FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. (No 4) [2012] FCA 1323
IN THE FEDERAL COURT OF AUSTRALIA | |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT ORDERS THAT:
1. The applicant have leave to reopen its case to tender the affidavit of Ms Susan Jacquier affirmed 13 March 2012.
2. The application filed by the first respondent on 7 May 2010 that the grant of leave to serve the first respondent be discharged, or that service of the originating process upon the first respondent be set aside, be dismissed.
3. The application filed by the second respondent on 29 March 2010 and amended on 11 May 2010 that the grant of leave to serve the second respondent be discharged, or that service of the originating process upon the second respondent be set aside, be dismissed.
4. The first and second respondents pay the applicant’s costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
SOUTH AUSTRALIA DISTRICT REGISTRY | |
GENERAL DIVISION | SAD 145 of 2009 |
BETWEEN: | AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
|
AND: | PRYSMIAN CAVI E SISTEMI ENERGIA S.R.L. (FORMERLY PIRELLI CAVI E SISTEMI ENERGIA S.P.A.) First Respondent NEXANS SA RCS PARIS 393 525 852 Second Respondent VISCAS CORPORATION ARBN 133 203 595 Third Respondent
|
JUDGE: | LANDER J |
DATE: | 26 NOVEMBER 2012 |
PLACE: | ADELAIDE |
REASONS FOR JUDGMENT
1 The applicant’s originating application, which was filed on 23 September 2009 and which was accompanied by a statement of claim, seeks declarations, injunctions, pecuniary penalties and other orders pursuant to:
(1) s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA);
(2) s 76 and s 80 of the Trade Practices Act 1974 (Cth) (TPA); and
(3) s 76 and s 80 of the Competition Codes of New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania and the Australian Capital Territory (each, a Competition Code and collectively, the Competition Codes)
in respect of alleged contraventions of ss 45(2)(a)(i) and (ii), and ss 45(2)(b)(i) and (ii) of the TPA and the Competition Codes.
2 Each of the States, the Australian Capital Territory (ACT) and the Northern Territory, has enacted a Competition Policy Reform Act (CPRA) in common terms. Part 2 of each CPRA contains “The Competition Code”, the text of which consists of the text that is set out in Part 1 of the Schedule to the TPA and certain other provisions of the TPA that are relevant to that text, as well as the relevant regulations under the TPA. The text mirrors the TPA provisions. Section 5 of each CPRA states the Competition Code text applies as a law of that State or Territory.
3 The first respondent (Prysmian) is incorporated in Italy and was, prior to 28 July 2005, a wholly owned subsidiary of Pirelli & C. S.p.A., which is also a body incorporated in Italy, and since 28 July 2005 has been a wholly owned subsidiary of Prysmian S.p.A., a body also incorporated in Italy. Prysmian Power Cables & Systems Australia Pty Ltd (Prysmian Australia) ACN 096 594 080, formerly called Pirelli Power Cables & Systems Australia Pty Ltd (Pirelli Australia), is a wholly owned subsidiary of Prysmian.
4 It is alleged in paragraphs 2.9 and 2.10 of the statement of claim that between 10 July 2003 and 20 June 2006, Prysmian was a foreign corporation registered in Australia and under the law of Victoria with the registration ARBN 105 479 589; and carried on business in Australia and in a State or Territory of Australia during at least that period. It is alleged in paragraph 2.11 of the statement of claim that Prysmian supplied and offered to supply products, including high voltage and extra high voltage land-based electrical cables and accessories (land cables) and medium voltage, high voltage and extra high voltage submarine electrical cables and accessories (submarine cables) to customers in places including Australia.
5 The second respondent (Nexans) is incorporated in France. It is claimed in paragraph 3 of the statement of claim that Nexans was a foreign corporation within the meaning of s 4 of the TPA; and carried on business in Australia, and in a State or Territory of Australia. It is further alleged in paragraph 3 of the statement of claim that Nexans supplied and offered to supply products including land cables and submarine cables to customers in places including Australia.
6 The third respondent (Viscas) is incorporated in Japan. It is claimed in paragraph 4 of the statement of claim that Viscas is a foreign corporation within the meaning of s 4 of the TPA; has carried on business in Australia and in a State or Territory of Australia; and, since 10 September 2008, has been a foreign corporation registered in Australia and under the law of New South Wales with the registration ARBN 133 203 595. It is further alleged in paragraph 4 of the statement of claim that Viscas supplied and offered to supply products including land cables and submarine cables to customers in places including Australia.
7 Exsym Corporation (Exsym) is a body corporate incorporated in Japan and was established in April 2002 by the integration of Showa Electrical Wire & Cable Co Ltd and Mitsubishi Cable Industries Ltd, both of which were incorporated in Japan.
8 It is claimed that Exsym, since April 2002, has been a foreign corporation within the meaning of s 4 of the TPA. It is further alleged in paragraph 5.2.2 of the statement of claim that Exsym has, since April 2002, supplied and offered to supply products including land cables (but not submarine cables) to customers in places including Australia.
9 J-Power Systems Corporation (JPS) is a body corporate incorporated in Japan as a joint venture between Sumitomo Electrical Industries (Sumitomo) and Hitachi Cable Limited. It is claimed that JPS is a foreign corporation within the meaning of s 4 of the TPA. It is alleged in paragraph 6.3 of the statement of claim that since October 2001, JPS has supplied and offered to supply products including land cables and submarine cables to customers in places including Australia.
10 Section 4 of the TPA, relevantly, provides:
Foreign corporation means a foreign corporation within the meaning of paragraph 51(xx) of the Constitution and includes a body corporate that is incorporated in an external Territory.
11 It is claimed in paragraph 10 of the statement of claim that there was a market in Australia for the supply of land cables from at least October 2001 by Prysmian, Nexans, Viscas and JPS and, from April 2002, Exsym. It is claimed in paragraph 14 of the statement of claim that there was a market in Australia for the supply of submarine cables from at least October 2001 by Prysmian, Nexans, Viscas and JPS.
12 It is alleged in paragraph 16 of the statement of claim that prior to October 2001, each of the respondents and Sumitomo arrived at an arrangement or understanding containing cartel provisions (A/R Cartel Agreement).
13 It is further alleged in paragraph 16 of the statement of claim that there were two groups amongst the cartel members: the A Group consisted of the Japanese companies, Viscas and Sumitomo; and the R Group consisted of the European companies, Prysmian and Nexans. It is alleged each of the two groups had a natural person as secretary who was the principal point of contact for communications between the A Group and the R Group. It is further alleged that the A/R Cartel Agreement provided that the A/R Cartel members would not compete with one another on price in tendering for projects for the supply of land and submarine cables: paragraph 16.5 of the statement of claim. The alleged manner in which the A/R Cartel Agreement was to be implemented is addressed in paragraph 16 of the statement of claim.
14 It is alleged, after JPS was incorporated in 2001, that JPS replaced Sumitomo as a cartel member. It is further alleged that after April 2002, Exsym, which is incorporated in Japan, also became a cartel member and a member of the A Group.
15 It is alleged that the provisions of the A/R Cartel Agreement had the purpose, effect or likely effect of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, prices for land cables and submarine cables supplied or to be supplied to customers in Australia by the respondents, JPX and Exsym, within the meaning of s 45A(1) of the TPA and the Competition Codes (paragraph 21 of the statement of claim), and substantially lessening competition in the Australian land cable market and submarine cable market within the meaning of s 45(2) of the TPA and the Competition Codes.
16 In the alternative, it is pleaded that the A/R Cartel Agreement had the purpose of preventing, restricting or limiting the supply of land cables and submarine cables by the respondents, JPS and Exsym, to customers in the Australian land cable market and the Australian submarine cable market: paragraph 22.1 of the statement of claim.
17 In the further alternative, it is pleaded that the provisions of the A/R Cartel Agreement constituted exclusionary provisions within the meaning of s 4D and s 45(2) of the TPA and the Competition Codes.
18 Snowy Hydro Limited (Snowy Hydro) was the owner and operator of the Snowy Mountains Scheme located principally in Victoria and New South Wales. In September 2003, it required land cables and accessories for use in the Snow Mountains Scheme: paragraph 24 of the statement of claim.
19 It is alleged that on or about 12 September 2003, Snowy Hydro issued an invitation to tender to Prysmian, JPS, Mitsui & Co (Australia) Ltd (Mitsui Australia) being a subsidiary of the construction company Mitsui & Co Ltd (Mitsui), which is a company incorporated in Japan, and also to Midland Metals Overseas Pte Ltd, a company incorporated in Singapore. The tender was for a contract for the supply and delivery in Australia of land cables and accessories (the Snowy Hydro Project) and had a closing date of 10 October 2003.
20 It is alleged that on 12 September 2003, JPS, by its employee Mr Osada, pursuant to the A/R Cartel Agreement, sent notification of its receipt of the invitation to tender to the respondents and Exsym: paragraphs 29 and 30 of the statement of claim.
21 It is alleged that also on 12 September 2003, Mr Osada, on behalf of the A Group members, requested that the Snowy Hydro Project be allocated to the A Group: paragraph 33 of the statement of claim.
22 It is alleged that on 24 September 2003, the A Group members and R Group members arrived at an arrangement or understanding (Snowy Hydro Agreement) that the Snowy Hydro Project would be allocated to the R Group pursuant to the A/R Cartel Agreement: paragraph 34 of the statement of claim.
23 It is alleged that after 24 September 2003 and before 3 October 2003, the members of the R Group agreed that Prysmian would be the successful tenderer for the Snowy Hydro Project: paragraph 35 of the statement of claim.
24 It is alleged that the Snowy Hydro Agreement had the same purpose, effect or likely effect as the A/R Cartel Agreement and contained exclusionary provisions: paragraphs 36 and 37 of the statement of claim.
25 It is alleged in paragraphs 38 to 43 of the statement of claim that the respondents implemented the Snowy Hydro Agreement by exchange of information so that on 8 October 2003 Prysmian could, and did, submit a tender that was less than the price guidance it had given the other cartel members. It is alleged that on the same day JPS submitted to Mitsui pricing for the supply of the cable and accessories specified in the invitation to tender for the Snowy Hydro Project, which was above the price guidance provided by Prysmian and in accordance with the Snowy Hydro Agreement: paragraphs 44 and 45 of the statement of claim.
26 It is alleged that on 10 October 2003, Mitsui by its agent Mitsui Australia submitted a tender for the Snowy Hydro Project, which included a schedule of prices which were at levels above those submitted to it by JPS: paragraph 46 of the statement of claim.
27 In paragraph 47.1 of the statement of claim, the applicant pleads that Prysmian’s conduct was conduct engaged in outside Australia by: a body corporate carrying on business within Australia within the meaning of s 5(1) of the TPA; a person carrying on business within the jurisdiction of a State or Territory within the meaning of s 8(1)(a) of the CPRAs of the various States and the ACT; a body corporate registered under the law of Victoria within the meaning of s 8(1)(b) of the CPRAs; and a person otherwise connected with the jurisdiction of a State or Territory within the meaning of s 8(1)(d) of the CPRAs.
28 It is pleaded in paragraph 47.2 of the statement of claim that Prysmian’s conduct in responding to the invitation to tender; providing a response to tender and instructing Pirelli Australia not to make any alteration to pricing; and on 8 October 2003, by having its agent Pirelli Australia submit the tender, was all conduct in Australia.
29 Similar pleas are made against Nexans in relation to conduct engaged in outside Australia (paragraph 48 of the statement of claim), and against Viscas: (paragraph 49 of the statement of claim).
30 The applicant claims, in its originating application, a declaration that each of the respondents has contravened s 45(2)(a)(i) and s 45(2)(a)(ii) of the TPA and the Competition Codes by making or arriving at the Snowy Hydro Agreement pleaded in the statement of claim, and has contravened s 45(2)(b)(i) and s 45(2)(b)(ii) of the TPA and the Competition Codes by giving effect to the provisions of the A/R Cartel Agreement pleaded in the statement of claim and the provisions of the Snowy Hydro Agreement pleaded in the statement of claim.
31 However, at the hearing, Nexans submitted that the statement of claim does not include a plea that Nexans gave effect to the Snowy Hydro Agreement. Nexans contended that the allegation that it gave effect to the Snowy Hydro Agreement, which appears in the applicant’s originating application at paragraph 1.2.2, is not a plea raised against Nexans in the statement of claim.
32 On the first day of the hearing, the applicant accepted that its pleading meant that its claim against Nexans was limited to a claim that Nexans, by entering into the Snowy Hydro Agreement, gave effect to the overarching A/R Cartel Agreement. The applicant confirmed that it does not now seek a declaration that Nexans gave effect to the Snowy Hydro Agreement. During the hearing, the need to amend the originating application was discussed by deleting the claim that Nexans gave effect to the Snowy Hydro Agreement, but no application was made and there has been no ruling.
33 The applicant seeks an injunction restraining each of the respondents for a period of seven years from making, arriving at, or giving effect to any contract, arrangement or understanding with any of its competitors that contains provisions that have the purpose, effect, or likely effect of fixing, controlling or maintaining the price or any part of the price at which it or any of them will supply land cable or submarine cable in competition with each other, or which have the purpose of preventing, restricting, or limiting the supply of land cable or submarine cable by all or it or any of them to any customer in Australia.
34 Lastly, the applicant seeks penalties pursuant to s 76 of the TPA or s 76 of the Competition Codes as determined by this Court.
35 On 24 November 2009, the Court granted leave to the applicant, pursuant to O 8 r 3 and r 4 of the Federal Court Rules 1979 (FCR), to serve its application and statement of claim outside the jurisdiction upon Prysmian and Nexans. Viscas was served within the jurisdiction, and filed an appearance on 7 October 2009.
36 It would appear both Prysmian and Nexans were served outside the jurisdiction. There does not appear to be any dispute that Prysmian and Nexans were served in accordance with the requirements for service in Italy and France respectively as deposed to by Mr Nicholas Parkyn in his affidavit affirmed on 6 November 2009. Service was acknowledged to have occurred on 21 April 2010 by Prysmian’s solicitors in a letter written to the applicant on 6 May 2010. That letter is Annexure B to the affidavit sworn by Ms Kangatharan on 7 May 2010. Nexans’ solicitor, Mr Mavrakis, tacitly acknowledges service in his affidavit sworn on 10 May 2010 in support of Nexans’ notice of motion. Indeed, there would be no point in seeking to set aside the orders made on 29 November 2009 unless service had been effected in accordance with requirements for service.
37 On 7 May 2010, Prysmian filed a notice of motion for an order that the grant of leave to serve Prysmian be discharged, or that the service of the originating process on Prysmian be set aside. On 29 March 2010, Nexans filed a notice of motion, which was subsequently amended on 11 May 2010 to seek the same orders as Prysmian.
38 Between those dates and the hearing of these applications, the Court heard other applications in relation to the production of documents and questions of legal professional privilege.
39 On 17 October 2011, the Court made an order pursuant to r 1.04(3) of the Federal Court Rules 2011 that Prysmian’s and Nexans’ notices of motion be determined under the FCR as in force immediately before 1 August 2011. Prysmian’s and Nexans’ notices of motion were brought under O 9 r 7 of the FCR, which provided:
(1) The Court may make an order:
(a) setting aside an originating process; or
(b) setting aside the service of an originating process on the respondent; or
(c) declaring that an originating process has not been duly served on the respondent; or
(d) discharging any order giving leave to serve an originating process outside Australia or confirming service of an originating process outside Australia.
(2) A respondent applying for an order under subrule (1) must file and serve the notice of motion:
(a) before the respondent enters an appearance; or
(b) within 14 days after the respondent enters a conditional appearance.
40 Although O 9 r 7 might suggest otherwise, Prysmian and Nexans contended, and the applicant accepted, that on an application under that rule the Court should conduct a rehearing of its original decision to grant leave taking into account any additional material put to the Court on the later application: Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31 at 33; Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 at [53]. In such a rehearing the applicant has the onus of establishing that it was appropriate to make the order first made.
41 On these applications the applicant relied in the first instance upon the following affidavits:
(1) Nicholas John Parkyn, solicitor with the Australian Government Solicitor affirmed and filed 6 November 2009;
(2) Susan Jacquier, an officer of the applicant, affirmed and filed 13 November 2009 (Jacquier first affidavit);
(3) Susan Jacquier, affirmed and filed 16 November 2009 (Jacquier second affidavit);
(4) Susan Jacquier, affirmed and filed 15 June 2010 (Jacquier third affidavit);
(5) Susan Jacquier, marked “Confidential”, affirmed and filed 15 June 2010 (Jacquier fourth affidavit).
42 Exhibited to these affidavits are a large number of documents upon which the applicant relied on the application for leave to serve and upon these applications. Where, in these reasons, a reference is made to a document, it should be understood that the document is exhibited to these affidavits or Ms Jacquier’s fifth affidavit about which I shall say more shortly.
43 At the hearing the applicant also sought to rely upon a statement of Mr Takeo Osada. After the hearing, the applicant sought to reopen the applicant’s case to tender a fifth affidavit of Ms Jacquier affirmed on 13 March 2012.
44 Prysmian and Nexans objected to the tender of the hearsay evidence contained in Ms Jacquier’s first four affidavits. My reasons for ruling that the hearsay evidence be received appear later.
45 Prysmian and Nexans objected to the tender of Mr Osada’s statement. Nexans objected to the tender of Ms Jacquier’s fifth affidavit. The circumstances of the tender of the further evidence contained in Mr Osada’s statement and Ms Jacquier’s fifth affidavit, and my reasons for receiving the evidence, will be discussed later.
46 The orders made on 24 November 2009 relied on O 8 r 3, which provided as at that date:
(1) Service of an originating process on a person in a foreign country is effective for the purpose of a proceeding only if:
(a) the Court has given leave under subrule (2) before the application is served; or
(b) the Court confirms the service under subrule (5); or
(c) the person served waives any objection to the service by entering an appearance in the proceeding.
(2) The Court may give leave to a party to serve an originating process on a person in a foreign country in accordance with a convention or the law of the foreign country, on such terms and conditions as it considers appropriate, if the Court is satisfied that:
(a) the Court has jurisdiction in the proceeding; and
(b) the proceeding is of a kind mentioned in rule 2; and
(c) the person seeking leave has a prima facie case for the relief claimed by the person in the proceeding.
