were with the emergency response trailer and when I purchased some oil off him. But, no, I wasn't - I have called into Mr Rosenow's office and passed the telephone information on but not frequently, no.”

278 Finally, as discussed above, Dow gave evidence that he saw Rosenow meet separately with Zala (monthly), Bentley (monthly) and Dalton (twice a month) at Triton’s Ballarat depot.

(v) Conclusion

279 The evidence regarding face-to-face meetings between competitors in the Ballarat petrol market did not advance the ACCC’s case in relation to Anderson’s (and therefore Apco’s) or Dalton’s (and therefore Brumar’s) participation in the price-fixing understanding during the 1999 to 2000 period. On the other hand, the evidence established that Rosenow attended and participated in face-to-face meetings between competitors at which price increases were discussed. On the evidence, which I have accepted, at the meetings at Zala’s office and the Olive Grove Cafe, the parties went further and reached a consensus about a specific price increase.

280 The meetings were relied upon by the ACCC in support of its case in relation to the making of the price-fixing understanding. The meetings, particularly the meetings at Zala’s office and the Olive Grove Cafe, are plainly consistent with and afford some corroboration of the understanding. As outlined above, the preferable view is that, rather than there being a specific price-fixing understanding made, in part, at the meetings, there was a price-fixing understanding in operation before and during the relevant period that was adapted from time to time to meet changes in personnel and market forces. The main relevance of the meetings for present purposes is:

· they establish that Rosenow, and therefore Triton, participated in two meetings between competitors at which there was consensus about specific increases in prices;

· they establish that, in addition to telephone communications between competitors, there were direct face to face meetings from time to time at which specific price-increase information was conveyed for the purposes of the price-fixing understanding;

· they afford further evidence in support of the ACCC’s case that Balgee, Chisholm, Justco and Triton were parties to the price-fixing understanding.

(g) Annexure A and Exhibit DA 13

281 Annexure A (which was also presented in a CD rom representation) and Exhibit DA 13 were the subject of extensive submissions by all of the parties. At the outset it is appropriate to state that I am satisfied that the information set out in the two documents, which took into account many of the criticisms of the contesting respondents, is accurate, albeit that it is incomplete. However, each of the contesting respondents put forward an analysis of why the documents cannot be relied upon to support the inference the ACCC sought to draw. That inference was that on price-increase days there were extensive telephone communications between the corporate respondents informing each other of the proposed or stipulated price increase followed by follow-up calls in an endeavour to make that price “stick.” The inference was said to be supported by the direct and hearsay evidence about the calls, the substantial price increases that occurred at the corporate respondents’ sites on price-increase days and the absence of any similar or comparable pattern of calls on days when the price of petrol did not increase.

282 Significantly, Annexure A and Exhibit DA 13 were relied upon by the ACCC both as evidence of the making of, and of giving effect to, the price-fixing understanding.

283 Those documents establish that during the relevant period the typical pattern of communication between the corporate respondents in relation to the price-fixing understanding alleged by the ACCC was as follows:

· Levick (Balgee) – Palmer and Carmichael (the Leahy Companies) – Anderson (Apco);

· Levick (Balgee) – Zala (Chisholm) – Bentley (Justco) – Anderson (Apco);

· Zala (Chisholm) – Rosenow or Dow (Triton) – Dalton (Brumar);

· Bentley (Justco) – Rosenow or Dow (Triton) – Dalton (Brumar).

284 It is appropriate to observe that there was little or no reason for the other corporate respondents to have extensive telephone communications with each other, with the exception of certain conversations between Apco (Anderson) and the Leahy Companies Geelong (Carmichael), between Apco (Anderson) and Justco (Bentley) and, to a lesser extent, of some conversations between Brumar and Triton. That is generally supportive of the inference the ACCC seeks to draw from the two documents. While the evidence given by the witnesses was unable to descend into the detail or content of specific calls that is not surprising as the calls took place over a long period, were ongoing and of a generic kind and related generally to a price increase or a follow-up communication concerning such an increase that would not have been unusual for the parties to make.

285 On the other hand, it must be accepted that much of the information in the two documents is equivocal. For example, in some instances prices were increased by Brumar and Apco when there was no evidence of telephone communications between either of them and any of the other respondents. Also, many of the records do not specify the time of day when the increases in the prices of some of the respondents occurred, therefore it is often difficult to link particular increases with any particular call. Further, on many occasions the price increase sought by one or more of the respondents did not take effect because the increase was not matched during the day by one or more of the other corporate respondents. Finally, as price increases were immediately reflected in a corporate respondent’s board prices, the charts and graphical representations in the two documents cannot negate the possibility that a particular respondent obtained its information in relation to a price increase from its inspections of competitors’ board prices. The force of that observation is weakened to some extent by the fact that such inspections, with the consequential follow-up calls, were an inherent part of the process by which the price-fixing understanding was able to achieve its purpose, and likely effect, of having the proposed or stipulated price increase “stick” because it was being matched by competitors. Price observations were a necessary part of that process because they enabled the participating parties to determine the extent to which the proposed or stipulated price rise was being matched in the market by competitors.

286 In my view Annexure A and Exhibit DA 13 support the inference contended for by the ACCC. A comparison of the two documents establishes a pattern of extensive telephone communications between most, if not always all, of the corporate respondents on price-increase days, which is significantly greater than such communications on non-price-increase days. For example, the complete records for February-April 2000 show that on the 89 days in that period there were 885 calls between the various competitors with an average of 9.9 calls per day, but on the 16 price-increase days in that period there were 592 calls with an average of 37 calls per day. The average on the 73 non-price-increase days in that period was 4 calls per day. Although the averages are of limited utility against the contesting respondents who generally made fewer calls on price-increase days, they do support the inference invited by the ACCC, that it is probable that the higher number of calls between competitors (including Triton) on price-increase days related to the price increase being sought on those days. When it is appreciated that, as explained above, follow-up calls were an inherent aspect of the price-fixing understanding, the pattern of calls is evidence that is corroborative of the process provided for by the price-fixing understanding.

287 Generally, the pattern of calls discloses more extensive telephone communications between the initiating respondents. Nonetheless, there is a pattern of calls involving Triton, Brumar and Apco on price-increase days. Exhibit DA 13 shows that the pattern of calls to and from Triton on those days is greater than the calls on non-price-increase days. It can be accepted that the calls between the Leahy Companies Geelong and Apco, Justco and Apco, and Triton and Brumar on price-increase days are considerably fewer in number than calls between the other corporate respondents, but that is consistent with the evidence that during the relevant period the parties to the price-fixing understanding only had access to Brumar through Rosenow and access to Apco through Carmichael (the Leahy Companies Geelong) or Bentley (Justco). Also, the evidence involving Brumar and Apco is more ambivalent because, consistent with their evidence that they had other commercial reasons for talking to some of the other respondents, there were also calls involving those parties on non-price-increase days. Nonetheless, the pattern of calls to and from Apco and Brumar is generally corroborative of the direct evidence that the content of the calls included informing Anderson and Dalton of the fact of the price increase that was occurring or in progress. Apco’s complaint that its pattern of calls with the Leahy Companies is not so different on non-price-increase days loses much of its force when regard is had to the evidence that Carmichael and Bentley relied on their other reasons for calling Anderson to “incidentally” inform him of the price increase then in progress in Ballarat.

288 The inference in respect of Triton is the most easily established because, unlike the situation with Apco and Brumar, there is a pattern of calls between one or more of the initiating respondents and Triton on price-increase days, which is generally absent on non-price-increase days.

289 The linking of a specific call to a particular corporate respondent and a price increase by that respondent is more difficult. One of the reasons for this is that the information available is incomplete. For example, there may or may not have been other telephone or face to face communications between those respondents. Also, the evidence does not establish the precise time at which all of the corporate respondents implemented a price increase on a price-increase day. Nonetheless, Annexure A reveals a probable correlation between the price increases recorded and the pattern of calls. The correlation is two-fold. First, there is a probable correlation between calls to and from particular corporate respondents, and those respondents increasing their prices after such calls. Second, there is also a probable correlation between the pattern of continuing calls between the corporate respondents during the course of a price-increase day and the decisions of other respondents during the day about whether they would match the increase and whether the increase would “stick.” Because the information available is incomplete, the correlation may not be stated with precision. If the two documents were offered as the only evidence, the lack of specificity and precision concerning the correlation may have been fatal to the ACCC’s claims in respect of the price-fixing understanding. However, the information in the documents supplements direct evidence about price-increase and follow-up calls between the corporate respondents, and justifies the inference that I am prepared to draw, that on price-increase days the content of most of the telephone communications between the corporate respondents probably related to or included the price increases proposed or in progress on that day. Because Apco had other reasons for regular and ongoing communications with the Leahy Companies Geelong and Justco, its position differs in that the calls were not just about price increases. Nonetheless, the evidence is that Carmichael and Bentley used the occasion for their calls to inform Anderson of the fact of a price increase when it was occurring. Thus, it is likely that calls on price-increase days included communication of the increase, even if the calls were also about other matters.

