FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) [2012] FCA 1355

REASONS FOR JUDGMENT

1    On 27 November 2012, I indicated that I had rejected Air New Zealand (‘AirNZ’) and Garuda’s sample objections to the ACCC’s proposed tender on its conduct case (save in relation to one document). These are my reasons for taking that course.

2    The Australian Competition and Consumer Commission (the ‘ACCC’) tenders documents relating to its conduct case against AirNZ and Garuda. The tender is divided into three categories:

(a)    documents relating to the historical context (set out in ACCC.500.001.0210);

(b)    documents relating to the Hong Kong (‘HK’) understandings which are relevant to both airlines (set out in ACCC.500.001.0453); and

(c)    documents relating to the Singapore understandings relevant only to AirNZ (set out in ACCC.500.001.0231).

3    AirNZ and Garuda formally objected to the tender. It is useful to consider each class of objection in turn. The objections pursued by AirNZ were also adopted by Garuda, which also had some additional objections. I will address the former category first.

Ruling on objections raised by Air New Zealand

First objection: records of communications between members of the Hong Kong BAR-CSC Executive Committee and the Surcharge Working Group

4    In Hong Kong (‘HK’), the Board of Airline Representatives (the ‘HK BAR’) had a Cargo Sub-Committee (the ‘HK BAR-CSC’). The HK BAR-CSC’s structure included an Executive Committee and a Surcharge Working Group. Neither AirNZ nor Garuda were members of the HK BAR–CSC Executive Committee (‘EC’) or the Surcharge Working Group (‘SWG’). At paragraph 151 of the ACCC’s Further Amended Statement of Claim against AirNZ (‘the AirNZ FASOC’) it alleges that AirNZ made an arrangement or arrived at an understanding with a large number of airlines that the HK BAR-CSC should apply to the HK Civil Aviation Department (‘the CAD’) to extend the CAD’s approval of the HK Lufthansa Methodology. This is alleged to have occurred on or about 16 December 2003. It was not alleged to have occurred at a meeting of the SWG but the particular provided to the paragraph does say:

Meeting of the Surcharge Working Group held on or about 16 December 2003, at which it was agreed that the HK BAR-CSC should apply to the CAD to extend the approval for the Hong Kong Lufthansa Methodology, and that members should continue to apply the surcharge in accordance with that methodology.

5    Collectively, this was referred to as the ‘Second Hong Kong Surcharge Extension Understanding’. A similar allegation is made in relation to Garuda at paragraph 139 of the ACCC’s Amended Statement of Claim against it (‘the Garuda ASOC’). There are a number of other Hong Kong surcharge extension understandings alleged, but each shares the structural feature that the particulars either indicate that the understanding arose from meetings at which AirNZ and Garuda were not present or, alternatively, as a result of discussions or correspondence between the members of the EC or the SWG (which did not include AirNZ or Garuda).

6    AirNZ initially submitted in writing that the ACCC relied upon the proposition that the members of the EC and SWG were authorised by AirNZ to arrive at the relevant understanding. It then submitted that the evidence upon which the ACCC depended to make good the authorisation allegation was insufficient. After the delivery of the ACCC’s written submissions it was then submitted by AirNZ that the ACCC had abandoned any case based on agency.

7    I do not accept either of these submissions. At paragraphs 118 and 119 of the AirNZ FASOC (and at paragraphs 107 and 108 of the Garuda ASOC: see below at [111]), the ACCC alleges that the members of the SWG and EC had authority to act on behalf of HK BAR-CSC members (which membership included AirNZ and Garuda). The ACCC’s case in relation to the second to eighth surcharge extension applications is that these were arrived at through the means of the meetings of the EC and the SWG or communications between those committees’ members. If the ACCC succeeds in establishing the authority of the members of the EC and SWG to deal with surcharge matters on behalf of AirNZ as alleged in paragraphs 118 and 119, then there will be no difficulty in the fact that AirNZ was not a member of either committee.

8    It was no doubt for that reason that AirNZ submitted that the ACCC’s authority case could not succeed. But the issues are defined by the pleadings and the fact is that authorisation is alleged. I do not see that I should, in effect, entertain a summary judgment application on the authorisation issue so as to conclude that there is no issue about authorisation.

9    I reject also AirNZ’s submission that the ACCC had abandoned its case on authorisation at paragraph 42 of its written submissions. That paragraph was as follows:

In any event, a distinction needs to be drawn between authority to submit applications to and correspond with CAD on airlines’ behalf, and authority to enter into understandings on behalf of participating airlines. The ACCC does not plead that the Chair of BAR-CSC or any member of [the EC] or SWG entered into any of the pleaded understandings on behalf of a participating airline.

10    I do not accept that the second sentence involves an abandonment of what was pleaded at paragraphs 118 and 119. Those paragraphs do not plead authority to enter into understandings but rather authority to deal with surcharges. Correspondingly, the allegation at, for example, paragraph 151 is that the understanding was arrived at during a meeting of the SWG in relation to a surcharge. The case is that the airlines authorised the EC and SWG to deal with surcharges and that as a result of those dealings an understanding was reached.

11    I reject, therefore, AirNZ’s objection to this class of document.

12    The ACCC pursued an alternate basis for the relevance of the material. It was said that the meeting of the relevant committee was only the first step in arriving at the conclusion that an understanding had been reached. There were other steps, too. It was said that the SWG or EC made recommendations in respect of proposed applications by the HK BAR-CSC to the CAD; that the chair of the HK BAR-CSC made the application to the CAD and distributed the application to the members; that the chair received the CAD approval and forwarded it to members; and that members then distributed announcements of the surcharge alteration before implementing it. There were thus to be seen a number of distinct events – recommendation, submission of proposal, forwarding, distributing, implementation and so forth – from which, viewed as a whole, the participation of AirNZ or Garuda in the understanding might be inferred. So viewed, the case alleged was circumstantial.

13    To be clear, the value of this case from the ACCC’s perspective was as an alternate to its authorisation case pleaded at paragraphs 118 and 119. Under this alternate case, it does not matter whether the EC and SWG were authorised or not – their actions are merely pieces in a larger mosaic (including each airline’s announcement and implementation of the surcharge variation) from which the relevant understanding could be inferred.

14    Both AirNZ and Garuda objected that this alternative case was outside that which was pleaded. I accept this. The case pleaded at paragraph 151 is that the relevant understanding was reached at a meeting on or around 6 December 2003. The single particular provided for this (which I have set out above at [9]) is that there was a meeting of the SWG on or about that day. The particulars to the subsequent surcharge extension understandings similarly point only to a meeting of the EC or correspondence between its members as the events that gave rise to the understandings. Those particulars do not disclose the case now foreshadowed.

15    Mr Halley SC pointed to the transcript of two of the directions hearings which had taken place before Jacobson J (who was previously the docket judge for these matters). These revealed that:

    the ACCC had indicated to AirNZ (and, at the time, others) which documents it was going to rely upon in relation to each understanding;

    AirNZ had sought particulars as to the significance of the documents. Perhaps to paraphrase, they had sought to be informed not only of the pieces in the mosaic (with which they had been provided) but also how those pieces fitted together;

    Jacobson J accepted that this was necessary, but was of the view that the explanation for how the strands might be pulled together could await the ACCC’s written opening. Accordingly, he declined to order the particulars sought on what were, in effect, case management principles.

16    When the trial opened before me, the ACCC opened at length (although not in writing). It appeared to be accepted before me on the present argument that the ACCC’s opening had included the manner of circumstantial proof now put forward by it as an alternative way to establish the understandings.

17    Mr Leeming SC who, with Mr Brennan of counsel, appeared for Garuda submitted, on the strength of Dare v Pulham (1982) 148 CLR 658 at 664, that the pleadings defined the issues in the proceedings unless the parties had departed from them and that in this case this had not occurred as both airlines had taken the point as an objection to evidence at the earliest available opportunity. I accept this submission.