(3) The evidence on an application for leave under subrule (2) must include the following:
(a) the name of the foreign country where the person to be served is or is likely to be;
(b) the proposed method of service;
(c) a statement that the proposed method of service is permitted by:
(i) if a convention applies — the convention; or
(ii) in any other case — the law of the foreign country.
47 The criteria for granting leave to serve outside the jurisdiction requires the Court to be satisfied that:
(a) the Court has jurisdiction in the proceeding;
(b) the proceeding is of a kind mentioned in O 8 r 2; and
(c) the applicant has a prima facie case for the relief claimed in the proceeding.
48 I shall address each of those criteria in that order.
Jurisdiction
49 The relief which the applicant seeks is identified in paragraph [1] of these reasons.
50 None of the sections relied upon for the relief claimed are the source of jurisdiction for this Court.
51 The source of jurisdiction for this Court is s 86 of the TPA. Section 86(1) of the TPA provides:
Jurisdiction is conferred on the Federal Court in any matter arising under this Act in respect of which a civil proceeding has, whether before or after the commencement of this section, been instituted under this Part.
52 This proceeding is a civil proceeding, which has been instituted after the commencement of s 86 of the TPA.
53 This Court has such original jurisdiction as is vested in it by laws made by the Parliament: s 19 of the FCA.
54 This Court is invested with jurisdiction under s 39B(1A)(c) of the Judiciary Act 1903 (Cth) (Judiciary Act), which provides that “[t]he original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter … arising under any laws made by the Parliament”. The TPA is a law of the Parliament.
55 This Court also is invested with jurisdiction under s 39B(1A)(a) of the Judiciary Act in any matter in which the Commonwealth is seeking an injunction or a declaration. The applicant is an emanation of the Commonwealth and, for that reason, this Court has jurisdiction under that provision of the Judiciary Act: Allied Mills Industries Pty Ltd v Trade Practices Commission (1981) 34 ALR 105.
56 This Court also has jurisdiction in relation to the claims made under the Competition Codes in its accrued jurisdiction, because those claims form part of the same “matter” upon which the applicant relies under the TPA: Carnegie Corporation Ltd v Pursuit Dynamics Plc [2007] FCA 1010 at [46]; Fortron Automotive Treatments Pty Ltd v Jones [2006] FCA 1239 at [29]; Mineral Commodities Ltd v Promet Engineers Africa (Pty) Ltd [2008] FCA 30 at [11].
57 This Court has jurisdiction in the proceeding. The jurisdiction of this Court is not dependent upon the applicant proving that Prysmian or Nexans were carrying on a business in Australia pursuant to s 5(1) of the TPA. Although that fact will have to be proved for the applicant to succeed, it is not a jurisdictional issue: Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 per Branson J at [165]-[170]; per Finkelstein J at [238].
The proceeding is of a kind mentioned in O 8 r 2
58 Although s 86(1) of the TPA gives the Court jurisdiction in the proceeding, the Court’s jurisdiction over a party outside Australia is dependent upon the proceeding being of a kind mentioned in O 8 r 2.
59 As at 24 November 2009, the day on which the Court granted leave to the applicant to serve its application and statement of claim outside the jurisdiction, O 8 r 2 relevantly provided:
2 Subject to rule 3, an originating process may be served on a person in a foreign country in a proceeding which consists of, or includes, any 1 or more of the kinds of proceeding mentioned in the following table:
____________________________________________________________________
Item Kind of proceeding in which originating process may be served on a person outside Australia
____________________________________________________________________
1 Proceeding based on a cause of action arising in Australia
…
11 Proceeding based on a breach of a provision of an Act that is committed in Australia
…
13 Proceeding in relation to the construction, effect or enforcement of an Act, regulations or any other instrument having, or purporting to have, effect under an Act
…
16 Proceeding in which:
(a) the person to be served is domiciled or ordinarily resident in Australia; or
(b) if the person is a corporation, the corporation is incorporated in Australia, carries on business in Australia or is registered in a State or Territory as a foreign company
…
21 Proceeding seeking an injunction ordering a person to do, or to refrain from doing, anything in Australia (whether or not damages are also sought)
____________________________________________________________________
60 Insofar as the applicant seeks relief against Prysmian in relation to the implementation of the Snowy Hydro Agreement, the cause of action arose in Australia and therefore Item 1 is engaged.
61 Item 11 gives the Court the power to order service of an originating process in a proceeding outside of the jurisdiction if the proceeding is based on a breach of a provision of an Act that is committed in Australia. Insofar as the Snowy Hydro Agreement was implemented in Australia, Item 11 is engaged.
62 Item 13 is engaged if the proceeding is in relation to the enforcement of an Act. The relief sought by the applicant, being injunctions and pecuniary penalties, is for the enforcement of an Act, being the TPA. The TPA is an Act for the purpose of Item 13.
63 The applicant also seeks to enforce provisions of the Competition Codes, which are not Acts for the purposes of Item 13. An Act for the purposes of Item 13 is an Act passed by the Parliament of the Commonwealth: s 38(1) of the Acts Interpretation Act 1901 (Cth) (Acts Interpretation Act). An Act passed by the Parliament of a State would be referred to as a “State Act”: s 38(2) of the Acts Interpretation Act.
64 However, not all parts of the proceeding need fall within O 8 r 2 for the Court to exercise its power under O 8 r 3. It is sufficient for the Court to order service outside Australia if some part of the proceeding falls within O 8 r 2: Webster Computer Systems Pty Ltd v Fujitsu Ltd [2007] FCA 825 at [11]-[12].
65 Item 16 could be relied on by the applicant if the applicant could establish that Prysmian and Nexans carry on business in Australia or are registered in a State or Territory as a foreign company.
66 It is not necessary, as I have already said, for the applicant to prove that Prysmian and Nexans are carrying on business in Australia for this Court to have jurisdiction. However, the applicant will have to prove, if the applicant is to establish a prima facie case for the relief claimed, that Prysmian and Nexans were carrying on business in Australia at the relevant time. Whether Item 16 is engaged will depend upon a consideration of that issue under the third criterion.
67 The applicant also relies upon Item 21, because part of the relief sought is for an injunction ordering Prysmian and Nexans to refrain from contravening the TPA and the Competition Codes in Australia.
68 I am satisfied that the proceeding is one or more of the kinds of proceeding mentioned in the Table in O 8 r 2, and I have reached that level of satisfaction without first deciding whether or not Item 16 is engaged.
69 As the reasons will disclose, I have reached the view that the applicant has established that Prysmian and Nexans were carrying on business at the relevant time. Therefore, the applicant is also entitled to rely upon Item 16.
A prima facie case for all or some of the grounds for relief
70 As at 24 November 2009, the day that the order for service was made, O 8 r 3(2) was in the form mentioned in [46] of these reasons. Subsequently, O 8 r 3(2)(c) was amended by the Federal Court Amendment Rules 2010 (No 1) to include the words “all or any of” after the word “for”. The amended form of the rule commenced operation on 3 July 2010.
71 The parties have proceeded upon the basis that the appropriate rule is the rule before it was amended. I am not so sure that the applicant needs to concede that the previous form of the rule is the relevant rule. This is, as I have already said, a re-hearing based upon material available at the time the order was made and any additional evidence adduced by the parties.
72 In those circumstances, it seems to me that the applicant could rely upon the rule in its amended form, which expressly only requires the applicant to establish that the applicant has a prima facie case for any of the relief claimed by the applicant.
73 Nevertheless, the applicant contended that the amendment to O 8 r 3(2)(c) did not make any difference to the test to be applied. The applicant contended that, under O 8 r 3(2)(c) before it was amended, it is sufficient to attract the discretion to order service out of Australia if there is a prima facie case for any of the relief sought in relation to any of the causes of actions relied upon for the relief sought: Bell Group Ltd (in liq) v Westpac Banking Corporation (1996) 20 ACSR 760; Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 per Carr J at [47]-[55]; per Branson J at [176]-[191]; Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159 at [45]-[46].
74 I accept the applicant’s contention.
75 The two decisions of the Full Court in Bray v F Hoffman-La Roche Ltd and Ho v Akai Pty Ltd (in liq) stand for the proposition contended for by the applicant that it is enough for the applicant to satisfy O 8 r 3(2)(c), as it stood prior to its amendment, to establish that the applicant is entitled to relief in respect of one of the causes of action pleaded.
76 I think O 8 r 3(2) was amended to put the issue beyond doubt and not to relax the requirements of the rule. As the Explanatory Statement to the Federal Court Amendment Rules 2010 (No 1) states, O 8 r 3(2)(c) was amended “to clarify that an applicant need establish a prima facie case for only one of the grounds of relief”. The purpose of the amendment was to put the construction which the Full Court favoured beyond doubt.
77 Of course, because an order under O 8 r 3 is discretionary, the Court would have regard, in the exercise of the Court’s discretion, as to whether the proceeding contained a number of causes of action for which the applicant could not establish a prima facie case.
78 The applicant contended that O 8 r 3(2)(c) had to be addressed in the manner described by Lee J in Century Insurance (in provisional liquidation) v New Zealand Guardian Trust Limited [1996] FCA 376:
What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court's processes to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified.
79 Nexans agreed that the test is as stated by Lee J, but Prysmian argued that Lee J’s observations had to be read having regard to the sentence that followed, which was:
If the case for relief is fundamentally deficient on the material presented, leave must be refused because a “prima facie case” will not appear.
80 I do not read those words as in any way qualifying the statement which preceded them. It almost goes without saying that if a case for relief is fundamentally deficient then a prima facie case will not have been made out.
81 Justice Lee’s statement of principle was approved by the Full Court of this Court in Ho v Akai Pty Ltd (in liq) at [10], and in those circumstances I am bound to follow that test.
82 Prysmian also contended that in Ho v Akai Pty Ltd (in liq) the Full Court should not have been taken to have explicitly approved Lee J’s statement, because the Full Court also had regard to Heerey J’s decision in Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390.
83 Prysmian contended that in that case, Heerey J held that the meaning of “prima facie case” is as laid down in May v O’Sullivan (1955) 92 CLR 654, namely, whether on the evidence as it stands, the defendant could be convicted. Merpro Montassa Ltd v Conoco Specialty Products Inc does not stand for the proposition contended. Heerey J had regard to May v O’Sullivan, because in that case the High Court explained the concept of a prima facie case.
84 In that part of the High Court’s judgment, which Heerey J addressed at 390, the High Court said:
… the question to be decided is not whether on the evidence as it stands the defendant ought to be convicted, but whether on the evidence as it stands he could lawfully be convicted.
(Original emphasis.)
85 Justice Heerey went on to say, also at 390:
It need only be added that the requirement of O 8, r 2(2)(c) has to be met at the outset of the proceedings. It does not suggest the kind of scrutiny that would occur in a submission of no case to answer following the closure of an applicant’s case at trial. As a matter of practicality, one is here concerned with, in Sheppard J’s words, “evidence which discloses in a little detail what the facts are …” (Stanley Kerr). It may be therefore that a court at this stage might draw inferences more readily in favour of an applicant, bearing in mind, amongst other things, that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a prima facie case at trial.
86 The reference of the Full Court in Ho v Akai Pty Ltd (in liq) to page 390 of Merpro Montassa Ltd v Conoco Specialty Products Inc is not to Heerey J’s reference to May v O’Sullivan, but to that part of Heerey J’s reasons to which I have quoted in [85] of these reasons.
87 In my opinion, Prysmian’s contentions in relation to the application of the principle as identified by Lee J in Century Insurance (in provisional liquidation) v New Zealand Guardian Trust Limited should be rejected.
88 I should proceed as the applicant has contended, and as Nexans has agreed, upon the basis that the purpose of the test is as explained by Lee J in Century Insurance (in provisional liquidation) v New Zealand Guardian Trust Limited, and approved by the Full Court in Ho v Akai Pty Ltd (in liq).
89 Having identified the purpose of the test, the next question is how the Court should go about the examination of the question of a prima facie case. In WSGAL Pty Limited v Trade Practices Commission (1992) 39 FCR 472, Beaumont J said that establishing a prima facie case for relief under what was then the equivalent of O 8 r 3(2)(c) “should not call for a substantial inquiry”: 476.
90 He said, at 476:
The kind of evidence adduced on the preliminary inquiry of this kind should be in proportion to the nature of such an interlocutory issue.
91 In Brookfield Multiplex Limited v International Litigation Funding Partners PTE Ltd [2008] FCA 1769, Finkelstein J said at [8], “[n]or would it, in my opinion, be appropriate to go into much detail on what is, after all, an ex parte application.”
92 I have already quoted the observations of Heerey J in Merpro Montassa Ltd v Conoco Specialty Products Inc, which are consistent, in my opinion, with Beaumont J’s observations.
93 If the purpose of the inquiry is as stated by Lee J in Century Insurance (in provisional liquidation) v New Zealand Guardian Trust Limited and approved by the Full Court in Ho v Akai Pty Ltd (in liq), the observations made by Beaumont J and Heerey J must be right.
94 It is not necessary, on applications of these kinds, to adduce the whole of the evidence that the applicant will present at trial in prosecution of the proceeding for the purpose of determining whether leave should be granted to serve a party outside Australia. The purpose of the rule is to require the Court to be satisfied that it would be appropriate to require the respondent to answer the claims made in the originating application and statement of claim by requiring the respondent to submit to the jurisdiction of the Court.
95 Order 8 rule 3(2) recognises that a respondent outside of Australia will be put to considerable cost in defending a proceeding in this Court and, for that reason, the Court should first be satisfied that the allegations made in the originating application and the statement of claim are capable of being proved.
96 The Court does not embark upon an inquiry which would be akin to a trial. The Court simply asks the applicant to satisfy the Court that the applicant has a prima facie case. The reasons that follow must be understood as addressing the test whether the applicant has a prima facie case and do not reflect a concluded view.
The evidence relied on by the applicant – admissible?
97 Next, Prysmian and Nexans complained of the manner in which the applicant had gone about establishing a prima facie case. For this aspect of the applicant’s case, the applicant relied upon the affidavits mentioned in [41] of these reasons.
98 The first four affidavits, sworn by Ms Jacquier, who is the Assistant Director of the Adelaide Regional Office of the applicant and who has deposed that she has the care and conduct of the matter for the applicant, contained hearsay evidence, but the applicant relied upon the provisions of s 75 of the Evidence Act 1995 (Cth) (Evidence Act) for the tender of that hearsay evidence.
99 Section 75 provides:
In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.
100 The applications under consideration are interlocutory because they do not finally dispose of the rights of the parties: Sanofi v Parke Davis Pty Ltd (No 1) (1982) 149 CLR 147 at 152. Prysmian conceded as much.
101 Whilst Prysmian conceded that s 75 applied, it nevertheless submitted that “the hearsay evidence in Jacquier’s first and fourth affidavits and their exhibits is not admissible, and that to the extent if at all admissible should be excluded in the exercise of the Court’s discretion under s 135 of the Evidence Act or otherwise”.
102 Section 135 provides:
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time.
103 Prysmian relied upon paragraph (a) for its proposition that the evidence, if admissible, should be excluded in the exercise of the Court’s discretion, because it would be unfairly prejudicial to Prysmian.
104 Both the applicant and Prysmian referred to the decision of Merkel J at first instance in Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1: the applicant, for its contention that the evidence was admissible under s 75 of the Evidence Act; and Prysmian for its contention that the evidence was not admissible. Prysmian argued that any second hand hearsay evidence contained in Ms Jacquier’s affidavits was not admissible under s 75 of the Evidence Act.
105 In support of its submission the applicant relied on [117] of that judgment where Merkel J said:
It is consistent with the meaning, structure, and purpose of Pt 3.2 to construe s 75 as creating a further exception to the hearsay rule in respect of hearsay evidence adduced in an interlocutory proceeding that is not admissible under Div 1 and not within an exception to the hearsay rule contained in Div 2. In my view, there is no proper basis for importing a requirement that s 75 is limited to first hand hearsay as defined in s 62 for the purposes of Div 2. The safeguard against reliance on hearsay evidence, where its prejudice outweighs its probative value, is s 135 which confers upon the Court a discretion to exclude such evidence.
106 Prysmian, on the other hand, argued that Merkel J was only disposed to admit the hearsay evidence in that case because the evidence was not in dispute and the hearsay evidence was reliable and accurate, having been prepared on the agreement and cooperation of the parties and their legal representatives. Prysmian argued that it was only after reaching that conclusion that Merkel J observed that if he were in error he would admit the evidence under s 75.
107 The first question is whether the applicant’s hearsay evidence, including second hand evidence, contained in the Jacquier affidavits is admissible. The second question, if the first question is answered in the affirmative, is whether the Court should refuse to admit the evidence because its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to Prysmian.
108 The evidence is admissible under s 75 of the Evidence Act and the evidence should not be refused to be admitted under s 135 of the Evidence Act.
109 Part 3.2 of the Evidence Act deals with hearsay evidence. It is divided into three Divisions: Division 1 The hearsay rule; Division 2 First-hand hearsay; and Division 3 Other exceptions to the hearsay rule. Section 75 is contained in Division 3 and forms part of other exceptions to the hearsay rule.
110 The hearsay rule is defined in s 59, which provides:
59 The hearsay rule—exclusion of hearsay evidence
(1) Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation.
(2) Such a fact is in this Part referred to as an asserted fact.
(2A) For the purposes of determining under subsection (1) whether it can reasonably be supposed that the person intended to assert a particular fact by the representation, the court may have regard to the circumstances in which the representation was made.
(3) Subsection (1) does not apply to evidence of a representation contained in a certificate or other document given or made under regulations made under an Act other than this Act to the extent to which the regulations provide that the certificate or other document has evidentiary effect.
111 “Previous representation” is defined in the Dictionary to mean “a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced”.
112 Divisions 2 and 3 of Part 3.2 distinguish first-hand hearsay from more remote hearsay. Section 62 defines first-hand hearsay:
62 Restriction to “first-hand” hearsay
(1) A reference in this Division (other than in subsection (2)) to a previous representation is a reference to a previous representation that was made by a person who had personal knowledge of an asserted fact.