290 In summary, the price-increase information and the pattern of calls in Annexure A and Exhibit DA 13 are consistent with and supportive of the inference the ACCC seeks to draw, particularly when the direct evidence about the content of the communications between the corporate respondents is considered. Of course, on many of the price-increase days the price increase did not take effect as it was not matched during the day by all of the main competitors. As explained earlier in these reasons, the price-fixing understanding provided for a process that enabled price increases to take effect, rather than for a commitment between all of the parties to it to increase their prices. Thus, the fact that on some days the price increase took effect and on others it did not, is not inconsistent with the ACCC’s case that the price-fixing understanding had the purpose or likely effect of providing for the fixing or controlling of prices.

291 I have confined the above observations to evidence that supports the ACCC’s case in relation to the making of the price-fixing understanding. An additional analysis is required in respect of the further claim of the ACCC that on particular days during the relevant period the parties gave effect to the price-fixing understanding.

(h) Evidence of giving effect to the price-fixing understanding during the relevant period

(i) The ACCC’s case

292 Evidence of parties giving effect to the price-fixing understanding during the relevant period is relevant to the ACCC’s primary case in relation to the making of the understanding as well as to its case of “giving effect” to it. Therefore the evidence on that subject must also be considered, together with the other evidence, in determining whether there is reasonable evidence that establishes the ACCC’s primary case.

293 Section 4(1) provides that “give effect to”:

“in relation to a provision of a contract, arrangement or understanding, includes do an act or thing in pursuance of or in accordance with or enforce or purport to enforce.”

294 In Tradestock Pty Ltd v TNT (Management) Pty Ltd (1978) 17 ALR 257 at 269 Smithers J stated that an act done in implementation of a contract, arrangement or understanding would necessarily be done “in pursuance thereof.” His Honour added that the words “or in accordance with” may have extended the ambit of the phrase to cover situations where a decision is made “in accordance with” an arrangement or understanding although it may not have been actuated by the arrangement or understanding. This interpretation was endorsed by Franki J in TNT Management at 68. In Dowling v Dalgety Australia Limited (1992) 34 FCR 109 at 133 Lockhart J observed that parties, in making a decision independently of each other may give effect to an allegedly offending arrangement notwithstanding that they were not acting in concert.

295 The ACCC claims that one or more of the corporate respondents gave effect to the price-fixing understanding on at least 69 occasions during the period commencing on 22 June 1999 and concluding on 8 December 2000. The ACCC contends that the understanding was given effect to by a corporate respondent participating in price-increase or follow-up calls on a price-increase day or increasing its price to the proposed or targeted price on that day. Because calls to Apco from the Leahy Companies or Justco may have been about matters unrelated to price, the ACCC only claims that Apco gave effect to the price-fixing understanding when calls with either the Leahy Companies or Justco can be correlated with a price increase by Apco that generally matched the increase of its competitors. However, on certain occasions where there was either insufficient evidence of an increase against a particular corporate respondent or there was not a satisfactory correlation between an increase and telephone calls, the ACCC did not press its claim against that respondent.

296 On the above basis the ACCC claims that Annexure A and Exhibit DA 13 disclose that Balgee gave effect to the price-fixing understanding on 70 days, Triton on 69 days, Brumar on 53 days and Apco on 34 days. The factual basis for the ACCC’s claims was tabulated by it as follows:

“List of days on which the Applicant alleges ‘giving effect’
Date	APCO	BRUMAR	TRITON	BALGEE
22-Jun-99	C&INC	C&INC	C	C&INC
30-Jun-99	C&INC	C&INC	C	C&INC
8-Jul-99		C&INC	C&INC	C&INC
20-Jul-99		C&INC	C&INC	C&INC
28-Jul-99			C&INC	C&INC
4-Aug-99	C&INC	C&INC	C&INC	C&INC
11-Aug-99		C&INC	C&INC	C&INC
17-Aug-99			INC	C&INC
19-Aug-99		C&INC	C&INC	C&INC
26-Aug-99		C&INC	C	C&INC
30-Aug-99	C&INC	C&INC	C&INC	C&INC
6-Sep-99		C&INC	C	C&INC
9-Sep-99			C&INC	C&INC
14-Sep-99	C&INC	C&INC	C&INC	C&INC
21-Sep-99		C&INC	C&INC	C&INC
28-Sep-99	C&INC	C&INC	C&INC	C&INC
7-Oct-99			C	C&INC
12-Oct-99		C&INC	C&INC	C&INC
25-Oct-99	~~C&INC~~	C&INC	C&INC	C&INC
15-Nov-99	C&INC	C&INC	C&INC	C&INC
25-Nov-99	C&INC	C&INC	C&INC	C&INC
6-Dec-99	C&INC	C&INC	C&INC	C&INC
15-Dec-99		C&INC	C&INC	C&INC
23-Dec-99	C&INC	C&INC	C&INC	C&INC
4-Jan-00			C	C&INC
7-Jan-00	C&INC		C&INC	C&INC
14-Jan-00	C&INC		C&INC	C&INC
20-Jan-00			C&INC	C&INC
24-Jan-00	C&INC	C&INC	C&INC	C&INC
31-Jan-00	C&INC	C&INC	C&INC	C&INC
4-Feb-00	C&INC	C&INC	C&INC	C&INC
9-Feb-00	C&INC	C&INC	C&INC	C&INC
17-Feb-00		C&INC	C	C&INC
21-Feb-00	C&INC		C&INC	C&INC
28-Feb-00	C&INC	C&INC	C&INC	C&INC
6-Mar-00	C&INC	C&INC	C&INC	C&INC
8-Mar-00	C&INC		C	C
10-Mar-00	C&INC	C&INC	C&INC	C&INC
16-Mar-00	~~C&INC~~	C&INC	C&INC	C&INC
27-Mar-00		C&INC	C&INC	C&INC
4-Apr-00		C&INC	C	C&INC
6-Apr-00		C&INC	C	C&INC
10-Apr-00	C&INC	C&INC	C&INC	C&INC
19-Apr-00		C&INC	C	C&INC
20-Apr-00	C&INC	C&INC	C&INC	C&INC
28-Apr-00		C&INC	C&INC	C&INC
5-May-00	C&INC	C&INC	C&INC	C&INC
12-May-00		C&INC	C&INC	C&INC
18-May-00		C&INC	C	C&INC
23-May-00			C	C&INC
1-Jun-00	C&INC	C&INC	C&INC	C&INC
5-Jun-00		C&INC	C&INC	C&INC
20-Jun-00	C&INC	C&INC	C&INC	C&INC
5-Jul-00				C&INC
7-Jul-00	C&INC	C&INC	C&INC	C&INC
18-Jul-00		C&INC	C&INC	C&INC
27-Jul-00			C	C&INC
1-Aug-00		C&INC	C	C&INC
10-Aug-00	C&INC	C&INC	C&INC	C&INC
15-Aug-00	C&INC	C&INC	C&INC	C&INC
22-Aug-00		C&INC	C&INC	C&INC
4-Sep-00				C
5-Sep-00		C&INC	C	C&INC
11-Sep-00	~~C&INC~~		C	C&INC
12-Sep-00
20-Sep-00		C&INC	C	C&INC
24-Sep-00		C&INC	C
25-Sep-00	C&INC		C&INC	C&INC
9-Oct-00				C&INC
18-Oct-00			INC	C&INC
31-Oct-00		C&INC	C	C&INC
7-Dec-00		C&INC	C	C&INC
8-Dec-00	C&INC		INC

Key
	giving effect alleged
	giving effect not alleged
C	Call(s)
INC	Increase in price”
~~C&INC~~	Dropped by ACCC

297 Subsequent to providing its initial tabulation, the ACCC filed a supplementary submission claiming that for particular reasons applying to Apco it wished to drop 25 October 1999, 16 March 2000 and 11 September 2000 against Apco (these days are crossed out on the above tabulation).