18    Despite the practicality of the course adopted by Jacobson J, I do not think that I can, as a matter of formality, proceed on the basis that the issues are defined, not by the pleadings, but by Mr Halley’s opening. I do not think this can be done under the Federal Court Rules 2011 without suspending their operation and I do not think that a course upon which I should now embark. This is for three reasons. First, this is hard-fought and complex civil penalty litigation. The proper conduct of the trial is going to require a precise articulation of the ACCC’s case, which I do not think that the opening necessarily sufficiently provides. Secondly, I do not think that using the transcript of the ACCC’s opening effectively as a set of particulars would be practical in view of its style and length. Thirdly, if and when these two cases reach the appeal stage, it is imperative that the trial record of precisely what is in issue be clear.

19    For those reasons, I do not accept that the circumstantial case articulated by the ACCC on the hearing of the objections is part of its pleaded case. Had I not accepted that these materials were relevant on the authority basis, I would have rejected their tender.

20    There are two additional matters I should note for completeness. The first is the fact that, whatever else happened before Jacobson J, it occurred at a time when Garuda was not involved in the proceedings. Even if I were of the view, which I am not, that what had occurred before his Honour had resulted in the ACCC’s opening being a pleading or serving the purpose of a pleading, this could not affect Garuda, which was not there. Secondly, I do not think that anything said by Mr Halley during the course of his opening (when challenged that he was departing from the pleading) is relevant to the present issues. The challenges at that time did not sufficiently indentify the present matter to constitute, as Mr Brennan submitted they should, a species of waiver by the ACCC.

21    However, for the reasons I have already given, the documents in question are relevant to the ACCC’s case and I will allow their tender.

Second objection: documents said to have no connection with AirNZ or Garuda

22    Broadly speaking, this category concerned documents passing between other airlines or, indeed, internal communications within other airlines. For example, AirNZ pointed to ACCC.008.023.0339 which was an internal email generated within Cathay Pacific on 12 July 2005. The email was as follows:

From:    Tom Wong

To:    David Sae Chiu

Cc:    Gary Chan; Kenneth Tsui; Leslie Lu; Ron Mathison; Christine Liu

Bcc:

Subject:    fsc/cad

David,

I attended last night's CAD/BAR Excom dinner, Norman Lo and his team including Stephen Kwok were present. Norman hinted to Tony that next round of pax fsc should be "ok". CAD seem to take a relatively positive attitude toward pax and cargo fsc since the public in general hasn't made too much noise.

anyway, further to Monday's bar-esc excom and full meetings, we agreed to start lobbying cad to see if there are ways to increase fsc by using a higher exchange rate to convert the LH index's euro rates to hkd, adjust the whole mechanism, or whatever options we could come up with. I think it would be useful if we could have your help again to raise these subjects with cad informally before any formal communication.

At the same time LH/Carsten will try to get from LH headoffice some data/analysis that we might possibly be able to use in future to justify higher fsc.

Next step is to review the situation by end Jul. Will let Christine to follow up with you, LH, and bar-csc excom.

Thanks. rgds, tom

23    AirNZ was not at the dinner in question. The ACCC submitted that such a document was admissible for the non-hearsay purpose of establishing the existence of an agreement to engage in a common enterprise, namely, the purpose of reaching an agreement on the surcharges. It noted that this was so even where the communication in question did not involve the party against whom its tender was sought. No question of an exception to the hearsay rule arose (such as whether the communication could be taken as an admission by a co-conspirator). Since the evidence was not hearsay, the hearsay rule did not apply to it: Ahern v The Queen (1988) 165 CLR 87 at 93.

24    In response, Mr Owens for AirNZ put these matters: first, there was a relevant distinction between a case in which conspiracy was alleged and a case in which it was alleged that a person was a party to an agreement or understanding of the kind referred in s 45 of the Trade Practices Act 1974 (Cth). An important aspect of this difference was said to be that, in this case, there were available ‘equally innocent and malign interpretations’ of the conduct alleged. This was said to be contrasted with an ordinary criminal conspiracy where, it was pointed out, the burden of the Crown case is that there is no other reasonable explanation of the circumstantial evidence consistent with the accused’s innocence: see, for example, Gebert v The Queen (1992) SASR 110 at 114-116 per Mullighan J (King CJ and Olsson J agreeing)..

25    I do accept the principle invoked by the ACCC, namely: that one may prove an agreement or understanding between a group of people by proving behaviour of individual group members consistent with the existence of the agreement; that such behaviour may include evidence of what members of the group said to each other or even to third parties; and, that this use of conduct as circumstantial evidence of an agreement does not involve a hearsay use of the words used when some or all of the conduct relied upon consists of speech acts. This is straightforward: Ahern at 93-94. If three airlines go to dinner and discuss reaching an agreement not to compete on a fuel surcharge on cargo, this is evidence which is capable of bearing on the existence such an agreement. Whether that evidence is ultimately accepted is a different question, as is the question of whether AirNZ and Garuda are shown to be parties to such an arrangement. But as an element in a circumstantial case, I do not doubt its relevance.

26    I do not accept that I am required to ask whether this individual communication shows that AirNZ or Garuda were parties to the agreement or understanding. Talking, it is true, of the application of the standard of proof to a civil case of fraud by circumstantial evidence, Ipp JA (with whom Tobias and Basten JJA agreed) referred with approval to what had been said by Winneke P in Transport Industries Co Ltd v Longmuir [1997] 1 VR 125 at 129: ‘It is erroneous to divide the process into stages and, at each state, apply some particular standard of proof. To do so destroys the integrity of [a] circumstantial case’: Palmer v Dolman [2005] NSWCA 361 at [41], [125], [126]. Of course here the question is not, as it was in Palmer, whether the particular integer alleged proved the fraud. Here the question is whether the integer is admissible to prove the existence of the agreement.

27    At the moment, there is no admitted evidence that AirNZ or Garuda acted pursuant to any such understanding. But it is plain from the way the case has been opened that the ACCC intends to prove that both airlines announced the surcharge adjustment hot on the heels of the CAD approval and implemented those announcements shortly afterwards. If evidence to that effect is admitted at a later stage of the proceedings then, in my opinion, it will be reasonably open to conclude that evidence of the present kind is relevant. I propose, therefore, to admit the present evidence under s 57(1)(b) of the Evidence Act 1995 (Cth) (‘the Act’) subject to such evidence linking to two airlines to the agreement later being led. To be clear there are three steps in this process:

(a)    receipt of circumstantial evidence establishing the existence of an understanding or agreement between various airlines not necessarily including AirNZ or Garuda. Discussions between the relevant airlines consistent with the existence of the understanding or agreement alleged are admissible to prove that matter and such use is not a hearsay use;

(b)    receipt of evidence linking AirNZ and/or Garuda to the understanding; and

(c)    acceptance of evidence in (a) as involving admissions by ‘co-conspirators’ under s 87(1)(c). The statements thus received are received as evidence of the truth of statements.

28    The evidence in (c) would be irrelevant without (b). There is good reason to think that evidence of the kind in (b) will be tendered and admitted. The evidence in (a) may be received provisionally under s 57. The evidence in (c) will be admissible under s 87 if it is ‘reasonably open’ to conclude that the airlines were acting in furtherance of a common purpose. I do not think that, until the evidence in (b) is tendered, this test is satisfied. If and when the evidence in (b) is tendered, the question of whether the non-hearsay evidence in (c) should be received to prove its truth under s 87(1)(c) can be considered.

29    I do not accept Mr Owen’s second submission that, in this case, there were other innocent explanations consistent with conduct not contrary to s 45. I do so because the question on a civil circumstantial case is not whether the only reasonable explanation of the material is the one put forward by the applicant but rather whether ‘the circumstances raise a more probable inference in favour of what is alleged’: Palmer at [39]. The existence of other reasonable innocent explanations is not a complete answer, as it might be, at least at the level of liability, in a criminal conspiracy case. In any event, and possibly more importantly, the submission again elides questions of proof with questions of admissibility. Here the ACCC seeks to prove that the more likely inference from the available circumstances is that there was an agreement or understanding. Evidence tending to have that effect is not rendered inadmissible because there is other evidence which, if accepted, suggests a different hypothesis to be true. Question of that kind are directed to the final question of what the Court should find. They have little role in a debate about admissibility.