(2) A person has personal knowledge of the asserted fact if his or her knowledge of the fact was, or might reasonably be supposed to have been, based on something that the person saw, heard or otherwise perceived, other than a previous representation made by another person about the fact.
(3) For the purposes of section 66A, a person has personal knowledge of the asserted fact if it is a fact about the person’s health, feelings, sensations, intention, knowledge or state of mind at the time the representation referred to in that section was made.
113 Section 62 only applies to Division 2: s 62(1). Exceptions to the hearsay rule are identified in ss 63 to 66A. Section 67 requires notice to be given if a party intends to rely on first-hand hearsay. Section 68 addresses objections to that type of evidence.
114 Division 3 identifies other exceptions to the hearsay rule, which are not addressed in Division 2.
115 Section 69 deals with business records and ss 70 and 71 deal with further documentary exceptions, which do not need to be addressed in these reasons. Sections 72 to 74 deal with specific evidence and deem that evidence to be exceptions to the hearsay rule.
116 Although s 75 is within Division 3, which deals with other exceptions, and s 75 is headed “Exceptions – interlocutory proceedings”, it does not make the evidence to be addressed an exception to the hearsay rule, but instead provides that the hearsay rule does not apply in an interlocutory proceeding; that is, the rule that the existence or the truth of a fact cannot be proved by evidence of a previous representation does not apply. First-hand hearsay and remote hearsay are subsets of the hearsay rule. There is nothing in s 75 from which it may be inferred that only the hearsay rule that addresses first-hand hearsay is addressed in that section. Section 75 simply says, in an interlocutory proceeding, the hearsay rule (as defined in s 59) does not apply, provided the party who adduces the hearsay evidence also adduces evidence of its source. Section 75 is intended to apply to hearsay evidence generally, not only the first-hand hearsay evidence identified in Division 2. That is what Merkel J said at [117] of Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1. See also Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 4) [2010] FCA 398 at [56]; Costa Vraca v Bell Regal Pty Ltd [2003] FCA 65 at [17].
117 Prysmian’s contention that remote hearsay evidence is not admissible is contrary to authority and, indeed, contrary to the Evidence Act itself.
118 Of course, s 75 makes hearsay evidence of any kind dependent upon the party adducing the evidence, also adducing evidence of its source. Ms Jacquier does that in her affidavits. Ms Jacquier’s evidence is admissible, subject to a consideration of s 135 of the Evidence Act.
119 Section 135 gives the Court a residual discretion to refuse to admit evidence (including hearsay evidence, whether first-hand or remote) if the probative value of the evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the party against whom the evidence is sought to be admitted.
120 This ground was maintained at the hearing, but Prysmian was not able to identify how the weighing of the evidence satisfied the section that the evidence ought not to be adduced or how Prysmian would be unfairly prejudiced. It is not enough, of course, that the evidence itself would make out the case for the party adducing the evidence. Unfair prejudice of some kind must be established and in that regard Prysmian failed. I decline Prysmian’s invitation to refuse, pursuant to s 135, the tender of the evidence contained in the Jacquier affidavits.
The Other Evidence
121 The applicant originally relied on the evidence contained in the first four Jacquier affidavits and an affidavit of Mr Parkyn, solicitor for the applicant, as described in paragraph [41] of these reasons.
122 However, at the beginning of the hearing, the applicant’s counsel indicated that the applicant also sought to rely by way of evidence on a draft statement of Mr Osada. Mr Osada is the General Manager, Marketing and Project Management Development, International Business Division for JPS. He was previously employed by Sumitomo, between 1983 and October 2001. When JPS commenced operations in 2001 he joined that company where he was employed until 2006. Between February 2006 and August 2008, he was again employed by Sumitomo. He commenced in his current position with JPS in August 2008. In Ms Jacquier’s first three affidavits, Mr Osada is referred to as “Mr A”. He was also referred to as “Mr A” in Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. [2011] FCA 938.
123 The applicant has an immunity policy in respect to its anti-cartel enforcement in Australia. JPS made an application for immunity and was granted conditional immunity from prosecution. Mr Osada was granted derivative conditional immunity. The applicant sought unsuccessfully to keep Mr Osada’s identity confidential to the applicant. After the decision in Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L., Ms Jacquier affirmed her fourth affidavit in which she first referred to Mr Osada by name. Exhibited to that affidavit were copies of documents which had been exhibited to her first affidavit, but for which she had in redacted form sought confidentiality.
124 Mr Osada’s statement is the product of interviews in September 2009 conducted by the applicant’s solicitors, the Australian Government Solicitor, with Mr Osada, and was prepared by a senior solicitor from the Australian Government Solicitor.
125 The statement had been previously the subject of a notice to produce from Nexans, which was objected to by the applicant. Having found that contents of the statement had been substantially disclosed in the first affidavit of Ms Jacquier and thus it would be inconsistent for the applicant to continue to claim privilege, I found that the applicant had waived privilege in the statement and I granted the application for production of the statement: Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. (No 2) [2012] FCA 44 at [106]-[107].
126 Notwithstanding that Nexans had successfully sought the production of the statement, Nexans’ counsel objected to the tender of the statement, on the ground that it was no more than a draft; that it was not signed let alone verified; and that it was hearsay, and inadmissible.
127 Prysmian’s counsel supported that objection and said the statement was simply a draft that was unidentified as to dates. Prysmian also contended that the reliability of the statement was uncertain as it was not affirmed. Prysmian complained that the statement did not make clear who wrote it and on what basis it was written. On the second day of the hearing, Prysmian’s counsel submitted that there was no evidence before the Court to establish that Mr Osada’s evidence, if he were called, would be in the form of his statement. Prysmian’s counsel also contended that the statement should be viewed with some scepticism, as it was prepared by a party that was seeking immunity from the applicant in exchange for continuing cooperation. It was also submitted that the statement contained evidence that was inadequate in that sense that it was not able to be tested.
128 Prysmian’s counsel also objected on the basis that the applicant’s counsel had, at an earlier directions hearing, identified the evidence upon which the applicant intended to rely on for the application, and did not then mention Mr Osada’s statement. It was contended that this was the first that Prysmian’s counsel had heard of the applicant relying on the statement of Mr Osada. The implied criticism of the applicant’s counsel for failing to state that Mr Osada’s statement would be relied upon must be rejected. At the time when the applicant’s counsel had identified the applicant’s evidence, it could not have been predicted that the statement of Mr Osada would be relied upon, because the applicant claimed privilege in respect of that statement. The applicant could not have decided to rely upon Mr Osada’s statement until after I had ruled that the privilege in the statement had been waived.
129 Prysmian’s counsel maintained the objection to exclude evidence, on the basis that the statement would be unhelpful to the Court and that it would be unfairly prejudicial to the respondents, if I were to consider the statement: s 135 of the Evidence Act.
130 Prysmian’s counsel also reserved Prysmian’s position to object to the statement on grounds of relevance. The applicant’s counsel submitted that the entire statement was relevant.
131 I admitted the statement, subject to any further objections in relation to relevance. No further arguments were put on relevance.
132 As I have said, it is common ground between the parties that JPS have sought immunity from the applicant in relation to the A/R Cartel Agreement and the Snowy Hydro Agreement. Mr Osada has also sought immunity. It is common ground that the evidence contained in Ms Jacquier’s first affidavit relevant to the A/R Cartel Agreement and the Snowy Hydro Agreement was derived from Mr Osada’s statement to the applicant. The purpose of admitting Mr Osada’s statement was to allow the Court to know whether Ms Jacquier’s first affidavit correctly reported this statement made by Mr Osada.
133 The parties know whether that was or was not the case. The tender by the applicant of that statement put the Court in the same position as the parties. The statement did not add to the applicant’s case but established the accuracy of the admissible evidence in the Jacquier affidavits.
134 The statement was clearly relevant. In that statement, Mr Osada gives a first hand account of the workings of the A/R Cartel and the manner in which the A/R Cartel Agreement was implemented by the parties entering into the Snowy Hydro Agreement. The document is relevant.
135 The receipt of the document did not prejudice Prysmian or Nexans because the evidence was already before the Court in the fourth Jacquier affidavit. There was no imperative to exercise the power given by s 135 because the evidence was unfairly prejudicial to a party.
136 This is not a trial. It is an inquiry into whether the applicant has a prima facie case for the claims made in the originating application and the statement of claim.
137 After the second day of the hearing, I reserved my judgment.
The Application to Re-open
138 On 14 March 2012, the applicant filed a Notice of Motion, seeking to reopen the hearing to tender further evidence, which, it was submitted, showed that Nexans was carrying on business in Australia at the relevant time. The further evidence was not relevant on Prysmian’s application.
139 On 16 March 2012, I made consent orders that the applicant serve written submissions on its application to reopen by 23 March 2012, and that by 30 March 2012 Nexans indicate whether or not it opposed the application and, if it did, to serve written submissions in response.
140 The applicant and Nexans provided written submissions and indicated they were content for me to decide the application on the papers.
141 I considered the application on the papers and, on 16 April 2012, my associate wrote to the parties informing them that I would grant the applicant leave to reopen its case. The parties were also informed that reasons for the decision to grant leave to reopen would be given at the same time as these reasons, and that I would make the order granting the application to reopen, when I delivered these reasons.
142 In support of the application to reopen on 14 March 2012, a fifth affidavit of Ms Jacquier, affirmed on 13 March 2012, was filed. In her fifth affidavit, Ms Jacquier said that on or about 5 March 2012 she became aware for the first time of a decision of Murphy J delivered on 2 March 2012 in a proceeding between Nexans and Nex 1 Technologies Co. Ltd in which Murphy J allowed Nexans’ appeal from a decision of a delegate of the Registrar of Trade Marks: Nexans S.A. v Nex 1 Technologies Co. Ltd [2012] FCA 180.
143 Ms Jacquier said that once she became aware of the Nexans’ trademark case, she immediately caused a search to be conducted of that Court file as a result of which she obtained a copy of an affidavit affirmed by Thierry Roucher on 29 September 2011 (the Roucher affidavit), which was filed by Nexans in the Nexans’ trademark case. Mr Roucher deposed that he was the Marketing and Communications Director of Nexans and resident in Paris. Mr Roucher said in his affidavit that he had full access to the business records of Nexans and was authorised to make the affidavit on Nexans’ behalf.
144 Justice Murphy’s decision delivered on 2 March 2012, and the Roucher affidavit and two of its annexures (being a statutory declaration of Mr Michel Rousseau, and a collection of Nexans’ press releases), were annexed to Ms Jacquier’s fifth affidavit.
145 Ms Jacquier deposed that these materials were relevant to the question of whether Nexans was carrying on business within Australia, and that they contained evidence from Nexans itself that was relevant to the evidence that was referred to by Nexans in the hearing of its application to set aside service. She said that the evidence was not known to, or available to, the applicant at the time of this hearing.
146 In his reasons, Murphy J decided that:
• Nexans had, since 13 December 2000, been the registered owner of the Australian Trade Mark for the word “NEXANS”, and had, since 14 February 2001, been the registered owner of the Australian Trade Mark for a logo incorporating the word “NEXANS”: at [6]-[7].
• Nexans had made comprehensive submissions as to its reputation in Australia based on, amongst other things: the use of the NEXANS trademarks throughout Australia since 2001 in relation to cables and cabling systems; that Nexans had sold goods under the NEXANS trademark in Australia and the approximate retail sales value in 2005 was AUD $10.6 million and in 2006 was AUD $12.3 million; that Nexans had acquired Olex Cables in 2006, which was an Australian cable manufacturer; and the goods sold by Nexans have been promoted under the NEXANS trademark by means of packaging, instructions, product handbooks, print advertisements, brochures, point-of-sale material, promotional articles in newspapers, on its websites and at trade fairs: at [23].
• The Nexans trademarks had acquired a reputation in Australia amongst a significant section of the public: at [24].
147 The Nexans’ trademark case was heard on 30 November 2011. On 5 December 2011, Nexans filed its written submissions in respect of its application to set aside service. Those written submissions did not refer to the Nexans’ trademark case. Nor did they refer to any evidence that Nexans had tendered in the trademark case about Nexans and its business activities in Australia since 2000.
148 Mr Roucher said in his affidavit that the approximate retail sales for goods sold in Australia under the “NEXANS” mark in 2005 and 2006 was €6.5 million and €7.407 million respectively.
149 Annexed to Mr Roucher’s affidavit was a statutory declaration of Mr Michel Rousseau (the Rousseau declaration), who is the “Corporate VP Technical of NEXANS” and resident in Paris. Mr Rousseau declared that he also had full access to the relevant records of “NEXANS”. He said that “[NEXANS’] authorised user, Nexans Australia Pty Ltd of 69 Justin Street, Lilyfield NSW 2040 commenced use of the NEXANS mark throughout Australia in 2001 in relation to cables and cabling systems”.
150 Mr Rousseau exhibited to his declaration a table entitled “Sales to Australia (delivery destination)”, which listed sales made to Australian customers for Nexans’ products in 2004 and 2005, as €5,624,683 and €9,467,863 respectively. The sales were shown as having been made by various Nexans’ subsidiary companies identified as “Nexans selling unit[s]”. The applicant contends that the table shows that Nexans treated these selling units as its agents for the purpose of conducting its business in Australia.
151 Whilst the table did not show the nature or extent of any business conducted by Nexans in Australia in 2003, the applicant submitted that it would be reasonable to infer, in the absence of any evidence to the contrary, that in that year, Nexans would have conducted substantial business in Australia, because it is highly improbable that Nexans would have achieved sales of €5,624,683 in 2004 unless it had conducted significant business in 2003.
152 Nexans advanced three arguments in its written submissions opposing the applicant’s application to reopen the hearing and tender additional evidence.
153 First, Nexans submitted that the judgment of Murphy J is inadmissible by reason of s 91 of the Evidence Act, which states:
91 Exclusion of evidence of judgments and convictions
(1) Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding.
(2) Evidence that, under this Part, is not admissible to prove the existence of a fact may not be used to prove that fact even if it is relevant for another purpose.
154 Nexans submitted that the judgment of Murphy J could only be admitted (if at all) if it were relevant and then only in order to prove the judgment’s existence, date or legal effect: National Mutual Life Association of Australasia Ltd v Grosvenor Hill (Qld) (2001) 183 ALR 700 at [46]. Nexans submitted the judgment plainly was not relevant to this proceeding for that purpose, and thus it was inadmissible.
155 Secondly, Nexans submitted that, apart from the judgment of Murphy J, the other material sought to be tendered could have been discovered prior to the hearing by reasonable diligence and that various matters said to arise from the material were already known at the hearing. Nexans submitted that because the Roucher affidavit was filed on 5 October 2011 and the Rousseau declaration and press releases were annexed to the Roucher affidavit, and the Nexans trademark proceeding was heard on 30 November 2011, which was more than two and a half months before the hearing of this proceeding commenced on 20 February 2012, then the applicant had ample opportunity to discover the evidence prior to the hearing.
156 Nexans submitted that as far as the press releases were concerned, they were publicly available on the Nexans.com website. Nexans submitted that the press releases did not expand upon the materials already put by the applicant into evidence, namely the Nexans group annual reports for the years 2001 to 2003.
157 Nexans submitted that the fact that sales had been made in Australia under the “NEXANS” mark was not new or previously unknown and the issue had been addressed during the hearing. Nexans submitted that the only issue of relevance was whether or not Nexans itself made those sales, and that there was no evidence in the material before the court, or in the additional material sought to be tendered, upon that issue.
158 Thirdly, Nexans submitted that even if the material, apart from the decision of Murphy J, was not available to the applicant at the time of the hearing, the Court should not exercise its discretion to allow the applicant to reopen and tender that material, since the evidence was either inadmissible or not sufficiently probative that the interests of justice required the evidence to be admitted.
159 Nexans submitted that the applicant did not identify any material in the press releases that was said to be relevant to this proceeding, and that the applicant did not advance any submission as to why it was in the interests of justice that leave be granted to reopen in order to tender any of the press releases.
160 Nexans submitted that as the Roucher affidavit was a document prepared for the purposes of a legal proceeding and not a business record, it was admissible only insofar as it comprised evidence of an admission within the meaning of s 81 of the Evidence Act: that is, a previous representation adverse to Nexans’ interest in the outcome of this proceeding. Nexans submitted that no such representation is found in the Roucher affidavit.
161 Nexans submitted that the question of whether or not Nexans employed Mr Roucher was irrelevant to the question whether Mr Jay or Mr Romand was employed by or acted on behalf of Nexans in 2001 to 2003, and also submitted that the annual reports show Mr Roucher was not employed by Nexans in 2001 to 2003.
162 Nexans submitted that the Roucher affidavit reference to sales in 2005 and 2006 was not a reference to sales by Nexans in Australia, but no more than a reference to sales made in Australia “under the NEXANS mark”, and that such sales do not demonstrate that it was Nexans that made those sales and thus carried on business in Australia in the relevant period. Nexans submitted that exhibit 3 to the Rousseau declaration, to which I have referred earlier, shows those sales were in fact made by a number of different Nexans group companies, but not Nexans itself. Nexans submitted that sales made by subsidiary companies in Australia were only relevant to the question whether Nexans carried on business in Australia if the subsidiaries sold products as agents of Nexans, which had not been demonstrated.
163 Nexans further submitted that evidence about the level of sales in years after 2003 was irrelevant to the issue whether Nexans carried on business in Australia in 2003. Nexans said that the applicant’s submission that the Court should draw an inference from these sales in the years following 2003, namely that there were significant sales in 2003, should be rejected.
164 Accordingly, Nexans submitted that the statements in the Roucher affidavit did not constitute admissions, or alternatively were not sufficiently probative to warrant the exercise of discretion to reopen the hearing to receive the evidence.
165 In regards to the Rousseau declaration, Nexans submitted that, like the Roucher affidavit, it was a document prepared for the purposes of legal proceedings and not a business record, and thus it was only admissible insofar that it comprised evidence of admissions.
166 The first question that had to be determined was whether it was appropriate in the circumstances of the case to allow the applicant to re-open its case to tender the additional evidence.
167 There was no suggestion that the power did not exist. Nexans, however, claimed that the power should not be exercised.