298 Because of the generic nature of the evidence given about price-increase calls, the preferable approach under the Briginshaw standard is to require that there be evidence of both one or more calls between the respondents and a price increase that appears to be part of a coordinated price increase on the day,before a “giving effect to” contravention can be made out assuming, of course, that it is also established that the particular respondent is a party to the price-fixing understanding. I would add that, in my view, the ACCC is correct in contending that it is not essential that a price-increase call always precede a price increase. While it is the ACCC’s case that price increases sometime occurred without preceeding price-increase calls, it is also its case that follow-up calls were an essential aspect of the implementation of the understanding because of their role in making the initial price increase “stick.”

299 In my view, calls between the respondents and price increases by them on a price-increase day can afford evidence of both the making of the understanding and giving effect to it. Also, because the understanding provided for a process for the fixing or controlling of prices, as opposed to the actual fixing or controlling of prices, it is not an essential element of the ACCC’s case that all of the contesting respondents’ prices always increased within a stipulated period of time (eg three hours) or that they moved to exactly the same level. Further, even if there was a lag in the increase in price by Triton’s retailers, that is not inconsistent with the ACCC’s case that Triton gave effect to the understanding by informing its retailers that it was withdrawing or reducing price support in order to cause the retailers to move to the increased price. Finally, it is clear that some or all of the initiating respondents coordinated the price increase on each of the days relied upon by the ACCC and I have found that the contesting respondents were aware of the fact that the price-increase and follow-up calls were related to the increases occurring or in progress. Thus, the respondents were aware that matching increases to the targeted or proposed price, or thereabouts, were increases that were likely to be part of the coordinated increase that was occurring or in progress on the price-increase days. Of course, whether the contesting respondents were parties to the coordinated increases relied upon by the ACCC on price increase days depends on all of the evidence.

300 The approach I have adopted, which treats the price-fixing understanding as a process for procuring coordinated increases and requires both a price increase by a party and a phone call between that party and a competitor on the alleged “giving effect to” day, addresses many of the issues raised by the contesting respondents. However, it is also necessary to consider separately a number of the other issues they raised.

(ii) Triton

301 First, Triton argued that it did not give effect to the price-fixing understanding on four of the days alleged by the ACCC (ie 6 March 2000, 10 April 2000, 20 April 2000, 28 April 2000) because its retailers did not increase their prices on those days. It appears that the ACCC included these days as “giving effect to” days based on a price increase on the morning of the day following the alleged day. As explained earlier, the lag in the increase is not a defence because the lag was probably a consequence of the previous day’s withdrawal of or reduction in price support, which was the manner in which Triton gave effect to the understanding. Accordingly, 6 March 2000, 10 April 2000, 20 April 2000, 28 April 2000 qualify as “giving effect to” days.

302 Second, Triton contended that several of the alleged “giving effect to” days should be dropped due to the fact that 1) while the Triton retailer initially raised its price on that day, it later decreased its price; or 2) while Triton eventually increased its price, that increase was preceded by a decrease. In my view neither argument is inconsistent with the ACCC’s case. An increase followed by a decrease may merely reflect a day on which the price rise did not stick. Also, a decrease followed by an increase is not inconsistent with “giving effect to” the price-fixing understanding during the day.

303 Third, Triton asserted that on some of the alleged “giving effect to” days the “supported price” applied by Triton was a different and lower support level than the price recorded in Annexure A. Triton argued that this indicates that on those days Triton administered the price-support system for its own commercial purposes. However, the issue is whether the price-support system was utilised on the alleged “giving effect to” days to facilitate a coordinated price rise. The fact that there may be some disparity between the increased prices is not inconsistent with the ACCC’s case.

304 Fourth, Triton argued that on 23 of the alleged “giving effect to” days, Triton applied different support levels to different independent Shell retailers. It noted that Annexure A does not record those differences and argued that the differences were significant because they comprise evidence that is inconsistent with the ACCC’s allegation that Triton was engaged in fixing or controlling the price of petrol. Taxi Co-op was the biggest and most important of the independent Shell retailer sites in Ballarat. According to the evidence, the price-support levels as recorded in Rosenow’s diary (which are depicted on Annexure A) usually correlated with the retail price of petrol at Taxi Co-op and the market price. As a result, it can be inferred that in so far as Taxi Co-op prices are concerned, they were a result of Triton’s reduction in, or withdrawal of, price support as part of the coordinated increase sought on the relevant price-increase days. Also, for the reasons given earlier, the understanding did not require all of the respondents to precisely match each others’ prices.

305 Triton also raised other issues but I do not regard them as meeting the ACCC’s case when regard is had to the approach I have adopted and the findings I have made. Accordingly, it follows from the foregoing that I am satisfied that there is reasonable evidence that Triton was involved in calls between competitors and withdrew or reduced its price support, at least in relation to Taxi Co-op, as part of a coordinated price increase on a total of 45 days during the relevant period.

(iii) Rosenow

306 Rosenow presented his own analysis of Annexure A but I am not satisfied that it warrants findings that differ in any respect from those I have made in respect of Triton. Accordingly, I am satisfied that there is reasonable evidence that Rosenow was involved in the price increase on each of those 45 “giving effect to” days.

(iv) Brumar

307 Brumar criticised Annexure A on the ground that it failed to set out, either comprehensively or at all: 1) the prices charged by competitors on and during each day set out in Annexure A; or 2) the level of price support enjoyed by the respondent retailers on each of the days in Annexure A. In particular, Brumar claimed that for a number of Annexure A days, detailed information regarding Swift’s price was not recorded. Because Brumar asserted that its strategy was to follow Swift, it argued that the exclusion of this information provided an incomplete and misleading picture of the price increases. Likewise, it asserted that inclusion of price-support figures would have benefited its case. Given that the threshold for present purposes for “giving effect to” is a competitor call and a price increase, the inclusion of this information would not have changed the present analysis.

308 I am satisfied that there is reasonable evidence that Brumar was involved in calls between competitors and increased its price as part of a coordinated price increase on a total of 53 days during the relevant period. As Dalton acted on behalf of Brumar it must follow that there is reasonable evidence that he was involved in the price increase on each of the “giving effect to” days.

(v) Apco

309 Apco argued that four additional “giving effect to” days must also be dropped.

310 Apco argued that on 14 September 1999, both competitor calls with Apco (at 12:55 and 13:12) before an Apco price increase (at 13:18) went to message bank. According to Annexure A, the Leahy Companies Geelong (Carmichael) received a call from the Apco offices at 11:59, which was before the Apco price increase, so it is incorrect to assume that there was no call with a competitor prior to Apco’s increase. In addition, there was a call from Anderson’s mobile phone to the Leahy Companies Geelong (Carmichael) following Apco’s increase. Because there was at least one call and an increase, this is a “giving effect to” day.

311 Apco contended that on 15 November 1999 the only relevant competitor call before Apco’s increase went to message bank. It appears from Annexure A that Anderson called the message bank from his mobile phone after the message was left and before Apco increased its price. However, there are also calls between Apco and competitors after Apco’s increase and, as a result, this is a “giving effect to” day.

312 Apco asserted that on 14 January 2000 the only relevant calls prior to the substantial price increase went to message bank. Reference to Annexure A reveals that the Apco message bank was checked prior to the Apco price increase. However, Apco did not make or receive any competitor calls. I am not prepared to treat a message bank call as a communication with a competitor about retail prices. As a result, this day will not be considered a day on which Apco gave effect to the price-fixing understanding.

313 Apco argued that on 9 February 2000 the only relevant competitor calls that occurred before the Apco increase went to message bank at 9:40 and 14:43, respectively. According to Annexure A, Anderson called to retrieve messages from the message bank from his mobile phone shortly after each of these messages were left (at 9:44 and 14:45 respectively) and thus before Apco increased its prices (at 15:50). Anderson’s message bank call might have alerted Anderson to the fact that a coordinated increase was taking place. However, as I am not prepared to treat a message bank call as a communication with a competitor about retail prices, I do not consider this to be a day on which Apco gave effect to the understanding.

314 Having regard to the criteria I have adopted and the findings I have made, I am satisfied that there is reasonable evidence that Apco was involved in calls between competitors and that it increased its price as part of a coordinated price increase on a total of 29 days during the relevant period. As Anderson acted on behalf of Apco, it must follow that there is reasonable evidence that he was involved in the price increase on each of the “giving effect to” days.