30    AirNZ submitted, thirdly, that the ACCC had decided to prove its case using documents rather than by calling any of the people alleged to have participated in the formulation of the understandings. Having elected to pursue proof by circumstantial means, it was not to be relieved of the burdens consequent upon that decision. I accept this, but I did not apprehend the ACCC sought so to be unburdened.

31    Finally, Mr Owens submitted on AirNZ’s behalf that the argument being pursued by the ACCC was in fact coincidence reasoning governed by s 98. Section 98(1) provides:

98 The coincidence rule

(1)    Evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events or the circumstances in which they occurred, or any similarities in both the events and the circumstances in which they occurred, it is improbable that the events occurred coincidentally unless:

(a)    the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party’s intention to adduce the evidence; and

(b)    the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.

32    No such notices have been served by the ACCC. Mr Owens submitted that the fact that the ACCC was using the material as part of coincidence reasoning was to be seen from paragraph 8 of its written submissions where, inter alia, it was said that the acts of an alleged conspirator may be fixed with the results of another’s acts for the purpose of proving common design because ‘there may a concurrence of time, character, direction and result as naturally to lead to the inference that these separate acts were the outcome of pre-concert, or some mutual contemporaneous engagement’.

33    Ultimately, it will be the ACCC’s onus to establish that the hypothesis of the existence of an understanding or agreement can be proved on the balance of probabilities. Already in this case there are competing hypotheses to explain the two airlines’ announcement that they were increasing or decreasing the surcharges at similar times to the other airlines and by similar amounts. One is that they were bound, along with the other airlines, to do so by Hong Kong law; the other that, as small players in the market, they simply followed the market leaders. Section 98 prohibits the ACCC from advancing an argument that its hypothesis is the more likely given that it is highly unlikely that the airlines made their announcements and changed their surcharge by coincidence.

34    However, that is not how the ACCC opened its case. Its case is, instead, that I should infer the understanding from a large number of factors: the original IATA directive, the Lufthansa index, the various committee meetings, the actions of the HK BAR-CSC Chair and the actions of individual airlines in receiving the minutes and thereafter making pricing decisions. I did not apprehend in any of this that the ACCC contend that an alternative hypothesis of coincidence was unlikely. Its case is consistency not coincidence.

35    Mr Brennan for Garuda made some additional points about the kind of material presently under consideration. First, like Mr Owens, he submitted that care was needed in applying the style of reasoning in Ahern to cases about s 45. In particular, he observed that there was a significant distinguishing feature, which was that in a s 45 case the understanding or the agreement was the very act which constituted the act breaching the requisite law. By this he meant, I think, that whilst one may be prosecuted for conspiring to do something unlawful, such as robbing a bank (an analogy which argument at the Bar table has shown to be curiously attractive to commercial lawyers), in the case of s 45 what was unlawful was the agreement itself. However, I do not think this is, with respect, either correct or a useful basis for distinguishing Ahern. Section 45 is not a rule proscribing agreements or understandings simpliciter; it is a rule proscribing agreements or understandings with a particular character, namely, having the purpose or likely effect of substantially lessening competition. In any event and even if that were not so, I do not see it as providing any reason for distinguishing Ahern’s statement that agreement may be proved by circumstantial evidence consisting of statements made by the protagonists, not necessarily to each other, tendered to prove behaviour consistent with the agreement rather than the truth of the statements.

36    Mr Brennan also submitted that in Ahern there was evidence linking the accused to the conspiracy. It was permissible to prove events showing conspiracy between and A and B against C but only where there was also evidence linking C to the conspiracy. Here there was nothing in evidence linking Garuda to the understandings. I accept that is presently so, but it is clear from the way the ACCC opened its case that it intends to adduce such evidence at least linking Garuda to the alleged understanding by means of the timing of its announcements and surcharge alterations, together with its presence at some meetings. As in AirNZ’s case, this therefore requires only that evidence of the kind presently under consideration be admitted subject to the receipt of evidence linking Garuda to the arrangement or understanding at a later stage of the proceedings.

37    As a variant on this argument, Mr Brennan submitted that the ACCC’s case that there was such an understanding in 2002 was statute-barred and that this complicated the picture for present purposes. I do not agree. The question of whether Garuda may plead a limitation defence has nothing to say about issues of admissibility.

38    Lastly, Mr Brennan submitted that Australian Competition and Consumer Commission v Leahy Petroleum (2007) 160 FCR 321 at 339-340 [52]-[54] stood for the proposition that it was not permissible to use an admission by one co-conspirator against another in s 45 cases. I do not think that that principle is presently apposite. The ACCC does not seek to outflank the hearsay rule by using statements by other airlines as admissions on Garuda’s behalf of the things alleged to have been said. At the moment it uses them only for the non-hearsay purpose of establishing the existence of the agreement or understandings. If and when the ACCC seeks to invoke the co-conspirators rule in s 87(1)(c) to prove the truth of something said by one of the airlines against Garuda (or AirNZ) by means of an admission, this question will arise.

39    In any event, for the reasons I have given, this category of documents ought to be admitted pursuant to s 57(1) of the Evidence Act for the non-hearsay purpose of proving the understandings. If the parties wish, I will direct that its use be so limited. I will consider the use of the non-hearsay material on an admissions basis when the ACCC seeks so to use it.

Third objection: minutes of BAR-CSC, EC and SWG meetings

40    AirNZ submitted that the minutes of these meetings did not fall within the business records exception to the hearsay rule in s 69 of the Evidence Act. In a nutshell, the submission was that the HK BAR-CSC and the EC and SWG were not businesses and that the mere fact that Cathay Pacific appeared to have had possession of the minutes did not mean that they formed part of a record or records kept by it. An allied submission was that, where the minutes contained statements such as ‘[i]t was agreed that the surcharge would be increased’, the word ‘agreed’ was an inadmissible opinion not rescued from inadmissibility by being in a business record.

41    Section 69(1) and (2) of the Evidence Act provide:

69 Exception: business records

(1)    This section applies to a document that:

(a)    either:

(i)    is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or

(ii)    at any time was or formed part of such a record; and

(b)    contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business.

(2)    The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made:

(a)    by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or

(b)    on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.

42    It was not put in dispute on the present argument that the minutes in question had been produced by one or more airlines in response to various compulsory notices. I was told that the minutes had been retrieved in each case from the relevant airline’s stored data. It is clear that the minutes were distributed to the airlines by email and I infer from the fact of production that each airline kept the emails received by its staff, at least for some period of time. I do not know whether – as is likely in most organisations – they were later archived on less expensive storage media or whether they persisted on the relevant airline’s servers. But the relevant point is that the emails and their attachments had been stored by the relevant airlines.

43    About this Mr Owens had two slightly different arguments. The first was that the reference in s 69(1)(b) to something being recorded in a document for the purposes of a business meant that the recording had to be done by the business or entity whose business the records were said to belong to. In this case the preparation of the minutes was carried into effect by the HK BAR-CSC, the EC and SWG so that it could not be accepted, on this view, that the minutes had been recorded by an airline for the purposes of s 69(1)(b). The second argument assumed that a record prepared by a third party might nevertheless satisfy the requirements of s 69(1)(b) but pointed to the requirement in s 69(1)(a) that the records form part of the records belonging to or kept by a business. Here the contention was that mere receipt by an airline of an email attaching minutes was not sufficient to constitute either as a record of or kept by a business.

44    I do not accept the first argument. I do accept Mr Owens’ submission that the business referred to in s 69(1)(b) must be the same as the business referred to in s 69(1)(a). The exception to the hearsay rule in s 69(2) only applies to the representation referred to in s 69(1)(b) so that it follows that s 69 will be of no utility even where a business record under s 69(1)(a) is accepted to exist unless the representation contained in the document which is sought to be tendered is of the kind described in s 69(1)(b), that is, it must be ‘made or recorded in the document in the course of the business, or for the purposes of the business’. That requirement is not new, having first appeared (albeit worded slightly differently) in Part IIC of the Evidence Act 1898 (NSW) after 1976 and Part IIIA of the Evidence Act 1905 (Cth) after 1978: see Evidence (Amendment) Act 1976 (NSW), sch 4; Evidence Amendment Act 1978 (Cth), s 3.