168 The power to allow a party to re-open its case will be exercised when it is in the interests of justice to allow that party to do so. It will be in the interests of justice where the evidence, if accepted, might affect the result and the evidence could not have been obtained by the exercise of reasonable diligence on the part of the party or the party’s advisers, and the re-opening of that party’s case would not cause prejudice to another party to the proceeding.
169 The applications before the Court require the applicant to establish a prima facie case against Prysmian and Nexans in order that the previous orders for service outside the jurisdiction be allowed to stand.
170 The onus is upon the applicant, and Prysmian and Nexans have no obligation to forewarn the applicant by way of evidence or submissions as to the matters in dispute. An applicant, therefore, on applications such as these, has no pleadings by which the applicant can understand the issues that are in dispute, or the matters upon which the respondents might concentrate their attack.
171 In this case, Prysmian and Nexans concentrated on different issues for their principal submission that the orders for service ought to be set aside.
172 It is not in dispute that Ms Jacquier did not become aware of Murphy J’s decision until 2 March 2012, which was after the hearing of these applications and judgment had been reserved.
173 Nexans did not seek to cross-examine Ms Jacquier on her fifth affidavit and it was never put to her that she had failed to show any due diligence in obtaining the evidence which is now sought to be relied upon.
174 I am not satisfied that the applicant should have found the evidence upon which the applicant relies to re-open its case any earlier than it did. Certainly I am not of the opinion that there has been any lack of diligence on the part of the applicant that would disqualify the applicant from making this application.
175 The evidence which is sought to be adduced is relevant because it goes to a matter upon which Nexans placed considerable reliance in opposition to the applicant’s claim that the applicant had not made out a prima facie case.
176 Nexans, as will be seen, argued that the applicant had failed to establish that Nexans carried on business at the relevant time in Australia.
177 Lastly, Nexans put that I should, in the exercise of my discretion, refuse to allow the evidence to be admitted because, for the reasons already put, it was inadmissible or was not sufficiently probative that the interest of justice required the evidence to be admitted.
178 Nexans’ contention that Murphy J’s reasons are not admissible because of the terms of s 91 of the Evidence Act is too wide. It is right, as Nexans have contended, that those reasons are not admissible to establish any finding of fact in those reasons as a fact that is an issue on these applications. However, the reasons can be received for the purpose of understanding the issues which were before Murphy J and the evidence by which the issues were addressed.
179 I will not treat anything found by his Honour as a finding of fact on these applications.
180 In my opinion, for the reasons already mentioned, the claim that the applicant did not proceed diligently must be rejected. If the evidence is relevant, and in my opinion it is, it ought to be received unless the evidence was not sufficiently probative to justify its admission.
181 In my opinion, the evidence is both relevant and probative of an issue which was before me, and that is whether or not there is a prima facie case on the evidence that Nexans was carrying on business in Australia at the relevant time.
182 Nexans did not suffer any prejudice by allowing the applicant to re-open its case.
183 For those reasons, I allowed the applicant to re-open its case and received the evidence in Ms Jacquier’s fifth affidavit.
The elements of the sections
184 The question then is has the applicant, on the evidence contained in Mr Parkyn’s affidavit, Ms Jacquier’s affidavits, and Mr Osada’s statement, established a prima facie case?
185 The applicant claims that all three respondents have contravened s 45(2)(a)(i), s 45(2)(a)(ii), s 45(2)(b)(i) and s 45(2)(b)(ii) of the TPA and the Competition Codes. As I have said, those sections as they appear in the TPA are reproduced identically in the text of the Competition Codes. Those sections, at the relevant time, provided:
45 Contracts, arrangements or understandings that restrict dealings or affect competition
(1) If a provision of a contract made before the commencement of the Trade Practices Amendment Act 1977:
(a) is an exclusionary provision; or
(b) has the purpose, or has or is likely to have the effect, of substantially lessening competition;
that provision is unenforceable in so far as it confers rights or benefits or imposes duties or obligations on a corporation.
(2) A corporation shall not:
(a) make a contract or arrangement, or arrive at an understanding, if:
(i) the proposed contract, arrangement or understanding contains an exclusionary provision; or
(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, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision:
(i) is an exclusionary provision; or
(ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition.
(3) For the purposes of this section and section 45A, competition, in relation to a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding, means competition in any market in which a corporation that is a party to the contract, arrangement or understanding or would be a party to the proposed contract, arrangement or understanding, or any body corporate related to such a corporation, supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the provision, supply or acquire, or be likely to supply or acquire, goods or services.
(4) For the purposes of the application of this section in relation to a particular corporation, a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding shall be deemed to have or to be likely to have the effect of substantially lessening competition if that provision and any one or more of the following provisions, namely:
(a) the other provisions of that contract, arrangement or understanding or proposed contract, arrangement or understanding; and
(b) the provisions of any other contract, arrangement or understanding or proposed contract, arrangement or understanding to which the corporation or a body corporate related to the corporation is or would be a party;
together have or are likely to have that effect.
186 A “corporation” is defined in s 4 to include a foreign corporation and a “foreign corporation” is defined to mean a foreign corporation within the meaning of placitum 51(xx) of the Constitution.
187 An “exclusionary provision” is defined in s 4D:
4D Exclusionary provisions
(1) A provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be taken to be an exclusionary provision for the purposes of this Act if:
(a) the contract or arrangement was made, or the understanding was arrived at, or the proposed contract or arrangement is to be made, or the proposed understanding is to be arrived at, between persons any 2 or more of whom are competitive with each other; and
(b) the provision has the purpose of preventing, restricting or limiting:
(i) the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons; or
(ii) the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons in particular circumstances or on particular conditions;
by all or any of the parties to the contract, arrangement or understanding or of the proposed parties to the proposed contract, arrangement or understanding or, if a party or proposed party is a body corporate, by a body corporate that is related to the body corporate.
(2) A person shall be deemed to be competitive with another person for the purposes of subsection (1) if, and only if, the first-mentioned person or a body corporate that is related to that person is, or is likely to be, or, but for the provision of any contract, arrangement or understanding or of any proposed contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person, or with a body corporate that is related to the other person, in relation to the supply or acquisition of all or any of the goods or services to which the relevant provison of the contract, arrangement or understanding or of the proposed contract, arrangement or understanding relates.
188 To establish a contravention of s 45(2)(a)(i) the applicant will need to prove that Prysmian and Nexans are corporations that have made a contract, or arrangement, or arrived at an understanding, that contained an exclusionary provision.
189 Furthermore, the applicant will need to prove that Prysmian and Nexans were competitive with each other and the purpose of the exclusionary provision was, in this case, to prevent, restrict or limit the supply of services to other particular persons or classes of persons: s 4D.
190 To establish a contravention of s 45(2)(a)(ii) the applicant will need to prove that Prysmian and Nexans are corporations that have made a contract, or arrangement, or arrived at an understanding, that contains a provision that has the purpose, or would have or be likely to have the effect, of substantially lessening competition.
191 Section 4G provides that a reference to lessening of competition shall be read as including references to preventing or hindering competition.
192 To establish a contravention of ss 45(2)(b)(i) and (ii) the applicant has to establish that Prysmian and Nexans gave effect to a contract, arrangement or understanding that contained a provision that was an exclusionary provision, or a provision that has the purpose, or has or is likely to have the effect, of substantially lessening competition. Section 4F provides a deeming provision for when a contract, arrangement or understanding contains a particular purpose.
193 Having regard to the applicant’s case, which is that Prysmian and Nexans engaged in cartel conduct, the particular sections do not have to be further analysed for their effect.
The application of the TPA and Competition Codes
194 There is, however, a threshold question in relation to both the application of the TPA, and the application of the Competition Codes.
195 Section 5(1) of the TPA provides:
Parts IV, IVA, Part V (other than Division 1AA), Part VB and Part VC extend to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia or by Australian citizens or persons ordinarily resident within Australia.
196 Although s 45 of the TPA is silent upon whether the contravening conduct must occur in Australia, Nexans argued that none of the conduct complained of occurred within Australia and that the TPA does not, notwithstanding s 5(1) of the TPA, extend to Nexans’ conduct.
197 Section 8 of the CPRAs provides:
8. Application of Competition Code
(1) The Competition Code of this jurisdiction applies to and in relation to —
(a) persons carrying on business within this jurisdiction;
(b) bodies corporate incorporated or registered under the law of this jurisdiction;
(c) persons ordinarily resident in this jurisdiction; and
(d) persons otherwise connected with this jurisdiction.
(2) Subject to subsection (1), the Competition Code of this jurisdiction extends to conduct, and other acts, matters and things, occurring or existing outside or partly outside this jurisdiction (whether within or outside Australia).
198 Nexans argued that there was no evidence to show it had carried on business within, or was otherwise connected with, any State or the ACT, and thus the Competition Codes, like the TPA, did not apply to any of its conduct.
199 These arguments were not available to Prysmian, which was, at the relevant time and until 20 June 2006, registered as a foreign corporation in Australia. Prysmian comes directly within s 5(1) of the TPA, and s 8(1)(b) of the CPRAs.
200 The sections of the TPA that are said to have been contravened are contained within Part IV of the TPA. The TPA will extend to conduct engaged in outside Australia if the contravenor is a body corporate incorporated in Australia or a body corporate carrying on business in Australia. Nexans is not a body corporate incorporated in Australia. Nexans argued that it was not carrying on business in Australia at the relevant time and, as the conduct complained of occurred outside Australia, the TPA did not extend to that conduct. If all of the impugned conduct occurred outside Australia as contended by Nexans, the applicant needs, in order to engage the extended application of the TPA provided for by s 5(1), to establish that Nexans was carrying on business in Australia. If the applicant has established that, the application of the Competition Codes will also be invoked: s 8(1)(a) of the CPRAs.
201 The question whether Nexans was carrying on business in Australia must be addressed by reference to the date or dates upon which it is claimed the contraventions occurred: Bray v F Hoffman-La Roche Ltd (2002) 118 FCR 1 at [57].
202 The expression “carrying on business” is not defined in the TPA, although the word “business” is defined in s 4 to include a business not carried on for profit. “Carrying on business” suggests more than one business act is necessary.
203 In Hope v The Council of the City of Bathurst (1980) 144 CLR 1 at 8-9, Mason J said of the expression “carrying on the business of grazing”:
It denotes grazing activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis.
204 The applicant alleges that the A/R Cartel was made or arrived at as a result of an arrangement or understanding between Nexans, Prysmian, Viscas and Sumitomo some time before October 2001: paragraph 16 of the statement of claim. The A/R Cartel Agreement did not on the applicant’s case have any effect in Australia at the time it was made or arrived at.
205 The conduct of which complaint is made arose out of Snowy Hydro issuing an invitation to tender for “Contract no. 90061 for spare 330kV Cable and Accessories”, on or about 12 September 2003: paragraph 25 of the statement of claim. The closing date was 10 October 2003.
206 The particular conduct complained of followed Snowy Hydro’s invitation to tender and occurred on or about 8 October 2003.
207 The time then for determining whether Nexans was carrying on business in Australia is September/October 2003.
208 The applicant submitted that Nexans carried on business in Australia within the meaning of s 5 of the TPA by Nexans’ own provision of services, and also through its subsidiaries including Nexans Australia Pty Ltd ACN 094 715 956 (Nexans Australia). The applicant submitted that Nexans carried on two businesses in Australia: first, an investment business through its wholly owned subsidiary paying it dividends; and secondly, a contracting business because it enters into a contract with its subsidiary in Australia and charges a monthly commission based on turnover.
209 An Australian Securities and Investments Commission (ASIC) company extract for Nexans Australia shows that it is a wholly owned subsidiary of Nexans Participations. The extract that was annexed to Ms Jacquier’s first affidavit was a current company search, but her first affidavit referred to it as an historical search. Ms Jacquier addressed that error in her second affidavit, to which was annexed the correct historical ASIC search.
210 An extract from the 2003 annual report of the Nexans group of companies stated that at “the end of financial year 2003, Nexans owned 99.99% of Nexans Participations and 99.99% of Nexans France”. The report stated:
Nexans Group has a decentralized management system both in France and abroad. Each entity determines and organizes, in accordance with applicable laws and regulations in force and the conditions specific to its business activity, its working hours, training, salary levels, etc., subject to the control of the Group’s management.
This explains why the Group does not currently have any consolidated data at Nexans Group level.
211 Copies of documents filed by Nexans Australia with ASIC pursuant to ASIC Class Order 98/0098, and ss 340 and 341 of the Corporations Act 2001 (Cth), included incorporation documents and resolutions by “directors of a small proprietary company controlled by a foreign company which is not part of a ‘large group’”.
212 A copy of the 2001 annual report of the Nexans group of companies referred to Nexans’ “global presence”, including in Australia at “69, Justin Street – Lilyfield NSW 2040 Sidney (sic)”. The report stated at page 39:
In addition to its role as the Group’s holding company, Nexans also fulfils financing and centralized cash management functions in support of the Group’s operations. Nexans has signed a contract with all Group companies covering the sharing of research and development expenses. Pursuant to this contract, Nexans, on behalf of the Group, collects royalty payments from Group companies and redistributes these payments among Group subsidiaries through the implementation of R&D programs of collective importance for the Group.
213 Nexans conceded that the report indicated Nexans was taking and redistributing research and development payments and expenses, but submitted that in collecting royalty payments from group companies and redistributing those payments it was not conducting a business.
214 The 2001 annual report of the Nexans group of companies also referred, at page 91, to the administrative services supplied:
The “General Relations Agreement” concluded with all Nexans Group subsidiaries, and approved by the Board of Directors on March 14, 2001. In respect of this agreement with Nexans Deutschland AG, Mr. Gerard Hauser is a director of both Nexans and Nexans Deutschland AG. These agreements govern the sharing of research and development facilities, the sharing of income issuing from research programs, and the administrative services rendered by Nexans to its subsidiaries.
Pursuant to these agreements, the companies pay to Nexans a percentage of their sales, varying according to the business sector involved, and Nexans contributes to the cost of the research and development programs. Nexans is paid a percentage of the company’s sales in consideration of administrative services rendered.
215 The 2002 annual report of the Nexans group of companies stated:
… major orders were placed with Nexans for the supply of special cables: submarine cables for power supply to “Daydream Island” (Australia), and high-voltage underground connection cables for Kuwait, under international calls for tender.
216 The 2002 report also referred to Nexans’ “global presence”, including in Australia at the same address as the 2001 annual report. The 2002 report stated that “[i]ncome from operations for the year ended December 31, 2002, amounted to 5,045,745 euros, and was derived mainly from services invoiced to Group subsidiaries.”
217 A media release obtained from the Nexans’ website addressed the Daydream Island project to which the 2002 annual report referred:
Nexans powers-up Daydream Island
Nexans to supply the Famous Holiday Resort with Submarine Energy Cables
Paris, 9th April, 2002 – Nexans, the worldwide leader in the cable industry, has been awarded a contract for the supply of 4,720 metres of 6.35/11kV, 3-core copper conductor, steel wire-armoured submarine energy cable to Daydream Island in Australia.
The contract was awarded to Nexans as part of a major redevelopment of the famous Queensland holiday resort. …
Nexans is one of a select group of companies in the world able to manufacture one continuous length of cable and still meet the time critical deadline set by Daydream Island. The submarine cable, manufactured at the Nexans dedicated MV and HV energy cables facility in Germany, was produced, certified and delivered in only four months. Special containers were built to ship the cable from Germany to Australia in its entirety to ensure the integrity of the cable during transportation.
218 Nexans submitted that the references to “Nexans” were references to the Nexans group, and the media release said nothing about Nexans itself whatsoever, let alone about Nexans carrying on business in Australia.
219 Ms Jacquier deposed that she had been informed by several persons that they had engaged in trade “with Nexans or Nexans Australia within Australia between 2001 and 2006”. Gareth Jones of Maser Communications informed Ms Jacquier that that entity held a non-exclusive distribution arrangement with Nexans Australia for low voltage data cables and connectors between 2001 and mid 2004; Steve McAuliffe of Bale Defence Industries informed her that that company had purchased marine cable in Australia from a Nexans entity during the period 2003 to 2006; Elliot Ralph of Cambridge Technologies informed her that that company had purchased a product “Flamex”, being a range of low voltage cables used in mass transit applications from Nexans Australia during the period 2001 to 2003. Tony Gangemi of Aero and Military Products Pty Ltd informed her that that company had purchased low voltage navy cable from a Nexans entity located in Germany between 1996 and 2001, and from Nexans Australia from late 2002 to early 2003, and in 2004 entered into an agreement with Nexans Australia to distribute navy products for Nexans Australia.
220 The 2001, 2002, and 2003 Financial Reports of Nexans Australia stated:
… the company is dependent on continued financial support from its ultimate parent company, Nexans SA, or from an alternative source, in order for it to continue to operate as a going concern …
Having considered the financial performance of Nexans Australia Pty Limited and its related entities and the likelihood that financial support will continue to be provided by Nexans SA or its related entities, the directors believe that the company will continue to operate as a going concern.
221 The Financial Report for the year ending 31 December 2003 included:
… in the absence of a firm commitment from Nexans SA to continue to provide financial support there remains significant uncertainty as to whether Nexans Australia Pty Limited will be able to continue as a going concern.
222 The Directors’ Reports for the year ended 31 December 2002 and 31 December 2003 stated:
The company is in the business of promoting the awareness of the Nexans brand and generating sales of Nexans product into the [sic] Australia, New Zealand and the Pacific Islands.
…
During the financial year, the Nexans Worldwide group have paid premiums in respect of Directors and Officers Insurance policies, which cover all Directors and Officers of the Group’s companies worldwide.
223 Minutes from a meeting of directors held on 22 December 2003 at the office of Nexans Australia stated that the consent of the then director Mr Martin Lynn to act as secretary and director was “subject to Nexans Corporate continuing to support Nexans Australia (even when it is in a negative equity position).” The applicant submitted that the minutes of all meetings of the directors of Nexans Australia that were held between 10 October 2000 to 1 January 2004 do not record any strategic decision-making of the board as to the operations and business of Nexans Australia, because those decisions were made by its parent company, Nexans.
224 A further document was also produced that the applicant submitted showed Nexans Australia incurred commission fees payable to Nexans for research and development and administrative services.