(vi) Conclusion

315 Annexure A was relied on by the ACCC as evidence of 1) the making of and 2) the giving effect to, the price-fixing understanding. On the basis of the above findings I am satisfied that there is reasonable evidence of the involvement of the contesting respondents and Balgee in coordinated price increases on the following days:

APCO (29 days)

22-Jun-99		7-Jan-00
30-Jun-99
4-Aug-99		24-Jan-00
30-Aug-99		31-Jan-00
14-Sep-99		4-Feb-00
28-Sep-99
		21-Feb-00
15-Nov-99		28-Feb-00
25-Nov-99		6-Mar-00
6-Dec-99		8-Mar-00
23-Dec-99		10-Mar-00

		10-Apr-00
		20-Apr-00
		5-May-00
		1-Jun-00
		20-Jun-00
		7-Jul-00
		10-Aug-00
		15-Aug-00

		25-Sep-00
		8-Dec-00
BRUMAR (53 days)
22-Jun-99		24-Jan-00
30-Jun-99		31-Jan-00
8-Jul-99		4-Feb-00
20-Jul-99		9-Feb-00
4-Aug-99		17-Feb-00
11-Aug-99		28-Feb-00
19-Aug-99		6-Mar-00
26-Aug-99		10-Mar-00
30-Aug-99		16-Mar-00
6-Sep-99		27-Mar-00
14-Sep-99		4-Apr-00
21-Sep-99		6-Apr-00
28-Sep-99		10-Apr-00
12-Oct-99		19-Apr-00
25-Oct-99		20-Apr-00
15-Nov-99		28-Apr-00
25-Nov-99		5-May-00
6-Dec-99		12-May-00
15-Dec-99		18-May-00
23-Dec-99		1-Jun-00
		5-Jun-00
		20-Jun-00
		7-Jul-00
		18-Jul-00
		1-Aug-00
		10-Aug-00
		15-Aug-00
		22-Aug-00
		5-Sep-00
		20-Sep-00
		24-Sep-00
		31-Oct-00
		7-Dec-00
TRITON (45 days)
	7-Jan-00
8-Jul-99	14-Jan-00
20-Jul-99	20-Jan-00
28-Jul-99	24-Jan-00
4-Aug-99	31-Jan-00
11-Aug-99	4-Feb-00
	9-Feb-00
19-Aug-99
	21-Feb-00
30-Aug-99	28-Feb-00
	6-Mar-00
9-Sep-99
14-Sep-99	10-Mar-00
21-Sep-99	16-Mar-00
28-Sep-99	27-Mar-00
12-Oct-99
25-Oct-99	10-Apr-00
15-Nov-99
25-Nov-99	20-Apr-00
6-Dec-99	28-Apr-00
15-Dec-99	5-May-00
23-Dec-99	12-May-00
	1-Jun-00
	5-Jun-00
	20-Jun-00
	7-Jul-00
	18-Jul-00
	10-Aug-00
	15-Aug-00
	22-Aug-00
	25-Sep-00

316 It is unnecessary to deal with Balgee’s position on a “reasonable evidence” basis as I am satisfied that the ACCC has established its case against Balgee in relation to both being a party to, and giving effect to, the price-fixing understanding. The “giving effect” to days are as follows:

BALGEE (68 days)
22-Jun-99		4-Jan-00
30-Jun-99		7-Jan-00
8-Jul-99		14-Jan-00
20-Jul-99		20-Jan-00
28-Jul-99		24-Jan-00
4-Aug-99		31-Jan-00
11-Aug-99		4-Feb-00
17-Aug-99		9-Feb-00
19-Aug-99		17-Feb-00
26-Aug-99		21-Feb-00
30-Aug-99		28-Feb-00
6-Sep-99		6-Mar-00
9-Sep-99
14-Sep-99		10-Mar-00
21-Sep-99		16-Mar-00
28-Sep-99		27-Mar-00
7-Oct-99		4-Apr-00
12-Oct-99		6-Apr-00
25-Oct-99		10-Apr-00
15-Nov-99		19-Apr-00
25-Nov-99		20-Apr-00
6-Dec-99		28-Apr-00
15-Dec-99		5-May-00
23-Dec-99		12-May-00
		18-May-00
		23-May-00
		1-Jun-00
		5-Jun-00
		20-Jun-00
		5-Jul-00
		7-Jul-00
		18-Jul-00
		27-Jul-00
		1-Aug-00
		10-Aug-00
		15-Aug-00
		22-Aug-00
		5-Sep-00
		11-Sep-00
		20-Sep-00
		25-Sep-00
		9-Oct-00
		18-Oct-00
		31-Oct-00
		7-Dec-00

317 The conclusions set out above in respect of Balgee and the contesting respondents constitute additional evidence that is to be considered in determining whether the Ahern criteria have been met and whether the ACCC has made out its case that all of the contesting respondents were parties to or involved in the price-fixing understanding.

10. Ahern

(a) The law

318 The ACCC, relying on Ahern, contended that statements by any individual respondent made on behalf of that person’s corporate principal in furtherance of the price-fixing understanding were admissible against all other respondents. The ACCC also claimed that, even if the statements were not admissible pursuant to Ahern, the statements made by one respondent outside the presence of the other respondents were nonetheless admissible for the fact of the statements having been made, if not for the truth of the statements’ content.

319 The contesting respondents objected to the admission of the alleged hearsay evidence under the Ahern principle and argued that Ahern applies only to cases involving criminal conspiracy. In addition, the contesting respondents asserted that, even if Ahern applies in the civil context, the threshold of reasonable evidence of participation in the alleged price-fixing understanding had not been met. Finally, the contesting respondents argued that the statements could not be admissible for the mere fact that they were made as they, in and of themselves, are irrelevant and prejudicial.

320 Ahern involved criminal conspiracy. It is authority for the proposition that, in order for acts done or words uttered outside the presence of an accused to be admissible against the accused to prove the participation of the accused in the conspiracy, it must be shown that: (1) there is a combination of the type alleged; (2) there is reasonable evidence, apart from the acts or words sought to be used, that the accused was a participant in the combination; and (3) the act or words sought to be used were uttered by a participant in furtherance of the common purpose: see Ahern; R v Blake & Tye (1844) 6 QB 126; Tripodi v The Queen (1961) 104 CLR 1 (“Tripodi”); R v Masters (1992) 26 NSWLR 450 at 461-463. In this context, “reasonable evidence” is equivalent to a prima facie case: see Ahern at 100; see also Milandinovic v The Queen (1993) 47 FCR 190 at 193.

321 The rationale behind the Ahern principle is that “the combination or preconcert to commit the crime is considered as implying an authority to each participant to act or speak in furtherance of the common purpose on behalf of the others”: see Tripodi at 7 per Dixon CJ, Fullagar, Windeyer JJ. A long line of cases has established that the same principle applies in the context of civil conspiracies and in cases of unlawful arrangements in contravention of Pt IV of the Act: see R v Associated Northern Collieries (1911) 14 CLR 387; Sheldon v Sun Alliance Limited (1988) 50 SASR 236 (affirmed by the Full Court in Sheldon v Sun Alliance Australia Limited (1989) 53 SASR 97); Italiano v Barbaro (1993) 40 FCR 303; Beach Petroleum NL v Johnson (1993) 43 FCR 1; Coomera Resort Pty Ltd v Kolback Securities Limited [2004] 1 Qd R 1; Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34; see Nicholas Enterprises at 633; Allied Mills at 238; David Jones at 470-471. The Ahern principle and its rationale are applicable to the price-fixing understanding alleged to have been made and given effect to in contravention of s 45(2) of the Act.

322 In any event, s 87(1)(c) of the Evidence Act substantially reflects the Ahern principle in so far as it provides:

“(1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that:

…

(c) the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party.”

323 See also s 57(2) of the Evidence Act.

324 The applicability of Ahern or s 87(1)(c) to persons involved in a contravention of s 45(2) raises an additional issue. Although the Ahern principle applies to the alleged contraventions by the individual respondents acting on behalf of their respective corporate principals, a different question arises in respect of the application of Ahern to the persons allegedly involved as individuals in the contraventions by reason of s 75B of the Act. Relevantly, for present purposes, the question is whether the Ahern principle applies to Anderson, Dalton and Rosenow. The ACCC’s case against the individual respondents is that they were persons who were knowingly concerned in and parties to the contraventions alleged against the corporate respondents: see s 75B(1)(c) of the Act. That case is premised on the individuals being “intentional participants” in the price-fixing understanding. In the present context such a case is directly analogous to a case that they were co-conspirators.

325 Although the rationale for the Ahern principle may preclude its application to accessorial liability generally, there is no reason why the principle should not apply to persons liable as intentional participants in the contraventions where, as is the case here, the contravention by their corporate principal arises solely by reason of the conduct of the individuals: see Yorke v Lucas at 670-671 and Hamilton v Whitehead (1988) 166 CLR 121 at 127-128.