45    It is clear that a representation made by a third party can still be said to be ‘for the purposes of the business’. The learned author of the 8th Edition of Cross on Evidence (JD Heydon, LexisNexis Butterworths, 2010) notes that a valuation report prepared for a business would contain representations which were made for the purposes of the business: see [35215] (although quaere whether such a statement of expert opinion could be a representation about a fact under s 69(2)). The learned author also notes the decision of Needham J in Re Marra Developments Ltd and the Companies Act [1979] 2 NSWLR 193 at 205-206 which appears to deny the view that such a third party document would engage s 69(1): ‘I do not think that statements by outsiders, such as an officer of the Bank of New South Wales, relating to matters which are of interest to Partnership Pacific Ltd can be said to have been made in the course of, and for the purposes of, that business. Therefore, I do not think that this document is admissible’.

46    There is a similar statement by Franki J in Trade Practices Commission v TNT Management Pty Ltd (1984) 56 ALR 647 at 659:

In general, a statement of fact in a letter from A to B found in the files of B is not admissible as a business record of B merely because it was filed and kept by B. This is because statements in the letter are not made in the course of, or for the purposes of, B’s business.

47    Despite those two statements, I agree with the observations of the learned author of Cross that an outsider may make a representation ‘for the purposes’ of a business even though separate from the business in question. And, indeed, Drummond J accepted as much in Tubby Trout Pty Ltd v Sailbay Pty Ltd (1992) 42 FCR 595 at 598-599. He doubted whether Franki J had truly meant what he said in the quotation above (noting that, a few lines later, Franki J may have accepted that a third party invoice might fall within s 7B(1)(b) of the Evidence Act 1905 (Cth)). In any event, if Franki J had said that, Drummond J thought it was wrong. He explained (at 599):

However, the question of admissibility of a document under s 7B [i.e. the predecessor to s 69] will depend in large part upon the nature of the document in question. There is a difference, it seems to me, between an invoice and a letter received by a business from an outsider. If the evidence shows that in the case of an invoice, for example, it was kept in a file of invoices sent by outsiders who have supplied goods and services to the business and that the invoice purports to record the supply of goods or services of a kind commonly used by the business in the course of its activities, that would, I think, be sufficient to satisfy s 7B(1)(b) [i.e. s 69(1)(b)]. Such a document could fairly be said to be made for the purposes of the recipient business although it was also made in the course of and for the purposes of the other business that supplied the goods or services listed in the invoice.

48    This approach seems, with respect, to have much to commend it. It is not unnatural to think of the statements contained in an invoice as being created by the entity issuing it not only for the purposes of its own business but also for the purposes of its intended recipient.

49    This is consistent with the approach taken in Cross and also with the decision of Evans J in State of Tasmania v Lin [2011] TASSC 54 at [27]-[29].

50    The question in each case will, therefore, be twofold. First, was the representation made or recorded in the document ‘in the course of the business’? Secondly, was it made or recorded ‘for the purposes of’ the business? The first inquiry will largely devolve to an examination of the business involved. But the second will invite consideration of the purposes of the business which made the representation and here it should be accepted that one business may intend its documentary output to serve a record keeping function for other businesses. Invoices and receipts will be the paradigm examples.

51    The documents in question here are minutes of the HK BAR-CSC, the EC and the SWG. The purpose of a minute of a meeting is twofold. It performs a role as the official record of what occurred at the relevant meeting for the purposes of the organisation constituted or administered by the meeting in question. But it also serves a secondary purpose; as an official record of what occurred at the meeting for the persons attending the meeting or, as will often be the case, the organisations they represent.

52    That observation means that each of the minutes involved contains representations which were included in them, not just for the purposes of the BAR and its committees, but also for the purposes of the airlines who were the BAR’s members. Accordingly, I reject Mr Owens’ first argument.

53    I turn then to Mr Owens’ second argument, that the minutes did not form part of the records ‘belonging to or kept by the business’. It is useful initially to assume that the business here is the business from whose electronic records the minutes were retrieved. I struggle to see how electronic records recovered from an airline can be said not to be ‘kept by’ that business. But AirNZ submitted that support for this proposition could be found in TNT Management and Tubby Trout.

54    I do not think TNT Management assists. It was concerned with whether an outsider’s document contained statements which could be said to have been made ‘for the purposes’ of the outsider’s business. I do not read it as being directed to whether such a document is itself a business record of the receiving party.

55    On the other hand, AirNZ is assisted to some extent by Tubby Trout. It is plain that Drummond J explicitly considered the question in that case of whether a letter received by a firm from another firm was a record of the receiving firm’s business (the question posed, at the time, by s 7B(1)(a) and, now, by s 69(1)(a)). Drummond J did not accept that mere possession of a document by a firm was sufficient to constitute the document possessed a record (at 597-598):

In my view, for s. 7B(l)(a) to be satisfied it is not enough that a document is in the possession of the operator of a business and it is not enough that the letter in terms deals with topics relevant to the conduct of that business. If the position were that the letter were received and passed on to [the recipient’s] solicitors for advice and then retrieved for the purposes of the discovery exercise, it would not, as a matter of fact, be able to be said to be part of [the recipient’s] records. If it was simply kept by the recipient in its office and not incorporated in some form of record system, similarly I do not think it could be said, as a matter of fact, that the letter formed part of a record of the business of [the recipient]. It is the fact that a document can be shown to be part of a store of information that can be said to be the records of a business that provides a sufficient acknowledgment by the operator of that business of the document’s reliability as a record of facts concerning the business that justifies the use in evidence of otherwise inadmissible hearsay.

56    So one would not expect a copy of a newspaper kept at a business’ reception to be a record in this sense. And, although I do not need to decide it, there may be many items of correspondence received by a firm which do not get filed and hence do not ever form part of a record. Advertisements for office stationery, invitations to Christmas parties and thank you notes are all examples of the documentary correspondence received by a business which would not normally be expected to be business records.

57    The question of email, however, is somewhat different. Because the email system is built on a highly formalised file system, all the communications which take place over it are kept, at least for some time, and often permanently. In that sense they are records and, where an email system is maintained by a firm, it is natural to see the records thus maintained as records of that business. Textually, it is difficult to see that records of that kind are not ones which are ‘kept by’ a business, the critical wording in s 69(1)(a).

58    Although there seems to be no direct treatment of this question, the modern practice of courts in relation to email points in this direction. It is known that ‘kept by’ in s 69(1) means ‘retained or held’: ASIC v Rich (2005) 191 FLR 385; [2005] NSWSC 417 at [190] per Austin J; Roach v Page (No 15) [2003] NSWSC 939 at [5] per Sperling J; Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 at [122] per Barker J. This has led to the assumption – implicit until AirNZ submitted to the contrary – that emails are records retained by a business: see, for example, ASIC v Rich (2005) 54 ACSR 28; [2005] NSWSC 471 at [42]-[44] per Austin J; Osborne v Boral Resources (NSW) Pty Ltd [2012] NSWCA 155 at [12] per Bathurst CJ (Allsop P concurring) and especially at [18] where Macfarlan JA said that he thought that ‘it should be inferred that a copy of that email was retained by [the company], for at least a short period, as part of the records of its business’; see also Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 4) (2011) 194 FCR 479 at [10] per Collier J; Blomfield v Nationwide News Pty Ltd (No 2) [2009] NSWSC 978 at [20] per Harrison J.

59    Of course, not every email sent or received by an employee to or from his or her work email address will be for work purposes but this does not mean that it ceases, as a result, to be a business record. One justification for email retention is to ensure and/or encourage responsible email use and this, by itself, is probably a purpose of the business. In practice, the communications contained in a personal email from a work address are unlikely to satisfy the requirements of s 69(1)(b); that is, the representations contained in them will not have been made in the course of or for the purposes of the business, but this does not mean that they are not business records.

60    In those circumstances, I conclude that emails received by a firm (including attachments) that are stored even for a brief period by the firm are business records. I infer that the minutes in question were so stored because of the fact of their retrieval. In those circumstances, I accept that the minutes of the HK BAR-CSC, the EC and the SWG are all business records containing representations which, in principle, satisfy the requirements of s 69(1)(b).

61    I reach that conclusion for another reason, too. The HK BAR is a business within the meaning of s 69. From the documents I have been taken to concerning the HK BAR, it is apparent that one of its functions is to provide a forum for members to discuss issues of concern to the international airline industry in HK. It also lobbies on behalf of airlines with the CAD and makes applications on the airlines’ behalf. This is plainly an ‘undertaking’ within the meaning of cl 1(1)(a) of the definition of a ‘business’ in the Dictionary to the Evidence Act. It does not matter that it is not conducted for profit or that it is conducted overseas: cl 1(2). Each of the HK BAR’s subcommittees are, in consequence, part of the same business. All that being so, the records of the HK BAR (and its various committees) are records created for the purpose of the HK BAR’s business.

62    Mr Owens then submitted that, even if that were so, s 69(1) did not have the effect of rendering statements of opinion appearing in the minutes as admissible. He gave as an example a sentence in one set of minutes (ACCC.009.097.0125) which contained this statement; ‘Member airlines agreed that there would be no reduction to the ISS charge’. It was said that the word ‘agreed’ was a statement of opinion, that s 69 applied only to asserted facts and, therefore, that it was inadmissible. It was also submitted that, quite apart from that problem, the requirements for the receipt of lay opinion evidence had not been satisfied.

63    A considerable body of first instance decisions have concluded that an opinion as to the existence of a fact falls within the scope of the term ‘asserted fact’ in s 69: ASIC v Rich (2005) 191 FLR 385 at 433-434; [2005] NSWSC 417 at [206]-[207] per Austin J; Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 at [3] per White J; Land Enviro Corp Pty Limited v HTT Huntley Heritage Pty Limited [2012] NSWSC 177 at [95] per Stevenson J; Ringrow Pty Ltd v BP Australia Ltd (2003) 130 FCR 569 at 573 per Hely J; Supetina Pty Ltd v Lombok Pty Ltd (1984) 5 FCR 439 at 442 per Spender J; Investmentsource v Knox Street Apartments [2007] NSWSC 1128 at [19]-[21] per McDougall J; Street v Luna Park Sydney Pty Limited [2007] NSWSC 688 at [5] per Brereton J; SPAR Licensing Pty Ltd v MIS QLD Pty Ltd (No 2) [2012] FCA 1116 at [238] per Griffiths J.

64    I should not depart from this view of s 69 unless persuaded that it is plainly wrong. I am not of that view. It is true that French CJ, Heydon and Bell JJ described this approach to the construction of s 69 as a ‘little strained’ in Lithgow City Council v Jackson (2011) 244 CLR 352 at 362 [11], but I reject the submission that that statement should be characterised as considered dicta of the High Court binding on me. I take that course because in the same paragraph their Honours also said:

However, it was not argued in this Court that the authorities which state that “asserted fact” includes an opinion in relation to a matter of fact are wrong. It is not necessary further to deal with this point, which the parties did not debate at any stage.

65    I would not, in any event, accept that the mere fact that an interpretation is ‘strained’ means inevitably it is wrong. Here the legislation was always intended as a beneficial reform. If ‘asserted fact’ does not extend at least to lay opinion as defined in s 78 then an important, reliable and common form of business record will be inadmissible. For example, a building site log recording that the site is ‘slippery due to rain’; a hotel incident report that a patron was ‘drunk’; a police pocket note that a person was ‘angry’ and so on.

66    I reject also the submission that the word ‘agree’ did not satisfy the requirements of s 78. It was not suggested that s 78 was inapplicable to non-testimonial evidence, an issue foreclosed by Lithgow. Instead the debate was whether s 78 was satisfied: It provides:

78 Exception: lay opinions

The opinion rule does not apply to evidence of an opinion expressed by a person if:

(a)    the opinion is based on what the person saw, heard or otherwise perceived about a matter or event; and

(b)    evidence of the opinion is necessary to obtain an adequate account or understanding of the person’s perception of the matter or event.

67    It was submitted for AirNZ that, in the present case, the exemplar lay opinion outlined at [62] was not ‘necessary to obtain an adequate account or understanding of the person’s perception of the matter or event’ (that is, s 78(b) was not satisfied). The ACCC submitted that this approach was contrary to the way the High Court had approached the critical minutes in ASIC v Hellicar [2012] HCA 17 at [69] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ, at [210] per Heydon J where the minutes had recorded that the critical press release had been approved and where the High Court said that those same minutes had been admitted as business records.

68    I am not sure that too much can be drawn from that, as the issue was not argued in Hellicar.

69    The approach to be applied by me is dictated by the language of s 78 and the High Court’s decision in Lithgow. The lay opinion rule in s 78 clearly needs to be accommodated to the business records provision in s 69. Should the relaxation in giving testimonial evidence about facts in the form of opinions permitted in court be the same as the analogous relaxation about similar statements in documents? That question, interesting though it may be, is not for this Court. The tasks for me are:

    the identification of what the person saw, heard or otherwise perceived (s 78(a));

    an inquiry into whether the opinion is necessary to give an account of what he or she saw (s 78(b)).

70    For reasons later to be given, I may draw inferences about these matters from the documents themselves: see below at [92]-[104].

71    On the s 78(a) question, I infer that the author of each minute was present, saw a number of people speak and finally assent to an agreed position. On the s 78(b) question, French CJ, Heydon and Bell JJ in Lithgow at 371-372 [46] approved this passage cited by Wigmore (Evidence in Trials at Common Law (Little Brown, 1978), Vol 7 at 13) from Sydleman v Beckwith (1875) 43 Conn 9 at 12-14:

[O]n the ground of necessity, where the subject of the inquiry is so indefinite and general as not to be susceptible of direct proof, or where the facts on which the witness bases his opinion are so numerous and so evanescent that they cannot be held in the memory and detailed to the jury precisely as they appeared to the witness at the time.

72    In my opinion, the distillation of the events at a meeting leading to agreement are so numerous and evanescent that it would be unrealistic either to require an explication of them in a minute of the relevant meeting or in the testimony of a witness giving evidence as to what happened at the meeting.

73    In those circumstances, I conclude:

(a)    the committee minutes contain representations made for the purposes of each member airline’s business (and also of the HK BAR);

(b)    statements such as ‘its was agreed’ are admissible as lay opinions under s 78;

(c)    such statements are also representations about asserted facts to which s 69 applies; and

(d)    the minutes are business records of each airline because they were received as emails on each airline’s email system. They are also business records of the relevant BAR.

74    It follows that the various minutes are admissible.

Fourth objection: historical matters

75    The structure of the ACCC’s case against AirNZ in relation to HK is as follows:

(a)    AirNZ was a member of IATA, the industry peak body for airlines. In 1997 IATA formulated, but did not implement, a proposed fuel surcharge methodology which would permit IATA to announce fuel surcharges with fluctuations in the fuel price and permit member airlines to implement those surcharges. This was known as Resolution 116ss and the index established by it was known as the IATA Fuel Price Index;

(b)    this index was published for some time and airlines, including AirNZ, implemented the surcharge announced;

(c)    the US Department of Transport eventually indicated that it would not approve the index on 14 March 2000;

(d)    IATA then wrote to its members and indicated it would no longer be publishing its index;

(e)    during 2000, Lufthansa published on a website maintained by it a largely similar index;

(f)    airlines, including AirNZ, then altered their fuel surcharges in line with Lufthansa’s index;

(g)    in July 2002, a number of airlines – including AirNZ – reached an understanding to apply a modified Lufthansa methodology to the fuel surcharges and to apply to the CAD for approval of those charges;

(h)    thereafter, as the index fluctuated, fresh understandings are alleged to have been reached between airlines, including AirNZ, to make fresh applications to the CAD in respect of the altered index level; and

(i)    it is alleged that there was also a single overreaching understanding to impose fuel surcharges in accordance with the index as approved by the CAD.

76    AirNZ alleges that the ACCC’s allegations about IATA Resolution 116ss was not probative of any issue and, in particular, was not relevant to the allegations concerning the Lufthansa methodology and the CAD applications.

77    The issues in the proceedings are defined by the pleadings. A series of matters are alleged in the AirNZ FASOC at [46]-[56] which are not admitted. These include allegations that:

    IATA has 230 members making up 90% of scheduled international traffic;

    there was a special composite meeting of the Cargo Tariff Coordinating Conference of IATA on 14-16 January 1997 to discuss whether IATA should impose a fuel surcharge in defined circumstances;

    IATA was informed in May 1998 that the US Department of Trade would not approve Resolution 116ss unsupported by an economic justification;

    the fuel surcharges imposed by AirNZ in February 2000 were in the amount of US$ 0.10/kg or € 0.10 kg (the same amount as in Resolution 116ss);

    IATA applied for US regulatory approval but that this was denied;

    Lufthansa began to publish its own index in February 2000 (shortly before the US had indicated to IATA that it would not approve Resolution 116ss); and

    IATA warned its members that publishing fuel indexes with a view to co-ordinating pricing action could include an illegal conspiracy.

78    On the state of the pleadings, these are all issues. AirNZ has not applied to have any of these parts struck out under r 16.21(1)(e), Federal Court Rules 2011 as failing to disclose any reasonable cause of action. I do not understand how they could be irrelevant whilst the ACCC's allegations remain in the FASOC and remain unadmitted. The ACCC is permitted to prove its pleaded case.

79    Despite that, debate was jointed by the parties on the issue of whether, and if so how, the ACCC’s allegations about Resolution 116ss and the Lufthansa Index could assist its case in relation to events in HK during and after July 2002. I can understand why those arguments might show that the allegations about Resolution 116ss and the Lufthansa Index might be liable to be struck out, but I do not understand how, if they have not been struck out, they do not define the issues for evidentiary purposes.

80    Leaving that matter aside AirNZ’s point, as I understood it, was that knowing the history which led to the initial HK understanding in July 2002 did not assist the ACCC in making good its case in 2002 or at any time later.

81    Mr Halley for the ACCC submitted that the history revealed that the airlines had been actuated by a single purpose since 1997 which was to avoid competition inter se resulting from fluctuations in the price of aviation fuel. This was why the understandings had been engaged in HK after July 2002 and it was the same purpose on display with Resolution 116ss and the Lufthansa Index. Those events were relevant because they showed the same purpose.

82    Mr Owens submitted that this invoked tendency or coincidence reasoning contrary to ss 97 and 98 of the Evidence Act. I do not agree. The ACCC does not allege that its case that AirNZ reached an agreement in 2002 is made more likely because it had reached similar agreements in the past. Its case, in effect, that its conduct was all actuated by the same motive. It is not tendency or coincidence evidence. It is direct evidence of the existence of a motive in the airlines to engage in the conduct alleged.

83    Garuda made an additional point. It submitted that, to the extent that this was a circumstantial case, there was an alternate innocent explanation. Granted that be so, I do not accept, as I have already explained, that this has the consequence of inadmissibility: see above at [24].

84    I do not accept that the historical matters are inadmissible.

Fifth objection: documents relating to the introduction of the Singapore competition law

85    In 2005 Singapore introduced, or was soon to introduce, a competition law. AirNZ objected to a number of documents touching upon this topic which may suggest that the competition law’s introduction led to a change in the airlines’ behaviour. One such is ACCC.008.016.0256, which is an email from Winston Tan to Alvin Lau of 17 March 2005 in these terms:

With the inmtroduction [sic] of competition law (anti-trust as some of us may know it as), carriers now communicate very little about pricing issues.

86    AirNZ made two submissions. First, it was said that there was no evidence about the content of the Singaporean competition law so that I would be unable to gauge what this meant. However, in the absence of any evidence about that topic I would proceed on the basis that its content is the same as Australian law where that can be given practical content: Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331 at 343 [16] per Gleeson CJ, 372 [125] per Gummow and Hayne JJ, 411 [249] per Callinan J and 420 [275] per Heydon J. At least for a debate about admissibility, I think I should approach the issue on the basis that the ACCC is likely to be able to demonstrate that Mr Tan and Mr Lau are discussing a law which contains a provision like s 45 of the Trade Practices Act.

87    Mr Owens submitted secondly that Mr Tan and Mr Lau were not AirNZ employees and that a change of behaviour in other airlines proved nothing about AirNZ. I reject this for reasons already given in relation to Ahern above at [25] and [35]-[36]. The exchange (and exchanges of that kind) are capable of proving: that the airlines party to them thought that their prior conduct breached a law like s 45; and that the airlines thought the prior conduct consisted of a collusive arrangement. The evidence is used for that non-hearsay purpose. If at a later time an attempt is made to have it admitted under s 87(1)(c), the issues which will then arise may be considered.

88    All that is presently required is provisional admission under s 57 of the Evidence Act pending the adduction of that evidence. At this stage, I would be prepared to direct that its use be limited to non-hearsay purposes.

Sixth objection: authenticity

89    AirNZ object to a number of documents upon the basis that they had not been authenticated. AirNZ points to two examples. The first is ACCC.011.006.0215. This document appears to be a spreadsheet. I will not set out its entire contents, but it contains six fields which appears to summarise the position in relation to the fuel surcharge out of various international airports including Hong Kong, Jakarta, Denpasar and Singapore. To give the flavour, the entry for Singapore (with the relevant field headings) is as follows:

90    The ACCC did not submit to me that this document was obtained from any particular airline or pursuant to any particular process. Strictly, I do not know directly where the document comes from or who produced it.

91    For reasons which follow, AirNZ’s authenticity objection should be rejected.

92    It is useful to begin with some basic propositions:

1.    There is no provision of the Evidence Act which requires that only authentic documents be admitted into evidence. The requirement for admissibility under the Act is that evidence be relevant, not that it be authentic. On some occasions, the fact that a document is not authentic will be what makes it relevant, i.e., in a forgery prosecution. In other cases, there may be a debate as to whether a particular document is or is not authentic, for example, a contested grant of probate where it said that the testator’s signature is not genuine.

2.    In cases of that kind, the issue of authenticity will be for the tribunal of fact to determine. In cases heard by a judge alone, this will be the judge at the time that judgment is delivered and the facts found. In cases with a jury, it will be the jury.

3.    The question of what evidence will be admitted is a question of law for the tribunal of law, which will be the Court.

4.    Since authenticity is not a ground of admissibility under the Evidence Act, the issue of authenticity does not directly arise for the tribunal of law’s consideration at the level of objections to evidence.

5.    What does arise for its consideration is the question of relevance under s 55. If the evidence is relevant it is admissible: s 56. It will be relevant under s 55 if the evidence is such that ‘if it were accepted, [it] could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue’.

6.    The question of a document’s authenticity is relevant only to the tribunal of law’s consideration of relevance under s 55. It has no other role.

7.    In that inquiry, the question for the tribunal of law is not whether the document is authentic but whether receipt of the document could, to paraphrase s 55, rationally affect the assessment of the probability of a fact.

8.    If there is raised a question about the authenticity of a document (and assuming that, if authentic, it would otherwise be relevant to an issue) then there will be an issue in the proceedings about its authenticity. This will be a question for the tribunal of fact to resolve, if the document is admitted.

9.    The question for the tribunal of law, by contrast, will be whether the document is relevant to a fact in issue under s 55. That is, the question will be whether the document can rationally affect the assessment of the probabilities of the fact, including its authenticity.

10.    What materials may be examined in answering this question? The answer is provided by s 58:

58 Inferences as to relevance

(1)    If a question arises as to the relevance of a document or thing, the court may examine it and may draw any reasonable inference from it, including an inference as to its authenticity or identity.

(2)    Subsection (1) does not limit the matters from which inferences may properly be drawn.

11.    The position then is clear. In answering the only question before the tribunal of law – relevance – the tribunal may examine the document to see what may be reasonably inferred from it (s 58(1)). It may also examine other material (s 58(2)).

12.    The tribunal of law does not find that the document is authentic. It finds that there is, or there is not, a reasonable inference to that effect and hence that the document is, or is not, relevant. If there is a reasonable inference that the receipt of the document will rationally affect the probability of a finding of fact, then the matter may to go to the tribunal of fact which will then determine at the end of the trial whether the document is authentic and whether the fact is proved.

13.    At no time does the tribunal of law determine that the document is or is not authentic because this is not a question for it. It may, however, determine that no reasonable inference to that effect is open and thereby conclude that it is not relevant. In a jury context, that will be similar to taking the question of authenticity away from the jury. Analytically, it will be the same where the tribunal of fact is a judge.

14.    In deciding relevance (i.e. whether the tribunal of fact could reasonably infer that the document (otherwise relevant) was authentic), the tribunal of law is explicitly authorised by s 58(1) to ask what inferences as to authenticity are available from the document itself. That is what s 58(1) says.

93    It will follow that AirNZ’s submission that ‘no inference as to authenticity can be drawn from the face of these documents’ ought to be rejected. In determining a relevance objection, that is precisely what s 58(1) permits.

94    AirNZ’s submission is, however, supported by authority. In National Australia Bank v Rusu (1999) 47 NSWLR 309 at 313 [19] Bryson J said of s 58(1):

In my opinion, a question of authenticity is not a question as to the relevance of documents within s 58(1), which treats authenticity as part of the material on which relevance may be determined.

95    His Honour concluded at 312 [17] that a document could not be used to authenticate itself. This reasoning involves the following problems:

(a)    since authenticity is not a question which arises for the tribunal of law under the Evidence Act, it is not clear what the ‘question of authenticity’ to which his Honour refers is, if it is not the question of relevance; and

(b)    it leaves s 58(1) with no work to do. If Rusu is correct, a party may ensure that recourse may not be had to the content of a document in determining admissibility by calling the objection ‘Authenticity’ rather than ‘Relevance’, and it may do this even though the former does not appear in the Act and the latter does.

96    Apart from those problems, the reasoning led his Honour to this corollary at 312 [17]:

Before a business record or any other document is admitted into evidence it is obviously necessary that there should be an evidentiary basis for finding that it is what it purports to be. Documents are not ordinarily taken to prove themselves.

97    The passage involves, with respect, a confusion between the role of the Court as the tribunal of law in admitting relevant evidence and the role of tribunal of fact in determining, if it be an issue, whether a document is authentic.

98    The question for the former is not, as Rusu suggests, whether the document proves itself. The question is whether it is relevant. If it is alleged not to be authentic it will still be relevant as long as there is material from which its authenticity may reasonably be inferred. By s 58(1), that material expressly includes what may reasonably be inferred from the document itself.

99    I ought not to depart from Bryson J’s interpretation of s 58(1) unless persuaded it is plainly wrong and this is particularly so in the case of a provision operating in more than one jurisdiction, such as the Uniform Evidence Acts: Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2003) 133 FCR 190 at 206 [52] per French J. The ‘plainly wrong’ test requires me to ask whether the disposition of the earlier controversy (here Rusu) has somehow miscarried: cf. BHP Billiton Iron Ore Pty Ltd v National Competition Council (2007) 162 FCR 234 at 253 [83]-[84] per Greenwood J. In my opinion the decision in Rusu satisfies the test because it:

(i)    overlooks and confuses the different functions of the tribunals of fact and law, eliding them;

(ii)    overlooks the fact that the Act does not make unauthenticated documents inadmissible. The criterion the Act operates on is relevance; and

(iii)    concludes that only authentic documents may be admitted into evidence with the consequence that (a) all forgery prosecutions must fail and (b) no jury ever gets to decide whether a document is authentic.

100    These suggest, and I conclude, that the reasoning in Rusu, with respect, is plainly wrong. Rusu has been criticised before. It was doubted by Gyles and Weinberg JJ in O’Meara v Dominican Fathers [2003] ACTCA 24 at [85] and it was described as ‘controversial’ by Madgwick J in Lee v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 305 at [25].

101    Rusu is also inconsistent with ALRC Report 26 on Evidence (Australian Law Reform Commission, Evidence, Report No 26 (1985)). That report discussed at [979]-[981] the previous position at common law where self-authentication was not possible (as Rusu holds) and then recommended at [985]-[986] that the position be liberalised by making the issue of authentication one of relevance. At [985] it said this:

Self-Authentication. There is a strong case for liberalizing the law by permitting the courts to take content of the proffered evidence into account together with the surrounding circumstances in determining its authenticity. This is particularly so in relation to writings. ‘The existing standard of authentication creates only a slight obstacle to the witting or unwitting presentation of forge writings. The present ‘agnostic’ approach imposes unnecessary and considerable cost burdens. Further, authentication difficulties usually arise where the writing did not originate with the party tendering it and the opposing party has the knowledge as to its origins. As to objects, self-authentication or identification is not likely to be possible. Proposals are included [in the draft legislation annexed to the report] which permit inferences to be drawn from a document in determining its authenticity. In this way the proposals recognise the reality that most documents produced in court are authentic.

(Footnotes omitted, emphasis added.)

102    Section 58(1) is the fruit of that recommendation. It is almost identical in terms to cl 46 of the draft legislation annexed to ALRC 26 and cl 53 of that annexed to ALRC 38 (Australian Law Reform Commission, Evidence, Report No 38 (1987)). Rusu’s interpretation results in the entire point of s 58(1) being thwarted and a return to the common law position which s 58(1) was explicitly intended to alter. I note the learned author of Odgers shares the same opinion (S Odgers, Uniform Evidence Law (Thompson Reuters, 10th ed, 2012) at [1.3.480]).

103    It is true that the critical passage in Rusu was apparently approved by the NSW Court of Appeal in Daw v Toyworld (NSW) Pty Ltd [2001] NSWCA 25 at [46] per Heydon JA (Priestley and Sheller JJA agreeing). However, that was an obiter dictum and does not bind me. It is also true that Rusu was followed by Austin J in ASIC v Rich (2005) 191 FLR 385; [2005] NSWSC 417 at [116], but even his Honour thought that Rusu was intended to be ‘illustrative rather than comprehensive’: see [99]. For the reasons I have given, I do not share that view. Rusu is an accurate statement of the common law but s 58(1) was intended to alter that position.

104    In those circumstances, I decline to follow Rusu. Accordingly, I do not accept the objection to the first document. It is reasonable to infer from its contents that it is a document generated by Thai Airways about fuel surcharges.

105    AirNZ also pointed to ACCC.001.016.0258 as an example of a document with the same problem. This is a document headed ‘Conference Call 22 Dec 2004’. There is set out in the document an apparent reporting by the cargo manager for each airport in the preceding week. It is not expressly apparent which airline is involved although the mentioning of the names of various competitors shows to an extent which airlines are not. Mr Halley told me during the course of his opening that it was a Qantas meeting.

106    It is reasonable to infer from this document that:

(a)    it was generated by an airline operating in Asia and the United States in the cargo business;

(b)    it competed with at least Polar Air and Singapore Airlines;

(c)    the document was prepared by a person attending a telephone conference in which the relevant cargo manager reported the position in that manger’s airport;

(d)    that person heard what the cargo managers said;

(e)    what the cargo managers said about the position in their respective airports was very likely to be accurate;

(f)    the document was stored electronically on the airline’s computer;

(g)    if tendered, it will be relevant in the Ahern sense for the non-hearsay purpose of showing agreement or understanding.

107    It is reasonable to infer that it is what it appears to be. AirNZ then submitted that, when the nature of the document was not apparent from its face, it could not satisfy the business records provisions. In light of my conclusion that s 58 permits me to draw reasonable inferences as to authenticity from the terms of each document, the minor premise of this submission is not made good.

Seventh objection: documents relevant to the HK Security Surcharge

108    Objection by way of example was taken to ACCC.001.504.0054 and ACCC.002.012.0285. I will not set these out. They show, if accepted, that some airlines made individual applications to the CAD. AirNZ submitted that the only issue is what HK law required. I reject this objection. It may well be that the requirements of HK law turn on what the HK CAD in practice required or permitted. AirNZ sought, in the alternate, the making of a s 136 direction. I decline this as I do not see that it is necessary. The fact that some airlines made individual applications is the fact which these documents prove. What may be inferred from what they prove is a matter for submission which I will not truncate through a s 136 order.

Ruling on objections raised by Garuda

109    Garuda objected to each of the categories of documents to which AirNZ objected on the same bases and, during the course of its counsel’s address, adopted the same nominal structure as AirNZ had. However, its written submissions (and address) developed other themes which I have experienced some difficulties in reducing into a clear form. To aid clarity, these points were as follows:

(a)    objection was taken to ACCC.009.070.0002;

(b)    the ACCC needed to prove the authority of various committees to act for Garuda to establish the admissibility of its case against Garuda;

(c)    the material relied upon by the ACCC to prove that Garuda authorised the actions of the HK BAR-CSC, the SWG and the EC were either insufficient for that purpose or inadmissible;

(d)    as to the insufficiency of the material referred to in (c), Garuda submitted that certain documents showed something different to that which the ACCC submitted;

(e)    as to inadmissibility, Garuda submitted that:

(i)    the evidence relied upon by the ACCC to show that Garuda completed and returned a surcharge survey to the HK BAR-CSC was inadmissible;

(ii)    the evidence relied upon by the ACCC to show that Garuda attended a meeting of the HK BAR-CSC in September 2001 (where the fuel surcharge was discussed), a meeting of the HK BAR-CSC on 2 December 2002 or a meeting on 12 June 2003 was all inadmissible;

(f)    the fact that Garuda is silent in the face of the minutes of various meetings being distributed did not permit an inference of authority to be drawn;

(g)    the minutes of the meetings of the HK BAR-CSC, SWG and EC were inadmissible hearsay;

(h)    the communications by those same bodies to Garuda were irrelevant and therefore inadmissible (because there was no evidence that Garuda had authorised the acts of those committees);

(i)    internal communications of other airlines were inadmissible hearsay;

(j)    market announcements of other airlines were inadmissible hearsay;

(k)    all communications between other airlines were inadmissible hearsay.

110    The document at (a) falls into category (i). Categories (g)-(i) and (k) have been dealt with above at [4]-[74] in my treatment of AirNZ’s objections. I reject them again. They proceed on the erroneous assumption that the primary relevance of the evidence is as to its truth when this is not so. Category (j) is governed by the same principle. The market announcements are relevant to prove conduct consistent with, and therefore probative of, the understandings alleged.

111    Categories (b) and, to an extent, categories (d) and (f) proceed from a misconception as to the ACCC’s case. That case is not that Garuda authorised the BAR-CSC, SWG or EC to enter into understandings on its behalf but rather that the SWG and EC were authorised to deal with surcharges and the like. This is apparent from paragraphs 107 and 108 of the Amended Statement of Claim against Garuda:

107.    In or about December 2003, a sub-committee of the HK BAR-CSC known as the Surcharge Working Group (the “Surcharge Working Group”) was formed. The Surcharge Working Group had authority to act on behalf of HK BAR-CSC members in relation to insurance, security and fuel surcharges.

108.    At a meeting of the HK BAR-CSC on or about 15 March 2004, an Executive Committee of the HK BAR-CSC (the “HK BAR-CSC Ex Com”) was formed and given authority to deal with surcharges, including fuel and security surcharges.

112    As I have explained above at [27] in relation to the AirNZ objections, proof of the understanding or agreement is said by the ACCC to occur in two, and possibly three, steps:

i.    proof of the existence of an understanding between at least two airlines. This will be circumstantial in nature and will include evidence not only of what the airlines were doing but of what they were saying to each other and/or third parties. This evidence is relevant for the non-hearsay purpose of proving conduct tending to show the existence of an agreement;

ii.    evidence linking Garuda to that agreement. This may consist of the fact that Garuda moved its prices in parallel with the other airlines. It may also consist of its receipt of minutes and so on. Again, this has little to do with authority;

iii.    if Garuda be shown to be one of the parties to the agreement, the question of the admissibility against it of admissions made by other airlines will arise (here the question under s 87(1)(c) will be whether there is reasonable material to that effect).

113    Garuda’s submissions therefore pose the wrong question. I reject the objections to categories (b), (d) and (f).

114    Category (c) is a compendious form of categories (d) and (e) and I have dealt with category (d) already.

115    This leaves category (e). Although the matter could be clearer I take this to be an objection to:

i.    ACCC.008.004.0095;

ii.    ACCC.008.004.0097;

iii.    ACCC.008.027.0120;

iv.    ACCC.008.004.0086;

v.    ACCC.008.004.0087;

vi.    CXA.001.028.300.001400; and

vii.    ACCC.008.004.0312.

116    I deal first with (i)-(iii). I admit (iii). It is a letter from the Chair of the HK BAR-CSC to the CAD dated 4 October 2001 enclosing a list of airlines who had voted in favour of imposing an insurance surcharge of HK$0.5/kg. The attached list (at ACCC.008.027.0121) includes Garuda. The objection was based on the proposition that the Chair of the HK BAR-CSC would not have personal knowledge of the fact asserted, i.e., that Garuda had voted in favour. It is true that this is required by s 69(2)(a), but Garuda’s argument overlooks s 69(2)(b) which makes admissible such statements if made ‘on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact’.

117    It is reasonable to draw the inference that the Chair of the HK BAR-CSC obtained the information indirectly from the person who prepared the attachment which listed the airlines who had voted in favour of the proposal. It is reasonable to infer that the list was prepared by a person who had access to document (i) (ACCC.008.004.0095), which was last updated on the day before the Chair’s letter. It is a spreadsheet setting out the results of a survey administered by the HK BAR-CSC to the airlines in which their attitudes to, and proposals about, levying a surcharge were recorded. It is reasonable to infer that this document was prepared within the HK BAR-CSC by a person or persons having access to the returned surveys. No other organisation would have had that material. It is reasonable to infer that the airlines would have had personal knowledge of the matters referred to in the surveys.

118    It is also a reasonable inference that the summary attached to document (iii) was drawn from document (i) because it is difficult to conceive of any other way it could have come into existence.

119    Document (ii) appears to be another document prepared from the spreadsheet in (i). It is reasonable to infer that it was prepared by someone having access to the survey results because the erroneous reference to ‘35’ has been changed by hand to ‘36’ (the missing airline being United). For similar reasons as that applying the case of documents (i) and (iii), I conclude that the objection based on s 69(2) does not succeed. I did not apprehend an objection based on s 69(1) to be advanced. I therefore admit (i)-(iii).

120    Documents (iv)-(vii) are all attendance lists for meetings which appear to show that Garuda had been present at certain meetings. The point made was that there was no basis to conclude that whoever filled the forms out knew that the person attending on behalf of a particular airline was from that airline. To take the example of document (v), it was said that the fact that list showed a Mr Kenneth Lam and Mr Paul Kwoh attending for Garuda could not be tendered against Garuda to prove it was represented at the meeting. In this particular case, this was submitted to be all the more so because there is no evidence as to who either of those gentlemen are. This is, essentially, an objection to the authenticity of the document. For the reasons I have explained in relation to the authenticity objections taken by AirNZ at [89]-[107], this is not the time to prove or disprove whether those gentlemen attended the meeting as representatives of Garuda or not. The only question presently under consideration is whether this document could rationally affect the assessment of the probability of that being so. In my view, it could.

121    It follows that I reject this argument. It is reasonable to infer from the attendance sheets either that the persons attending wrote their own names and airlines down or they told the person filling the sheet out their names and airlines. It follows that s 69(2)(a) or (b) was certainly satisfied. For those reasons I admit (v).

122    Garuda was not on (iv). I do not see that this detracts from the relevance of (v). It may contradict (v) (or it may be page two of a single list) but this has nothing to do with relevance. I admit the attendance lists, i.e., (iv)-(vii).

123    When I pronounced these rulings, I indicated that I proposed to reject the tender of ACCC.008.004.0097, that is, (ii). It will be apparent from these reasons that I have since reached a different view. To the extent necessary I revoke the former ruling.

Associate:

Dated:    30 November 2012