225 In addition to having submitted that Nexans carried on business in Australia directly, the applicant also submitted that Nexans carried on business in Australia through Nexans Participations’ subsidiary Nexans Australia. The applicant submitted that Nexans Australia supplied products under the Nexans brand that were manufactured by, and acquired from, other companies within the Nexans group to customers in Australia, and that Nexans Australia was dependent upon Nexans to the extent that it can be said that Nexans Australia was not carrying on its own business, but was carrying on the business of the Nexans group of companies and thus of that group’s ultimate parent, Nexans.
226 The applicant submitted that Nexans Australia held itself out to customers in Australia as not being a separate profit centre within the Nexans group. The applicant referred to an email sent on 4 October 2001 from the managing director of Nexans Australia purportedly to a customer, in which the managing director stated:
… one of my main roles is to ensure Nexans marketing and sales channel harmony – in all markets … to ensure the Nexans’ messages to local customers are consistent. … Our team is here to assist ALL Nexans customers, regardless of product, market, or sales channel.
227 The applicant also referred to an email from a product manager from Australia and New Zealand, which stated:
Nexans Australia is located in Sydney and Brisbane and represents all the Nexans Factories around the world. … Our role in Australia is to facilitate the various factories activities in Australia. We are not a profit centre but are part of the worldwide Global Export Sales Organisation.
228 The applicant further referred to other companies within the Nexans group, which were wholly owned subsidiaries of Nexans, and which supplied Nexans group products directly to customers in Australia. Communications between Bale Defence Industries Pty Ltd and Nexans Deutschland showed the sale of Nexans cable products in Australia. The applicant referred to the evidence of Nexans’ control over Nexans Australia suggested by the documents lodged with ASIC pursuant to the Class Order 98/0098; of royalty fees charged to Nexans Australia for research and development and administrative services based on sales of cables for use in Australia; of the provision of financial support enabling Nexans Australia to trade as a going concern; and of the nature of business conducted by Nexans Australia that included promoting the Nexans brand.
229 Nexans accepted that a foreign entity will be held to be carrying on business in Australia for the purposes of s 5 of the TPA if it can be shown that either the foreign entity carried on business within Australia directly on its own account, or that the business of the foreign entity was carried on in Australia by a subsidiary, but only so long as the subsidiary is carrying on the business on behalf of its parent as an agent of that parent.
230 Nexans addressed all of the documents relied upon by the applicant and contended for different reasons why those documents did not assist the applicant in establishing that Nexans was carrying on business in Australia. For completeness, I will set out Nexans’ arguments, some of which were in the written arguments and some of which were put at the hearing.
231 Nexans submitted that the references to “Nexans” in the General Relations Agreement, which was referred to in the 2001 annual report, are ambiguous because they did not distinguish between Nexans and other related entities, and that there is ambiguity as to whether there was one global agreement or a series of bilateral agreements. Nexans submitted that the evidence suggests that there may have only been an agreement with Nexans Deutschland AG, rather than any global agreement with all subsidiaries. The applicant submitted that the critical references plainly refer to the parent company, Nexans. Nexans submitted that the agreement would not make sense if the subsidiaries were acting as agents for Nexans so that Nexans itself was making the sales.
232 In relation to the 2001 annual report, Nexans submitted the report’s cover bears the word “Nexans” at the top and “The Group” at the bottom, and thus statements made in the report must be attributed to the Nexans group as a whole. Nexans referred to the annual report references to Nexans having only seven employees out of the Nexans group’s 18,000 employees to support its submission that it was unlikely that Nexans was carrying on business in Australia directly. Nexans further submitted that it did not carry on business in the sense that it did not trade or operate at all, but that it only operated some treasury functions for the benefit of its subsidiary companies.
233 Nexans submitted that there was no evidence that Nexans Australia paid Nexans a percentage of sales varying according to the business sector involved, or that Nexans had contributed to the cost of the research and development programs. Nexans submitted that there was no evidence that any administrative services had in fact been rendered by Nexans to Nexans Australia, or that payment had been made for such services.
234 Nexans submitted that the Directors’ Reports stated that the Nexans Worldwide group had paid premiums in respect of directors’ and officers’ insurance policies, and gave no indication or explanation as to the meaning of the term “the Nexans Worldwide Group”. Nexans submitted there was no basis for inferring that the entity that made such payments was Nexans.
235 Nexans submitted that the document relied upon by the applicant to show that Nexans Australia incurred commission fees payable to Nexans for research and development, and administrative services, was ambiguous because it referred to “Nexans Corporate” and there was no evidence as to which entity “Nexans Corporate” refers. Nexans submitted that there was no evidence that Nexans carried out any research and development activities at all.
236 Nexans submitted that even if there was any evidence to show that Nexans had entered into the General Relations Agreement with Nexans Australia and services had been provided under that agreement, or that payments had been made in respect of directors’ and officers’ insurance policies, or that research and development or administrative services had been provided for which commission fees were payable, there was no evidence to show that any conduct had been performed in a continuous and repetitive way over a substantial period of time, to allow for a finding that Nexans was carrying on business in Australia.
237 Nexans submitted in answer to the applicant’s submission that Nexans was carrying on business through a subsidiary that there was no evidence that products supplied by Nexans Australia were manufactured or acquired from Nexans, as opposed to any other entities within the Nexans group.
238 Nexans stated there was no information in the documents that Nexans Australia lodged with ASIC that stated Nexans Australia was “controlled by a foreign company”, or that stated as to which foreign company exercises control over Nexans Australia, and that there was no reference to that foreign company being Nexans. Nexans submitted that even if an inference could be drawn that it was the controlling company, proof of control was not sufficient to show Nexans Australia carried on the business of Nexans.
239 Nexans submitted that the financial statements of Nexans Australia from 2001 to 2003 did not make it clear whether any support for Nexans Australia would come from Nexans, as opposed to any other related entity of Nexans Australia. Nexans submitted that the fact that Nexans Australia was dependent upon financial support from another entity showed that Nexans Australia was a separate corporate personality. Nexans submitted that the evidence that Nexans had provided loans to Nexans Australia, which showed a rate of interest on the loan of 6.45%, showed that Nexans did not regard Nexans Australia as an extension of itself.
240 Nexans submitted that the minutes of a meeting of directors held on 22 December 2003, which showed that the consent for the then director to act as secretary and director was “subject to Nexans Corporate continuing to support Nexans Australia (even when it is in a negative equity position)”, made no reference to Nexans and there is no information to explain to which entity “Nexans Corporate” referred to.
241 Nexans submitted that the minutes of all meetings of the directors of Nexans Australia not recording any strategic decision-making as to the operations and business of Nexans Australia may be regarded as good or bad practice, but the practice did not prove or suggest that it was Nexans who made the strategic decisions for and on behalf of Nexans Australia.
242 Nexans submitted that the email that stated Nexans Australia was not a separate profit centre did not explain what was meant by “profit centre” or the phrase “Global Export Sales Organisation”. Nexans also referred to the financial statements of Nexans Australia, which showed Nexans Australia maintained its own profit and loss figures. Nexans submitted that even if Nexans Australia did hold itself out to customers in Australia as not a separate profit centre, that did not show that Nexans Australia’s profits were treated as profits of Nexans, or that Nexans Australia was carrying on the business of Nexans.
243 Nexans submitted that the 2002 and 2003 financial statements that stated that Nexans Australia’s business was “promoting the awareness of the Nexans brand and generating sales of Nexans product into the [sic] Australia, New Zealand and the Pacific Islands”, were irrelevant to the submission that Nexans Australia was carrying on business on behalf of Nexans, as they did not contain a reference to Nexans.
244 Nexans submitted there was no evidence that Nexans Australia promoted, or sold, any products or services of Nexans as opposed to the products or services of another Nexans group entity.
245 Nexans submitted there was not a scintilla of evidence that it had submitted tenders directly, or through its agents, for projects in Queensland. Nexans argued that this was the only allegation on which the applicant sought to advance a case that s 5 of the TPA was satisfied. At the hearing, Nexans submitted that the allegations under s 5 of the TPA were “transparently made for the purpose of fabricating jurisdiction that otherwise did not exist” and that even if it were found that s 8(1)(d) of the CPRAs were satisfied, the Court ought to decline jurisdiction because the federal element was invoked in a colourable manner. Nexans submitted that at best, there was evidence pertaining to a tender for Daydream Island, but no evidence as to which entity submitted that tender, and even then, there was no evidence of more than one tender to so as to constitute the plural “tenders”, which is the term used in the particulars of paragraph 48 of the statement of claim.
246 The applicant denied that it had attempted to “fabricate jurisdiction”. The applicant referred to an example of an offer, made by Nexans through its German subsidiary, to supply cables to Bale Engineering Co Pty Ltd located in New South Wales. The applicant also submitted it is open to infer that the Daydream Island project was the product of a tender or something very similar to a tender, because it is unlikely that such a large cable project would have been conducted without a competitive tendering process.
247 As I have said, the applicant relied upon two limbs for its proposition that Nexans was carrying on business in Australia. First, by Nexans in its own right, and secondly, through Nexans’ subsidiary.
248 The evidence would support a finding, at least to a prima facie level, that Nexans acted as the treasury for its subsidiaries. That appears clear from the 2001 annual report to which I have already referred. That, in my opinion, would constitute the carrying on of a business in Australia insofar as Nexans provided that service to Nexans Participations or, more particularly, to Nexans Australia.
249 The 2001 annual report refers to the General Relations Agreement, which indicates that Nexans’ subsidiaries paid a percentage of their turnover for Nexans to provide administrative services.
250 The 2002 annual report would suggest that Nexans was involved in the supply of submarine cables for power supply at Daydream Island, which again indicates it was carrying on business in its own right in Australia.
251 The matters to which Ms Jacquier refers in her affidavit to the number of persons who have dealt with Nexans of Nexans Australia, also indicate that Nexans in its own right, or through a subsidiary, carried on business during that period.
252 The 2001 and 2002 and 2003 Financial Reports of Nexans Australia showed that the company was dependant upon its ultimate parent company “Nexans SA” for it to continue to operate as a going concern. That was confirmed in the Financial Report ending 31 December 2003. Further support for that proposition was contained in the minutes of meeting of the Directors on 22 September 2003.
253 Furthermore, Nexans provided products under the Nexans brand to Nexans Australia. Indeed, Nexans Australia was dependent upon Nexans for the supply of product.
254 The individual criticisms that were made by Nexans of each of the documents do not address the totality of the evidence that Nexans was either carrying on business by itself or through its subsidiary. For example, where Nexans said that the financial statements did not show whether the financial support would come from Nexans or some other related entity, the submission overlooks the reference in the documents to the ultimate parent company.
255 I have already mentioned Murphy J’s reasons, none of which I have said prove any fact in issue on these applications, but which show what evidence was before him and for what purpose.
256 The applicant also relied upon the evidence that was before Murphy J including the evidence contained in Mr Roucher’s affidavit.
257 As already mentioned, Mr Roucher had claimed that the approximate retail sale for goods sold in Australia under the “NEXANS” mark in 2005 and 2006 was €6.5 million and €7.407 million respectively. Annexed to his affidavit was the Rousseau declaration, which referred to the use of the “NEXANS” mark throughout Australia in 2001. Mr Rousseau’s declaration referred to sales for Nexans’ products in 2004 and 2005 as €5,624,683 and €9,467,863. Those sales were made by various Nexans subsidiaries described as “Nexans selling unit[s]”.
258 The Rousseau declaration and the Roucher affidavit did not refer to 2003, in particular September/October 2003, but it may be inferred, as the applicant argued, that retail goods were sold under the Nexan mark in that year. It is highly unlikely that there were no sales in 2003, having regard to the use of the “NEXANS” mark before 2003, and to the volume of sales in the years after 2003.
259 For all those reasons, in my opinion, the applicant has established that Nexans was carrying on business in Australia both in its own right and through its subsidiaries, at the relevant time. For those reasons, Nexans is within the reach of the TPA: s 5(1). Accordingly, Nexans is within the reach of the Competition Codes: s 8(1)(a) of the CPRAs.
260 The applicant further submitted that it should be found that Nexans was “otherwise connected with” a state or territory for the purposes of the Competition Codes and s 8(1)(d) of the CPRAs, and that the words “otherwise connected” are wider and different from the concept of “carrying on business”, which is referred to in s 8(1)(a).
261 If I am wrong about that and Nexans is not carrying on business in Australia, the applicant would rely upon the Competition Codes. In my opinion, this Court would have jurisdiction in relation to a claim under the Competition Codes because, contrary to Nexans’ submission that the applicant “fabricated jurisdiction”, the claims under the TPA are not colourable. On any understanding, this Court has jurisdiction to entertain the applicant’s claims against Prysmian and Viscas under the TPA for cartel conduct. For the applicant to claim relief against what it alleges is the same cartel conduct by Nexans, cannot be described as an attempt to fabricate jurisdiction.
262 If I am wrong about Nexans carrying on business in Australia, this Court has jurisdiction, in its accrued jurisdiction, to decide claims made by the applicant against Nexans under the Competition Codes.
263 Nexans argued that it was not sufficient for the applicant to show that a subsidiary such as Nexans Deutschland supplied products in Australia to establish that Nexans was “otherwise connected with” a state or territory for the purposes of the Competition Codes and s 8(1)(d) of the CPRAs. Nexans relied on Commission of Stamp Duties (New South Wales) v Millar (1932) 48 CLR 618, and that it was Nexans Participations, not Nexans, that owned the shares in Nexans Australia, for its submission that Nexans is not “otherwise connected” with a state or territory of Australia pursuant to s 8(1)(d) of the CPRAs.
264 The expression “otherwise connected” must mean something other than “carrying on business”, or being incorporated or registered under the law of the relevant State or Territory, or being ordinarily resident in the state, because all of those expressions are contained in s 8(1)(a), (b) or (c).
265 The test of “otherwise connected” should be applied liberally and a remote or general connection between the conduct complained of and the relevant State or Territory should be sufficient: Pearce v Florenca (1976) 155 CLR 507 at 518; Mobil Oil Australia Pty Limited v The State of Victoria (2002) 211 CLR 1 at [48].
266 I am satisfied that if the evidence upon which I have relied for the finding that Nexans was carrying on business in Australia is insufficient for that finding, then it would be sufficient for a finding that Nexans was “otherwise connected” with the relevant State or Territory.
The Issues
267 Prysmian does not dispute that it was carrying on business at the relevant time and the applicant has satisfied me that Nexans was also carrying on business at that time. Therefore, the issues raised in the applicant’s claim that need to be addressed are: first, whether Prysmian and Nexans arrived at an arrangement or understanding with themselves and others evidenced by the A/R Cartel Agreement; secondly, whether Prysmian and Nexans each made or arrived at the Snowy Hydro Agreement with themselves and others by agreeing that Prysmian would be the allottee for that project; thirdly, whether Prysmian and Nexans each, in making or arriving at the Snowy Hydro Agreement (or in any other way) with themselves and others, gave effect to the A/R Cartel Agreement; and finally, whether Prysmian gave effect to the Snowy Hydro Agreement. As already noted, the applicant has not pleaded in its statement of claim that Nexans gave effect to the Snowy Hydro Agreement.
Incorporation Details
268 The corporate details of Prysmian and Nexans are addressed in Mr Parkyn’s affidavit and in Ms Jacquier’s first affidavit. Ms Jacquier, also in her first affidavit, addressed the corporate details of JPS.
269 In Ms Jacquier’s first affidavit, she addressed, for the purposes of establishing a prima facie case against Prysmian, its incorporation and status. Ms Jacquier referred to a company search, annexed to the affidavit of Mr Parkyn, which set out Prysmian’s incorporation details.
270 An ASIC company search extract for Prysmian disclosed that Prysmian was a foreign corporation registered in Australia, with the registration number ARBN 105 479 589, between 10 July 2003 and 20 June 2006. An ASIC historical company extract for Prysmian Australia disclosed that all shares in that company were owned by Prysmian. The extract also showed that a Mr Valerio Battista was a director of Prysmian Australia from 26 February 2002 to 7 April 2008. An extract obtained from a search conducted in relation to Prysmian on the database of official registration of companies maintained by the Italian Chamber of Commerce disclosed the change of name and corporate structure of Prysmian on or about 13 September 2005 from Pirelli Cavi e Sistemi Energia S.p.A. to Prysmian Cavi e Sistemi Energia S.R.L.
271 Extracts from the 2003 annual report of the Pirelli group of companies described the location and nature of the cable business of Pirelli Cavi e Sistemi Energia S.p.A. The report showed the structure of the Pirelli group as at 31 December 2003 and the distribution of net sales by sector and geographical area, which included Australia. The report commented on the operations of Pirelli Australia, and referred to the Pirelli group’s involvement in the “Basslink project”, which was a submarine cable link between Tasmania and Victoria.
272 Extracts from the 2005 annual report of the Prysmian group of companies described the location and nature of the cable business of Prysmian. The report referred to the global presence of the Prysmian group of companies and commented on the operations of Prysmian Australia.
273 Press information obtained from the Prysmian website referred to the Basslink project and described it as “the world’s longest at 295 kilometres”. The press information also referred to the appointment of Mr Valerio Battista to CEO in 2005.
274 That evidence establishes Prysmian’s incorporation details pleaded in the statement of claim.
275 Ms Jacquier then addressed the incorporation and status of Nexans. She referred to a company search, annexed to the affidavit of Mr Parkyn which set out Nexans’ incorporation details. She referred to other information relating to Nexans, which I have already addressed in considering whether Nexans was carrying on business in Australia, which related to Nexans’ annual reports and trade within Australia.
276 That evidence establishes Nexans’ incorporation details pleaded in the statement of claim.
277 Ms Jacquier also addressed JPS and in that regard relied upon what she was told by Mr Osada. Ms Jacquier deposed that she has been informed by Mr Osada that JPS manufactured and supplied electrical power cables and accessories, including high voltage and extra high voltage land cables, and submarine cables, and that between 2001 and 2006, JPS supplied those items to customers in Australia.
The A/R Cartel Agreement
278 It is necessary to first determine whether the applicant has made out a prima facie case for the A/R Cartel Agreement that it has pleaded.