326 An analogous issue arose in David Jones, a case where corporate employers were alleged to have contravened, as principals, s 45 of the Act and their respective employees were alleged to have been knowingly concerned in or a party to the contraventions. The issue, relevantly, was whether the statements of an accessory could be used as evidence against the corporate principal. The Court, after finding that the individual respondents were party to a common purpose, held (at 470) that their statements were admissible against the corporate principals because they were made in furtherance of the common purpose. While the Court did not consider whether one accessory’s statements are admissible against another accessory, it is clear that, on the facts of the case, the Court drew no distinction between the corporate principals and the employee accessories. Fisher J stated at 475:

“It is my opinion that [the wholesaler principal] as well as the [retailer principals] contravened s 45(2)(a)(ii). . . . The [retailer principals] have also contravened s 45(2)(b)(ii) of the Act . . . It must also follow that each of the individual respondents was knowingly concerned in and a party to the contravention of s 45(2)(a)(ii) and thus liable to a pecuniary penalty under s 76(1)(e) of the Act.”

327 In the context of s 87(1)(c) of the Evidence Act the question will be whether it is “reasonably open” to find that the representations were made by an individual in furtherance of a common purpose that the individual had with a party to the proceeding or with “one or more persons including that party.” Thus, if the facts establish that Anderson, Dalton or Rosenow were intentional participants in the respective contraventions alleged (ie they were acting in furtherance of the common purpose), which were constituted solely by their acts on behalf of their respective corporate principals, then the Ahern principle, whether in its common law form or in the form of s 87(1)(c), can apply to those individuals, as their participation is not relevantly distinguishable from the participation of the principals.

328 Finally, as between the parties to a conversation, the hearsay content is admissible for the fact of what was said even if it is not admissible as proof of the content of matters asserted: see Ahern at 93. Accordingly, such statements are admissible although, if the content is not admissible under Ahern against respondents who were not parties to the relevant conversation, the evidence would appear to have no relevance to the issue of whether those respondents were parties to the price-fixing understanding.

329 In considering whether the elements required by the Ahern principle have been made out, I have confined the analysis to the evidence that is admissible against the contesting respondents without resort to the evidence that might be admissible under the Ahern principle. Before considering that evidence it is necessary to define the price-fixing understanding that constitutes the alleged unlawful combination relied upon by the ACCC.

(b) The price-fixing understanding

330 The parties to the alleged understanding are the corporate respondents. As explained above, the preferable way to view the evidence adduced by the ACCC is to regard the understanding as evolving from the existing arrangements being adapted from time to time to changes in personnel and market forces. On that basis the evidence at trial established that the price-fixing understanding involved a consensus on the part of the participants as to the following course of conduct:

· when one or more of the initiating respondents intended to bring a discount cycle in Ballarat to an end by effecting a sudden and significant price increase, those respondents were to make, or cause to be made, price-increase calls to the other participating corporate respondents;

· at or about the same time, the initiating respondents intending to effect the price increase were to increase their price to the targeted or proposed price;

· price-increase calls, which communicate the proposed or targeted price increase, were to be made to the participating respondents who had not initiated or made the price increases;

· the participating respondents were to observe each others’ board prices in order to determine which of those respondents had not substantially matched the price increase;

· follow-up calls were to be made to those respondents that had not matched the increase in an endeavour to have them do so quickly in order to prevent the price increase from collapsing;

· in the case of a respondent that supplies to independent retailers, the making or matching of a price increase was to be achieved by the withdrawal of, or reduction in, price support;

· in the event that the price increase had not been expeditiously matched by the high visibility sites in Ballarat, the targeted or proposed increase would not take effect, with the consequence that the retail increases of the participating corporate respondents may return to the discounted levels they were at prior to the price increase.

331 For present purposes it may not matter if the steps outlined above are framed in terms of an expectation, rather than a commitment, as to what was to be done. However, if it matters I am satisfied that the evidence establishes that the first three steps involved a commitment on the part of each of the initiating respondents who intended to bring the discount cycle to an end and who gave effect to that intention by implementing the understanding.

332 At the commencement of, and during, the relevant period, the price-fixing understanding was in place. The parties to the understanding included the initiating respondents, namely the Leahy Companies, Balgee, Chisholm and Justco. The Ahern issue is whether there is reasonable evidence or whether it is reasonably open to find that, apart from the hearsay evidence sought to be relied upon by the application of Ahern:

· Triton, Apco and Brumar were also parties to the making of and giving of effect to the understanding; and

· Rosenow, Anderson and Dalton were intentional participants in making and giving effect to the understanding on behalf of their corporate principals.

(c) Summary of findings

333 I have already outlined the evidence that is admissible against the contesting respondents and I have set out my findings in respect of those parties on the basis that Ahern does not apply. In summary, I have found that:

· the price-fixing understanding was in place and was given effect to by the initiating respondents, as parties to the understanding, during the relevant period;

· it was integral to the price-fixing understanding that the sudden and significant increases proposed or targeted by the initiating respondents were to be substantially matched within a short period by the high visibility sites such as those operated by Brumar and Apco;

· the likelihood of competitors in the Ballarat retail market making or matching a sudden and significant increase in their retail prices is closely related to the confidence they had that other competitors in the market would substantially match the increase.

334 In that context my conclusions on the non-Ahern evidence relied upon by the ACCC are set out below.

(i) Apco/Anderson

335 I am satisfied that there is reasonable evidence, and that it is reasonably open to find, that Anderson, acting on behalf of Apco, was a party to the price-fixing understanding described in [330] above. The evidence can be summarised as follows:

· as at June 1999, Anderson was aware of the existing arrangements, and of the purpose of price-increase and follow-up calls, which were an essential aspect of those arrangements (see [139]-[140]);

· the typical pattern of communication for Apco during the relevant period was Levick (Balgee) – Palmer (the Leahy Companies) – Carmichael (the Leahy Companies) – Anderson (Apco) (see [131]; [157]; [283]) or Levick (Balgee) – Zala (Chisholm) – Bentley (Justco) – Anderson (Apco) ([134]-[135]; [150]-[154]; [283]);

· Anderson, being aware of the purpose of price-increase and follow-up calls from Carmichael and Bentley, received and acted upon those calls by closely monitoring the price increases in Ballarat and then determining whether to substantially match them (see [171]-[174]);

· Annexure A and Exhibit DA 13 establish a pattern of calls on price-increase days which is generally corroborative of the evidence that the calls were used by Carmichael and Bentley, amongst other things, to inform Anderson of the fact of the price increase that was proposed or in progress (see [282]-[286]);

· Anderson was aware that the price-increase and follow-up calls were part of a longstanding and collusive process, involving a number of the corporate respondents, for coordinating price increases in order to bring to an end a discount cycle in the Ballarat retail market (see [173]);

· on some occasions when he was being informed of a price increase, Anderson would mention to Carmichael that “he will look at it” or that others in the market had not yet gone up (see [171]);

· Annexure A also reveals a probable correlation between the calls to Anderson and the price increases by Apco that occurred on 29 price-increase days during the relevant period (see [286]-[287]; [315]);

· on the 29 price-increase days it is likely that Anderson was aware that Apco’s increase was part of a coordinated and collusive increase in petrol prices in Ballarat (see [171]-[175]).

(ii) Brumar/Dalton

336 I am also satisfied that there is reasonable evidence, and that it is reasonably open to find, that Dalton, acting on behalf of Brumar, was a party to the price-fixing understanding described in [330] above. The evidence can be summarised as follows:

· The typical pattern of communication for Brumar during the relevant period was either Zala (Chisholm) – Rosenow (or Dow) (Triton) – Dalton (Brumar) or Bentley (Justco) – Rosenow (or Dow) (Triton) – Dalton (Brumar) (see [182]-[186]; [188]; [191]-[194]; [283]);

· Dalton, being aware of the purpose of price-increase and follow-up calls between himself and Rosenow (and some similar calls with Dow), received and acted upon those calls by closely monitoring the price increases (particularly at Swift) and then determining whether to match each increase (see [196]-[197]);

· Annexure A and Exhibit DA 13 establish a pattern of calls on price-increase days that was, in general, absent on non-price-increase days, which is generally corroborative of the evidence that the calls were used to inform Dalton of the fact of the price increase that was proposed or in progress (see [283]-[287]);

· Dalton was aware of the connection between price-increase information that he received from Rosenow (or Dow) and the sudden and significant price increases occurring at that time in the Ballarat market and, in particular, that the increases were related to those calls and therefore not merely the product of market forces (see [196]-[197]);

· Brumar’s and Dalton’s false responses in relation to question 10 of the ACCC’s s 155 questions sprang from a consciousness of guilt in the sense that they sprang from a consciousness that if a truthful answer was given that would implicate them in the s 45(2) contraventions suspected by the ACCC (see [253]-[256]), which included that they were parties to the collusive arrangements suspected by the ACCC;

· Annexure A also reveals a probable correlation between the calls with Dalton and the price increases by Brumar which occurred on 53 days during the relevant period (see [286]-[287]; [315]);

· by reason of the above matters it is likely that on the 53 price-increase days, Dalton was aware that Brumar’s increase was part of a coordinated and collusive increase in petrol prices in Ballarat;

· the failure of Dalton to give evidence enables me to more confidently draw the inference based on the above findings that there is reasonable evidence that Dalton, acting on behalf of Brumar, was a party to the price-fixing understanding (see [262]).