279 In paragraph 25 of her first affidavit and following, Ms Jacquier addressed information given to her by Mr Osada.
280 I have compared Ms Jacquier’s first affidavit with Mr Osada’s statement. Some sections of her affidavit are taken almost word for word from Mr Osada’s statement, which is not surprising because she deposed in her affidavit that Mr Osada was the source of her hearsay evidence. In relation to those sections, Mr Osada’s statement is direct evidence of the source upon which Ms Jacquier relied and establishes the reliability of her evidence.
281 It is unnecessary, because of the consistency between Ms Jacquier’s affidavit and Mr Osada’s statement, to refer to both sources of evidence. It may be assumed that Mr Osada’s statement includes a first-hand account of the hearsay evidence in Ms Jacquier’s affidavit.
282 Ms Jacquier addressed the A/R Cartel Agreement in evidence that relied entirely upon what she had been told by Mr Osada. Her evidence is confirmed in the statement of evidence of Mr Osada, to which I have just referred.
283 She said that between 2001 and 2004, Mr Osada participated on behalf of JPS in a cartel arrangement in relation to a project for the supply of high voltage land and submarine cables with competitors of JPS, being Viscas, Exsym, Nexans and Prysmian. Mr Osada said that Exsym supplied only land cable and was not involved in the arrangements relating to submarine cable.
284 She said that Mr Osada’s contact at Viscas was Mr Tsubaki, at Exsym Mr Toshihisa Inoue, at Prysmian Mr Gianfranco Acquaotta, Mr Frederico Corbellini, Mr Alan Jones, and Mr Robert Comber, and at Nexans Mr Jeanmarie Jay and Mr Alain Ramond. I note that as Mr Corbellini’s email address (to which I refer later in these reasons) indicates, his first name is Federico, not Frederico as Ms Jacquier and Mr Osada have said. Mr Osada said that he was introduced to those persons by Mr Yamaguchi, shortly after Mr Osada started with JPS, who approached him and a Mr Knabe, and asked one of them to assist him in managing the day-to-day business of JPS’ involvement in certain arrangements with JPS’ competitors.
285 Ms Jacquier said that the communication between Mr Osada and the persons mentioned were by email and in person at meetings. The meetings were referred to as the “A/R meetings”.
286 Ms Jacquier said that the A/R Cartel Agreement operated by the participants notifying one another promptly when any one of the companies they represented received an inquiry from a customer about a high voltage land or submarine cable project in Australia, and that following such notification the participants would reach an agreement as to which of them would be allocated the project; that participant being referred to as the “allottee”.
287 Ms Jacquier said that if a participant wanted to be allocated an Australian project they sent an email to the other participants either directly or via individuals who were the “windows” for communication between them, stating that they sought a preference for the project. If the project was at a preliminary budgetary stage only, the participants reached agreement as to the minimum price referred to as a “floor price”, above which those parties submitting quotes or tenders should submit their prices.
288 Ms Jacquier said that in the cartel, the European companies were referred to collectively as the R Group, and the Japanese companies as the A Group. The companies who had arrived at the arrangement would determine whether a particular Australian project should be an “A preference” project, which meant that one of the Japanese companies would be the allottee, or an “R preference” project, which meant that one of the European companies would be the allottee.
289 She said the companies would, through the representatives to whom I have referred, take various matters into account in deciding who would be the allottee for an Australian project: if one of the companies had been involved in assisting the customer to put together the tender specifications at a pre-bid stage; whether a participant had a long relationship with the particular company; whether the project was a replacement or upgrade or work previously done by a participant; and the existing work levels of the participants.
290 Ms Jacquier said if the project was given an “A preference”, then the Japanese companies would discuss between themselves which of those companies should be the preferred company for the project without involving the European companies in that further decision.
291 She said that once a decision was made as to who was the allottee for an Australian project, that company then notified the other cartel members of a price at or above which the others should submit prices for the project, to ensure the allottee submitted the lowest price and was therefore likely to be awarded the tender. The price that was notified to other participants by the allottee was sometimes referred to as “price guidance” or “guidance” in communications between the members.
292 Ms Jacquier said that the A/R Cartel Agreement covered all land cable projects over 220kV and all submarine cable projects.
293 Ms Jacquier said that Mr Jay of Nexans was responsible for keeping a table recording the allocations of projects, including Australian projects, between participants in the A/R Cartel and that he emailed that table to Mr Osada from time to time.
294 The table that Mr Jay kept was exhibited in a redacted form to Ms Jacquier’s first affidavit and in an unredacted form to her fourth affidavit and also annexed to Mr Osada’s statement. The document identified projects by order and preference.
295 The document identified the projects as being either A Group or R Group and included some comments. There was a reference to “TG Sydney 330kV” and further down the document a reference to the Snowy Hydro Project. It is recorded that the project received an R Group allocation with the words in the comment column “LOST TO OUTSIDER”.
296 There is a reference to a second table, maintained by Mr Osada, which also recorded details of Australian projects. In that document, there was a reference to “Snowy Hydro” and in the comments column, the words “Reported and asked for A-pref (JP, 030312). Agreed on R-pref (030924). Guidance received (0310**)”. The document is illegible in parts, and where characters are not discernable, they have been represented by an asterix.
297 Ms Jacquier said that between 2001 and 2004, the A/R Cartel participants met in person at meetings approximately three to five months apart. These meetings were divided into a land cable session and a submarine cable session. Exhibited to her first affidavit was a redacted version of a note taken by Mr Osada at one such meeting. An unredacted version of the note was provided as a confidential annexure to Ms Jacquier’s fourth affidavit and also attached to Mr Osada’s statement. In the top right hand side of the first page of the note were the initials “AR, JMJ, FC[,] ET, TI, JY, TO”. Ms Jacquier said that they were the initials of the persons present at the meeting and representing the participants.
298 Under a section entitled “(1) Land … 3. Current” on that note were the words “Australia, Snowy Hydro stop, 0.3M RP”. Ms Jacquier said that the heading “Current” meant that the projects were under discussion but had not yet been awarded to a particular supplier by the customer. She said the letters “RP” meant the allottee was to be Prysmian of the R Group, and that the reference to “0.3M” was a reference to the value of the project being USD $300,000.
299 Ms Jacquier said that Mr Osada ceased attending meetings with other A/R Cartel participants, and ceased communicating with the cartel participants about Australian projects, in mid 2004.
300 The applicant has, in my opinion, made out a prima facie case that Prysmian and Nexans arrived at an arrangement or understanding with others which gave rise to the A/R Cartel Agreement.
The Snowy Hydro Agreement
301 In paragraph 34 of the statement of claim, the applicant pleads that the A Group members and R Group members arrived at an arrangement or understanding that constituted the Snowy Hydro Agreement, which is identified as follows:
34.1 The Snowy Hydro Project would be allocated to a member of the R Group as an R Preference;
34.2 Pursuant to the provisions of the A/R Cartel Agreement;
34.2.1 the R Group would be entitled to nominate the Allottee;
34.2.2 the R Group would notify the A Group of the Price Guidance, being the price at or above which a member of the A Group who was tendering for the Snowy Hydro Project should submit its tender, so as to ensure the R Group Allottee was the tenderer with the lowest price of the members tendering for the project;
34.2.3 the A Group representative would communicate the Price Guidance to the A Group members, if they were not already coped in to the original communication from the R Group representative concerning the Price Guidance;
34.2.4 any A Group members submitting tenders for the project would tender in accordance with the notified Price Guidance for the project.
302 Ms Jacquier produced a series of documents from Snowy Hydro’s business records, supplied to the applicant as a result of communications by the applicant with Cesilia Kym (Corporate Counsel) and David Britten (Corporate Solicitor) of Snowy Hydro. She said that those documents related to the issuing of the tender for the Snowy Hydro Project, and that they evidenced: the invitation to tender; a screen-capture of an email sent 12 September 2003 at 2:29pm, which shows Snowy Hydro invited Mitsui & Co (Australia) Ltd, JPS, Pirelli, and Midland Metals, to tender (the initial invitation); the receipt of tenders; the prices submitted to Snowy Hydro; and the acceptance of the successful tender.
303 Ms Jacquier produced four emails that the applicant received from JPS, which she said are evidence of the cartel activity.
304 The first email was sent on 12 September 2003 at 7:39am GMT (the first email) after Snowy Hydro sent out the initial invitation. Mr Osada sent the first email to Mr Jay, who was employed in the Nexans’ group, Mr Corbellini and Mr Comber of Prysmian, Mr Watanabe and Mr Yamaguchi of JPS, Mr Tsubaki of Viscas, and Mr Inoue of Exsym. As I have said, Prysmian was, at the time, called “Pirelli …”, and that is why Mr Corbellini’s and Mr Comber’s email addresses used the domain name “@pirelli.com”. The first email was entitled “Inquiry Notification, Australia”, referred to the Snowy Hydro tender, and read:
From: Takeo Osada <osada.takeo@jpowers.co.jp>
Sent: Friday, September 12, 2003 7:39 AM (GMT)
To: Jeanmarie.Jay@nexans.com; watanabe.yasutoshi@jpowers.co.jp; yamaguchi.joji@jpowers.co.jp; federico.corbellini@pirelli.com; e-tsubaki@viscas-j.co.jp; Toshihisa_Inoue@exsym.co.jp; robert.comber@pirelli.com
Subject: Inquiry Notification, Australia
Dear Mr. Jay:
Inquiry Notification
_________________
Country: Australia
Project Name: Contract No. 90061
Customer: Snowy Hydro
Bid date: Oct. 10, 2003
Voltage: 330kV
Insulation: Fluid filled
Quantity: 525 meters plus 555 meters option
A is interested and would like to ask preference.
Best regards
T. Osada for J. Yamaguchi
osada.takep@jpowers.co.jp
305 Ms Jacquier said that Mr Osada informed her of several matters in relation to this email: first, the email was sent by JPS pursuant to the A/R Cartel Agreement; secondly, the email constituted a prompt initial notification of the type I have already discussed; thirdly, the email addresses of the recipients are in fact those with whom JPS communicated with Mr Jay, Mr Corbellini, Mr Tsubaki, Mr Inoue, and Mr Comber; and fourthly, the words “A is interested and would like to ask preference” would be understood to mean that the A Group was making a request to the R Group that the project be allocated to the A Group.
306 The second email was sent on 16 September 2003 at 4:11am by Mr Inoue to Mr Osada (the second email) in response to the first email, and stated:
From: Inoue Toshihisa <Toshihisa_Inoue@exsym.co.jp>
Sent: Tuesday, September 16, 2003 4:11 AM (GMT)
To: Takeo Osada <osada.takeo@jpowers.co.jp>
Subject: Re: Inquiry Notification, Australia
Dear Mr. Osada
Received same inquiry as reported below which is repalcement (sic) of BICC/Pirelli
circuit installed in 1961 and 1959 respectively.
Thanks and best regards
EXM/T, Inoue
************************************
EXSYM Corporation
T. Inoue
1-8-10, Azabudai, Minato-ku, Tokyo
106-0041, Japan
Tel: +81-3-4523-5030, Fax: +81-3-4523-5070
E-mail: Toshihisa_Inoue@exsym.co.jp
*************************************
…
–– Original Message ––
From: “Takeo Osada” <osada.takeo@jpowers.co.jp>
To: <Jeanmarie.Jay@nexans.com>; <watanabe.yasutoshi@jpowers.co.jp>; <yamaguchi.joji@jpowers.co.jp>; <federico.corbellini@pirelli.com>;
<e-tsubaki@viscas-j.co.jp>; <Toshihisa_Inoue@exsym.co.jp>; <robert.comber@pirelli.com>
Sent: Friday, September 12, 2003 4:38 PM
Subject: Inquiry Notification, Australia
> Dear Mr. Jay:
>
> Inquiry Notification
> _________________
>
> Country: Australia
> Project Name: Contract No. 90061
> Customer: Snowy Hydro
> Bid date: Oct. 10, 2003
> Voltage: 330kV
> Insulation: Fluid filled
> Quantity: 525 meters plus 555 meters option
>
> A is interested and would like to ask preference.
>
> Best regards
>
> T. Osada for J. Yamaguchi
>
> osada.takep@jpowers.co.jp
307 Ms Jacquier said Mr Osada informed her that the second email again constituted an initial notification email of the kind to which I have referred.
308 The third email was sent on 24 September 2003 at 5:44am by Mr Osada to Mr Jay, Mr Watanabe, Mr Yamaguchi, Mr Corbellini, Mr Tsubaki, Mr Inoue, and Mr Comber (the third email). The email was entitled “Aus. Snowy Hydro”:
From: Takeo Osada <osada.takeo@jpowers.co.jp>
Sent: Friday, September 24, 2003 5:44 AM (GMT)
To: Jeanmarie.Jay@nexans.com; watanabe.yasutoshi@jpowers.co.jp; yamaguchi.joji@jpowers.co.jp; federico.corbellini@pirelli.com; e-tsubaki@viscas-j.co.jp; Toshihisa_Inoue@exsym.co.jp; robert.comber@pirelli.com
Subject: Aus. Snowy Hydro
Dear Mr. Jay:
We agree on R-Pref.
Please send guidance by September 30.
Best regards
_______________________________________
Inquiry Notification
____________________
Country: Australia
Project Name: Contract No. 90061
Customer: Snowy Hydro
Bid date: Oct. 10, 2003
Voltage: 330kV
Insulation: Fluid filled
Quantity: 525 meters plus 555 meters option
T. Osada for J. Yamaguchi
osada.takeo@jpowers.co.jp
309 Mr Osada informed Ms Jacquier: first, that the third email was sent by JPS pursuant to the A/R Cartel Agreement; secondly, the email was sent on behalf of the A Group to the R Group and constituted the A Group participants’ agreement that the project be allocated to one of the R Group participants, rather than an A Group participant; and thirdly, that the words “Please send guidance by September 30” constituted a request for “price guidance”, being a request to which I have already referred, namely a request for the R Group allottee for the Snowy Hydro Project to notify a price at or above which the A Group participants tendering for the project should submit their tender, so as to ensure the allottee was the lowest priced tenderer.
310 The fourth email was sent on 3 October 2003 in reply to the third email. I note the difference between the sent time stamp of the third email that is reproduced at [308] of these reasons, and the sent time stamp of the email that the fourth email replies to. The fourth email was sent by Mr Comber to Mr Osada, Mr Jay, Mr Watanabe, Mr Yamaguchi, Mr Corbellini, Mr Tsubaki, and Mr Inoue, and contained pricing information (the fourth email):
From: Comber Robert, IT <robert.comber@pirelli.com>
Sent: Friday, October 3, 2003 12:19 PM (GMT)
To: Takeo Osada <osada.takeo@jpowers.co.jp>; Jeanmarie.Jay@nexans.com; watanabe.yasutoshi@jpowers.co.jp; yamaguchi.joji@jpowers.co.jp; Corbellini Federico, IT <federico.corbellini@pirelli.com>; e-tsubaki@viscas-j.co.jp; Toshihisa_Inoue@exsym.co.jp
Subject: RE: Aus. Snowy Hydro
Dear Mr Osada,
I apologize for rather later reply.
Hereunder you will find DDP prices in AUS Doll (inclusive of your
commission and GST):
- cable: 510/m
- Outdoor termination: 121,000.
- Oil imm termination: 101,500.
- Joint: 60,400.
Thanks.
Best regards,
Robert L.P. Comber
HV Systems
Ph 0039-02-64422936
Fax 0039-02-64422682
–– Original Message ––
From: Takeo Osada [mail to: osada.takeo@jpowers.co.jp]
Sent: Wednesday, September 24, 2003 07:44
To: Jeanmarie.Jay@nexans.com; watanabe.yasutoshi@jpowers.co.jp; yamaguchi.joji@jpowers.co.jp; Corbellini Federico, IT; e-tsubaki@viscas-j.co.jp; Toshihisa_Inoue@exsym.co.jp; Comber Robert, IT
Subject: Aus. Snowy Hydro
Dear Mr. Jay:
We agree on R-Pref.
Please send guidance by September 30.
Best regards
_______________________________________
Inquiry Notification
____________________
Country: Australia
Project Name: Contract No. 90061
Customer: Snowy Hydro
Bid date: Oct. 10, 2003
Voltage: 330kV
Insulation: Fluid filled
Quantity: 525 meters plus 555 meters option
T. Osada for J. Yamaguchi
osada.takeo@jpowers.co.jp
311 Mr Osada informed Ms Jacquier that the fourth email was received by JPS pursuant to the A/R Cartel Agreement and it contained “price guidance” of the kind to which I have referred.
312 On 4 October 2003, Mr Ian Knowles of Prysmian sent an email to Mr Peter Zenkis and Mr Michael Mills, both of Pirelli Australia, and also attached a cover letter, which was intended to accompany the formal tender:
From: Knowles Ian, CH
</o=pirelli/ou=chbasel1/cn=recipients/cn=knowlia1>
To: Zenkis Peter, AU
</o=pirelli/ou=ausydny1/cn=recipients/cn=zenkipe1>; Mills
Michael, AU </o=pirelli/ou=ausydny1/cn=recipients/cn=millsmi1>
Cc: Butt Ian, SG
</o=pirelli/ou=sgsinga1/cn=recipients/cn=buttia1>
Bcc:
Subject: Snowy Mountains tender
Date: Sat 04 Oct 2003 02:34:55 EST
Attachments: Cover letter 10.10.03.doc
Locations: d:\cases\prysmian\tranche4-problem files 2 > peter zenkis > top of personal folders\jo_1 Custodian: (Peter Zankis)
D:\CASES\Prysmian\email\Peter Zenkis\My_Documents_Backup\application_data\Microsoft\Outlook > zenkipe1006.pst > Top of Personal Folders\Jo Custodian: (Peter Zenkis)
D:/CASES\Prysmian\problem files > zenkipe1.pst > Top of Personal Folders\Jo
Custodian: (problem files)
Peter/Mick,
I have sent today, to your Heathcote Road address, a courier package that contains the majority of the tender details for the formal quote to Snowy Hydro Ltd. Hopefully you should see it early next week. There is 1 x Original and 1 x Copy for the customer, plus an additional copy for your office. I will send a copy to Ian Butt separately.