(iii) Triton/Rosenow

337 I am satisfied that there is reasonable evidence, and that it is reasonably open to find, that Rosenow, acting on behalf of Triton, was a party to the price-fixing understanding described in [330] above. The evidence can be summarised as follows:

· as at June 1999, Rosenow had been an active participant in the existing arrangements and was well aware of the purpose and likely effect of price-increase and follow-up calls, which were an essential aspect of those arrangements (see [203]; [241]-[242]);

· Rosenow was an active participant in the continuation of the existing arrangements and in the price-fixing understanding during the relevant period because he regularly participated in price-increase and follow-up calls, and he used price support to cause Triton’s independent retailers to match proposed or targeted increases (see [241]-[242]);

· the typical pattern of communications involving Rosenow and Triton during the relevant period was Zala (Chisholm) – Rosenow (or Dow) (Triton) – Dalton (Brumar) (see [241]; [283]) or Bentley (Justco) – Rosenow (or Dow) (Triton) – Dalton (Brumar) (see [241] [283]);

· Annexure A and Exhibit DA 13 establish a pattern of calls on price-increase days that was, in general, absent on non-price-increase days. This pattern is corroborative of the evidence that the calls were used by Zala and Bentley to inform Rosenow of price increases that were proposed or in progress and that they were used by Rosenow to inform Dalton of the increase (see [283]-[287]);

· Rosenow’s false response to Dow concerning the Olive Grove Cafe meeting sprang from a consciousness of guilt on Rosenow’s part in the sense that it sprang from a consciousness that if he told the truth it would implicate him in unlawful price-fixing arrangements with retailers or other suppliers in the Ballarat market ([259]);

· Rosenow’s participation in the meetings at Zala’s office and the Olive Grove Cafe establish his, and therefore Triton’s, participation in two meetings between competitors at which a consensus about specific price increases was reached between persons who were parties to the price-fixing understanding (see [279]-[280]);

· Annexure A also reveals a correlation between the calls and the price increases by Triton’s retailers, following Triton’s withdrawal of, or reduction in, price support on 45 days during the relevant period (see [286]-[287]; [315]);

· by reason of the above matters, Rosenow was aware that on the 45 price-increase days Triton’s withdrawal of, or reduction in, price support was part of a coordinated and collusive increase in petrol prices in Ballarat;

· the failure of Rosenow to give evidence enables me to more confidently draw the inference based on the above findings that there is reasonable evidence that Rosenow, acting on behalf of Triton, was a party to the price-fixing understanding (see [262]).

338 The findings set out above in relation to Apco, Anderson, Brumar, Dalton, Triton and Rosenow also apply to the “giving effect” contraventions alleged under s 45(2)(b).

(d) The Ahern evidence

339 I now turn to consider the statements that were alleged by the ACCC to have been uttered or made by a participant “in furtherance of the common purpose”.

(i) Apco/Anderson

340 The ACCC contends that the following statements are admissible:

Levick’s testimony

· When a price rise was on and Levick and Palmer had price-increase calls, Palmer told Levick, “I’ll get the message through to Mr. Anderson.”

· During reminder calls between Levick and Palmer, Palmer told Levick that Apco was “whinging” about particular sites that had not yet gone up.

· If certain sites had not followed the rise, Palmer would ring Levick and say, “Anderson’s whinging about a certain site. . . .”

· On some occasions when Levick made reminder calls to Palmer regarding Apco, Palmer would call Levick back and say “Mr. Anderson is moving shortly”, or “He’s whinging about a specific site that hadn’t gone up.”

· On occasion, Palmer would tell Levick that, “Anderson won’t move until the road pantries go.”

· Palmer asked Levick, “What’s going on with the Alien site? Anderson’s not moving till it goes.”

· Palmer asked Levick what was happening with Caltex on Main Road because it was a concern for Anderson.

341 Because Anderson, acting on behalf of Apco, and Palmer, acting on behalf of the Leahy Companies, were participants in the common purpose, and because Palmer’s statements related to price-increase or follow-up calls which were made in furtherance of the common purpose of the price-fixing understanding, those statements are admissible against Apco and Anderson.

Zala’s testimony

342 After he told Levick that Anderson was no longer taking his calls, Levick told him that he was contacting Apco with price information. Specifically, Zala said that sometime after Levick told him that he had had a fall out with Anderson, Levick informed him the call was now being transferred through to Anderson via the BP office in Geelong.

343 Because the statement was made between participants and concerned the manner in which Apco was to be contacted about price increases, the statement is admissible as it was made in furtherance of the common purpose of the price-fixing understanding.

Palmer’s testimony

344 During follow-up calls with Carmichael, Carmichael would say words to the effect of, “I’ll give [Anderson] another call” or “Anderson says he’s looking at it” or “Anderson says he’s looking at it but Liberty (for example) hasn’t moved yet either.”

345 Carmichael, acting on behalf of the Leahy Companies, was the conduit to Apco and therefore was a participant in the price-fixing understanding. Because his statements related to price-increase or follow-up calls that were made in furtherance of the common purpose they are admissible.

346 The Ahern evidence is consistent with and supplements the evidence that Anderson received price-increase and follow-up calls from Carmichael and Carmichael’s evidence that on some occasions Anderson complained about some sites that had not increased their prices by stating that he would not be increasing his prices until those sites had increased their prices. Although the evidence is hearsay, and in some instances is hearsay upon hearsay it nonetheless falls within the Ahern “hearsay” exception, which is premised upon the statement in question being authorised to be made by the party against whom it is tendered. Although hearsay evidence needs to be received with some caution, the evidence was not seriously challenged in the course of cross-examination. Nonetheless, in some instances the evidence, which is likely to have been based on information provided by Carmichael to Palmer, goes further than the evidence that Carmichael was able to give based on his own recollection. As Carmichael was only the Leahy Companies’ conduit to Anderson, and had no other role to play in relation to the Ballarat market, it is not surprising that at trial he may not have recalled the detail of Anderson’s responses about particular sites. While the testimonies of Palmer, Levick and Zala involve hearsay upon hearsay, Anderson’s responses to Carmichael were significant to them because they were active and direct participants in the understanding and were likely to have taken notice of the responses as they were directly relevant to whether Apco would be increasing its prices. However, in so far as the evidence suggests that in some instances Anderson might have stated or implied that he would increase his price, it is likely that this reflected the views of Carmichael or Palmer, rather than a statement by Anderson. Having regard to the totality of the evidence before the Court, I accept that Anderson made statements from time to time about sites that had not yet gone up, and that he was likely to have said that he was considering whether to increase his prices, but it is unlikely that he told Carmichael about whether and, if so, when, he would increase Apco’s prices.

347 The Ahern evidence does not greatly advance the ACCC’s case, but it is consistent with and corroborates the findings I have already made in relation to Apco and Anderson. Nonetheless, in so far as it is more specific about Anderson’s comments about other sites not increasing their prices and about Anderson saying he is “looking” at an increase, it adds further support to the finding that Anderson was fully aware of, and participated in, the processes by which the price-fixing understanding was to achieve its purpose of a sudden and significant price increase to bring an end to the discount cycle.

(ii) Brumar/Dalton

348 The ACCC contends that certain hearsay statements of Rosenow are admissible against Brumar and Dalton. Because I have found that there is reasonable evidence of Rosenow’s and Dalton’s participation in the common purpose, I need only consider whether the statements were made in furtherance of that common purpose in order for them to be admissible.

349 First, Levick’s testimony was as follows.

350 Levick stated:

“Mr Rosenow was the main contact for Mr Dalton’s sites. On the odd occasion that I had price move and reminder calls with him, he told me that he would pass or had passed the message through to Mr Dalton in words to the effect ‘I’ll pass it on to Dalton.’ or ‘I’ve passed it on to Garry.’ On a few occasions, Mr Rosenow added in effect ‘Garry plays his own game, but I’ll pass the information on’ … .”

351 Levick said he remembered making reminder calls to Rosenow regarding Dalton’s sites:

“BURNSIDE: Did you ever make any reminder calls to Mr Rosenow?

LEVICK: On the odd occasion, yes.

BURNSIDE: Doing the best you can, would you tell his Honour what you said and what he said?

LEVICK: The only time I'd ring Mr Rosenow is when I couldn't get on to Mr Zala, and I would say to Tony that - what was happening with Sturt Street and with the Shell sites.

BURNSIDE: What did Mr Rosenow say?

LEVICK: He would say, ‘Leave it with me’.

BURNSIDE: Did you ever hear back from him after you'd left it with him?

LEVICK: On the odd occasion, yes.

BURNSIDE: When he rang back what did he say?

LEVICK: That he'd either spoken to Garry and it was going to happen, or that Garry had cracked the shits and wasn't going to do anything.

BURNSIDE: Who did you understand Garry was?

LEVICK: I understand Garry to be Mr Dalton, who my understanding was he ran the major Shell sites in Ballarat.

BURNSIDE: Was there one time you can recall when Mr Rosenow rang back and told you of a particular reaction of Garry Dalton on that occasion?

LEVICK: As I said in the last paragraph, that he'd cracked the shits and was going to play his own game.”

352 These statements are admissible as they were made in furtherance of the price-fixing understanding, because, as with the statements relating to Apco, they relate to the price-increase and follow-up calls that were made for the purpose of having the price increases “stick.”

353 Second, Levick testified that Zala rang him and said, in effect, “Rosenow has rung Garry and Garry told him to piss off and that he’s not going up this time.” This statement is in the same category as Rosenow’s evidence. Although it is double hearsay, that is not fatal because, as explained above, an exception to the hearsay rule exists for each layer of hearsay. The evidence supports the ACCC’s contention that Dalton received price-increase calls, even though it also supports the other evidence that Dalton maintained his independence in relation to determining whether to increase Brumar’s prices.

354 Zala’s testimony about follow-up calls concerning Brumar’s sites was as follows:

“BURNSIDE: Okay. Can I ask you about follow-up calls that you received or made when you were at Chisholm, okay? First of all, did you ever make follow-up calls to Mr Rosenow?

ZALA: When I was at - sorry, Chisholms or Andersons, did you say?

BURNSIDE: When you were at Chisholm?

ZALA: Chisholms, yes.

BURNSIDE: As best you can recall, when you made a follow-up call to Mr Rosenow, what did you say and what did he say?

BURNSIDE: That happened on?

ZALA: A number of occasions. But, again, not a lot of occasions, because Shell would generally follow the lead of the others.

BURNSIDE: Who operated those high visibility sites that he referred to?

BURNSIDE: Could you tell us, please, whether you ever received - when you made a follow-up call to Mr Rosenow, in the terms you have described, did you ever hear back from him?

BURNSIDE: Did you make observations of the board prices at the Brumar sites after you had made a follow-up call to Mr Rosenow?

BURNSIDE: Did you check, and when you checked, did it happen?

ZALA: Yes.

BURNSIDE: Yes to both, is it?

ZALA: Sorry.

BURNSIDE: Did you check?

ZALA: Yes, I did check.

BURNSIDE: And had it happened?

ZALA: Yes, it had.”

355 The follow-up calls were in furtherance of the common purpose and the evidence about them is admissible against Brumar and Dalton

356 As with Apco, the Ahern evidence is consistent with and corroborates the findings I have already made in relation to Brumar and Dalton. Further, the evidence affords additional and more specific evidence of Dalton’s participation in price-increase and follow-up calls with Rosenow. The evidence also gives instances of price increases by Brumar after a follow-up call to Dalton by Rosenow.

(iii) Triton/Rosenow

357 The ACCC has alleged that certain hearsay statements are admissible against Triton and Rosenow pursuant to Ahern. As I have already concluded that the direct evidence against those parties is compelling I do not regard the hearsay evidence as advancing the ACCC’s case.

358 The remaining issue is whether, on the findings I have made, the ACCC has established the contraventions it has alleged against the contesting respondents.

11. Contraventions of ss 45(2)(a)(ii) and 45(b)(ii)

359 It is clear from the findings I have made that the price-fixing understanding had the purpose, and had or was likely to have the effect, of fixing or controlling the price of retail petrol supplied in Ballarat by the parties to the understanding during the relevant period. In so far as the initiating respondents were concerned, there can be little doubt that there was the requisite meeting of minds and a consensus as to what was to be done. The consensus aroused expectations (see Australian Safeway Stores at 426 [409]) in each of the participants that the others would act in the manner set out in [330] above. It is likely that there was also a commitment in relation to the first three steps set out in [330] above on the part of the respondents initiating the price increase.

360 The price-fixing understanding provided for a process by which the increased price could take effect in Ballarat in order to bring to an end a discount cycle. That was its purpose and likely effect. In my view the understanding plainly meets the statutory requirement that it provide for the fixing of the price of petrol supplied by parties to the understanding (cf Radio 2UE at 567). Also, the purpose, effect or likely effect of the understanding was to significantly restrain the continuation of the discount cycle by providing for the cycle to be brought to an end by a sudden and substantial price increase. The restraint is such that it falls within the alternative statutory requirement that the understanding provide for the controlling of the price of petrol supplied by parties to the understanding (cf ACCC v Pauls at [121]-[125] and ACCC v AMA at 461-462 [193]-[195]).

361 There was little contest about the above matters in so far as the initiating respondents were concerned. As already outlined, the contest was about whether the contesting respondents were parties to the understanding. In the course of submissions it was contended that the ACCC’s case at trial departed from the case pleaded. The contention was that the understanding pleaded was, in effect, a pre-arranged increase to a specifically nominated price. In response to the submissions the ACCC, without objection, amended its pleadings to make it clear that its case was that the understanding provided for a coordinated price increase by communicating “the amount of and/or approximate time of and/or the fact of the price increase proposed, or in progress”.

362 The amendment appeared to meet the main contentions of the contesting respondents. However, even if it did not, I am satisfied that the case conducted and litigated at trial was whether the price increases during the relevant period were a result of collusion that involved the contesting respondents (ie by reason of their participation in the price-fixing understanding) or were a result of free market forces. That issue may fairly be described as the issue that was “in the ring” and was strongly contested at trial: see Nescor Industries Group Pty Ltd v MIBA Pty Ltd (1997) 150 ALR 633 at 640, 647 and 650 and the authorities there cited. It is to that issue I now turn.

363 In the context of s 45A of the Act, the question of whether the contesting respondents were involved in collusion in respect of the price increases during the relevant period requires consideration of whether, applying the Briginshaw standard, I am satisfied that there was the requisite meeting of minds between two or more parties to the understanding, and a consensus as to what was to be done, not merely a hope as to what might be done or might happen (see [54] above).

(a) Triton and Rosenow

364 I am satisfied that there was the requisite meeting of minds and consensus in so far as Rosenow, acting on behalf of Triton, is concerned. At [337] I summarised the findings that led me to conclude that there was reasonable evidence of those matters. In terms of the price-fixing understanding described at [330] both prior to, and during, the relevant period Rosenow actively participated in price-increase and follow-up calls with Zala (Chisholm) and Bentley (Justco). Also, Rosenow acted on those calls by generally withdrawing or reducing price support to the proposed or targeted price to Taxi Co-op and other independent retailers to whom Triton supplied petrol, and by participating in price-increase and follow-up calls with Dalton who was acting on behalf of Brumar.

365 In so far as Zala (Chisholm), Bentley (Justco) and Rosenow (Triton) were concerned, they were each aware of the price-fixing understanding and its purpose, and, in participating in it, they adopted it and aroused an expectation on the part of each other that they would fulfil their respective roles in relation to the understanding, as they, in general, did. Save for maintaining the initial increase in price by one or more of the initiating respondents for such time as was necessary to ascertain if it was to take effect, there may not have been any other commitment by any of the participants to increase their price to the targeted or proposed price. However, the initial increase or increases and the consequential price-increase calls were significant because they gave the other participants the necessary confidence that a coordinated increase pursuant to the understanding was in progress. Also, I infer that there was an expectation on the part of the initiating respondents that Rosenow would “cause” Triton’s independent retailers to move to the proposed or targeted price but, as his primary role was as a conduit to Brumar, there was also an expectation by the initiating respondents that Rosenow would make price-increase and follow-up calls to Dalton. I also infer that there was an expectation by Rosenow that the initiating respondents would maintain their price increases while the high visibility sites were deciding whether to match the increases.

366 In the above circumstances I am satisfied that not only is there reasonable evidence that Triton was a party to the understanding but also that the case against it in that regard is compelling. The case of Rosenow’s involvement as an intentional participant in the understanding is equally compelling. I can more confidently arrive at those conclusions as a result of Rosenow’s false denial, his failure to give evidence, his participation in two meetings at which a consensus on a price increase was reached and by the additional evidence of Dow that he performed aspects of Rosenow’s role in relation to the understanding in Rosenow’s absence.

367 The finding that Triton was a party to the price-fixing understanding during the relevant period strongly supports the view I have formed that its role in relation to the price increases on 45 price-increase days during the relevant period resulted in it, acting through Rosenow, giving effect to the understanding on those days. I am satisfied that my findings on the evidence upon which I have relied satisfy the Briginshaw standard.

(b) Apco and Anderson

368 The position of Apco is more difficult because, unlike Triton, its involvement was primarily limited to receiving price-increase or follow-up calls from Bentley and Carmichael. It did not initiate such calls nor did it initiate price increases. Also, unlike Triton, there was no expectation by any of the respondents that Apco’s preparedness to receive calls from Bentley and Carmichael meant that Apco would substantially match the increased prices. Some of the witnesses could go no further than stating that it was their “hope” that Apco would increase its prices.

369 Nonetheless, I have found that there is reasonable evidence that Anderson, acting on behalf of Apco, was aware that:

· the purpose of the price-increase and follow-up calls was to influence or persuade him to substantially match the increase;

· those calls were part of a longstanding and collusive process involving a number of the corporate respondents coordinating price increases to bring to an end a discount cycle in the Ballarat retail petrol market.

With this awareness, Anderson continued to receive such calls during the relevant period and acted upon the calls by closely monitoring the price increases and then determining whether to match them.

370 In my view Anderson’s preparedness to receive the price-increase and follow-up calls in the above circumstances, his occasional responses to Carmichael that other outlets had not yet increased their prices and that he was “looking” at whether he would increase his prices, together with his decision from time to time to increase his prices to match the market increase by the other corporate respondents, aroused an expectation in at least Bentley (Justco) and Palmer and Carmichael (the Leahy Companies) that during the relevant period:

· Anderson would continue to receive those calls;

· Anderson would continue to act upon the calls by closely monitoring the prices of the other corporate respondents in Ballarat and decide whether to participate in the coordinated increases being sought;

· Anderson’s receipt of the calls made it more likely that he would substantially match an increase than if he did not receive the calls.

371 Importantly, Anderson was aware that, in the usual course, his decision was likely to be determinative of whether the coordinated price increase being sought by the other participants would “stick” so that on each occasion that he made the decision to increase his prices after the receipt of price-increase or follow-up calls he was aware that his increase was likely to ensure that the collusive process achieved its purpose on that occasion. In the circumstances I am prepared to infer that Anderson expected that the participants in the collusive process would maintain their price increases while Apco was deciding whether to match the increases.

372 The above matters amount to participation in, and adoption of, the understanding by Anderson. I would add that Anderson’s responses to follow-up calls from Carmichael, when Anderson said that certain sites had not yet increased their prices or that he was looking at whether to increase his prices, constitute evidence that is confirmatory of his adoption of, and participation in, the understanding.

373 Accordingly, I have concluded that the matters set out above constitute the requisite meeting of minds and consensus in so far as Anderson is concerned with at least Bentley (Chisholm) and the Leahy Companies (Carmichael) as to what was to be done by the various parties to the understanding.

374 The finding that Apco was a party to the price-fixing understanding during the relevant period affords persuasive evidence in support of the conclusion I have formed that Apco’s role in increasing prices on the 29 price-increase days during the relevant period resulted in it, acting through Anderson, giving effect to the understanding on 29 price-increase days during the relevant period. I am satisfied that my findings on the evidence upon which I have relied satisfy the Briginshaw standard.

375 Brumar’s position is analogous to that of Apco. Brumar did not initiate price increases or price-increase calls. Also, as with Apco there was no expectation on the part of the participants that, by receiving or participating in price-increase or follow-up calls with Rosenow, Brumar would increase its prices.

376 Nonetheless, I have found that there is reasonable evidence that Dalton, acting on behalf of Brumar, was aware that:

· the purpose of the price-increase and follow-up calls in which he participated with Rosenow was to influence or persuade him to match the increase;

· there was a connection between the calls and the sudden and significant increases at the time, which were not merely the product of market forces.

377 Also, the false s 155 responses suggest a consciousness that truthful answers would implicate Brumar and Dalton in the collusive arrangements suspected by the ACCC.

378 In all the circumstances, Dalton would have been aware that, as his sites included high visibility sites in Ballarat, a decision by him to match the increase sought by those participating in the understanding was important if the collusive process was to achieve its purpose. Also, Dalton’s preparedness to participate in the calls, and his conduct in usually matching the increases, aroused an expectation in at least Zala, Bentley and Rosenow that during the relevant period:

· Dalton would continue to participate in those calls;

· Dalton would continue to act on those calls by monitoring price increases in Ballarat and, in particular, at Swift, in the knowledge that the increases were likely to be part of a collusive process involving other retailers and Triton in Ballarat;

· Dalton’s participation in the calls made it more likely that he would match the increases.

379 In the circumstances outlined above, I infer that Dalton expected that the participants in the collusive process would maintain their price increases while Brumar was deciding whether to match the increases.

380 The Ahern evidence supports the above findings, and Dalton’s failure to give evidence on his own behalf and on behalf of Brumar enables me to be more confident about making those findings.

381 I am satisfied that by reason of the above matters, Brumar, acting through Dalton, participated in and adopted the understanding. Accordingly I have concluded that, in so far as Brumar was concerned, there was the requisite meeting of minds and consensus with, at least, Triton as to what was to be done. I am also satisfied that Dalton was also aware that Rosenow was not on a frolic of his own but, rather, was providing him with price-increase information as part of a coordinated and collusive process to increase prices that involved other major petrol retailers in Ballarat.

382 In the above circumstances I am satisfied that Brumar, acting through Dalton, was a party to the understanding. That finding affords persuasive evidence in support of the view I have formed that Brumar’s role in increasing prices on 53 price-increase days during the relevant period resulted in it giving effect to the understanding on 53 occassions during the relevant period. I am satisfied that my findings on the evidence upon which I have relied satisfy the Briginshaw standard.

(d) Balgee

383 For the reasons given earlier I am satisfied on the basis of the Briginshaw standard that Balgee was a party to the price-fixing understanding and gave effect to it on 68 days during the relevant period.

12. Conclusions

384 I have concluded that the ACCC has established that Triton, Apco, Brumar and Balgee contravened s 45(2)(a)(ii) by arriving at the price-fixing understanding and contravened s 45(2)(b)(ii) by giving effect to the understanding during the relevant period on 45 occasions, 29 occasions, 53 occasions and 68 occasions respectively. I have also concluded that Rosenow, Anderson and Dalton were persons who were involved in each of the contraventions by their respective corporate principals. The contraventions, which involve serious and on-going breaches of important provisions of the Act, resulted in the price of petrol in Ballarat being the subject of a cartel type of arrangement or understanding over a substantial period of time. It was an arrangement or understanding that led to the public paying higher retail prices for petrol than they would have paid if the prices had been determined by market forces, rather than by a collusive arrangement between competitors.

385 In the light of the above conclusions it is appropriate to require the parties to file minutes of consent directions concerning a further hearing in relation to penalty and any other remedies or relief that is appropriate.

I certify that the preceding three hundred and eighty five (385) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate:

Dated: 16 December 2004

Counsel for the Applicant:	Mr J Burnside QC with Ms EA Strong SC

Solicitor for the Applicant:	Australian Government Solicitor

Counsel for the Third Respondents:	R Kendall QC with AK Panna

Solicitor for the Third Respondents:	Macpherson & Kelly

Counsel for the Sixth and Thirteenth Respondents:	M Dreyfus QC with S O’Bryan SC

Solicitor for the Sixth and Thirteenth Respondents:	Alan Williamson B. Juris, LL.B

Counsel for the Seventh and Fourteenth Respondents:	CM Scerri QC with PJ Cosgrave

Solicitor for the Seventh and Fourteenth Respondents:	Griffith Hack

Counsel for the Eleventh Respondent:	J Middleton QC with R Moore

Solicitor for the Eleventh Respondent	Home Wilkinson & Lovey

Date of Hearing:	3, 4, 5, 6, 7, 10, 11, 12, 13, 17, 18, 19, 20, 24, 25, 26 and 27 May and 16, 19, 20, 21, 22 and 26 July 2004

Date of Judgment	17 December 2004

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