The documents have been set up for Mick to sign all the relevant pages. The main things that are left to be done are the following:
*PCAL to produce the covering letter for section 1. I attach below some suggested wording, but it only needs to be something brief.
*PCAL to produce the tender form for section 2.
*PCAL to produce the Supplier Information (Schedule 3) for section 5. We have already included the required details of similar works.
*UK to complete parts B, C and D of schedule 6, which will e.mailed through on monday.
The prices in Schedule 2 are based on the last ones we submitted, but adding the GST this time. Please do not make any alteration to the prices.
As far as I can tell this should cover virtually all they ask for. Let me know if you find anything missing or incorrect.
Once the documents are completed, it will be necessary for someone will take the tender to the customer to avoid any problems of submission.
I hope everything is OK.
Regards
Ian Knowles
Pirelli Cavi e Sistemi Energia S.p.A
c/o Chickenhall Lane,
Bishopstoke,
Eastleigh,
Hampshire,
England
SO50 6YU
Tel.& Fax ++ 44 23 80295503
Mobile++ 44 (0)797 112 9575
E-mail. ian.knowles@pirelli.com
313 On 7 October 2003, Mr Knowles again emailed Mr Zenkis and Mr Mills, and attached detailed technical information:
From: Knowles Ian, CH
</o=pirelli/ou=chbasel1/cn=recipients/cn=knowlia1>
To: Zenkis Peter, AU
</o=pirelli/ou=ausydny1/cn=recipients/cn=zenkipe1>; Mills
Michael, AU </o=pirelli/ou=ausydny1/cn=recipients/cn=millsmi1>
Cc: Butt Ian, SG
</o=pirelli/ou=sgsinga1/cn=recipients/cn=buttia1>
Bcc:
Subject: Snowy Hydro
Date: Tue 07 Oct 2003 02:05:56 EST
Attachments: Schedule 6_Technical Detail.doc
Locations: d:\cases\prysmian\tranche4-problem files 2 > peter zenkis > top of personal folders\malaysia_indonesia_overseas supply_1 Custodian: (Peter Zankis)
Peter/Mick, here is the finalised technical schedule, which should hopefully complete all the input from our side. Please confirm that everything is OK as far as you are concerned.
Regards
Ian Knowles
Pirelli Cavi e Sistemi Energia S.p.A
c/o Chickenhall Lane,
Bishopstoke,
Eastleigh,
Hampshire,
England
SO50 6YU
Tel.& Fax ++ 44 23 80295503
Mobile++ 44 (0)797 112 9575
E-mail. ian.knowles@pirelli.com
314 Copies of tenders that were submitted by Pirelli Australia dated 8 October 2003; by Midland Metals also dated 8 October 2003; and by Mitsui & Co (Australia) Ltd dated 10 October 2003 were produced by Ms Jacquier. Also produced was a letter dated 17 February 2004 in which Snowy Hydro writes to Midland Metals informing Midlands Metals that its tender has been accepted.
315 On 28 October 2003, Mr Mills emailed Mr Ian Butt, an employee of Pirelli in Singapore, and copied in Mr Zenkis:
From: Mills Michael, AU
</o=pirelli/ou=ausydny1/cn=recipients/cn=millsmi1>
To: Butt Ian, SG
</o=pirelli/ou=sgsinga1/cn=recipients/cn=buttia1>
Cc: Zenkis Peter, AU
</o=pirelli/ou=ausydny1/cn=recipients/cn=zenkipe1>
Bcc:
Subject: RE: Snowy Hydro 330kV – CONTRACT 90061
Date: Tue 28 Oct 2003 16:49:21 EST
Attachments:
Locations: d:\cases\prysmian\tranche4 - problem files 2 > peter zenkis > top of personal folders\malaysia_indonesia_overseas supply_1 Custodian: (Peter Zankis)
Ian,
I am assuming that you have received the email with questions from Ed Chenery?
Can I also assume that either yourself or Ian Knowles will be answering the questions with a response back to Pirelli Australia?
Regards
MM
–– Original Message ––
From: Chenery Ed [SMTP:Ed.Chenery@snowyhydro.com.au]
Sent:Tuesday 28 October 2003 14:58
To:Mills Michael AU
Cc:Butt Ian, SG; Harding Warren
Subject:CONTRACT 90061
Hello Michael,
Thank you for your tender for the above contract to supply spare cable and accessories. I have attached a list of technical clarifications and I would appreciate your response in due course. There may be some commercial clarification questions that will follow shortly.
Regards,
Ed Chenery Senior Electrical Engineer.
<< File: SUPPLEMENTARY QUESTIONS PIRELLI 1.doc>>
316 Some years earlier, in 2001, the following email correspondence had occurred:
From: Comber Robert, IT
</o=pirelli/ou=itmilan2/cn=recipients/cn=combero1>
To: Mills Michael, AU </o=pirelli/ou=ausydny1/cn=recipients/cn=michael mills>
Cc: Atkinson Paul, AU
</o=pirelli/ou=ausydny1/cn=recipients/cn=atkinpa1> Furlan
Tiziano, IT </o=pirelli/ou=itmilan2/cn=recipients/cn=furlati1>
Corbellini Federico
</o=pirelli/ou=itmilan2/cn=recipients/cn=corbefe1>; Knowles
Ian, CH </o=pirelli/ou=chbasel1/cn=recipients/cn=knowlia1>
Butt Ian, SG </o=pirelli/ou=sgsinga1/cn=recipients/cn=buttia1>
Bcc:
Subject: RE: Recent Feedback
Date: Wed 21 Nov 2001 04:26:38 EST
Attachments:
Locations: D:\CASES\Prysmian\email\Paul Atkinson > atkinpa2003.pst > Top of Personal Folders\UTILITIES Custodian: (Paul Atkinson)
D:\CASES\Prysmian\email\Paul Atkinson > Archive2003.pst > Top of Personal Folders\UTLITIES Custodian: (Paul Atkinson)
Michael, as you have realized we are doing our best to support PCAL. The orders we have received, I think, confirm an increased focus on the Australian market and we will certainly try to do better. However, it must be clear that we are not prepared to take orders at crazy prices. Unless, of course, Cable Sector decides to go for volumes (as opposed to margins). As per the Management’s instructions we are concentrating on margins in order to improve PBIT etc.
Regards, Robert.
–– Original Message ––
From:Mills Michael AU
Sent:Tuesday 20 November 2001 10:00
To:Knowles Ian, CH; Comber Robert, IT; Butt Ian, SG
Cc:Atkinson Paul, AU
Subject:Recent Feedback
Gentlemen,
Just a bit of feedback from recent EHV quotes.
The last 132kV with Western Power, apparently +40% on the tender winner Midland Metals and +20% higher than OLEX. I am trying to find out the manufacturer, could be lijun again.
We need to sharpen our pencil on the current WPC 132kV tender as we have not moved any closer to winning from last year with EHV or WPC.
The current 132kV fluid Cable for Energy Australia, I have been informed that we are +30% on the joints and cable from the Koreans.
I will forward further information as and when it becomes available.
Regards
Michael Mills
***
Power Cables & Systems Australia Pty Ltd.
michael.mills@au.pirelli.com
Tel. +61 (0)2 9600 0235
Fax +61 (0)2 9600 0311
Mobile: +61 (0)412 141 240
317 The remaining paragraphs of Ms Jacquier’s first affidavit referred to copies of emails, which she produced, which were received by the applicant from Prysmian Australia pursuant to a notice issued under s 155(1)(b) of the TPA. She said that on the basis of the email addresses used, they were communications between persons within Prysmian and its subsidiaries in relation to the Snowy Hydro Project.
Did Prysmian make or arrive at the Snowy Hydro Agreement?
318 For the reasons that follow, I find that there is a prima facie case that Prysmian, with others, made or arrived at the Snowy Hydro Agreement by agreeing that Prysmian would be the allottee for the Snowy Hydro Project.
319 The first email although addressed to Mr Jay was also sent to Mr Corbellini and Mr Comber of Prysmian, using email addresses that comprised their given names and surnames, and the domain name “@pirelli.com”, which reflects the name of the first respondent before it changed its name to Prysmian. It requested that the Snowy Hydro Project be allocated to the A Group and was sent to Mr Jay as secretary of the R Group, and Mr Corbellini and Mr Comber in accordance with the A/R Cartel Agreement for the purpose of obtaining the R Group’s consent.
320 The second email, whilst not sent to or from Mr Corbellini or Mr Comber, contains information that the Snowy Hydro Project related to a circuit previously installed by Prysmian. As I have said, such information is the kind of information said to be considered by the A/R Cartel when it determined which member would be allotted the project. The second email was also sent in accordance with the A/R Cartel Agreement. A criterion for allocating the preferred tendered with the A/R Cartel Agreement was whether the work was replacement work of a cartel member. It may be inferred that the purpose of this email was to tell the A Group secretary, Mr Osada, that Prysmian might be entitled to tender rather than a member of the A Group because it was replacement Pirelli/Prysmian work.
321 The third email, although containing text that begins with “Dear Mr. Jay”, was also sent to Mr Corbellini and Mr Comber. It indicated that the A Group agreed on R preference and requested price guidance. That email is consistent with the second email which implicitly suggested that the tender should be allocated to R Group because it was replacement of Prysmian’s work.
322 Also in the third email, Mr Osada asked the R Group to inform him of the price at which an A Group tenderer should pitch its tender. It is consistent with Mr Osada’s evidence.
323 The fourth email was sent from Mr Comber in direct reply to the third email. It is sent to Mr Osada and the other cartel participants and contains price guidance as sought in the third email, and in accordance with the operation of the A/R Cartel Agreement.
324 This email starkly sets out the manner which the A/R Cartel Agreement operates. The R Group through Prysmian, which was to be the tenderer, was giving the members of the A/R Cartel price guidance so that Prysmian’s tender would be the lowest tender of the group for the Snowy Hydro Project. By itself, this email would establish a prima facie case against Prysmian that Prysmian made or arrived at the Snowy Hydro Agreement by reaching an agreement that Prysmian would be the allottee for the Snowy Hydro Project. Read with the previous three emails it also supports Mr Osada’s statement, which is also in evidence in Ms Jacquier’s affidavit.
325 Mr Osada’s evidence is that these emails were, in fact, sent to and from Prysmian pursuant to the A/R Cartel Agreement, and Mr Corbellini and Mr Comber were his contacts with whom he communicated in accordance with the A/R Cartel Agreement. The emails are consistent with and corroborative of Mr Osada’s statement and the hearsay evidence contained in Ms Jacquier’s affidavit.
326 The note that Mr Osada said he took at a meeting of the A/R Cartel participants stated “Australia, Snowy Hydro stop, 0.3M RP”, which it is alleged is a reference to the allottee of the project being Prysmian of the R Group. The initials “RP” were also used within the tables that Mr Osada said were maintained by him and Mr Jay to record allocations of projects between cartel participants, with the inference open again that the initials “RP” were used to record project allocations to the R Group and more specifically Prysmian. There is also a sequence of initials on the top right-hand side of the note, which Mr Osada said recorded the participants of the meeting. The initials included “FC”, which Mr Osada said was a reference to Mr Frederico Corbellini of Prysmian and evidenced his attendance at the cartel meeting.
327 Prysmian submitted that the applicant had not sufficiently established that the Australia-wide markets alleged in the statement of claim exist. Prysmian contended that there was no evidence to show that the Snowy Hydro Project fell within or established the markets pleaded, being the Australian land cable market or Australian cable market. However, I accept the applicant’s submission that there is ample evidence, to which I have already referred, that establishes the markets at a prima facie level.
328 Secondly, Prysmian submitted that the applicant had failed to show that two or more parties to the alleged arrangements were, at all relevant times, competitive with each other within the meaning of s 4D and s 45 of the TPA and the Competition Codes, as would be required to establish the alleged contraventions. The annual reports of Prysmian and Nexans showed they were conducting business in the same markets and from which it may be inferred they were competitors. The communications of pricing passing between cartel participants shows that, were the anti-competitive cartel agreement not in place, the cartel members would be competitors. I find that there is sufficient evidence to establish, to a prima facie level, the requisite level of competitiveness.
329 Thirdly, Prysmian submitted that the applicant had not led any evidence that would establish that on some “unknown date” an arrangement or understanding was arrived at “containing provisions which are not specifically identified”. Prysmian submitted that in regards to the table of project allocations and the note from the cartel meeting, there was no evidence that Prysmian was involved in their creation, nor is there evidence that either document was sent to Prysmian. Nevertheless, both the table and the note contained the initials “RP” which Mr Osada says refer to the R Group and Prysmian, and the note contained the initials of Mr Corbellini.
330 Prysmian’s counsel submitted that “there is just insufficient evidence of any agreement having been reached as alleged”. Prysmian attacked the evidence of Mr Osada, because Mr Osada admitted in parts of his statement that he could not recall all aspects of, or explain all parts of, the materials relied upon by the applicant.
331 There is, in my opinion, sufficient evidence to establish a prima facie case against Prysmian, namely: the note from the cartel meeting; the two tables of the project allocations; the evidence of Mr Osada; and the four emails, in particular the fourth email, which contained price guidance in response to a request for such guidance and was in accordance with the way in which the A/R Cartel Agreement was said to operate; and the evidence contained in Ms Jacquier’s first affidavit and Mr Osada’s statement. In relation to the fourth email, it may be inferred that its sender, Mr Comber, was involved in Prysmian’s pricing into the Australian Snowy Hydro tender.
332 I am satisfied that the applicant has established a prima facie case that Prysmian made or arrived at the Snowy Hydro Agreement in that it reached an agreement that Prysmian would be the allottee for the Snowy Hydro Project.
Did Nexans make or arrive at the Snowy Hydro Agreement?
333 The next question is whether Nexans made or arrived at the Snowy Hydro Agreement that Prysmian would be the allottee for the Snowy Hydro Project.
334 Nexans submitted that because it did not receive the initial invitation, it could not tender for the Snowy Hydro Project. In those circumstances, Nexans submitted, it could not have been in a position to enter into any agreement to refrain from bidding for the tender, in order to favour the alleged allottee, Prysmian. Nexans relied on Mr Osada’s statement that “quotes or tenders for a cable project could generally only be submitted by those parties contacted and invited by a customer to submit a price in relation to the project”. However, whilst relevant, that is not decisive.
335 The absence of an invitation to Nexans to tender does not mean Nexans could not have tendered for the Snowy Hydro Project. Nexans knew of the requests for tenders before the tender period closed, and that tendering for a project in the absence of an initial invitation was consistent with conduct expected in a competitive market place. The second email showed that Exsym was aware of the tender for the Snowy Hydro Project, notwithstanding that Exsym was not sent the initial email invitation on 12 September 2003, which contradicts Nexans’ submission that because it did not receive the initial invitation it could not tender for the Snowy Hydro Project.
336 Nexans submitted that notwithstanding the first email was sent to Mr Jay and begins “Dear Mr. Jay”, it was not Mr Jay to whom the email was in fact directed or from whom a response could necessarily be expected. It may be inferred that the email was sent to Mr Jay because Mr Jay was the secretary of the R Group and it was with him that Mr Osada had to communicate to decide an A Group or R Group preference.
337 Nexans submitted that the second email is irrelevant so far as Nexans is concerned, because it was not sent to Mr Jay. I reject that submission. The email is relevant because it showed the Snowy Hydro Project involved the replacement of a circuit installed by Prysmian and it explains why, although there was an initial request for an A Group preference, the Snowy Hydro Project was ultimately given an R Group preference.
338 Nexans put several contentions in relation to the third email; first, it is not known with whom Mr Osada was apparently agreeing; secondly, the email is inconsistent with the earlier email, which said “A is interested and would like to ask preference” (a submission which is answered in the manner I have just stated); thirdly, although the email was addressed to “Dear Mr Jay”, there is no basis for inferring it amounts to Mr Osada’s agreement to a proposal put forward by Mr Jay; fourthly, it is open to infer that Mr Osada was simply reporting to Mr Jay an agreement that Mr Osada had reached with some other unnamed persons; fifthly, notwithstanding that the email is sent to Mr Jay and begins “Dear Mr. Jay”, it was not Mr Jay to whom the email was in fact directed or from whom a response could necessarily be expected; sixthly, at most it established an agreement as between the A Group participants, of which Nexans was not a member.
339 Nexans submitted that there was nothing in the fourth email to suggest Mr Jay, let alone Nexans, was responsible for, or in any way authorised, its contents.
340 Nexans submitted that the four emails only gave rise to an inference from Nexans’ point of view that Mr Jay may have been aware, if he read the emails, that JPS and Prysmian had communicated about the Snowy Hydro Project, but nothing more. Nexans submits that Mr Jay was nothing more than a passive receipient of the emails, and that to establish the alleged making of the Snowy Hydro Agreement, a meeting of the minds of the participants including Nexans was required, which was not satisfied by the passive receipt of emails. Nexans submitted that as paragraph 35 of the statement of claim is pleaded in terms of Nexans having “reached agreement”, a mere acquiescence to an understanding will not be sufficient. Nexans submitted that Mr Jay and Mr Ramond took no part in the making of the Snowy Hydro Agreement. The applicant submitted that even if Nexans was not capable of being a tenderer for the Snowy Hydro Project, that does not mean that Nexans could not have agreed to the Snowy Hydro Agreement.
341 For the reasons that follow, and in light of the evidence advanced by the applicant, I reject Nexans’ contentions that the evidence does not establish a prima facie case that Nexans made or arrived at the Snowy Hydro Agreement.
342 The Snowy Hydro Agreement cannot be considered in a vacuum. It must be considered in the light of the pre existing and continuing A/R Cartel Agreement. When understood in that light, the parties’ behaviour can be understood. The A/R Cartel Agreement, so Mr Osada has said in his statement, subsisted between 2001 and 2004, and during the time when the Snowy Hydro tenders were sought and received.
343 As I have said, the alleged A/R Cartel Agreement was implemented by cartel members operating in two groups, with each group nominating a natural person to act as a secretary who was the principal point of communications between the two groups. Mr Osada said that he was the secretary for the A Group and Mr Jay was the secretary for the R Group. When any member of the A/R Cartel received an initial inquiry, request for a quote, or an invitation to tender, in regards to a project, that member would notify the other members of the cartel either directly or through the group secretary. The members would then determine, on the basis of a variety of factors already mentioned, the group to which the project would be allotted to, the member of that group that would tender so as to be confident of being allotted the project, and a minimum tender to be preferred by those members who were not to be allotted the project. One of the factors was whether the work was replaced for work previously done by a cartel member.
344 The first email was sent to Mr Jay, begins “Dear Mr. Jay”, and is consistent with the manner in which an initial notification is to be made in accordance with the A/R Cartel Agreement. It might be supposed that Mr Jay would have recognised the notification for what it was.
345 The second email conveyed information about Prysmian having performed the original installation in regards to the invitation tender, being a matter that Mr Osada said was to be taken into account in deciding which cartel participant would be the allottee for an Australian project. This email is also in accordance with the claimed manner in which the parties to the A/R Cartel Agreement were to operate.
346 It is not to the point that Mr Jay did not receive that email. The email was sent to the secretary of the A Group because the A Group had sought preference. The information in the email meant that Prysmian in the R Group had a better claim.
347 The third email sent to Mr Jay begins “Dear Mr. Jay” and in the context of the other correspondence indicates at least a prima facie case that the Snowy Hydro Agreement was reached in accordance with the A/R Cartel Agreement. In this third email, the phrase “Dear Mr. Jay: We agree on R-Pref.” gives rise to the inference, sufficient for the purposes of establishing at least a prima facie case, that prior to this email Mr Jay had requested that the R Group receive preference, and the third email was a reply to that request which was to give effect to the A/R Cartel Agreement by entering into the Snowy Hydro Agreement. Although there was no correspondence that explicitly showed Mr Jay had responded to earlier emails, he was, in receiving the emails about the allocation of the Snowy Hydro Agreement, acting in his role as the secretary of the R Group, by reaching an understanding in relation to the Snowy Hydro Agreement. On Mr Osada’s statement it would be expected that Mr Jay would be informed in the manner in which he was.
348 The fourth email sent to Mr Jay contained “price guidance” and was also in accordance with what is said to be the mode of operation of the A/R Cartel Agreement.
349 Furthermore, Mr Osada’s own evidence is that the emails were, in fact, sent to Nexans pursuant to the A/R Cartel Agreement.
350 Nexans, however, submitted that, at best, the alleged conduct upon which the applicant relied was conduct of Mr Jay or Mr Ramond, and not conduct of Nexans. I reject that submission. Nexans submitted that even if there is a prima facie case that Mr Jay or Mr Ramond did engage in cartel conduct, they did so only on behalf of a Nexans’ subsidiary rather than Nexans. The first, third and fourth emails were sent to Mr Jay at Nexans. It may be inferred that he acted on behalf of Nexans.
351 Nexans observed in counsel’s submissions that in the Jacquier first affidavit, she defined the term “Nexans” as “Nexans SA”. Nexans referred to a number of instances in Ms Jacquier’s first affidavit where the term “Nexans” was used to refer to the Nexans group as a whole, other than specifically the second respondent. For example, in paragraph 21, Ms Jacquier referred to “the 2003 annual report of the Nexans group of companies” If, in this instance “Nexans” is taken for its previously stated definition of “Nexans SA”, that excerpt from paragraph from 21 would not make sense, so Nexans submitted. Nexans submitted that I should only read those parts of Ms Jacquier’s affidavit that used the word “Nexans” to mean the second respondent when Ms Jacquier had explicitly said so by, for example, using the phrase “the parent company Nexans”.
352 Nexans submitted that, because of the structure of the Nexans group of companies; Nexans does not have any factories nor does it carry on the business of the manufacture and sale of cable to third parties; that Nexans only has seven employees; and that Nexans only operates a central treasury function, it is highly improbable that the conduct of Mr Jay or Mr Ramond is connected with Nexans in any way. The applicant submitted that it does not matter which entity within the Nexans group owned the factories, because Nexans earnt the profits ultimately flowing from its subsidiaries.
353 Although emails were sent to Mr Jay at the domain name “@nexans.com”, Nexans submitted that the only inference that can be drawn is that Mr Jay worked for one of the operating subsidiaries of Nexans, and not for Nexans itself. The natural inference, to be drawn in the absence of any evidence to the contrary, is that users of an “@nexans.com” email address are Nexans employees.
354 Nexans submitted that it has not been proved that Mr Jay was in fact employed by Nexans. Nexans relied upon the 2002 annual report which stated that the “only employees of the Nexans holding company are the members of the Executive Committee” and that Mr Jay and Mr Ramond are not identified in that report as member of the committee. Nexans made similar submissions upon the 2003 annual report.
355 Mr Jay’s precise employer and that employer’s position within the Nexans group may be established at trial. In the meantime, the applicant has established a prima facie case that Mr Jay and Mr Ramond were acting on behalf of Nexans over the relevant period. Employment is not the only way that Nexans might be bound by Mr Jay’s and Mr Ramond’s conduct.
356 Mr Jay acted as Nexans’ representative in respect to the A/R Cartel Agreement and Mr Jay maintained the table recording the projects relating to the A/R Cartel. For that reason, it does not presently matter which entity actually employed Mr Jay. During the hearing, Nexans’ counsel, Mr Jackman QC, did not submit that if Mr Jay and Mr Ramond were not employed by Nexans, then Nexans could not be responsible. He said Nexans did not put that proposition.
357 During the hearing of these applications, I did not rule the use of the phrase “of Nexans” in the relevant affidavits inadmissible, but I agreed that if in due course there was no evidence that Mr Jay was in fact employed by Nexans then I would reject that evidence in the affidavits.
358 The evidence would not at this stage allow for a finding that Mr Jay and Mr Ramond were employed by Nexans. However, the evidence is sufficient to find that the applicant has made out a prima facie case that Mr Jay and Mr Ramond had authority to act on behalf of and bind Nexans. On Mr Osada’s account, Mr Jay had been acting on behalf of Nexans for years to the point of accepting the position of secretary of one of the groups. The table kept by Mr Jay to which I will shortly refer confirms that.
359 I reject Nexans’ submission that it requires a “leap of faith” to accept that the emails show Mr Jay, on behalf of Nexans, entered into the Snowy Hydro Agreement. In any event, at this stage of the proceeding, I need only be satisfied, and I am, that there is a prima facie case that the evidence shows that Mr Jay, on behalf of Nexans, caused Nexans to make or arrive at the Snowy Hydro Agreement, which provided that Prysmian would be the allottee for the Snowy Hydro Project.
Did Prysmian, in making or arriving at the Snowy Hydro Agreement or by offering price guidance, or by submitting its tender, give effect to the provisions of the A/R Cartel Agreement?
360 In my opinion, the entry into the Snowy Hydro Agreement was contemplated by the A/R Cartel Agreement. The A/R Cartel Agreement required the participants to proceed in accordance with the way in which the four emails informed the participants and caused the participants to react. The purpose of the A/R Cartel Agreement was to enable the participants to make or arrive at further agreements in relation to projects world-wide so that one of the participants would have preference in relation to the tender for that project. The purpose of the A/R Cartel Agreement was to foster further cartel conduct. In other words, the A/R Cartel Agreement contemplated that the participants would give effect to it in the way in which the Snowy Hydro Agreement was made or arrived at.
361 This issue therefore can be addressed quite quickly.
362 The fourth email was written in accordance with the participants’ understanding of the A/R Cartel Agreement. The company which obtained preference was to give price guidance, which is exactly what was done in the fourth email. The submission of the tender on 8 October 2003 was also in accordance with the understanding of the participants of the A/R Cartel Agreement. The applicant has made out a prima facie case that Prysmian gave effect to the A/R Cartel Agreement by those two actions.
Did Nexans, in making or arriving at the Snowy Hydro Agreement, give effect to the provisions of the A/R Cartel Agreement?
363 Nexans submitted that even if the applicant were able to establish a prima facie case in respect of the making of the alleged Snowy Hydro Agreement, there was no evidence to support the claim in the pleading that in doing so, Nexans gave effect to the alleged A/R Cartel Agreement and thus there is no prima facie case in that regard.
364 For the same reasons that Prysmian gave effect to the A/R Cartel Agreement, so also did Nexans, by entering into the Snowy Hydro Agreement. The applicant has made out a prima facie case in respect of the relief sought in relation to this issue.
365 There is evidence, apart from the Snowy Hydro Agreement itself, to establish a prima facie case that Nexans gave effect to the A/R Cartel Agreement; first, the pair of tables that allegedly record the allocations of projects between cartel participants, and secondly, the note Mr Osada said he took a meeting of cartel participants.
366 Nexans submitted that there was nothing in the tables to support an inference of any connection between the tables and Mr Jay or Nexans. The tables, however, contained the very projects covered by the A/R Cartel Agreement, and according to Mr Osada’s evidence, one of the tables was kept by Mr Jay himself for recording the allocations of Australian projects between participants in the A/R Cartel. Mr Osada also said that this table was emailed to him from time to time. The table allegedly kept by Mr Jay contains an “A” column and an “R” column, an entry “TG SYDNEY 330kV”, and an entry “SNOWY HYDRO Aust 330 kV OF 0.5Km” with the comment “LOST TO OUTSIDER”, which is said to mean that the project was allocated to an entity that was not a cartel participant. The table shows that the “SNOWY HYDRO” item was allocated an R preference, because there are entries in the R column of the table. The email correspondence to which I have referred earlier indicates that the Snowy Hydro Project was indeed given an R preference. Furthermore, the Snowy Hydro Project was ultimately allocated to Midland Metals, which is an entity not party to the cartel agreement and thus an “outsider”. The tables are consistent with Mr Osada’s account of the manner in which the A/R Cartel operated.
367 Nexans submitted that the note of the meeting taken by Mr Osada did not support an inference that Nexans entered into the Snowy Hydro Agreement so as to give effect to the A/R Cartel Agreement, particularly as the date listed on the note is 27 November 2003, which was more than two months after the Snowy Hydro Agreement was allegedly reached. It is not surprising that a period of two months elapsed, given that is likely to have been the first A/R Cartel meeting after the Snowy Hydro Agreement was reached. The phrase “Australia, Snowy Hydro stop, 0.3M RP” contained in the note tends to establish that a meeting of competitors occurred for the purpose of discussing the Snowy Hydro Project, which gives rise to the inference of cartel conduct. Furthermore, Mr Osada says that the initials “JMJ” on the note signify Mr Jay’s attendance at the meeting, and the initials “RP” indicate the allottee was Prysmian of the R Group.
368 For those reasons, the applicant has made out a prima facie case that Nexans gave effect to the A/R Cartel Agreement.
Has the applicant established a prima facie case that Prysmian gave effect to the Snowy Hydro Agreement?
369 I have found that the applicant has established a prima facie case that Prysmian and Nexans arrived at the arrangement or understanding that constituted the Snowy Hydro Agreement. The last question to be determined is whether Prysmian gave effect to the Snowy Hydro Agreement. As I have already said, the applicant does not assert, in the statement of claim, that Nexans gave effect to the Snowy Hydro Agreement.
370 The fourth email from Mr Comber to Mr Osada is prima facie evidence, in my opinion, of Prysmian giving effect to the Snowy Hydro Agreement. That email advised all other members of the A/R Cartel of the tender price that Prysmian would submit and, having regard to the operation of the A/R Cartel Agreement, told the members of the cartel of the price below which they should not tender.
371 On 4 October 2003, Mr Knowles sent the email to which I have already referred to Mr Peter Zenkis and Mr Michael Mills of Pirelli Australia, identifying a courier package, which had been sent that day to Pirelli Australia’s Heathcote address, containing the tender details for the formal quote to Snowy Hydro Limited.
372 In that email, Mr Knowles instructed Mr Zenkis and Mr Mills not to make any alteration to the prices.
373 Prysmian contended that at best the evidence only showed that Mr Ian Knowles “of some Pirelli entity in England” was responsible for providing part of Prysmian Australia’s Snowy Hydro Project tender. That submission cannot be accepted. Mr Knowles’ address on the email is the address of the respondent Prysmian, before it changed its name. At least on the level of a prima facie case, the document is evidence of Prysmian’s involvement.
374 Prysmian contended that there was no evidence that Mr Knowles was aware of the existence of either the A/R Cartel Agreement or the Snowy Hydro Agreement, which of course is correct. However, the question is whether Prysmian gave effect to the Snowy Hydro Agreement. Mr Knowles sent the email on 4 October 2003, which was the day after the fourth email was sent by Mr Comber of Prysmian to Mr Osada, the other members of the cartel, and particularly Mr Corbellini, also of Prysmian. The evidence supports the applicant’s proposition that Mr Comber and Mr Corbellini were aware as at 4 October 2003 of the existence of Snowy Hydro Agreement. The timing, contrary to Prysmian’s submission, is more than coincidence. The inference, at least at the prima facie level, is that Mr Knowles did what he did in providing the details to Mr Zenkis and Mr Mills for the purpose of Prysmian giving effect to Snowy Hydro Agreement, even though Mr Knowles may not himself have known of the Snowy Hydro Agreement.
375 On 7 October 2003, Mr Knowles wrote again to Mr Zenkis and Mr Mills, and provided a finalised technical schedule in relation to the tender for the Snowy Hydro Project.
376 The further correspondence to which I have already referred on 28 October 2003 indicates, as the applicant contended, that the tender, which was submitted by Prysmian, was at the direction of the parent company, not the Australian subsidiary.
377 The earlier correspondence from 2001, which was produced by the applicant, from Mr Mills to Mr Knowles and Mr Comber, supports the applicant’s proposition that the tender process in Australia was controlled by the parent company.
378 On 8 October 2003, Prysmian formally submitted its tender for the Snowy Hydro Project, including prices that were below the prices contained in the price guidance contained in the fourth email of 3 October 2003. The applicant has established on a prima facie basis, that in doing so, Prysmian submitted a tender, which would, according to the Snowy Hydro Agreement, facilitate Prysmian becoming the successful tenderer.
379 For those reasons, I am satisfied that the applicant has made out a prima facie basis case that Prysmian gave effect to the Snowy Hydro Agreement by providing price guidance and submitting a tender.
Conclusion on the prima facie case
380 As I have said, the provisions of the Competition Codes upon which the applicant relies are the same as those provisions of the TPA upon which the applicant relies. Prysmian does not dispute that it was carrying on business at the relevant time. I have found that Nexans was carrying on business, or alternatively “otherwise connected” within the meaning of s 8(1)(d) of the CPRAs. Accordingly, the applicant has made out a prima facie case that would entitle the applicant to the relief sought under both the TPA and the Competition Codes.
381 For the reasons expressed, the applicant has made out a prima facie case that would entitle the applicant to the relief sought in the statement of claim, which does not include the relief sought in paragraph 1.2.2 of the original application that Nexans gave effect to the provisions of the Snowy Hydro Agreement.
382 However, for the reasons earlier stated, the applicant is entitled to succeed on these applications, notwithstanding that the applicant has not established an entitlement to relief for all of the causes raised in the originating application.
Residual Discretion
383 A grant of leave under O 8 r 3 is discretionary: see Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2006] FCAFC 116 at [30] and the cases cited therein.
384 Prysmian submitted that even if the requirements of O 8 r 3(2) were satisfied, I should exercise my discretion to set aside service, because the claims made against it have insufficient prospects of success to warrant putting it to the time, expense and trouble of defending the claims.
385 Prysmian referred to the Court’s discretion to refuse leave when the proceeding might be subsequently stayed on forum non conveniens or other grounds: Voth v Manildra Flour Mills Proprietary Limited (1990) 171 CLR 538 at 654. Prysmian submitted that this Court is an inappropriate forum, because the alleged conduct was that of Japanese and European corporations primarily in those locations, which had effect on those and other international markets which is being or will be investigated in those other markets, and that it had no effect in Australia because the only relevant tender was by won by Midland Metals, who was not an A/R Cartel member.
386 Prysmian submitted that the applicant did not make full and frank disclosure of the relevant matters on its ex parte application. Prysmian submitted that it had relied on the evidence of Mr Osada and upon the assumption that Mr Osada would be giving evidence, and that the applicant knew that assumption was incorrect at the time of the hearing of that application.
387 Prysmian described the Snowy Hydro Project as “very small” and referred to the fact that Prysmian was ultimately unsuccessful in the tender, which was competitively bid and won by Midland Metals. Prysmian submitted there is no suggestion that there has been any effect on any Australian market.
388 Nexans referred to the Court’s discretion to decline leave when the connection between a proposed respondent and the Australian forum is too tenuous: Century Insurance Ltd v New Zealand Guardian Trust Ltd [1996] FCA 376 at 6.
389 I reject the contentions of Prysmian and Nexans that I ought to exercise my residual discretion to set aside service.
390 I have found that this Court has jurisdiction in the proceeding, the proceeding is of a kind mentioned in O 8 r 2, and the applicant has shown a prima facie case for the relief claimed in the originating proceeding. This Court is the most appropriate forum to hear allegations of breaches of the TPA concerning conduct that involves a market in respect of the Snowy Hydro Project. Although neither Prysmian nor Nexans were ultimately successful in winning the tender, that is not to the point if they were engaged in cartel conduct. On the findings made, Prysmian and Nexans were carrying on business in Australia at the relevant time. This Court has jurisdiction under the TPA in relation to cartel conduct by corporations carrying on business in Australia, and under its accrued jurisdiction, in relation to the Competition Codes. This Court is the appropriate forum.
391 The conduct alleged is of a serious kind and precisely of the type that the relevant provisions of the TPA and the Competition Codes are designed to address. Accordingly, I refuse to exercise my residual discretion to set aside service against Prysmian and Nexans.
Orders
392 The applicant have leave to reopen its case to tender further evidence as contained in Ms Jacquier’s fifth affidavit affirmed on 13 March 2012.
393 The application filed by Prysmian on 7 May 2010, that the grant of leave to serve Prysmian be discharged, or that the service of the originating process be set aside, must be dismissed.
394 The application filed by Nexans on 29 March 2010, and amended on 11 May 2010, seeking the same orders, must be dismissed.
395 Prysmian and Nexans must pay the applicant’s costs.
I certify that the preceding three hundred and ninety-five (395) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. |
Associate:
