FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Delta Building Automation Pty Ltd [2023] FCA 880

ORDERS

THE COURT ORDERS THAT:

1.    The parties confer and within 14 days, or such longer time as may be allowed, submit agreed or competing draft orders as to:

(a)    declarations of contravention; and, separately

(b)    procedural orders for the conduct of the remedies phase of the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Table of Contents

BROMWICH J:

Introduction

1    This is a liability adjudication on allegations by the Australian Competition and Consumer Commission (ACCC) of attempted bid rigging, and attempted inducement of bid rigging. The attempts are alleged to have been directed to a tender for a contract to supply a replacement building management system (BMS) for the original part of the building housing the National Gallery of Australia (NGA) in Canberra. That work is referred to in these reasons as the BMS upgrade or the Honeywell BMS upgrade.

2    The contravening conduct is alleged to have taken place during a brief meeting over coffee on 18 December 2019 between representatives of two competing companies. One of the two companies is the first respondent, Delta Building Automation Pty Ltd, a BMS company operating in Canberra. The second respondent is Mr Timothy (Tim) Davis, the sole director and managing director of Delta. The other company is Logical Electrical Solutions Pty Ltd (LES), also operating in Canberra. The key witness for the ACCC is Mr Antony (Tony) McEvilly, the general manager of LES.

3    In December 2019, both Delta and LES held contracts to perform BMS work at the NGA:

(a)    Delta to maintain the BMS that was due to be replaced; and

(b)    LES to maintain the BMS for the adjacent NGA extension building.

There was going to be a need for some degree of integration, or some kind of interface, between the new BMS and the continuing BMS, when the former was installed. There is a dispute as to the extent of difficulty that might entail.

4    On the morning of Wednesday, 18 December 2019, Mr Davis and Mr McEvilly had a relatively brief meeting at a coffee shop not far from Canberra Airport. The meeting had been called by Mr Davis via a telephone call to Mr McEvilly on either Monday, 16 December 2019, or Tuesday, 17 December 2019. I conclude that the call took place the day before the meeting, on 17 December, rather than 16 December. Nothing turns on this difference.

5    The ACCC alleges that during the 18 December 2019 meeting:

(a)    each of Mr Davis, and Delta via Mr Davis, attempted to induce LES to make an arrangement or arrive at an understanding containing a cartel provision, in contravention of s 45AJ of the Competition and Consumer Act 2010 (Cth) (CCA);

(b)    additionally or alternatively, Delta via Mr Davis attempted to make an arrangement or arrive at an understanding containing a cartel provision, in contravention of s 45AJ of the CCA.

6    The respondents deny any wrongdoing. Mr Davis elected to waive penalty privilege after the close of the ACCC’s case and to advance a positive evidentiary case for the respondents by way of a detailed affidavit, upon which he was cross-examined.

7    The respondents accept that the evidence establishes that Delta and LES were in competition with one another in the BMS industry in Canberra, and that Mr Davis acted on behalf of and with the authority of Delta. This sensible concession, reflective of the cooperative stance taken by the respondents in confining the trial to the real issues in dispute, is made in circumstances where Delta and LES were plainly competitors in relation to the BMS upgrade contract. Further, Mr Davis and Mr McEvilly via their companies (or a predecessor of LES with Mr McEvilly as its directing mind) had previously competed for BMS tenders in the ACT twice before the NGA BMS upgrade tender, namely the High Court of Australia tender in 2013 and the National Library tender in 2019.

8    The case largely turns on the fundamentally conflicting evidence of Mr McEvilly and Mr Davis, both as to what took place at the 18 December 2019 meeting, but also as to conversations and events prior to that. The competing cases, and especially the ACCC case, also rely upon the context for that meeting provided by the balance of the evidence, both contested and uncontested.

9    The ACCC seeks:

(a)    declarations of contravention by both Delta and Mr Davis;

(b)    the imposition of pecuniary penalties upon both of them;

(c)    injunctions restraining both of them from directly or indirectly communicating to competitors or potential competitors in relation to building management system tenders in the Australian Capital Territory (ACT) for three years;

(d)    the disqualification of Mr Davis from managing a corporation for three years; and

(e)    Delta being required to establish, administer and comply with a trade practice compliance program for three years.

The parties sensibly sought a separate trial on liability first.

10    These are the conclusions I have reached on liability:

(a)    The purpose of a 17 December 2019 telephone call from Mr Davis to Mr McEvilly was to arrange a meeting to discuss the upcoming BMS upgrade tender at the NGA.

(b)    The purpose of Mr Davis organising the 18 December 2019 meeting was to endeavour to rig any tender bid process between the two likely tenderers, Delta and LES.

(c)    The evidence of Mr McEvilly as to what transpired during the critical conversation about the BMS upgrade tender at the 18 December 2019 meeting was more credible in all the circumstances than the version advanced by Mr Davis. I accept Mr McEvilly’s version over that of Mr Davis.

(d)    At the 18 December 2019 meeting, Mr Davis was proposing that LES not be a genuine competitor in the BMS upgrade tender.

(e)    Mr Davis took both the necessary steps immediately connected to the commission of the alleged contraventions of s 45AJ by Delta, and an affirmative and positive act directed towards making, and inducing LES to make, the alleged arrangement or to reach the alleged understanding. As such, I have concluded that the declarations of contravention sought by the ACCC should be made.

The reasons as to the conclusions I have reached above are as follows.

The key entities and people

11    This is a narrative-based case that relies heavily on events leading up to and after the 18 December 2019 meeting between Mr Davis and Mr McEvilly. To aid in following the fact-finding process, the following is a list of the key entities and people involved in 2019:

Background

12    A BMS may be described generally as a computer-based system installed in buildings to control and monitor their internal environment. This includes their mechanical, electrical and other equipment and systems, covering such things as ventilation, air conditioning, lighting, lifts, closed-circuit television (CCTV), electricity and other utility services, fire systems, and security systems.

13    A BMS therefore consists of computer software, computer hardware, other hardware, and specialised equipment, including cabling, alarms, sensors, monitors, and other devices. A BMS is typically used in large commercial or government buildings.

14    Delta was in 2019, and still was at the time of trial and closing submissions, the exclusive ACT distributer of the “Delta Controls” brand of BMS. As noted above, Mr Davis is the sole director and managing director of Delta.

15    LES was in 2019, and still was at the time of trial and closing submissions, the exclusive ACT supplier of the Automated Logic Corporation (ALC) brand of BMS, otherwise known in the industry as Web Control, stylised as WebCTRL, being the name of the software the ALC BMS uses. As noted above, Mr McEvilly is the general manager of LES, with his wife, Karen McEvilly, as the sole shareholder and director of LES.

16    Delta and LES were in 2019 and 2020, and still were at the time of trial and closing submissions, companies that conduct businesses which include the design, installation and maintenance of BMS. They, along with other BMS companies, were in competition in the BMS market in the ACT.

17    The NGA comprises an original building, the construction of which was completed in 1982 (Original NGA) and an extension built between 2007 and 2010 (NGA Extension). In the period up to and including 2019 and 2020:

(a)    The Original NGA was served by a BMS developed by Honeywell Limited (Honeywell BMS). The Honeywell BMS was maintained by Honeywell until about October 2019, when Delta was given a 12-month maintenance contract to maintain that BMS (the formal signed contract came later in November).

(b)    The NGA Extension was served by an Automated Logic Corporation (ALC) BMS, installed by a predecessor company to LES, also associated with Mr McEvilly, in about 2007. In 2019 and 2020 in particular the NGA Extension BMS was maintained by LES.

18    By 2019, the Honeywell BMS for the Original NGA had reached the end of its life. This was known by Mr Davis and Mr McEvilly and thus by their respective companies.

19    In the period prior to 2019, a decision was made by the NGA to replace the Honeywell BMS, which was always going to be a valuable and prestigious contract. This is the BMS upgrade or Honeywell BMS upgrade referred to earlier in these reasons. No change was in contemplation for the ALC BMS for the NGA Extension, serviced and maintained by LES. That is, at all times the proposed BMS upgrade was to be confined to the Original NGA.

20    Delta and LES were in competition in relation to any contract that would be granted to perform the BMS upgrade, and thus in relation to any tender that might issue for that purpose. Both companies submitted bids for the tender that issued in 2020, after the contraventions alleged to have taken place on 18 December 2019. Neither was successful.

21    As at late 2019, both Delta and LES were companies capable of performing the BMS upgrade, and both were contracted to do other work at the NGA:

(a)    Delta was contracted to carry out the maintenance of the Honeywell BMS; and

(b)    LES was contracted to maintain the NGA Extension BMS.

Objectively speaking, they were the two companies potentially best placed to tender successfully for the BMS upgrade to replace the Honeywell BMS in the Original NGA.

22    However, it was anticipated that a new BMS for the Original NGA and the existing and continuing BMS for the NGA Extension would need to be integrated, or made to interface, in some way. These two concepts are separate from each other. As explained by Mr Davis, integration involves connecting two or more BMSs to function as a single system, while interfacing involves the exchange of information and data between different BMSs. Both approaches can be combined to create a unified interface, eliminating the need for users to log into separate systems. The likely nature and extent of that need is a live issue in the proceeding. Another contested issue is whether it was ever, to the knowledge of Mr Davis and therefore Delta, the situation that the Original NGA BMS upgrade could be contracted directly to Delta or if it would always be subject to a tender process. If it is the latter, the nature and extent of the tender process, whether it be limited or closed, rather than open and competitive, is also in question.

23    A further live issue is the impact and effect that the continuation of the NGA Extension BMS would have on the tender for the BMS upgrade in the Original NGA, especially as to the cost of integration between the two BMSs, and any need for involvement by LES in that integration. In short, the ACCC case is that the cost of integration or an interface between the two BMSs was always going to be insignificant in the context of the overall upgrade and the need for LES involvement, if any, was very limited. The contrary case for the respondents was that both that cost and that need for LES involvement was, or at least might have been at the time of the 18 December 2019 meeting and in the mind of Mr Davis, more substantial.

24    The substance of the ACCC’s case can be briefly summarised as follows, drawn from its closing written submissions and supplemented by closing oral submissions. The ACCC allege that:

(a)    in the period from early August 2019 to 2 December 2019, the respondents at least believed the NGA would be likely to engage Delta to undertake the BMS upgrade without a competitive tender taking place (the ACCC cast this as being viewed by the respondents as having a greater degree of certainty during that period, but this characterisation will suffice in light of the observations at [309] below which refer to Mr Davis’ evidence to the effect that he thought it was at least possible that there would be no tender process);

(b)    the respondents took steps to price the work it was proposing to do for the BMS upgrade, and were able to do so without contacting Mr McEvilly or LES;

(c)    the belief that a competitive tender would not be needed was “shattered” on 2 December 2019, when the respondents learned that the NGA had determined that they would put the BMS upgrade out to a formal competitive tender, and that the two tenderers would be Delta and LES;

(d)    on 16 or 17 December 2019, Mr Davis telephoned Mr McEvilly and arranged to meet with him to discuss the tender, before the BMS upgrade tender was formally announced or issued;

(e)    the meeting took place on 18 December 2019 at Tulips Café at Pialligo, Canberra;

(f)    at the 18 December 2019 meeting, by his express words and by implication, Mr Davis and thereby Delta offered to make a payment to Mr McEvilly or to LES, if LES agreed:

(i)    not to submit a bid for the tender; or

(ii)    to submit an uncompetitive bid for the tender; or

(iii)    to submit a bid for the tender on terms that would make Delta’s bid more likely to be successful than LES’s bid,

going well beyond merely preparatory conduct, and with there being no plausible exculpatory explanation for arranging a meeting with a competitor;

(g)    by doing so:

(i)    the respondents each attempted to induce LES to enter into an arrangement, or to reach an understanding, containing a cartel provision; and

(ii)    Delta attempted to make such an arrangement, or reach such an understanding,

in contravention of s 45AJ of the CCA.

25    The ACCC’s alternative case, casting the alleged cartel provision in two additional different ways, is that Mr Davis was attempting to make, and induce LES to make, an arrangement or understanding:

(a)    that would prevent LES supplying services to the NGA by way of upgrading the Original NGA BMS; or

(b)    whereby LES would agree to tender at a “cover price”, which would have the purpose or likely effect of fixing or controlling the price of the Original NGA BMS upgrade.

26    The beginning of the respondents’ closing written submissions identifies the core, but not only, arguments advanced as to why they contend the ACCC’s case should fail. In short, and noting that the ACCC takes exception to each of them, they are to the effect that:

(a)    the ACCC had not even attempted to discharge the onus of proving that the respondents intended, and engaged in conduct, to bring about an arrangement or understanding with the necessary features of a consensus or meeting of the minds, a commitment to act in a particular way or to maintain a particular state of affairs, and at least one party assuming an obligation or giving an assurance or undertaking to behave in a particular way – this is principally a dispute about the metes and bounds of what well-established authority requires be proven for the alleged attempt contraventions;

(b)    the evidence in any event falls well short of satisfying the conduct element of the alleged attempt contraventions, and at worst still fell short of anything immediately connected to any arrangement or understanding, also relying on Mr McEvilly’s evidence in cross-examination about what was conveyed to him as amounting to no more than speculation, a submission that requires a close focus on the questions asked;

(c)    the position as to the intention element was even weaker when regard was had to Mr Davis’s evidence as to his reasons for attending the meeting to the effect that, rather than those asserted by the ACCC, he instead wanted to “clear the air” with Mr McEvilly, arising out of a heated telephone conversation between the two men on 9 October 2019 about Delta personnel being present at the NGA in order to smooth the way for LES to perform any integration work between the two NGA BMS sets of equipment, and to assert that the NGA was not LES’s “turf” (or “site”) – going so far as to submit that unless the Court finds that Mr Davis was lying about the reasons he gave for attending the meeting, the necessary intention cannot be proven;

(d)    Mr Davis’s evidence should be accepted, especially having regard to what is characterised as the inadequate and unrealistic cross-examination of him;

(e)    Mr McEvilly’s evidence should be treated with caution, because, although he does not need to be found to have lied, he wished to inflict as much damage as he could upon the respondents because of the adverse view he took as to how they had been favourably treated by the NGA, and because he had wanted to go public with his allegations.

27    After closing oral submissions, a significant gulf between the parties remained. The points of disagreement are profound and have been difficult to resolve. A major part of that disagreement concerns:

(a)    differences as to the characterisation and understanding of the oral evidence of Mr McEvilly and Mr Davis, especially in cross-examination;

(b)    the nature and extent of evidence that was required to prove the alleged attempts; and

(c)    whether the evidence adduced by the ACCC went far enough, having regard to established authority as to what was required to be proved.

28    The competing accounts about the key conversation at the 18 December 2019 meeting, and prior telephone conversations, especially on 9 October 2019, are irreconcilable, such that the ACCC can only succeed if the account given by Mr McEvilly is accepted and preferred over that of Mr Davis.

Relevant provisions of the CCA

29    The relevant provisions of the CCA in relation to attempted bid rigging or inducement into a contract, arrangement or understanding containing a cartel provision are undisputed between the parties.

30    Section 76 of the CCA relevantly provides (emphasis added):

(1)    If the Court is satisfied that a person:

…

the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part or Part XIB to have engaged in any similar conduct.

31    Section 45AJ of the CCA provides:

A corporation contravenes this section if:

(a)    the corporation makes a contract or arrangement, or arrives at an understating; and

(b)    the contract, arrangement or understanding contains a cartel provision.

32    Section 45AD identifies what constitutes the cartel provisions proscribed by s 45AJ:

(a)    s 45AD(1) provides that a provision of a contract, arrangement or understanding is considered a cartel provision if it meets either the “purpose/effect condition” or the “purpose condition” in subsection (3) and the “competition condition” in subsection (4).

(b)    s 45AD(2) relevantly provides:

The purpose/effect condition is satisfied if the provision has the purpose, or has or likely to have the effect, of directly or indirectly:

(a)    fixing, controlling or maintaining;

… the price for …

(c)    goods or services supplied, or likely to be supplied, by any or all of the parties to the contract, arrangement or understanding; …

(c)    s 45AD(3) relevantly provides:

The purpose condition is satisfied if the provision has the purpose of directly or indirectly:

(a)    preventing, restricting or limiting:

…

(iii)    the supply, or likely supply, of goods or services to persons or classes of persons by any or all of the parties to the contract, arrangement or understanding; or

…

(c)    ensuring that in the event of a request for bids in relation to the supply or acquisition of goods or services:

(i)    one or more parties to the contract, arrangement or understanding bid, but one or more other parties do not; or

(ii)    2 or more parties to the contract, arrangement or understanding bid, but at least 2 of them do so on the basis that one of those bids is more likely to be successful than the others;

…

(iv)    2 or more parties to the contract, arrangement or understanding bid and proceed with their bids, but at least 2 of them proceed with their bids on the basis that one of those bids is more likely to be successful than the others;

…

(d)    s 45AD(4) describes the “competition condition” referred to in s 45AD(1), but does not need to be reproduced because there is no dispute that this condition is met on the evidence.

33    The ACCC’s factual propositions outlined above at [24] (and in the alternative at [25]) can be framed by reference to the cartel provision that is alleged to be the subject of the alleged attempt and inducement. In combination with the now undisputed satisfaction of the competition condition in s 45AD(4), the cartel provision is alleged:

(a)    primarily by reference to any of the purpose conditions in s 45AD(3)(c)(i), (ii) or (iv); or

(b)    in the first alternative by reference to the purpose condition in s 45AD(3)(a)(iii); or

(c)    in the second alternative by reference to the purpose/effect condition in s 45AD(2)(a) and (c).

34    The ACCC’s case is that the arrangement or understanding would have involved, if entered into as allegedly sought by Mr Davis, any of the following five modes of implementation, styled by the ACCC as being one of a limited number of ways in which the arrangement or understanding could occur, each involving a cartel arrangement or understanding:

(a)    a provision of the kind in s 45AD(3)(c)(i), namely that LES would not submit a bid for the BMS upgrade tender; or

(b)    a provision of the kind in s 45AD(3)(c)(ii), namely that Delta and LES would both bid on the basis that Delta’s bid would be more likely to be successful; or

(c)    a provision of the kind in s 45AD(3)(c)(iv), namely that Delta and LES would both bid and proceed with their bids, on the basis that Delta’s bid would be more likely to be successful; or

(d)    a provision of the kind in s 45AD(3)(a)(iii), namely that it would prevent LES from supplying services to the NGA by way of upgrading the Original NGA BMS; or

(e)    a provision of the kind in s 45AD(2)(a) and (c), namely that LES would agree to tender at a “cover price”, which would have the purpose or likely effect of fixing or controlling the price of the Original NGA BMS upgrade.

35    An important aspect of the ACCC’s case is that the precise mode of implementation did not have to be agreed or understood at the attempt stage. On its case, whatever mechanism Mr Davis may ultimately have favoured in seeking the arrangement or understanding with LES, it would have contained a cartel provision.

36    The respondents’ case, although principally one of denial that the conversation deposed to by Mr McEvilly took place at all, is that even if it did take place, the evidence did not go far enough to constitute either of the attempts alleged.

37    These statutory elements have been the subject of judicial analysis, which will be explored in greater detail below.

Legal principles from the case law

38    As already noted, the ACCC alleges that Mr Davis and Delta (via Mr Davis), each attempted to induce LES to make an agreement, or arrive at an understanding containing a cartel provision, contrary to s 45AJ of the CCA. Further and in the alternative, the ACCC alleges that Delta (via Mr Davis) attempted to make an arrangement or reach an understanding that contained a cartel provision, also contrary to s 45AJ of the CCA.

39    The legal principles that apply are generally agreed upon, but there is a substantial dispute about their application, especially as to what is required to prove the alleged attempts, which leaches into the extent of the real agreement. The respondents, in their closing written submissions, analysed numerous cases applying the principles pertaining to attempts to make or induce an arrangement or understanding, which I have considered. However, I found that reasoning by factual analogy was of limited assistance. Prior cases and their inevitably factual circumstances principally assist in identifying and understanding the principles, and only to a lesser extent help with the application of those principles to the present circumstances.

40    It is convenient to commence with the legal principles which seem to be agreed. It is uncontroversial between the parties that, in both paras (b) and (d) of s 76(1), an attempt has two elements, namely, conduct and intention: Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719 (also 76 FLR 455), referred to and approved by the Full Court in Australian Competition and Consumer Commission v Australian Egg Corporation Ltd [2017] FCAFC 152; 254 FCR 311 at [92] per Besanko, Foster and Yates JJ, reproduced below at [42].

41    The relevant intention contrary to s 45AJ that must be established is an intention to bring about the proscribed result, in this case, the making of an arrangement or the reaching of an understanding containing a cartel provision: Tubemakers at 735-736 per Toohey J, cited with approval by the Full Court in Egg Corporation at [92]. That intention will suffice even if the proscribed result would be impossible to achieve: Tubemakers at 736.

42    The Full Court in Egg Corporation succinctly set out many of the key principles applicable to this case:

[92]    In order to establish an attempt, an applicant must prove both intention and conduct. The intention is to bring about the proscribed result which in this case is the making of an arrangement or the reaching of an understanding … (Trade Practices Commission v Tubemakers of Australia Ltd (1983) 76 FLR 455; 47 ALR 719 (Tubemakers) at 472-473; 737 and 479; 743 per Toohey J). It is not necessary in order to establish the relevant intention to prove that it was accompanied by or included an expectation of success or a belief that the purpose would be achieved (Tubemakers at 471-472; 736 per Toohey J).

[93]    The conduct which is necessary to constitute an attempt is a step towards the commission of a contravention, which is immediately and not merely remotely connected with it (Tubemakers at 472; 736 per Toohey J referring to Archbold’s Pleading Evidence & Practice 36th [Ed], para 4101). The Full Court of this Court in Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 7 FCR 534 (Parkfield Operations) at 538-539 made a similar point when it said that an attempt must involve taking a step towards the commission of contravening conduct and that it is not sufficient that it be merely remotely connected or preparatory to the commission of it. In Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] ATPR 41-877 (ACCC v SIP Australia) at 45-015, Goldberg J made the point that what is required for an inducement is that “there be an affirmative or positive act or course of conduct directed to the person who is said to be the object of the inducement”. In addition to that point, his Honour also referred to the decision of the Full Court of this Court in Heating Centre Pty Ltd v Trade Practices Commission (1986) 9 FCR 153 at 164 where it was said that mere persuasion, with no promise or threat, may well be an attempt to induce.

[94]    For the purposes of both elements of an attempt, that is to say intention and conduct, it is not necessary for the precise terms of the proposed arrangement or understanding to have been formulated. This point was made by the Full Court in Parkfield Operations (at 539) and another way of putting the point is that it is not necessary for an attempt to be made out to establish that the relevant conduct had reached an advanced stage. Having said this, it is perhaps trite to note that the more advanced the conduct, the more likely it is that the inference of the necessary intention will be drawn.

[95]    In order for there to be an arrangement or understanding …, there must be a meeting of minds and this involves a commitment to act in a particular way. A mere expectation as distinct from an assumption of obligation, assurance or undertaking to act in a particular way is not sufficient. Unlike an arrangement, an understanding can be tacit (Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (1999) 92 FCR 375 (CC Pty Ltd) at [135]-[141] per Lindgren J; Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452 at [45]-[47]; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321 at [28]-[39] per Gray J).

[96]    For some time, there has been a debate in the authorities as to whether a meeting of minds involving only one party assuming an obligation as distinct from mutual or reciprocal obligations can constitute an arrangement or understanding of a proscribed kind. The issue has not been authoritatively determined. The courts which have addressed the issue have consistently said that even if the undertaking of a unilateral obligation can constitute a contravening arrangement or understanding, such cases are likely to be rare (see, for example, Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 (Service Station Association) at 230-231 per Lockhart J, at 238 per Spender and Lee JJ; CC (NSW) Pty Ltd at [139] per Lindgren J). For reasons which we will give, it will not be necessary for us to resolve the issue in this case.

43    After this judgment was reserved, O’Bryan J handed down Australian Competition and Consumer Commission v BlueScope Steel Limited (No 5) [2022] FCA 1475. The parties directed my attention to this keenly awaited decision soon after it was delivered and after I had considered it, but as is conventional did not indicate any particular passage that either side relied upon. I have read BlueScope Steel carefully, and in particular Part C ([72]-[183]), in which his Honour addresses the legal principles applicable to that case, which largely, but not entirely, mirror those applicable to this proceeding, and key parts of the application of those principles to the substantially different factual circumstances of that case. In particular, I adopt these as useful statements of principle on the topics of the conduct element in the context of the attempt provision in s 76(1)(b) of the CCA ([86]-[97]), the corresponding intention element ([98]-[99]), the purpose of a cartel provision ([110]-[112]) and the effect of a cartel provision ([113]-[114]).

44    O’Bryan J in BlueScope Steel at [101]-[108] provided a more detailed explanation of the meaning of the terms “arrangement” or “understanding” than I have found generally necessary. However, at [108] his Honour concluded with the pithy observation about a concluded arrangement or understanding as relevant to the intention element for an attempt or attempt to induce that state of affairs, which I gratefully adopt:

A meeting of minds as to a course of conduct to be followed by one or more persons cannot arise unless those persons have communicated their assent to adopting that course of conduct. It is important to emphasise, though, that in the context of an understanding containing an unlawful cartel provision, the assumption of an obligation means no more than the communication of assent to a particular course of conduct proposed by a competitor, where the communication may be by words or conduct. Language of obligation, commonly used in the law of contract, should not obscure the nature of an understanding and the means and circumstances in which it may be arrived at.

45    The above observation is of particular importance in assessing the question of what the evidence establishes about the conversation between Mr Davis and Mr McEvilly at their coffee shop meeting on 18 December 2019, and in particular whether that evidence went far enough on the intention element for the alleged attempts. The importance emerges in large measure because the respondents in BlueScope Steel, in common with the respondents in this proceeding, asserted that the evidence did not go far enough, even if Mr McEvilly’s account of that conversation was accepted, on the concept of commitment and the related concepts as addressed by O’Bryan J at [142]-[148] in the abstract, and at [1420]-[1422] in their application. The following statements of principle in relation to concluded arrangements or understandings as relevant to the intention element for an attempt are particularly apposite to this proceeding, noting that the ACCC’s primary case here concerned bid rigging rather than price fixing:

[144]    As to the conduct element of an attempt to induce, in my view a person may be found to have attempted to induce a counterparty to reach a price fixing understanding notwithstanding that the person never expressly asked the counterparty for a commitment with respect to the counterparty’s prices. The respondents’ submission to the contrary has a number of difficulties: it seeks to frame the applicable legal principles in a narrow and rigid manner and also has the effect of substituting the word “commitment” in place of the word “understanding” in the Act.

[145]    As discussed above, there has been considerable judicial explication of the words “arrangement” and “understanding” as used in the Act. Reducing those words to the single notion of a “commitment”, however that might be conceived, is an erroneous reduction in legal principle. The statutory words have a broader meaning. They require that the parties have, by words or conduct, aroused an expectation in each that they will conduct themselves in accordance with the subject matter of the arrangement or understanding. The expectation must be more than a mere hope, belief or prediction that, as a matter of fact, a person will conduct themselves in the future in a particular way. The expectation must arise out of the dealings between the parties which has resulted in what can alternatively be called the assumption of an obligation, the giving of an assurance or undertaking, or a meeting of minds, that they will act in the future in a particular way. While an arrangement is well described in terms of undertaking obligations or duties, albeit not legally enforceable, an understanding is more aptly described as arriving at a common mind (or consensus) as to a particular course to be followed. Conduct which founds an understanding can be arrived at by words or conduct and may be tacit. Further, as an arrangement or understanding is not binding on the parties in law, the parties are inevitably free to withdraw from it and act inconsistently with it, notwithstanding their consent to it.

[146]    It follows from the judicial explication of the concept of an “understanding” that there is no requirement in law for one of the parties to have expressly sought a commitment from the other party to assume some obligation. An understanding may be reached through a course of dealings between the parties that makes clear the desired outcome and through which a meeting of minds on pursuing the outcome is achieved. A course of dealings between parties is capable of arousing an expectation in each party that they will conduct themselves in accordance with the communicated outcome.

[147]    It necessarily follows that an attempt to reach a price fixing understanding within s 76(1)(b) does not require, as a matter of law, that the relevant person has expressly sought a commitment from a competitor to price in a particular way. There are other ways in which a price fixing understanding may be brought about. That conclusion is even stronger in the case of inducing or attempting to induce a person to reach a price fixing understanding within s 76(1)(d). An inducement ordinarily refers to some proffered advantage or disadvantage, promised or threatened, which will follow if the object of the inducement adopts or fails to adopt a stipulated course of action. Mere persuasion, with no promise or threat, may also constitute an attempt to induce. It is not possible to define in any rigid or narrow manner the categories or types of conduct that may constitute inducing or attempting to induce a person to reach a price fixing understanding within s 76(1)(d). The conduct may involve a course of meetings, communications and other dealings in which inducements are proposed or offered and which are directed at reaching a consensus, or a meeting of minds, about the level of prices to be charged by one or more of the parties. It can be accepted that, for a consensus or meeting of minds to be finally arrived at, there must be some communication or indication of assent from one party to the other whether by words or by conduct. However, an attempt to induce a person to reach a price fixing understanding does not require assent to be achieved; it requires a step towards the inducement of the understanding which is more than merely preparatory and which is immediately and not merely remotely connected with the inducement to reach the understanding. It should also be reiterated that, in the context of an attempt and an attempt to induce, it is not necessary for the conduct to have reached an advanced stage or for the precise terms of the proposed understanding to have been formulated.

[148]    As to the intention element of an attempt to induce, a person may only be found to have attempted to induce a counterparty to reach a price fixing understanding if the person intended, by their conduct, to take steps which were directed at inducing the counterparty to reach the understanding. In other words, it is necessary that the understanding be in contemplation and be the intended outcome of the attempt to induce. It is not sufficient for the person to merely intend that the counterparty reflect on the prices they are charging. The intention must be directed to the ultimate end of reaching an understanding. Again, though, the use of the word “commitment” in that context is unduly limiting. The intention must be to induce the counterparty to reach an understanding, which requires a consensus or meeting of minds about acting in accordance with the subject of the understanding. It is sufficient that, by the acts that constitute the attempt to induce, the person offers promises or threats or otherwise engages in persuasive conduct that is intended to induce a consensus, however the ultimate assent may be communicated.

46    When considering the Egg Corporation case both at first instance and on appeal, it is important to appreciate that the ACCC’s case at trial failed on intention as to all five respondents, not on conduct (although there was a dispute at the appeal about what was found about the conduct of three of the respondents): see the Full Court at [74]-[75] and [84]-[85] (in the context of [82]-[83]); see also the reasons of the primary judge, White J, in Australian Competition and Consumer Commission v Australian Egg Corporation Limited [2016] FCA 69; 337 ALR 573 (Egg Corporation trial judgment or Egg Corporation White J judgment) at [403]. By notices of contention, the respondents sought to overturn the findings made as to conduct. The Full Court at [137]-[138] addressed and rejected a submission by the respondents to the ACCC appeal on those notices of contention that the absence of a concrete proposal by way of an arrangement or understanding was fatal to establishing the element of intention, specifically endorsing the Egg Corporation White J judgment at [78] and [81] as to the statements of principle, and [394] as to their application.

47    Those paragraphs in the Egg Corporation White J judgment as to that part of the ACCC’s case that succeeded are particularly relevant to the present case and warrant reproduction of the most relevant passages of those paragraphs, adding also [79]:

[78]    In those cases in which the ACCC alleges that an arrangement or understanding had been reached, there must be evidence of a meeting of minds between the parties under which at least one of them assumes an obligation or undertakes to act in a certain way. However, in the case of an alleged attempt, what must be established, relevantly, is that the respondents engaged in conduct (took a step towards) inducing others to reach an agreement or understanding that at least one or more would limit their production or supply. Liability under s 76(1)(b) is established if the respondent engaged in conduct directed towards inducing another to reach an agreement or understanding which has the proscribed qualities. Section 76(1)(d) will be engaged if a respondent has engaged in the requisite conduct with the particular intention, even if the form of the proposed agreement or understanding is unparticularised, undeveloped and inchoate. It is not necessary for the ACCC to establish in addition that the agreement or understanding was to take a particular form or to have a particular content or would involve, as in this case, only particular egg producers.

[79]    The approach just outlined is supported by the reasons of the Full Court in Parkfield Operations at 539-40:

Finally, his Honour thought that there could be no attempt to induce XL to make an arrangement of the kind alleged if there was no arrangement which was in place or could readily be effected. He thought that the evidence established no more than that there was an invitation “to start to see if an arrangement can be made”. We do not think that it was necessary for any arrangement to be in place, or readily able to be effected, with the other retailers. It was sufficient that the respondents sought to persuade XL to enter into an arrangement to increase prices. As was said in Yorke v Lucas (1983) 49 ALR 672 at 681 (affirmed by the High Court, (1985) 59 ALJR 776):

“Inducing a contravention in the context of s 75B(b) connotes, in our view, some act of compulsion by force or threat of force or some act of persuasion or stimulation aimed at ensuring that an act is committed which constitutes a contravention. The word ‘incite’ is akin to ‘induce’, though induce probably covers a wider field.”

We therefore cannot agree with the reasons which led his Honour to the conclusion that the Commission had not established a case against the respondents.

[80]    …

[81]    I accept however, the submission of Mr Doyle SC, counsel for AECL and Mr Kellaway, that the uncertain and general nature of the putative arrangement makes the pinpointing of conduct or words referrable to such an arrangement difficult, and that account should be taken of this in the assessment of the evidence.

…

[394]    It is true that an attempt to induce a contravention … does not require that a single form of action be proposed. …

48    Applying by analogy the passage from Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 7 FCR 534 quoted by White J above, to the ACCC’s primary case of an attempted inducement, it needed to establish that Mr Davis (and through him, Delta), sought to persuade Mr McEvilly to enter into an arrangement, or to reach an understanding, to rig the BMS tender. As his Honour observed at [78], endorsed by the Full Court, it was not necessary for the ACCC to establish that the agreement or understanding in contemplation was to take a particular form or to have a particular content. That said, the absence of any allegation as to the precise form of the alleged intended arrangement or understanding may make it more difficult to be satisfied that this was what was sought: Egg Corporation at [83], in the final point aspect of White J’s reasoning on intention as summarised by the Full Court at the end of that paragraph. In the case of bid rigging, the available options for a proposed arrangement or understanding may, as a practical matter, be more limited, going some way to alleviating this barrier to a finding of the necessary corresponding intention.

49    The Full Court in Egg Corporation at [95] was referring to what is required to prove that an arrangement has been made, or an understanding arrived at, including tacitly – that is, in the event of the attempt succeeding – whereas at [94] the Full Court is referring to the antecedent stage of an attempt to achieve either outcome. It necessarily follows that proving an attempt does not require establishing a meeting of minds, nor as part of that any kind of commitment being given. An attempt by one person directed to another is, by its very nature, unilateral, but must involve more than preparatory steps to achieve the proscribed objective. It is common ground in this case that there must be sufficient proximity between the conduct and the commission of the contravention. There remains a dispute as to how far the ACCC’s case needed to go, which is addressed later in this segment, in the context of the following paragraph and what it means in practical terms.

50    It is important to maintain a distinction between the attempts alleged, and the alleged object of those attempts. The ACCC accepts, and indeed submits, that in the case of an attempt or inducement to contravene s 45AJ of the CCA, there are two additional requirements that must be met:

(a)    First, it must be demonstrated that the relevant attempt was to induce a person to enter into, in this case, an “arrangement or understanding” (a contract not being alleged) within the meaning of s 45AJ, noting again as per the above that neither the conduct nor the intention requires precise terms to have been formulated: Egg Corporation at [94]. By reference to what constitutes an arrangement or understanding, per Egg Corporation at [95], this requires that there was an attempt to induce a “meeting of the minds” and “a commitment to act in a particular way”. At least one party must, if the attempt were to succeed, “assume an obligation” (whether legal or moral in nature) to act in a certain way: J Wisbey & Associates Pty Ltd v UBS AG [2021] FCA 36 per Beach J at [125].

(b)    Second, it must be demonstrated that the relevant arrangement or understanding would contain a cartel provision within the meaning of s 45AD of the CCA. This, in turn, requires consideration of two further requirements:

(i)    whether a provision of the relevant arrangement or understanding would contain a provision satisfying either the “purpose/effect condition” in s 45AD(2) or the “purpose condition” in s 45AD(3); and

(ii)    whether two or more parties to the arrangement or understanding satisfied the “competition condition” in s 45AD(4).

51    The purpose/effect condition and the purpose condition are set out above at [32] and are addressed in more detail later in these reasons.

52    The “competition condition” in s 45AD(4) relevantly requires that the two or more parties involved in the arrangement or understanding are, or are likely to be, in competition with each other in the supply of the services in question. The ACCC submits that general competition meets this requirement, even in circumstances where LES and Delta were not competing for the BMS Upgrade Tender in particular, citing the Full Court case of J McPhee & Sons (Australia) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365; 172 ALR 532 at [111]-[112] (Black CJ, Lee and Goldberg JJ). However, as already noted, the respondents accept that the competition condition is satisfied, and I am satisfied that is so on the evidence.

53    I now turn to a key area of dispute at the level of principle, to be applied to the facts as found. It is convenient to address this at a relatively early stage in these reasons because of its importance to the fact-finding exercise that follows. The issue is jointly posed as follows:

Does the common law of attempt, insofar as it is applicable to an allegation of civil attempt under s 76(1)(b) or (d) of the Competition and Consumer Act 2010 (Cth) (CCA), contemplate not only use of the proximity test (conduct that is more than merely preparatory), but also the equivocality test (conduct having no reasonable purpose other than the commission of the alleged contravention)?

54    The ACCC contends that the answer is “no”; while the respondents contend that the answer is “yes”. For the reasons that follow, there is no equivocality test to be applied, and accordingly the answer is “no”.

55    The principle sought to be applied is drawn by analogy from the criminal law. Considerable caution must be exercised before importing criminal law concepts too readily or uncritically into civil proceedings, even civil penalty proceedings, for reasons identified in relation to civil penalty proceedings generally: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (Agreed Penalties Case) at [51]-[57] and Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 399 ALR 599 at [14]. A key reason for that caution is that the standard of proof in criminal proceedings means that when circumstantial evidence is relied upon, especially to prove state of mind, the prosecutor must exclude all reasonable explanations consistent with innocence: Shepherd v The Queen (1990) 170 CLR 573. That is an aspect of proof beyond reasonable doubt in criminal proceedings, which has no analogue in relation to the civil standard of the balance of probabilities, even when serious allegations require evidence to be of a sufficient quality to support any adverse conclusion reached: s 140(2) of the Evidence Act 1995 (Cth), the statutory version of Briginshaw v Briginshaw (1938) 60 CLR 336 per Dixon J at 361-362.

56    In a civil case, the combination of circumstances relied upon must do no more than raise “a more probable inference in favour of what is alleged”: see Shepherd per Mason CJ at 576 and per Dawson J at 581 (with whom Toohey and Gaudron JJ agreed), explaining a passage from Chamberlain v The Queen [No 2] (1984) 153 CLR 521 at 536 containing that phrase without adverse comment. The unquoted, but footnoted, source of that phrase in Chamberlain is Luxton v Vines (1952) 85 CLR 352 at 358, where Dixon, Fullagar and Kitto JJ quoted from the following passage in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 (emphasis added to identify the phrase):

Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture (see per Lord Robson, Richard Evans & Co Ltd v Astley (1911) AC 674 at 687). But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as a mere conjecture or surmise: cf per Lord Loreburn, above, at p 678.

57    It follows that the starting point is that the exclusion of alternative explanations forms no part of any civil law requirement for reaching the necessary state of satisfaction on the balance of probabilities, even if it might be analytically deployed as a process of reasoning. Although common, this is not a rule of law even in relation to jury directions in criminal cases and is sometimes not appropriate in such a case: Shepherd per Mason CJ at 575 and per Dawson J at 578. As Dawson J pointed out, while a direction of that kind is customarily given to a jury in circumstantial evidence cases, it is no more than an amplification of the rule that the prosecution must prove its case beyond reasonable doubt, such that in some cases such a direction may be confusing rather than helpful. Even in criminal proceedings, it is only the elements of an offence that must be proven beyond reasonable doubt, each fact relied upon to support the proof of that element need not be proven to that standard unless indispensable to the finding of guilt. Of course, sometimes a non-element component of a criminal case may need to be proven beyond reasonable doubt, such as identification.

58    Given the strong background of fundamental principles against the existence of a principle of equivocality in a civil case, it was for the respondents to demonstrate a reason why that should be departed from in any civil case, and particularly in a case such as this. It will not suffice to refer to such a rule applying in criminal cases where that is not, in any event, so clearly entrenched as a rule of law. That is, it was not for the ACCC to show that a principle of equivocality did not apply, but rather for the respondents to show that it did.

59    The respondents rely upon Toohey J, when his Honour was a member of this Court, in an express aside from the question of intention by addressing conduct (actus reas), dispelling the notion that an expectation of success was necessary for an attempt to be established. As part of that reasoning, his Honour quoted in Tubemakers at p 736 the following passage from Archbold’s Pleading Evidence & Practice (36th ed):

… the actus reus necessary to constitute an attempt is complete if the prisoner does an act which is a step towards the commission of the specific crime, which is immediately and not merely remotely connected with the commission of it, and the doing of which cannot reasonably be regarded as having any other purpose than the commission of the specific crime.

60    The respondents contend that this passage plainly contemplates the use of both a proximity test and an equivocality test. Quite apart from the fact that this is a reference to the requirements in criminal proceedings being used by analogy to address a different issue, I am unable to accept that, read in context, this has anything to say about equivocality at all. Nor does Toohey J’s later reference at p 743 to purpose or effect in relation to the issue of substantially lessening competition assist. Similarly, the Full Court in Parkfield Operations at pp 538-9 quoting this part of Tubemakers was concerned with proximity, and not any novel notion of equivocality foreign to the ordinary concepts and principles of civil law, and in particular the civil standard of proof.

61    The respondents suggest that in Egg Corporation, both White J at [387]-[388], and the Full Court in upholding those passages at [109]-[111], was also endorsing an unstated principle of equivocality. In keeping with what the Full Court actually said, I am unable to accept that White J was doing any such thing. Rather, his Honour was referring to innocent explanations for facts upon which the ACCC relied to draw adverse inferences as to what was taking place for the purpose of making a decision on whether the necessary intention corresponding to the proven conduct had also been proven, which is a very different exercise even if it bears a superficial similarity. It is the difference between an analytical tool and a legal requirement.

62    White J found that the understanding that the ACCC placed on certain phrases that had been used in the context of a meeting between competitors was not supported because of other innocent inferences that could reasonably be drawn on the question of intention. That was clearly enough a reference to the ordinary processes of inferential fact finding for state of mind as to whether the necessary state of satisfaction had been reached, not requiring the ACCC to exclude innocent explanations as a precondition to reaching the requisite state of satisfaction.

63    As the Full Court observed at [110], this was no more than an exercise by White J in correctly applying the civil standard of proof in the first place, expressly rejecting the submission recorded at [109] that his Honour’s approach was one of asking whether there were explanations consistent with innocence, so as to be applying the criminal standard of proof. It is plain enough that had the Full Court found that White J had been applying any test akin to the equivocality test advanced by the respondents, that would have been found to be an error because it would have entailed applying the wrong standard of proof. That way of reading the Full Court’s reasons is supported by the earlier passage in Egg Corporation at [93], reproduced above at [42], where the references to Tubemakers and Parkfield Operations are clearly directed only to proximity.

64    There is a material difference in principle between on the one hand evaluating evidence and forming a view as to whether or not the evidence establishes an alleged contravention on the balance of probabilities, and on the other hand ascertaining whether that standard has not been met because some competing possibility consistent with there being no contravention has not been excluded. The latter involves a reasoning process in criminal proceedings which can be a necessary part of the discharge of the onus of proving a case beyond reasonable doubt (ie, beyond the balance of probabilities), but which never arises in civil proceedings because that is not the ultimate burden of proof threshold required to be met. It follows that there is no basis, either on first principles or by authority, for the application of an equivocality test in relation to an alleged attempt in a civil penalty proceeding. For the same reason, there is no requirement, as suggested by the respondents, to apply some kind of test that the offer made by Mr Davis be found to be unambiguously directed to either of the two attempts, because that too implies the necessity of going beyond the threshold of the balance of probabilities.

65    The next major disagreement in principle between the parties turns on the distinction between what must be proven to establish that an arrangement has been made, or an understanding reached, and what must be proven to establish an attempt to induce that or an attempt to achieve that objective. As the ACCC points out in closing oral submissions, there is no dispute that an arrangement or understanding within the meaning of s 45AJ of the CCA requires a meeting of the minds and a commitment to act in a particular way, nor any dispute that such an arrangement or understanding requires that at least one party assumes an obligation, whether legal or moral in nature, to act in a particular way. The dispute turns on how granular the identification of the proposed arrangement or understanding must be by the evidence when an attempt is alleged.

66    Omitting the errant references to equivocality, the respondents contend that a person cannot be liable for an attempt to make, or an attempt to induce, an arrangement or understanding unless they engage in conduct immediately or proximately connected and directed to securing:

(a)    a consensus or meeting of the minds;

(b)    a commitment to act in a particular way or the maintain a particular state of affairs;

(c)    the assumption of obligations, assurances or undertakings,

coupled with an intention to bring about that specific result. The respondents maintain that the ACCC's submissions failed to consider these factors because the evidence does not support an affirmative answer to any of the factors, let alone all of them.

67    In applying those principles in closing oral submissions, the respondents gave content to this requirement by suggesting that it was not sufficient for a person to appreciate that the natural and probable consequence of their conduct is a completed contravention; they must have intended to bring about a specific result; and they must have had a subjective intention to bring about each of the essential elements of the contravention alleged to have been attempted. An attempt, they submit, requires the critical features of an arrangement or understanding to be sought, being an intention, with proximate acts, to bring about an arrangement with the features of a commitment and obligation. The key issue in dispute is how far the ACCC’s case needed to go on the question of commitment on the conduct element.

68    This is put somewhat evocatively in closing oral submissions for the respondents as whether it was proven, as said to be required, that Mr Davis wanted an arrangement whereby he would be able to say to Mr McEvilly in due course something like “What on earth are you doing?” We had a deal that you weren’t going to put in a bid”. This submission was evidently directed to the manner in which the bid rigging would be proposed to be implemented, and therefore equally applying to the alternative options for implementation identified by the ACCC of a bid being put in by LES which was either higher than the Delta bid, such as by a cover price, or that was in some other way inferior to Delta’s bid. To the extent that this is a submission that the precise mechanism by which any proposed arrangement or understanding to induce bid rigging had to be identified, as opposed to such identification making the case stronger, it cannot be accepted in light of the reasoning of both White J and the Full Court in Egg Corporation considered above. However, this still leaves for determination just how detailed the identification must be shown to be, at this stage dealing with the applicable principles.

69    The ACCCs’ contrary submission is that the propositions of law summarised above do not mean that an attempt to contravene s 45AJ of the CCA, or to induce such a contravention, will only be made out where the conduct has progressed to the point where a commitment has been expressly sought. That is because a distinction must be drawn between the intention element and the conduct element. To establish the intention element, it is necessary to prove an intention that an arrangement or understanding involving a meeting of the minds, a commitment, and an assumption of obligations would ultimately be reached, but in order to prove the conduct element it is not necessary to prove that the conduct actually reached the stage at which a commitment was sought. The ACCC submits this is supported by Egg Corporation at [93], with the Full Court quoting with approval the observations of Goldberg J in Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] FCA 824; ATPR 41-877 at [112] that what is required for an inducement is that “there be an affirmative or positive act or course of conduct directed to the person who is said to be the object of the inducement”, and (quoting from Heating Centre Pty Ltd v Trade Practices Commission (1986) 9 FCR 153 at 164) that “mere persuasion, with no promise or threat, may well be an attempt to induce”. The ACCC also notes that the respondents’ suggestion that Heating Centre be treated with caution because it is a resale price maintenance case belies its endorsement in Egg Corporation at [93].

70    The ACCC submits that this then leads into the statement of principle in Egg Corporation at [94], and especially the first sentence, that for both intention and conduct, “it is not necessary for the precise terms of the proposed arrangement or understanding to have been formulated”. Further, at [137], the Full Court expressly endorsed the observation by White J at [78] that s 76(1)(d) of the CCA “will be engaged if a respondent has engaged in the requisite conduct with the particular intention, even if the form of the proposed agreement or understanding is unparticularised, undeveloped and inchoate”. In reliance upon these statements of principle, the ACCC submits that it is not necessary for the conduct to have reached the stage that a specific commitment has been sought in order for the conduct element, or an attempt to induce a contravention of s 45AJ, to be established.

71    The ACCC’s submission must be accepted, relying as it does upon the binding authority of the Full Court in Egg Corporation. The relevant test for the conduct element is whether a sufficient step was taken in all the circumstances to take it beyond being merely preparatory. An attempt does not require that the substantive contravention has almost taken place. Of course, if all that Mr McEvilly needed to do was assent to what was proposed in order for the inducement to have been effective, the arrangement to have been made, or the understanding to have been reached, then the threshold for an attempt will comfortably have been surpassed.

The witnesses

72    I made notes of my perception of the four witnesses who gave oral testimony at the time it was given or soon afterwards, mostly in cross-examination on their affidavits, and recorded much of the following observations as the evidence progressed, supplemented by reading the transcript.

Mr McEvilly and LES

73    Mr McEvilly has been a licensed electrician since about 1982. He has worked as an electrical contractor for almost 40 years, specialising in mechanical electrical services. He formed his own company in about 1984, until it was purchased in about 1987. He then worked for the purchaser for about 18 months, until he left to start up another business, which was later incorporated in 2004 as Electrical Solutions (ACT) Pty Ltd. That business provided services relating to the design and installation of electrical and control systems, which later progressed to BMS work in around 1991 in the ACT and surrounding areas, prior to incorporation in 2004. Mr McEvilly was the sole director of Electrical Solutions (ACT).

74    Electrical Solutions (ACT) went into liquidation on the petition of the Deputy Commissioner of Taxation in this Court in March 2019. This took place following a request made on its behalf to reduce the rate at which tax debts were required to be repaid. A liquidator was appointed on 31 May 2019. On Mr McEvilly’s evidence in cross-examination, which was not challenged and which I accept, that tax debt situation in turn was reached by reason of a major project running seriously over the allotted time and causing substantial losses. Mr McEvilly was keen not to cause losses to customers or to have employees losing any entitlements, so, with the benefit of insolvency advice, in April 2019 he set up a new company to buy the assets of Electrical Solutions (ACT) and to assume responsibility for accrued employee entitlements. That new company was LES. Mr McEvilly has been the General Manager of LES since May 2019. His wife is the sole shareholder and sole director, and provides accounting and office management services. LES employs about 15 staff and provides a range of electrical services.

75    As with all of the witnesses who gave oral evidence, I watched and listened carefully to the cross-examination of Mr McEvilly, taking notes of my impressions at the time and preparing these observations soon afterwards while it was still fresh in my mind. Mr McEvilly is quietly spoken and generally understated. That said, he was firm in his views and a careful and attentive witness. It was apparent that this was driven by attention to detail and a desire to be accurate, rather than being either pedantic or unduly aware of the impact of his answers on the ACCC’s case. Without hesitation, he gave a number of answers that were not entirely helpful to aspects of that case. He was reluctant, but not ultimately unwilling, to accept that the conduct of Mr Davis and Delta had annoyed him, as had what he perceived to be the preferential treatment of Delta by the NGA and its contractors. As the later cross-examination of Mr Nugraha demonstrated, that perception proved to be well-founded. I ultimately conclude that Delta was intended to be the beneficiary of a degree of overt preferential treatment, especially by Mr Sitauti of Steensen Varming, but also in less clear ways by at least some at the NGA, a process that Mr Davis not only was aware of, but contributed to.

76    Overall, I have little hesitation in accepting Mr McEvilly as a witness of truth, reliability and accuracy, and in accepting his evidence even when not corroborated. That acceptance is qualified to a limited degree by other evidence that cast doubt on limited aspects of what he said had taken place. For the reasons set out below, I do not accept the respondents’ submission that any particular caution is required before accepting his evidence.

77    My response to a clash between the evidence of Mr McEvilly and the evidence of Mr Davis has been to look to the timing, logic and consistency of each in the context of, in particular, documentary evidence and the sequence of events to see whether one or the other can safely be preferred. In the greater part, that has resulted in me preferring the evidence of Mr McEvilly, but there are a number of lesser areas where a concluded view was not possible.

Mr Davis and Delta

78    Mr Davis has been a licensed electrician since 1993, and has specialised in mechanical electrical services and BMS since 2000. Prior to founding Delta he was employed at a company called AKM Electrical Services Pty Ltd in the role of apprentice electrician between 1989 and 1993. It was during some of that period where he worked with Mr McEvilly.

79    After 1993, Mr Davis continued with AKM Electrical until 1994, in the role of a tradesman. In subsequent years until 2000, he worked for three more companies, Staefa Controls as a BMS commissioning engineer, Brooks Merchant Industries Pty Ltd as a switchboard designer and Tyco Pty Ltd as a services manager, between 1998 and 2000. Subsequently, he founded Delta in around September 2000, where he has been the sole managing director since then.

80    Mr Davis spoke clearly and quite forcefully. He was a careful but wary witness. He initially answered questions as asked, but there was some degree of deterioration of this as his evidence progressed and the questions became more difficult. Within about 20 minutes of cross-examination, he was visibly sweaty and nervous. To my perception that was a product of being under considerable, and understandable, stress. A close consideration of the transcript reveals that he was put on the spot by methodical cross-examination, with aspects of his evidence being, in context, inconsistent or implausible. I do not accept the respondents’ submissions as to any inadequacy of the cross-examination of Mr Davis.

81    Mr Davis came across as well-prepared and was able to agree to questions as to time and the sequence of events without referring to his affidavit (albeit that his affidavit had only been concluded some 36 hours before). He was watchful and careful with his answers. I did not form any adverse view of his demeanour as any basis to doubt his truthfulness, but the same cannot be said about his reliability or accuracy in a number of key respects. That evaluation fell to be considered in light of the logic and sequence of events as established by the rest of the evidence, including that of Mr McEvilly, as well as the damage done by cross-examination.

82    I do not accept the respondents’ submission that in order to reject the evidence that Mr Davis gave as to his reasons for attending the 18 December 2019 meeting, and thus more readily draw the inference that the ACCC seeks, I had to find he was lying, being a conclusion that he deliberately and intentionally gave evidence which he knew to be false. My experience in law and life is that people who find themselves in trouble in some way can sometimes reproduce, characterise, justify or explain what they have said, meant, and done in the past to their current advantage to the point of convincing themselves that such an account is true, complete, consistent and accurate. This is such an occasion.

83    As I noted above, Mr Davis was clearly under a lot of pressure. A lot rests on this case for him and for his company. He may well have subjectively convinced himself that a benign account of what took place is true. If so, this is likely to be a view formed in the crucible of self-interest, rather than disinterest, wanting it to be so.

84    In any event, as Deane J observed in Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256 at 271, a finding that a party or witness had deliberately given false evidence should ordinarily not be made unless that it is “truly necessary for the purpose of disposing of the particular case”. Such a finding is not necessary in this case.

Mr Mitton and Manteena

85    Mr Mitton generally impressed me as an honest witness, doing his best to give an accurate account of what he said, did, saw and heard. However, he was not as careful as Mr McEvilly and agreed to a number of propositions in cross-examination that could not be correct unless the evidence in his affidavit was false, which I do not accept that it was likely to be. His vice lay in simply being too keen to please and not checking or thinking carefully enough before agreeing to assertions that were put to him. This mostly related to questions of timing as to dates and times. A few examples suffice to demonstrate what I am referring to.

86    In his affidavit, Mr Mitton deposed to having a telephone conversation with Mr McEvilly at about 11.30 am on 12 March 2020. In cross-examination, he was taken to a chain of emails between 6 and 16 March 2020 that were annexed to his first affidavit concerning non-compliance by LES with contractual obligations to furnish “shop drawings” for the Switchboard Project contract by specified dates. Relevantly, within that chain of emails was an email forwarded to him by Mr McEvilly at 12.23 pm on 12 March 2020, so just under an hour after the telephone conversation. Yet despite this, he agreed in cross-examination that the email had been sent to him prior to the telephone conversation. The error was not of any moment beyond demonstrating the lack of care that I have adverted to, and a lack of reliability about the timing and sequence of events when relying upon his unaided or uncorroborated memory.

87    A further example was that Mr Mitton deposed in his affidavit to having been overseas from late December 2019 and most of January 2020, returning to work on 28 January 2020. The email chain referred to above commenced with a show cause notice sent by Manteena’s Services/Design Manager, Mr Jason Bills, on 6 March 2020, referring to “Shop Drawings” that were required to be provided by 28 February 2020 and by 4 March 2020 not having been provided. Mr Mitton deposed to having a conversation with Mr Bills about Mr McEvilly being behind schedule with those drawings in February 2020 shortly after he returned to work, to having multiple phone conversations with Mr McEvilly on this topic in early February 2020, and to a “show cause” email being sent not long after one of those early February conversations. However, that email was not sent until about a month later on 6 March 2020. Again, the error in this evidence was not of any moment beyond demonstrating the lack of care that I have adverted to, and a lack of reliability about the timing and sequence of events when Mr Mitton was relying upon his unaided or uncorroborated memory.

88    The importance of the foregoing is confined. In his affidavit, Mr Mitton deposes to having a telephone conversation with Mr McEvilly in late November 2019 about the Switchboard Project, before the tender for that project went out on 29 November 2019. He deposes to a recollection of telling Mr McEvilly during that conversation about LES being potentially invited to tender for the Original NGA BMS upgrade. Mr McEvilly denies being told that before he met with Mr Davis on 18 December 2019. Because of the mild concerns I have about the reliability of Mr Mitton’s recollection about the timing (rather than content) of events, and because of the greater confidence I have in relation to the evidence of Mr McEvilly in that regard, I accept and prefer the evidence of Mr McEvilly on this topic as being, on balance, more likely to be reliable. I hasten to add that I make that preference upon the basis only of reliability as to timing, not honesty. I have no reason to doubt Mr Mitton’s honesty. Nor do I doubt that he was doing his best to give an accurate and reliable account of events. It is just that this conflict on this small portion of his evidence needed to be resolved if at all possible, and it is resolved in favour of the greater reliability of Mr McEvilly’s evidence on this topic.

Mr Nugraha

89    Mr Nugraha has a first class honours degree in engineering from the University of New South Wales, completed in 1998. He held a position at a company in Singapore as a mechanical design engineer for a short period in 1999 before being a BMS project manager for some seven years. By the time he gave evidence he had been employed by Delta for over 15 years, had occupied a range of positions mostly entailing engineering management, and was Delta’s ACT engineering manager. In each role at Delta he has assisted with the preparation of responses to tenders, including BMS design, and in providing technical solutions for the integration of various control systems with Delta’s products.

90    Mr Nugraha was a careful, thoughtful and clearly spoken witness, although somewhat wary and on occasions taking a while to accept, reject or qualify a proposition put to him in cross-examination. I had no reason to doubt his truthfulness, honestly or general reliability.

91    The respondents cast doubt on Mr Nugraha’s capacity to give certain evidence, which is addressed below, but overall I do not share those reservations or concerns. In particular, I am satisfied he was, by reason of his professional training, work history and in particular, experience with and understanding of BMS and BMS tenders, in a position to give evidence about propositions put to him in cross-examination as to the propriety of Mr Sitauti, employed by Steensen Varming as a subcontractor to Manteena and in that capacity performing work for the NGA, and seeking and obtaining input from Delta into BMS upgrade tender specifications that were favourable to Delta and the BMS it could supply.

92    Mr Nugraha was also well-placed to give evidence on technical matters, such as BMS integration or interface needs between the ALC BMS in the NGA Extension and the replacement BMS in the Original NGA, and when such issues might arise to the point of needing to be addressed. He was sufficiently involved with the NGA on behalf of Delta to give evidence about the NGA’s BMS upgrade, including as to whether or not that had been expected, at different times, to proceed by way of a tender. I therefore consider that it is open to me to proceed upon the basis of substantially accepting Mr Nugraha’s evidence.

Mr Peter Hart

93    Mr Peter Hart is a director of Control & Electric Pty Ltd (C&E), the company that was ultimately the successful tenderer for the Original NGA BMS upgrade in 2020. He was unwell at the time he gave evidence, as it turns out apparently infected with COVID-19 as the Court was advised the next day. He only gave evidence in cross-examination for about 20 minutes, with no re-examination. There was no reason not to accept his evidence.

Affidavit witnesses not called to give oral evidence

94    The relevant aspects of the affidavit evidence of the remaining two witnesses, Mr Mark Wright, an estimator at C&E, and Ms Sarah Burrows, a senior project manager at Manteena, featured briefly in an agreed statement of uncontentious facts established by the evidence. Delta’s closing written submissions referred to Ms Burrows’ evidence in relation to there being five final tenderers in support of an argument that there was always going to be a tender for the BMS upgrade.

Agreed facts and the resolution of some of the contested facts and issues

95    The substance of the case for the ACCC may be briefly summarised to set the scene:

(a)    In the period from about August to 2 December 2019, it had been indicated by senior managers at the NGA that Delta would also be likely to be given a contract to carry out the NGA BMS upgrade.

(b)    On or about 2 December 2019, Delta’s engineering manager, Mr Hendra Nugraha, was informed by Mr Tava Sitauti of Steensen Varming that two of the senior managers at the NGA had instead decided that there should be a tender for the BMS upgrade.

(c)    Mr Davis, upon being told that there was to be a tender for the BMS upgrade, sought to rig the tender process via Mr McEvilly.

96    The following comprises:

(a)    facts that are not contentious, such that the parties are in agreement that they are established by the evidence, as reflected in a detailed and helpful agreed statement to that effect provided jointly by the parties, based on admissions in the pleadings, subordinate allegations that are not contested, and uncontested evidence; and

(b)    the identification and resolution of disputed facts outside of the most significant issues in dispute, which are addressed later in these reasons.

Delta, LES and competition between them to supply BMS in the ACT

97    As noted earlier in these reasons, a BMS is a network system for monitoring and controlling a building’s internal environment and can be used to control the building’s lighting, heating, ventilation, air conditioning, CCTV, fire alarms, lift sensors, and security. It is typically used in large commercial or government buildings, including health care facilities and educational facilities.

98    Although disputed by the respondents, the evidence of Mr McEvilly in his first affidavit at [15] is quite clear in deposing to there being three main types of services that BMS providers supply: design, installation and commissioning services. He states that they comprise the following:

(a)    Design work, usually involving engineers tailoring the BMS hardware and designing the programs to provide the functionality specified in a customer’s tender document.

(b)    Installation work, involving sourcing, assembling and delivering BMS hardware and installing it at the customer’s building.

(c)    Commissioning work, involving testing and checking the hardware to ensure it is performing as designed.

99    Mr McEvilly also expressly states at [16] that LES is a “full service BMS provider in that it is able to provide all three of these services”, being a further unchallenged factual assertion that the respondents inexplicably deny is supported by the evidence. There is no reason not to accept this evidence. Mr Davis at [7] and at [11] of his affidavit deposes to Delta providing BMS design, installation, commissioning services, and maintenance services.

100    Delta designs, installs and maintains BMS in the ACT. On or about 25 March 2010, Delta was appointed as the exclusive distributor for the Delta Controls Brand of BMS in the ACT. Other BMS suppliers in the ACT include C&E, Schneider Electric, Alerton and Innovative Electrical Solutions (IES). They each offer design, installation, and commissioning services.

101    Mr Davis is, and has been since 1 September 2000, the sole managing director of Delta. Mr Davis’ role involves overseeing the commercial operation of Delta’s business, including maintaining and generating new business, in the ACT. Mr Davis is also responsible for assessing new business opportunities and deciding whether Delta will quote for new business in the ACT. Mr Davis has the ultimate or final authority within Delta to determine the final price Delta will quote on new business. At all relevant times, Mr Davis had the necessary authority to engage in conduct on behalf of Delta.

102    LES is a company that carries out the business of designing, installing and maintaining BMS in the ACT. LES was incorporated on 14 April 2019 and Mrs Karen McEvilly, the wife of Mr McEvilly, has been the sole director and shareholder of LES since that time. Mr McEvilly has been the general manager of LES since about May 2019.

103    The ACCC contends that the evidence also establishes that LES is the exclusive distributor of the Automated Logic Corporation, or ALC brand, of BMS in the ACT and surrounding areas. The respondents accept that the competition condition is satisfied, but do not accept that the evidence goes far enough to establish the existence of any exclusive distributorship, asserting that there is “no evidence” of that fact, and pointing to evidence in cross-examination in which Mr McEvilly said that while he believed that ALC signed such an agreement, he thought they had failed to send one to him and he had never seen a copy signed by them. In his first affidavit at [7] (repeated at [12]), to which this aspect of the cross-examination was directed, Mr McEvilly expressly said, in a single sentence, that in about May 2019 LES had been incorporated and entered into an agreement with ALC to become the exclusive authorised distributor of the ALC brand of BMS in the ACT and surrounding regions. The fact of that having happened was not in terms challenged. Mr McEvilly expressly adhered to this part of his affidavit in cross-examination. In my view, the cross-examination cannot be taken to go further than what was asked, namely that a copy of the agreement with ALC was never seen or received by Mr McEvilly. That falls short of impugning Mr McEvilly’s otherwise unchallenged evidence that such an agreement existed from about May 2019. For whatever slight weight or significance that fact might have, I am satisfied that such a legal relationship existed between LES and ALC.

104    The nature of the relationship between Mr McEvilly and Mr Davis is important, because it goes directly to the assessment of the competing accounts by the two men of what was said at the 18 December meeting, to be considered in the context, in particular, of a telephone conversation between them on 9 October 2019. By the time of the events in the second half of 2019 that are critical to this proceeding, Mr Davis had known Mr McEvilly for some 30 years. They met when Mr Davis commenced an apprenticeship at the same electrical contractor where Mr McEvilly was the manager. Mr McEvilly left that employment to set up his own business in about 1989, so the two men had met at some imprecise time not very long before then. On Mr Davis’ evidence in cross-examination:

(a)    for the past 20 or more years the two men have had a purely business relationship as competitors in the same industry, and occasionally saw each other at trade events and the like (a description that Mr Davis said at [27] of his affidavit had applied to their relationship after the year 2000);

(b)    they are acquaintances rather than friends, and have never had a close or social relationship, such that would involve them catching up for a beer or coffee, only having done so at workplace events when they worked for the same company, which ended in about 1989;

(c)    before the second half of 2019, he could not recall a single occasion on which he had spoken with Mr McEvilly by telephone for many years.

105    Later in his cross-examination, Mr Davis was taken to the part of the transcript of his 9 December 2020 examination conducted under s 155 of the CCA (s 155 examination). He was challenged on his previous account in which he claimed that:

(a)    when he saw Mr McEvilly at a site walk at the National Library in July or August 2019 (in fact, on the evidence, 23 July 2019) they had agreed to catch up for coffee because they had known each other a long time; and

(b)    after he had won the Honeywell BMS maintenance contract, he formed the view that Mr McEvilly would be disappointed and he wanted to clear the air.

It was put to Mr Davis that it was very unlikely that at the site walk he would have proposed meeting for a coffee with Mr McEvilly, a proposition he denied.

106    I have difficulty in accepting the account that Mr Davis gave, in his 9 December 2020 s 155 examination, that, at the time Mr McEvilly and Mr Davis saw each other at the National Library in July 2019, Mr McEvilly agreed to meet for coffee because:

(a)    that form of casual social interaction without any particular overt stated business purpose is inconsistent with the lack of that sort of relationship between them;

(b)    Mr Davis makes no mention of it in his affidavit;

(c)    in his affidavit Mr Davis deposes to making a telephone call to Mr McEvilly on 17 December 2019 to arrange a meeting, and only at that time having on his mind wanting to clear the air following the prior call from Mr McEvilly on 9 October 2019.

Having regard to the evidence of the 9 October 2019 telephone conversation between the two men, considered in more detail below, I am not satisfied that there was any agreement, or even foreshadowing, for the two men to meet prior to this being proposed by Mr Davis a day or two before it took place on 18 December 2019.

107    In the past, Delta and LES had competed for tenders for BMS work. The competition between Mr Davis via Delta and Mr McEvilly via LES and its predecessor, Electrical Solutions (ACT), had included the tender for the High Court of Australia in December 2013, the tender for the National Library in August 2019, and the tender for the BMS upgrade for the NGA in July 2020 (after the key events in the second half of 2019). Mr McEvilly’s company had emerged as the successful bidder for both the National Library and High Court tenders.

108    Since LES was incorporated in April 2019, Delta and LES have competed with each other in relation to the supply of BMS in the ACT and surrounding areas. There is a dispute as to the extent to which Mr McEvilly’s prior company, Electrical Solutions ACT, supplied BMS in the ACT and surrounding areas. Mr McEvilly referred to 1991, which was prior to the incorporation of Electrical Solutions (ACT) in 2004, and was probably therefore a reference to the prior partnership he had with his wife. The respondents contend that there was no evidence of any supply of the ALC BMS prior to LES and Delta competing for the BMS upgrade project for the High Court building in 2013. This dispute does not seem to require resolution as nothing seems to turn on it, noting that Mr Nugraha’s evidence was that Mr McEvilly had competed with Delta to supply BMSs over a number of occasions over the past 12 years, which goes back to about 2007. Moreover, it was also not in dispute that LES had the contract for maintaining the NGA Extension BMS, so was familiar with it. Indeed, a key explanation Mr Davis gave for arranging the 18 December 2019 meeting with Mr McEvilly was to ask about the possibility of LES subcontracting any necessary integration work.

109    I accept Mr McEvilly’s unchallenged evidence in his first affidavit at [13] and [16] that each of Delta, LES, C&E, Schneider, Alerton and IES are in some degree of competition by way of tender for the design, installation and commissioning of BMSs in large commercial or government buildings in the ACT, acknowledging the point that the respondents make as to the lack of clarity as to just what that competition involved, but also noting that nothing seems to turn on this at present given that there is no dispute that the competition condition is satisfied. I also accept Mr McEvilly’s unchallenged evidence in those paragraphs that each of those companies are full service BMS suppliers in the ACT, despite the respondents’ curious assertion that this evidence to that precise effect does not support that conclusion, but again noting that nothing much seems to turn on that.

110    The ACCC’s case, largely based on Mr McEvilly’s evidence, is that modern BMS, including the ALC and Delta brands, use an open standard protocol known as “Building Automation Control and Network” (BACnet); and that BACnet allows software and hardware from different suppliers, manufacturers and BMS providers to interface with each other. The ACCC’s case is that open standard systems are to be distinguished from proprietary systems, which cannot interoperate with other BMSs. The Honeywell BMS is an example of a proprietary BMS, which the respondents contend is better expressed as a BMS using a proprietary communications protocol.

111    The respondents contend that there is no evidence that an interface between an ALC BMS at the “application layer” for programming to turn equipment on and off, which uses the communication protocol called ARCnet (based on evidence from Mr Davis, which was confined to his understanding of ARCnet, and not as evidence of the fact), and a BMS that uses another communication protocol called BACnet at all layers including the application layer (such as Delta’s BMS), will work. Neither Mr Davis nor Mr McEvilly had any experience of integration or interface in such circumstances. This is a point that seems to be taken to bolster Mr Davis’ account of the 18 December 2019 meeting. Having read the evidence of Mr McEvilly and Mr Hart referred to by the respondents, the overall burden of that evidence is that two BACnet systems, such as the ALC BMS and the Delta BMS ought to be able to be integrated without difficulty, but the possibility of a problem could not be ruled out, and therefore engaging with LES might be considered prudent to save money. This evidence was apparently adduced in cross-examination in anticipation of Mr Davis waiving penalty privilege and giving evidence, as he did by his affidavit and in cross-examination. The conclusion I reach is that, at the time of the 18 December 2019 meeting, an integration or interface problem between the existing and continuing ALC BMS and the replacement for the Honeywell BMS did not rise higher than a possibility, and it may or may not have required the assistance or cooperation of LES via Mr McEvilly.

The NGA and its BMS arrangements

112    As noted at [18] above, the Original NGA was built around 1982 and the NGA Extension between 2007 and 2010, with the Honeywell BMS being installed in the Original NGA in about 1982. By at least May 2019, Mr McEvilly knew that the NGA wanted to replace the Honeywell BMS. Honeywell provided maintenance services to the NGA for the Honeywell BMS until Delta took over as the contractor responsible for maintenance services.

113    The NGA Extension has a different BMS to the Original NGA. The BMS in the NGA Extension is an ALC brand BMS (ALC BMS). It was installed in or around 2010. The ACCC plead that it was installed by Electrical Solutions ACT, the predecessor company to LES, but the respondents point out that was not proven, or at least no evidence is identified. This does not seem to matter much as LES was the exclusive supplier of ALC BMS in the ACT by at least 2019.

114    A sister company to LES, Logical Service Solutions Pty Ltd (LSS), was incorporated in June 2016. Mr McEvilly is also a director and the company secretary of LSS. LSS is a company that is in the business of providing regular preventative maintenance and servicing of BMSs, and invoices are in evidence for the provision of such services to the NGA for at least the period from 30 April 2019 to 10 January 2020, as part of a monthly service contract. LSS does not provide construction services and does not supply the ALC brand of BMS, unlike LES which does both.

Manteena Pty Ltd and the unchallenged evidence of Mr Mitton as to the tender process

115    In early 2019, Manteena Pty Ltd, a commercial construction company with offices in the ACT, was awarded the contract for managing the “NGA Project”. This phrase is used in one of the 2 December 2019 WhatsApp texts from Mr Nugraha to Mr Davis considered below, but in context was apparently only referring to the Original NGA BMS upgrade. In fact, the NGA Project comprised 21 specific projects at the NGA, ranging in value from $10,000 to $10,000,000, with a total overall budget of about $21 million. Two specific projects that involved electrical work (among others) were: an upgrade to, and subsequent management of, the Honeywell BMS at the NGA (BMS upgrade) and the upgrade of several mechanical switchboards (Switchboard Project), under a contract let to LES in early 2020.

116    In the period from about February 2019 to February 2020, Mr Mitton, as Manteena’s Project Director, was responsible for leading a team on what was called the “NGA Project”. By then, Mr Mitton had been employed by Manteena for over 30 years. That role ceased when he was promoted to the position of Design Manager at Manteena in about February 2020. Mr Mitton’s duties and responsibilities in the Project Director role involved managing staff, liaising with clients, reviewing design documents, contracts and programs, managing financial aspects, and identifying suitable tenderers for subcontracting works required to be undertaken.

117    The tender parts of the NGA Project involved Manteena conducting the design and management of tenders, dealing with parties who submitted tenders (including subcontractors), assessing the tenderers, informing the NGA as to how tenderers fitted in with budget requirements, and recommending a successful tenderer.

118    Mr Mitton described the Honeywell BMS for the Original NGA and the NGA Extension BMS as operating independently of each other, and with limited exceptions comprising separate mechanical systems. The exceptions were some common infrastructure shared between the Original NGA and the NGA Extension, such as boilers in the former that also supplied water to the latter. Alterations and checks on each BMS were completed separately and effected through their different platforms.

119    Manteena also from time to time engaged Steensen Varming (Australia) Pty Ltd to provide design and consultancy services in relation to the NGA. As relevant to this proceeding, some of that work for Steensen Varming was performed by its employee, Mr Tava Sitauti. Uncontested evidence considered in some detail below about the conduct of Mr Sitauti, who was not called as a witness, is part of the matrix of evidence, especially his role, aided by Mr Nugraha, in apparently slanting the drafting of tender specifications to favour Delta’s prospects of success, and Mr Davis’ contribution to that process by suggesting changes to the information that Mr Nugraha provided in an email to Mr Sitauti on 30 October 2019, considered in more detail below.

120    Mr Mitton’s evidence as to how the tender process took place for the BMS upgrade was not challenged in cross-examination and may therefore be briefly summarised as follows, with a notable feature of this evidence being a lack of any precise recollection on his part as to when any of the individual meetings or conversations took place, or even their sequence, unless there was a documentary record available. During his time as project director for the NGA Project, Mr Mitton had both weekly scheduled formal meetings with NGA staff, including the manager of the capital works team at the NGA, Mr Nick Xirakis, and unscheduled informal meetings or discussions with NGA staff.

121    In the three-month period from about August to October 2019, Mr Mitton also had a number of formal and informal meetings with Mr Xirakis, during which they discussed the Honeywell BMS at the Original NGA. At one of the weekly formal meetings with the NGA, Mr Xirakis told Mr Mitton that the NGA was not intending to renew its contract with Honeywell, because of unhappiness with its performance. At another meeting during this period, Mr Xirakis told Mr Mitton that Delta would be managing all of Honeywell’s projects at the NGA and would be the interim manager for the Honeywell BMS until a new contractor was formally appointed and that there would be a process to change that BMS. That is, the maintenance contract was given to Delta directly by the NGA and Manteena was not involved in that decision. The evidence indicates that Manteena was probably advised by the NGA of the 12-month maintenance contract given to Delta sometime in the period between August and October 2019, although it was not formalised until November 2019, after the decision had been made, but nothing turns on this.

122    Around October 2019, with the sequence being unclear, Mr Xirakis told Mr Mitton that there would be a formal tender process undertaken by the NGA to replace the contractor responsible for managing the BMS in the Original NGA. Despite this being an ostensible reference to management or perhaps maintenance, Mr Mitton later understood this to have been a reference to the tender to upgrade that BMS.

123    Also around this time, with there being no date or even month identified by Mr Mitton, Manteena was engaged by the NGA to design the BMS upgrade tender to replace the Honeywell BMS. By reason of records that came into existence in late October referred to below, I infer this engagement did not take place until after that time. In a meeting with Mr Xirakis to discuss that tender, Mr Mitton recalls Mr Xirakis telling him that Delta would be on the list of tenderers.

124    On 29 October 2019, Mr Mitton and other representatives of Manteena, attended a meeting at Manteena’s premises with representatives of the NGA, including Mr Xirakis, and certain other contractors. Mr Mitton deposes to the BMS upgrade tender being discussed. That is borne out of the minutes of that meeting that Mr Mitton produces. Those minutes disclose the following:

(a)    the project for which the meeting was called was the NGA infrastructure program;

(b)    its purpose, as set out at item 1.2, was to “give stakeholders a high-level review of the project’s current activities and to maintain the responsibility for those completing the action items”;

(c)    under the heading “6.0 PLANNING PHASE” was a list of topics, the last of which at item 6.10 records (emphasis added to the last line):

6.10     BMS Control Strategy

•    MCPL to issue PPB and planning phase fee for approval

•    SVA to be engaged as consultant

•    Delta and Web Control proposed as likely contractors

125    By reference to the next entry, this minute entry indicates that Delta and LES had been proposed as likely contractors, the reference to “Web Control” being a reference to LES. Further, the reference to “SVA to be engaged as consultant” is a reference to retaining Steensen Varming, as is made clear below.

126    The following day, 30 October 2019, an email was sent to Mr Mitton by a contracts manager appointed by the NGA who had chaired the meeting, Mr Adam Kaufhold, copied to Mr Jason Bills at Manteena, and to Mr Xirakis and Ms Dagseven at the NGA. The email was headed “NGA Infrastructure Program – BMS Control Strategy”. Mr Kaufhold’s email was as follows (emphasis added):

Hi Rod

Thanks for meeting with the Gallery yesterday to discuss the BMS Control Strategy project. We are seeking a Project Planning Brief (PPB) and planning phase fee to commence project planning.

Key points to inform the PPB are summarised as follows:

•    Aim (broadly): To provide head end equipment and remove and replace controllers and EOLD Budget: $1.5M

•    Program: planning from Nov 19 to Feb 20, delivery from Feb 20 to Jun 20 (subject to advice received from approach to market)

•    Area: Main Building & TEG and excludes Web Control areas

•    Consultants: Steensen Varming

•    Base Building BMS Contractor: Delta Building Controls (can be accessed to provide advice to inform performance specification and/or design in conjunction with the NGA building services team)

•    NGA Stakeholders: All

•    Procurement (contractor): Limited and options are Delta, Web Control, Schneider Electric

Please advise if there is any further information you require and we look forward to receipt of the PPB and Manteena planning phase fee.

127    I was satisfied, over objection, that Mr Mitton had sufficient expertise to give evidence about the tender processes and communications about such processes, and could therefore give the following evidence about the meaning of key aspects of that email:

(a)    “Web Control” was a reference to LES because this is the product name of the software used in the ALC BMS that LES maintains;

(b)    “Limited” indicated that the NGA was seeking a closed tender process whereby only specific tenderers would be invited to apply, rather than the tender being publically advertised, that is, as an open tender (which can also be described as a competitive tender);

(c)    the NGA was indicating by that time that it considered the possible options for BMS providers for the tender were Delta, LES and Schneider Electric.

128    It is of considerable importance that the minutes of this 29 October 2019 meeting record consideration of a procurement process for the BMS upgrade by way of a limited tender confined to only three tenderers: Delta, LES and Schneider.

129    Mr Mitton disagrees with affidavit evidence by Mr Nugraha to the effect that Delta would have needed to have discussions with, or coordinate with LES if it succeeded in winning the BMS upgrade tender, and whether that meant that the successful tenderer would need to enter into some commercial agreement with LES, such as a subcontracting arrangement. As Mr Mitton described it in his second affidavit, while some limited integration was required between the new BMS in the Original NGA and the existing BMS in the NGA Extension as part of the BMS upgrade tender, that would be practically achieved by the NGA directing LES to provide the NGA or the successful tenderer with sufficient information to facilitate that integration.

130    Mr Mitton further deposed that while LES might need to have some limited discussions with the successful tenderer to carry out that direction, there was no need for there to be any separate engagement of LES to achieve that integration. While this evidence was given in the context of the BMS upgrade tender that ultimately issued, I am comfortably satisfied that its use was not so confined and in fact reflected the substance of the objective situation in the second half of 2019 as well. I find it difficult to accept that Mr Davis could legitimately have had a different view and thus concern, especially prior to the BMS upgrade tender being issued. This conclusion is important when it comes to resolving the conflicting evidence about the 18 December 2019 meeting.

Events from 31 July 2019 to 30 November 2019

131    As at 31 July 2019, Mr Nick Xirakis was Head of Capital Works at the NGA. On 31 July 2019 Mr Xirakis sent Mr Davis a message on the LinkedIn platform asking Mr Davis to call him.

132    After receiving the LinkedIn message, Mr Davis called Mr Xirakis and left him a voice message. Mr Xirakis then called Mr Davis and asked him if Delta would be able to provide a proposal for Delta to do servicing and maintenance on the Honeywell BMS. Following the call, Mr Davis sent Mr Xirakis a text message with his email address.

133    At the time of the 31 July 2019 call with Mr Xirakis, Mr Davis did not regard the Honeywell maintenance contract as commercially attractive by itself. However, Mr Davis saw the service and maintenance arrangement with the gallery as a potential stepping-stone to winning the work to replace the Honeywell BMS. The respondents suggest that this extended to other upcoming infrastructure projects at the NGA, but Mr Davis’ evidence did not go that far.

134    On 2 August 2019, Mr Xirakis emailed Mr Davis and invited Mr Davis and “Sid” (his brother, Mr Glenn Davis) to have a meeting to discuss “BMS and related building controls” for the NGA.

135    On 8 August 2019, Mr Davis and Mr Glenn Davis met with Mr Xirakis and Mr Mark Mandy (NGA Head of Facilities Management) at the NGA. At the meeting Mr Xirakis asked if Delta would be able to do the maintenance work on the Honeywell BMS and said he was interested in learning more about the Delta BMS. Mr Davis understood Mr Xirakis to be saying that he was interested to learn more about the possibility of the NGA replacing the Honeywell BMS with a Delta BMS.

136    On 9 August 2019, Mr Xirakis emailed Mr Davis to organise a team from the NGA to visit Delta’s offices on 14 August 2019 for a presentation on Delta’s BMS.

137    On 14 August 2019, Mr Davis and Mr Nugraha delivered the “Delta Product and Capability Presentation” at Delta’s offices in Canberra to Mr Xirakis, Mr Matthew Hanns and Ms Amelia Gregory (an employee of the NGA). The purposes of the meeting included, inter alia, discussing the potential for Delta to perform service and maintenance work on the Honeywell BMS, introducing the NGA personnel to the Delta BMS and its features, promoting the Delta BMS, and promoting the Delta BMS as a potential replacement for the Honeywell BMS.

138    At that meeting, Mr Xirakis told Mr Davis and Mr Nugraha that the NGA was “looking for someone to take over the service and maintenance work for the Honeywell BMS in the original part of the NGA”, and that “at some stage the gallery will be upgrading the Honeywell BMS”. Mr Xirakis also said that he and the NGA staff had seen the BMS that Delta had set up at the National Archives and that they wanted to see the capabilities of the Delta BMS. Mr Davis understood from what Mr Xirakis said at that meeting that the replacement of the Honeywell BMS was part of the capital works that the NGA was proposing to undertake in the near future.

139    Mr Xirakis also said at that meeting that the NGA would like the service and maintenance work to go to a company that would have the ability to do the BMS upgrade. This was consistent with Mr Davis’ assessment at the time that getting the service and maintenance work was a stepping stone to getting the BMS upgrade work. Mr Davis’ thinking at the time was that if Delta could secure the service and maintenance work, it was very likely that it would get the BMS upgrade work. This is an important contextual circumstance to take into account in assessing what happened after that, culminating in the 18 December 2019 meeting, as are the next described events in August 2019 that followed.

140    In the weeks after the 14 August 2019 meeting, Mr Nugraha attended several walkthroughs at the NGA. The purposes of the walkthroughs included assisting Delta to prepare a proposal for the service and maintenance contract in relation to the Honeywell BMS, assisting Delta to determine the work that would be required to replace the Honeywell BMS with a new Delta BMS, and enabling Delta to quote for that work if it was asked to do so.

141    On 27 August 2019, Mr Xirakis emailed Mr Davis requesting a “monthly monitoring proposal” for Delta “to takeover our building management systems”. Despite the apparent breadth of this email, it was in fact a narrower request for a proposal for the service and maintenance contract for the Honeywell BMS. Mr Xirakis added, “We would further like Delta to be involved in our upcoming infrastructure projects currently managed onsite by Manteena.” Mr Davis replied the following day to say that Delta “would be delighted to assist as required”.

142    On 13 September 2019:

(a)    Mr Davis and Mr Nugraha met with Mr Xirakis at the NGA to discuss the Honeywell BMS;

(b)    Mr Xirakis sent an email to Mr Mitton and Mr Bills of Manteena, copied to Mr Nugraha and Mr Davis, instructing Manteena to commence conversations with Delta “in relation to all infrastructure projects going forward excluding 1B” – the reference to “1B” was a reference to the NGA extension building, which had the ALC BMS;

(c)    Mr Mitton telephoned Mr Nugraha and asked Delta to price up all current works with the NGA; and

(d)    after the call with Mr Mitton, Mr Nugraha informed Mr Davis that he had received “a call from Manteena asking us to price up current works with NGA” and that Mr Xirakis had “instructed Manteena not to engage Honeywell anymore from today”.

143    The ACCC contends that the evidence established that both Mr Nugraha and Mr Davis understood that the infrastructure projects referred to at (b) above would include the proposed upgrade of the Honeywell BMS. The respondents contend that the evidence goes no further than establishing only that Mr Davis was hopeful that those infrastructure projects would include the proposed upgrade of the Honeywell BMS, and that there was no evidence to support Mr Nugraha having any such understanding. I am unable to accept the respondents’ submission, and accept the characterisation of the facts urged by the ACCC as established by the evidence for the following reasons (noting that the reference to “1B” is a reference to the NGA extension):

(a)    the respondents’ argument entails reading the sentence in the email that was copied to both Mr Davis and Mr Nugraha as meaning something less than what was expressly stated, namely that Mr Mitton should commence conversations with Delta in relation to all infrastructure projects other than the ALC BMS in the NGA extension;

(b)    in his first affidavit at [22], Mr Nugraha repeated the substance of the email without qualification as to what it said;

(c)    in cross-examination Mr Nugraha agreed with the words “that’s correct, yes” that the email was “an instruction by Mr Xirakis to Manteena to commence commercial discussions with Delta on all infrastructure projects at the gallery going forward, excluding [1B]”;

(d)    after some further questions on this topic, it was put to Mr Nugraha that in the email to all infrastructure projects at the gallery outside of 1B, he “understood” Mr Xirakis to mean that it included the upgrade of the Honeywell BMS, to which he ultimately responded “I would so say so, yes”;

(e)    Mr Davis accepted in cross-examination that the email was a wider instruction than the maintenance contract for the Honeywell BMS and was an instruction from Mr Xirakis to Mr Mitton to commence commercial discussions with Delta related to all infrastructure projects at the gallery excluding 1B and that his “understanding at the time was that those infrastructure projects would include the proposed upgrade of the Honeywell BMS”.

144    The affidavit evidence of Mr Davis at [58] is therefore referring to his state of mind as at 13 September 2019, where he is saying that he did not think he was guaranteed success in relation to the “BMS upgrade contract”, and also saying that he did not know whether it would be mandatory for the BMS upgrade to be the subject of a competitive tender, but anticipated that there would be a competitive tender. Mr Davis’ evidence at [54]-58] of his affidavit is as follows:

[54]    Also after the 13 September 2019 meeting, I was copied to an email Nick Xirakis sent to Rod Mitton and Jason Bills from Manteena in which Nick instructed Manteena to “please commence the conversations with [Delta] in relation to all infrastructure projects going forward excluding 18”. A copy of Nick's email is at TDD-1 Tab 13[DBA.001.001.0183]. I recall receiving this email and my understanding of it at the time was that Delta would be approached by Manteena and asked for pricing in relation to all NGA BMS infrastructure projects in the future excluding 1 B (being the NGA Extension) and I also thought this was a positive statement in relation to Delta's chances of securing the BMS Upgrade Tender.

[55]    Later on 13 September 2019, Hendra sent me a message on WhatsApp to tell me that he received a call from Manteena and that he was going to see Rod Mitton on-site after the site walk. Hendra also said that Nick had instructed Manteena not to engage Honeywell anymore. A copy of Hendra's and my WhatsApp messages are at TDD-1 Tab 11 [DBA.001.002.0016].

[56]    From around this time, my attention turned to pricing the Honeywell Service and Maintenance Contract, and I left it to Hendra to follow up with Nick Xirakis in relation to site walk-throughs. At around this time, I recall saying to Hendra words to the effect of:

[Mr Davis]: I really want you to be on your toes. You were there when Nick Xirakis told us that the Honeywell BMS is going to be upgraded at some point and if we're doing service and maintenance on that BMS it makes sense for us to do the upgrade work. Nick Xirakis has also told Manteena to start a conversation with Delta in relation to all future BMS projects in the NGA excluding any in the extension. Find out whatever you can about the Honeywell upgrade.

[Mr Nugraha]: No worries. I'll keep it in mind as I'm going through.

[Mr Davis]: I want you to basically reverse engineer the Honeywell BMS. I want to know everything.

[57]    When I referred to reverse engineering the Honeywell BMS, I had in mind that Hendra would prepare a network architecture and points list. At that stage, I was considering the pricing for the Honeywell Service and Maintenance Contract, although Craig Davis was primarily responsible for pricing that contract. However, I thought that it would be useful for Hendra to prepare a network architecture and points list so that it would assist our technicians undertaking the maintenance works and also so that it would be useful when it became necessary to price the BMS upgrade contract in due course. As I explain in paragraph [170] below, it was actually Ron Atinkson rather than me who eventually did the pricing.

[58]    Although Nick Xirakis had told Manteena that it should start a conversation with Delta in relation to all future infrastructure projects in the NGA, I did not think that Delta was guaranteed success in respect of the BMS upgrade contract. I did not know whether it would be mandatory for the BMS upgrade to be the subject of a competitive tender, but I anticipated that there would be a competitive tender managed by Manteena. I was trying to put Delta in the best position to win the BMS upgrade regardless of whether it was the subject of a competitive tender.

145    The email sent on 13 September 2019 as referred to at [54] and [58] of Mr Davis’ affidavit above sent to representatives of Manteena, Mr Rod Mitton and Mr Jason Bills by Mr Xirakis is as follows:

Hi Rod,

As discussed this morning, please see the contact details for Delta, please commence the conversations with them in relation to all infrastructure projects going forward excluding 1B. Hendra will be on site on Monday morning meeting with our HVAC team and may have time for a catch up with Manteena.

As always, happy to discuss further, if required.

146     Mr Davis was cross-examined on this aspect of his affidavit evidence as follows:

…do you see the date of this email is 13 September, so it’s the same date as you’re talking about in paragraph 55. You see that?---Yes.

And then in paragraph 56, you say in the second sentence, just before the quoted speech in the third line “at around this time”, you see that?---Yes.

So there, you’re saying at around 13 September 2019, correct?---Yes.

And you say:

I recall saying to Hendra words to the effect of –

And then there’s some quoted speech?---Yes.

And do you see about four lines down, you say:

Nick Xirakis has told Manteena to start a conversation with Delta in relation to all future BMS projects in the NGA excluding the extension.

?---Yes.

And that reflects the fact that your understanding at this time was that this instruction from Mr Xirakis to Mr Mitton was to start a conversation with Delta in relation to all future BMS projects in the NGA outside of the extension, correct?---I’m sorry. Could you repeat that? I was just reading another paragraph.

Yes, of course. This reflects the fact that your understanding as at 13 September 2019 was that the instruction of Mr Xirakis emailed to Mr Mitton on that day was to start a conversation with Delta in relation to all future BMS projects in the gallery excluding the extension?---In relation to the infrastructure works.

Well, all future BMS projects is how you described it to Mr Nugraha, correct?---Yes.

And that was a correct description?---Yes.

And that included the BMS upgrade, correct?---Yes.

Now, Mr Nugraha, in this same text on 13 September 2019 sent via WhatsApp, told you that Mr Xirakis had told him that Mr Xirakis had instructed Manteena not to engage Honeywell any more from that date. Do you recall that?---Yes.

And that was particularly exciting news to you, given that it meant you were likely to win the service and maintenance contract?---Yes.

But as you say in your affidavit, the service contract for the Honeywell BMS was of itself uncommercial from Delta’s standpoint in view – if it was viewed in isolation?---Yes.

And the true value of the service and maintenance contract from your perspective was that you anticipated it would assist you in winning the work of replacing the Honeywell BMS with a new BMS?---Yes.

It was the stepping stone, as we have discussed?---Yes.

And your expectations in this regard were consistent with what Mr Xirakis had told you at the 14 August meeting at the gallery regarding the fact that the gallery was looking a maintenance contactor for the Honeywell BMS in the first instance, but that it intended that that same contractor would ultimately do the BMS upgrade?---Yes.

Now, you say in your affidavit that you did not think that Delta was guaranteed success in respect of the BMS upgrade on 13 September 2019. Do you recall that?---Yes.

But Mr Xirakis had already told you that the gallery would be looking to use the same provider for the replacement of the Honeywell BMS as they were using for the service and maintenance work, correct?---Yes.

So you must have thought that Delta was very likely to win the BMS upgrade if it was able to secure the service and maintenance contract?---Yes.

And you were very confident of winning at that time?---As at - - -

Sorry, as at 13 September 2019 you were very confident of winning the BMS upgrade work?---Yes.

147    Carefully reading Mr Davis’ affidavit at [54]-[58] together with his cross-examination on this very issue, I am satisfied that he has gone further in his cross-examination evidence than [58] of his affidavit by agreeing that he was very confident of winning the work, without the qualification of expecting a competitive tender. Mr Davis perhaps did not appreciate the significance of the final answer reproduced above. He went further than his affidavit by moving, as at 13 September 2019, from not being guaranteed that Delta would win the contact, not being aware whether a competitive tender was required, and expecting a competitive tender, to being very confident of winning the work. I am unable to accept that he could be confident of winning the work if there was a competitive tender, or even if there was a limited tender with only Delta and LES bidding without clear evidence being given of the basis for any such confidence. I therefore understand the final resting place of his evidence on this issue during cross-examination to be that as at 13 September 2019 he was confident of winning the contract if there was no tender process and, at that time, he thought there was at least a possibility of there being no tender process. This is not necessarily inconsistent with [58] of his affidavit.

148    For completeness, Mr Davis later in his affidavit at [125] is not talking about his state of mind at 13 September 2019, but rather is his account of his state of mind on 17 December 2019, at the time that he rang Mr McEvilly to set up the meeting the next day. He is there saying that he was confident of winning the tender, and with hindsight was perhaps over confident. But his overall position is somewhat inconsistent as between evidence and submissions.

149    The case his counsel puts forward is that this was confidence in relation to winning a competitive tender, or a tender with more than 2 tenderers, but this does not sit well with the 2 December 2019 WhatsApp texts from Mr Nugraha. The ultimate conclusion I reach is that, by the time of Mr Davis’ meeting with Mr McEvilly on 18 December 2019, he was trying to engineer the same effective position that he had thought was possible as at 13 September 2019, with the appearance of a limited tender, or at least the NGA seeking a limited tender, but the reality of no real tender at all taking place, either because of LES not participating, or of LES not participating as a genuine competitor for the BMS upgrade contract. This was reflective of him saying to Mr McEvilly that he was confident of winning, but not genuinely having that level of confidence.

150    This conclusion is also supported by Mr Davis’ acceptance in cross-examination of the proposition that he was excited to get the information from Mr Nugraha by a WhatsApp text after the email that Mr Mitton had asked Delta to price all current works with the NGA. Mr Davis sought to downplay the proposition that one of the reasons for that excitement was that he understood the pricing instruction to include the work of replacing the Honeywell BMS to which he responded “possibly”. When challenged on that somewhat tepid response, Mr Davis sought to walk back from the answers he had given by referring to being “hopeful” that the work would include the upgrade of the Honeywell BMS. But this must be read as relating to being hopeful that the process would result in getting that contract, and does not detract from him understanding that the direction being given by Mr Xirakis to Manteena via Mr Mitton was to commence commercial discussions that would include the Honeywell BMS upgrade, and that this would possibly extend to pricing that upgrade at that time.

151    It is reasonably clear on the evidence read as a whole and properly understood that, as at 13 September 2019, Mr Davis and therefore Delta were confident of winning the Honeywell BMS upgrade work. That conclusion is reinforced by what Mr Davis said to Mr Nugraha in around mid-September 2019. Mr Davis instructed Mr Nugraha to find out whatever he could about the Honeywell BMS upgrade. Mr Nugraha recalls in his first affidavit at [30] that the effect of what Mr Davis said to him as being:

We need to prepare a Delta BMS points list and network architecture design for the replacement of the Honeywell BMS and to help the service team to understand what’s involved in maintaining the Honeywell BMS.

152    Mr Nugraha’s first affidavit at [31] deposes to, after that conversation with Mr Davis, him working with Mr Wilcomes on a preliminary network architecture design and points list, setting out how a Delta BMS might be installed in the NGA, which would assist them in understanding the time and materials required.

153    The burden of Mr Nugraha’s evidence in cross-examination is that:

(a)    a points list is a list of all the inputs and outputs that will form part of a new BMS;

(b)    together with network architecture, a points list is used by Delta to price the costs of supplying a new BMS, here for the replacement of the Honeywell BMS with the Delta BMS;

(c)    a points list is also used to assist service technicians when installing a new BMS.

154    Mr Nugraha agreed that the fact that pricing was being prepared at the earlier time from about mid-September 2019 reflected the fact that Delta was not expecting there to be any formal competitive tender for the work of replacing the Honeywell BMS at that time. Mr Davis’ affidavit evidence at [77] was that between 1 and 3 October 2019, he had received a series of emails from Mr Nugraha in relation to the points list and preliminary network architecture for the NGA and that Mr Nugraha had suggested he could use the preliminary network architecture to accompany his pricing submission, with Delta not yet having started pricing the BMS upgrade as a whole.

155    The ACCC and the respondents agree regarding the dual purpose of the points list. That is, the points list could be utilised for preliminary works related to the network architecture for the NGA and undertaking the work of replacing the Honeywell BMS. However, the respondents submit that Mr Davis only believed that the upgrade contract use was only confined to the pricing of the upgrade when the tender was ultimately released in due course. Mr Davis confirmed that a 1 October 2019 email from Mr Nugraha attaching a points list reflected the fact that the points list was being prepared, at least in part, to price a new Delta BMS at the NGA to replace the Honeywell BMS, but also to assist with the service and maintenance contract because there was no Honeywell service or points list available for Delta to undertake the maintenance. Mr Davis also confirmed those emails were not addressing the pricing for the service and maintenance contract, because that had already been submitted.

156    The respondents rely upon evidence from both Mr Nugraha and Mr McEvilly that pricing for a proposed BMS for would require consideration of the tender documents, including drawings and specifications. However, this evidence of Mr McEvilly was given in the context of cross-examination on the 18 December 2019 meeting with Mr Davis, by which time it was known that there was going to be a tender process of some kind. This evidence from Mr Nugraha was also given in the context of a tender process. Therefore, the ACCC accurately characterises one purpose of the points list that Mr Davis, in mid-September 2019, asked Mr Nugraha to prepare was to assist Delta to prepare a pricing submission for the replacement of the Honeywell BMS with the Delta BMS. That is, it was work to support a submission on pricing for the purposes of a contract that would be let in the absence of a tender process. Mr Davis’ evidence that it was impossible to price the BMS Upgrade before the release of the tender, and Mr Nugraha’s evidence that the points list and network architecture were insufficient has to be understood in that light and its scope limited to the tender process once that emerged.

157    On 16 September 2019, Mr Nugraha attended a meeting with Mr Mitton and Mr Paul Cresswell of Manteena and Mr Matthew Hanns of the NGA. On a walkthrough that day, either Mr Xirakis or Mr Hanns told Mr Nugraha that the NGA was contemplating replacing the Honeywell BMS and Mr Hanns and Mr Nugraha discussed the “changeover methodology”. After the walkthrough, Mr Nugraha emailed Mr Hanns asking if he could return to the NGA on Wednesday, being 18 September 2019, “with one of our commissioning engineers, Steve Saltum, to review the changeover methodology”. By the words “changeover methodology”, Mr Nugraha was referring to “the process for the replacement of the Honeywell BMS with Delta BMS”.

158    On or around 16 September 2019, Mr Nugraha discussed the replacement of the Honeywell BMS with Mr Davis.

159    On 18 September 2019, Mr Nugraha conducted a site walk of the NGA with Mr Steve Saltum. Mr Saltum was employed by Delta Building Automation (Vic) Pty Ltd and was based in Melbourne. He had flown to Canberra for the day to assist Mr Nugraha.

160    On 19 September 2019, Mr Nugraha emailed Mr Davis a summary of his 18 September 2019 site visit at the NGA. That email prints out as a full A4 page. As part of the summary, Mr Nugraha’s email relevantly stated (ellipsis in place of portions not reproduced; emphasis added):

I’ve put all graphics screenshots, points list and site photos in a dropbox folder here: …

ln summary:

l.    …

2.    …

3.    …

4.    …

5.    There is an existing ALC system which controls mainly the front part of the gallery (part of BENMAX upgrade few years ago), they’re not part of our upgrade works. The ALC controllers are on different VLAN to that of Honeywell.

6.    …

7.    …

8.    …

9.    …

Items to consider for pricing:

1.    …

2.    …

3.    …

4.    …

From both Steve and my point of view, we both believe the Temporary Exhibition Gallery (TEG) plantroom should be our first one to cutover as it addresses a) current Manteena’s TEF dehumidifier project, b) establishes Delta’s presences on-site and c) the current exhibition (Contemporary Worlds: lndonesia) is due to finish on 27/10/2019 and this would give us enough time to prepare the contract, documentation, programming, graphics, procurement etc.

Also before our first cutover, we need to establish the enteliWEB server first to ensure visibility is maintained at all times.

161    The ACCC submits that the evidence of Mr Davis and Mr Nugraha establishes the following about the above email:

(a)    the reference to “our upgrade works” was intended by Mr Nugraha, and understood by Mr Davis, to mean the replacement of the Honeywell BMS with a Delta BMS;

(b)    the reference to “Items to consider for pricing” was intended by Mr Nugraha, and understood by Mr Davis, to refer to the work of pricing the replacement of the Honeywell BMS with a Delta BMS; and

(c)    the reference to “cutover” refers to “the cut over from the Honeywell BMS to the Delta BMS”, which would first be installed in the Temporary Exhibition Gallery (TEG) plant room at the NGA.

162    In relation to (a) above, the respondents take issue with Mr Nugraha’s understanding being shared by Mr Davis, with him initially agreeing to that proposition in cross-examination, and then recanting once further questions made clear the adverse consequences of the acceptance of that proposition. I found Mr Davis’ original acceptance more credible than his recantation, and made a note to myself at the time the evidence was given to that effect. Having reread the transcript I remain of that view. I reach the same conclusion about (b). I therefore accept the slightly lesser assertion made by the ACCC in relation to those two portions of the email. That carries over to (c) above as it is a consistent way to read that email. It follows that this is evidence of an expectation on the part of Mr Davis, and thus of Delta, that the contract for the BMS upgrade would be given to Delta, and that, as at 19 September 2019, the respondents did not envisage any tender process taking place for the BMS upgrade.

163    The ACCC further submits that, in his email of 19 September 2019, Mr Nugraha was proposing that the process of replacing the Honeywell BMS with a Delta BMS would commence in about six weeks’ time and would coincide with the capital works within the temporary exhibition gallery (TEG), and points out that Mr Davis did not respond to this email by suggesting that Mr Nugraha’s proposal was unrealistic. I consider that this is the most sensible way to read the email. It follows that I accept the ACCC’s follow on submission that, as at 19 September 2019:

(a)    Mr Nugraha was proceeding on the assumption that there would not be a formal competitive tender for the work of replacing the Honeywell BMS; and

(b)    Mr Davis and Mr Nugraha both (somewhat optimistically) assumed – perhaps better described as hoped – that Delta alone would be awarded the work of replacing the Honeywell BMS with the Delta BMS.

164    However unrealistic an assumption of no tender process at all taking place might have been, it was dispelled by no later than 2 December 2019 because of what Mr Sitauti told Mr Nugraha about a tender process involving just Delta and LES, forming the basis for a text from Mr Nugraha to Mr Davis to that effect on that date.

165    On 24 September 2019, Mr Davis emailed Delta’s proposal on the maintenance of the Honeywell BMS to Mr Xirakis.

166    The ACCC submit, and I accept that the evidence establishes, that:

(a)    the service and maintenance contract was itself uncommercial from Delta’s standpoint, if viewed in isolation;

(b)    the true value to Delta of that service and maintenance contract was that Mr Davis anticipated it would assist Delta in winning the work of replacing the Honeywell BMS with a new BMS; and

(c)    Mr Davis thought that Delta was very likely to win the BMS Upgrade if it was able to secure the service and maintenance contract for the Honeywell BMS.

167    Manteena was advised by the NGA of the 12-month maintenance contract given to Delta in about September 2019, after that decision had been made. That is, the maintenance contract was given directly by the NGA and Manteena was not involved in that decision.

168    From mid-September 2019 to early October 2019, Mr Nugraha worked with Mr Jason Wilcomes, a project engineer with Delta, on a preliminary network architecture design and points list.

169    In September and October 2019, Mr Davis appreciated that there might possibly be difficulties in the future in integrating a Delta BMS at the NGA with the ALC BMS in the NGA Extension. I am not satisfied on the evidence that this concern genuinely rose any higher than that, not least because there was no sound basis at that pre-tender stage for it to be more than a possibility. I accept Mr Mitton’s evidence as to how this concern, if it crystallised, could readily have been addressed if and when it needed to be.

170    Between 1 and 3 October 2019, Mr Nugraha sent Mr Davis a series of emails in relation to the points list and preliminary network architecture for the NGA. The reference to “pricing” in Mr Nugraha’s email of 1 October 2019 was to pricing the replacement of the Honeywell BMS with a Delta BMS.

171    By 3 October 2019, Delta was taking steps to assemble the information it would need to price up the BMS upgrade. It needs to be kept steadily in mind that this was prior to any indication of there being a tender process, as opposed to a single party – Delta – quote process. It is not to the point that this might have seemed unlikely at the time, as, logically, work done on this would hardly have been wasted even if a tender process did emerge because of the information that would have been assembled in aid of any such process.

172    In or around late September or early October 2019, there was a site inspection at the Fairfax Theatre at the NGA. Mr McEvilly and Mr Glenn Davis of Delta attended that inspection. During the inspection, Mr McEvilly observed that employees of Delta were in attendance. The respondents dispute Mr McEvilly’s account of what he said at this site inspection. However, no competing evidence was called, and he adhered to the account recorded in his affidavit evidence to the limited extent it was the subject of cross-examination. I therefore accept his evidence as to what he said, as follows:

[39]    In or around September 2019, I attended a site inspection at the Fairfax Theatre of the NGA for a small tender job. During the site inspection, I noticed that representatives from Delta were present. I considered this odd given that I was not aware that Delta was involved in completing any works on that part of the NGA. During the site inspection, the Project Director of the NGA informed me that Delta was the incumbent maintenance provider for the Honeywell BMS. I was surprised by this because I had not heard about the maintenance contract for the Honeywell BMS being released for tender.

[40]    Shortly after the site inspection was completed, I telephoned Tim [Davis] to ask him what the representatives from Delta were doing at the site inspection at the NGA so that I could better understand whether Delta had a contract with the NGA to perform maintenance works for the Honeywell BMS. I recall Tim said that Delta had been engaged by the NGA to perform service and maintenance works on the Honeywell BMS. Tim said words to the effect: “We priced some of the repair works on the Honeywell BMS but have not yet received any orders.”

173    Mr McEvilly’s oral evidence during cross-examination was consistent with his affidavit as follows:

We – we were invited to a site inspection for an upgrade on the Fairfax Theatre at the gallery by one of the mechanical services clients we had. When I turned up for that site inspection to have a look at the works, I noticed Delta were onsite and the project director, I think it was, actually informed everyone in attendance that Delta were the BMS provider for the gallery and that’s when I found out that Delta were there and followed up with the phone call to Tim.

Yes. Tim himself wasn’t there at the Fairfax Theatre; that’s right, isn’t it?---Sorry?

Tim was not there at the Fairfax Theatre, was he?---No. Mr Glenn Davis was there at that meeting

And it’s right, isn’t it, that when you saw Glenn Davis at that meeting, you said to him words to the effect of, “What the hell are you guys doing here”?---That’s probably close to the words I used when I rang Tim, yes.

It may have been less polite than that?---No. It probably wasn’t any less polite than that.

But you accept you said words to that effect both to Mr Glenn Davis in – at the theatre and then in your subsequent phone call with Mr Tim Davis; do you agree?---Yes, well, we didn’t have much of a conversation with Glenn. I think I saw him on the way out and asked if he wanted coffee because I was going to try and get an opportunity to talk to him, but he just kept moving on, so the next point of contact was the telephone call with Tim.

And when you called Tim, not only did you say to him, “What the hell are you guys doing at the gallery,” you told him that the gallery was your site?---Sorry?

You told him that the gallery was your site?---No, no. I told him that we were on-site and we had had a long association. Tim was aware of all that.

Yes. And you made it clear that you considered it to be your site and that Delta should not be there; correct?---Well, no. No. I wanted to know why Delta were there, and again, it goes back to the fact that we – we’ve found out that they were there and we hadn’t been given the same opportunity, so that’s – that’s where that stemmed from.

Yes. And you found out not only that they were there, but they had been awarded a contract without you knowing about it; correct?---Well, they hadn’t been awarded a contract at that point, but they were certainly going to be tendering on the contract and everyone that was in attendance at the meeting was being advised that BMS that the BMS vendor was Delta for the National Gallery.

But you’re not prepared to accept you were annoyed about that?---Yes, I was a bit annoyed about that. Yes.

174    During cross-examination, Mr McEvilly admitted to making the remark, “what the hell are you guys doing here?”. However, there was a disagreement regarding who that remark was directed to. The ACCC disagrees with the respondents’ submission that it was directed towards Mr Glenn Davis during their encounter at the Fairfax gallery. Instead, the ACCC argues that the parts in bold above of Mr McEvilly’s cross-examination indicate that the words were said to Mr Tim Davis during the subsequent telephone conversation on 9 October 2019, not Mr Glenn Davis at the NGA prior to that telephone conversation. I am unable to accept the respondents’ submission that this question and answer comes close to establishing that Mr McEvilly said anything like “what the hell are you guys doing here” to Mr Glenn Davis at the NGA.

175    At 1.32 pm on 9 October 2019, Mr McEvilly called Mr Davis. At 1.53pm on 9 October 2019, Mr Davis returned Mr McEvilly’s phone call and they had a conversation by telephone. The contents of this short telephone conversation is hotly disputed. The version that each side advances is consistent with their case and inconsistent with the case for the other side.

176    On the account given by Mr McEvilly in his first affidavit, he made the telephone call, which was returned by Mr Davis 20 minutes later, to ask what representatives of Delta were doing at the site inspection at the NGA so that he could better understand whether Delta had a contract to perform maintenance works for the Honeywell BMS. He said he recalled Mr Davis telling him that they had priced some of the repair work, but had not yet received any orders. He denied the proposition put to him in cross-examination that he considered the NGA to be his site and that Delta should not be there, and maintained that he wanted know why they were there and why LES had not been given the same opportunity as Delta to tender. Mr McEvilly understood those in attendance at the site meeting were advised that the BMS vendor for the NGA was Delta. He also described wanting to know if Delta had any contacts at the NGA. He accepted in cross-examination that he was a bit annoyed about the situation, but denied that he had said to Mr Davis that it was pretty ordinary behaviour by Delta. When asked, he said that he did not recall the discussion concluding with Mr Davis suggesting that the two men catch up for a coffee, doubting that would have happened as that is the last thing he would have been thinking about because he was pretty worked up, or moderately worked up, and probably not very happy at that point. He also denied that he was extremely worked up, or that he had sworn at Mr Davis.

177    Mr Davis made no mention of the 9 October 2019 telephone conversation in his s 155 examination. The respondents deny it has any significance. In his affidavit, Mr Davis says that he does not agree with Mr McEvilly’s account of the conversation and instead deposes to a significantly different conversation taking place. Mr Davis says that Mr McEvilly was angry with him and gave an account of the conversation in the following terms at [81] of his affidavit:

To the best of my recollection, this was the first time I had spoken to Tony on the phone for years. Tony describes this conversation in paragraph 40 of his first affidavit. I do not agree with Tony's description of our conversation. As soon as Tony picked up the phone he sounded angry. The conversation I had with Tony was to the following effect:

[Mr McEvilly]:    Timmy bloody Davis, what the fuck are you up to?

[Mr Davis]:    G'day Tony, I'm not sure what you mean.

[Mr McEvilly]:    What are you fucking blokes doing at the gallery? You know that is my site!

[Mr Davis]:    We are pricing the Honeywell maintenance contract, but it’s early days and we haven’t received any order yet. It’s an opportunity that came to us. We haven’t been asked to look at anything to do with the ALC System or anything down that end of the gallery.

[Mr McEvilly]:    That's ordinary from you blokes. You should've let me know.

[Mr Davis]:    Look mate, I can tell you've got the shits. After the maintenance contract is sorted out by the Gallery, let's catch up for a coffee.

178    Mr Davis was vigorously cross-examined about his account of the 9 October 2019 telephone conversation with Mr McEvilly. A number of propositions were put to him challenging the logic of what he said had taken place and in particular what he gave as his account of what he said to Mr McEvilly. That cross-examination was effective in rendering Mr Davis’ account considerably less credible than the account given by Mr McEvilly, for the following reasons:

(a)    although, on his account of it, the conversation “should have been” memorable, he did not mention it during his s 155 examination just over 12 months later, nor the prior conversation with his brother on 1 October 2019 pertaining to the site visit and Mr McEvilly, casting a real doubt on the accuracy or reliability of his recollection at the time of the trial, which was reinforced by the next point;

(b)    he accepted that suggesting to Mr McEvilly that they have a coffee after the Honeywell BMS maintenance contract (also referred to as the maintenance and service contract) was “sorted out” by the NGA, that was, at a time when he saw that maintenance contract as being a stepping stone to winning the BMS upgrade tender – to which may be added that it was clear that Mr McEvilly was of the same view about that advantage, such that this must have been reasonably obvious;

(c)    he regarded that maintenance contract as a key competitive advantage to Delta;

(d)    even later in October when Delta had commenced doing that work, and the written service and maintenance contract had been signed by him, he had been very nervous about the prospect that it might not be countersigned by the NGA and was concerned at that later time that it was not too late for the NGA to take that contract away from Delta and give it to Schneider or to LES;

(e)    the situation was even more tenuous on 9 October 2019, because he was yet to hear whether the Delta proposal for that contract had been accepted;

(f)    if he told Mr McEvilly on 9 October 2019 that Delta was pricing that contact, there was possibly a real risk that Mr McEvilly would try to “swoop in” and undercut Delta on that contract, after initially denying that there was any such risk;

(g)    he did not just tell Mr McEvilly that he was pricing the contract, but, on his account, made it clear that the contract had not been sorted out;

(h)    if he had said that to Mr McEvilly, he would have been making it absolutely clear to his competitor that Delta was trying to secure that contract, in circumstances when on his account, Mr McEvilly was angry at him and said that the NGA was his site;

(i)    the reason behind Mr McEvilly calling Mr Davis, on Mr Davis’ account, was that he was angry with him for trying to win business at the gallery, such that it was inherently unlikely that an offer to have coffee to “clear the air” would have been well received by Mr McEvilly, especially in circumstances where Mr Davis would be effectively telling him “Let me sort out the maintenance contract and get that settled with the gallery and then we will have a coffee”, because it would be in effect telling Mr McEvilly to “let me win more business at the gallery and then we will have a coffee”, noting that this is the very thing that “enraged” Mr McEvilly in the first place;

(j)    if it was Mr McEvilly’s view that the site did indeed belong to him, it would have been an incredibly foolish thing for Mr Davis to do as it would tip Mr McEvilly off as to a commercial opportunity that Delta was pursuing at the NGA, in circumstances where it was reasonably common knowledge in the BMS industry that there would be an opportunity in the near future to replace the Honeywell BMS, and he would assume that Mr McEvilly and other competitors wanted to win that work;

(k)    he would assume that Delta’s competitors would also form the view that winning the maintenance contract was a stepping stone to winning the BMS upgrade;

(l)    it would be foolish to tell a competitor that an important stepping stone at the NGA was up for grabs;

(m)    on his account, the offer of a coffee was an attempt to clear the air;

(n)    on his version of the conversation, he was foolishly telling a key competition of his critical commercial opportunity, notwithstanding that Mr McEvilly was angry, that he was trying to clear the air by offering him a coffee, but would only have that coffee once he succeeded in winning that maintenance contract.

179    The above makes clear that, despite Mr Davis’ denials, his account of the 9 October 2019 telephone conversation with Mr McEvilly is simply not credible and cannot be accepted. A further problem for the respondents, identified by the ACCC, is that the content of the call asserted by Mr Davis is that it formed one of the reasons for arranging the 18 December 2019 meeting with Mr McEvilly. That is, it was on his mind for over two months. Yet he did not mention this during his s 155 examination, conceding in cross-examination that it should have been a memorable event on his account of what took place.

180    A judgement call has to be made as to which version is more probable. The logic and sequence of events much better supports Mr McEvilly’s account. I therefore accept that account over that given by Mr Davis. It follows that I am unable to accept that this conversation formed any part of the reason for Mr Davis arranging for the meeting that took place between the two men on 18 December 2019.

181    At 2.02 pm on 9 October 2019, Mr McEvilly called Mr Hart, a director of Control & Electric. Mr McEvilly and Mr Hart are friends and speak on a regular basis. During cross-examination, Mr McEvilly stated that he and Mr Hart would meet up for coffee approximately once a month which contrasts with the relationship between Mr Davis and Mr McEvilly, highlighting the inherent unlikelihood of Mr McEvilly and Mr Davis arranging to meet over a coffee without there being some purpose in mind, or that either would seek to do so without some credible reason.

182    At 3.35 pm on 9 October 2019, two hours after his conversation with Mr Davis, Mr McEvilly emailed Mr Mandy, the Head of Building Services at the NGA (also referred to by Mr McEvilly as the Head of the Maintenance Division at the NGA). In terms, by this email, Mr McEvilly was inquiring about the Honeywell BMS upgrade and requesting an opportunity to provide a competitive bid for the work, making no reference at all to the Honeywell service and maintenance contract. At 7.54 am the next day, 10 October 2019, Mr Mandy forwarded Mr McEvilly’s email of 9 October 2019 to Mr Xirakis (Head of Capital Works at the NGA, copied to Mr Hanns). Mr Mandy said his preference was “that we give Tony the opportunity to see if he can, in the first instance, take control of the maintenance and day to day operation of the Honeywell system, and then as needed involve both companies to provide pricing for the replacement of the Honeywell system or go to the market?” This email was therefore canvassing with Mr Xirakis both giving LES a chance to compete for the maintenance contract for the existing Honeywell BMS, and the options of either a limited or open tender for the BMS upgrade. That is, Mr Mandy was going further than the request expressly made by Mr McEvilly.

183    There is an issue relating to Mr McEvilly’s 9 October 2019 email raised by the respondents. They submit that Mr McEvilly also complained to the NGA about the award of the Honeywell service and maintenance contract to Delta. The ACCC counters this by submitting that there is no mention of the Honeywell service and maintenance Contract in the email from Mr McEvilly to Mr Mandy. The respondents reply by submitting that Mr Davis did not once tell Mr McEvilly about the upgrade contract, pointing to a series of evidence said to support their submissions, namely that Mr Mandy’s email sent the next day refers to the service and maintenance contract as well as the BMS upgrade contract, and during the telephone conversation Mr Davis said he also mentioned the maintenance contract. The problem for the respondents with reliance on this evidence is that it is Mr Mandy who refers to the service and maintenance contract, not Mr McEvilly; and I have already rejected Mr Davis’s account of the 9 October 2019 telephone conversation.

184    I infer that Mr McEvilly became aware of the awarding of the service and maintenance contract to Delta, and had been advised by someone, most likely other than Mr Davis, about Delta also being approached about the BMS upgrade, as noted above. While Mr McEvilly was annoyed about the service and maintenance contract, there is no reason to think that he considered anything could be done about that. There is no suggestion that he was aware that the service and maintenance contract had not in fact been formally let to Delta at that time. The email he sent to Mr Mandy suggests he was concerned that this not be repeated with the BMS upgrade contract, and wanted an opportunity to compete. Mr Mandy had evidently misread Mr McEvilly’s email as referring to both the service and maintenance contract and the BMS upgrade contract, presumably because he knew that the former had not been finalised and therefore, unlike Mr McEvilly, thought it was still in play. I therefore reject the respondents’ submission about Mr McEvilly’s 9 October 2019 email also raising the service and maintenance contract.

185    The former reference in Mr Mandy’s 10 October 2019 email to Mr Xirakis, that is LES being given a chance to compete for the maintenance contract for the existing Honeywell BMS, evidently was not accepted because the following day, 11 October 2019, Mr Xirakis sent an SMS message to Mr Davis to inform him that the NGA had endorsed Delta to be the NGA’s service and maintenance provider for the Honeywell BMS.

186    The latter reference in Mr Mandy’s 10 October 2019 email to Mr Xirakis, to the choice of Delta and LES being given an opportunity to “provide pricing for the replacement of the Honeywell system or go to the market” is relied upon by the ACCC as evidence that, contrary to the case for the respondents, the NGA did have in contemplation the possibility of a closed tender process for the replacement of the Honeywell BMS, involving only those two contractors, rather than a full competitive tender, which ultimately did take place. I accept that this is so.

187    On 16 October 2019, the proposed service and maintenance contract for the Honeywell BMS was emailed to Mr Davis by Ms Aimee Dagseven, the capital works and project coordinator at the NGA.

188    On 18 October 2019, a “Delta start up meeting” was held at the NGA. The attendees were Mr Davis, Mr Nugraha, Mr Middleton (Delta’s Service Manager at the time) and Mr Atkinson (Delta’s Account Manager at the time) as well as Mr Mandy, Mr Hanns, Mr Andrew McRae (a member of the facilities and maintenance team at the NGA), Mr Xirakis and Ms Dagseven.

189    After that meeting, Mr Davis spoke with Ms Dagseven regarding the proposed service and maintenance contract for the Honeywell BMS.

190    On or around 25 October 2019, Mr Tava Sitauti, a Principal Project Delivery Consultant with Steensen Varming, an engineering firm, told Mr Nugraha that a representative of Schneider, a competitor of LES and Delta in the supply of BMS in the ACT, had rung the NGA requesting tender documents for the Honeywell BMS Upgrade. Mr Nugraha relayed this information to Mr Davis via a WhatsApp text message the same day. Mr Davis was concerned by the news that Schneider had approached the NGA. After receiving Mr Nugraha’s WhatsApp message regarding Schneider, Mr Davis telephoned Mr Xirakis trying to get a signed copy of the service and maintenance contract as soon as possible. Mr Davis was in a rush to get the service and maintenance contract signed because he believed that, if Delta had the signed service and maintenance contract, that would be a significant advantage if the BMS upgrade was put out to a tender that was not limited or closed. Necessarily that would also be an advantage for a limited or closed tender as well.

191    On 28 October 2019, Ms Dagseven emailed Mr Davis an updated version of the proposed Honeywell service and maintenance Contract. Mr Davis signed the contract and emailed a signed copy to Ms Dagseven later that day. This copy of the Honeywell service and maintenance Contract was apparently never countersigned by the NGA; rather, as described below, Mr Davis signed another copy four weeks later, on 25 November 2019.

192    After Mr Davis returned the signed service and maintenance contract to Ms Dagseven on 28 October 2019, he remained nervous that the NGA had not returned a signed contract. He thought there was a prospect that the NGA might change its mind and engage LES to perform service and maintenance on the Honeywell BMS. Plainly enough, Mr Davis’ confidence that Delta would win the BMS Upgrade work was slipping.

193    On 1 November 2019, Mr Sitauti informed Mr Davis that he would be working on the specification for the Honeywell BMS Upgrade. Mr Sitauti said he wanted to include all of Delta’s technical advantages over the ALC BMS (that is, the LES product). The role of Steensen Varming in the BMS Upgrade Tender process, which was assigned to Mr Sitauti, was “to develop the functional requirements for the new BMS and to prepare the technical specifications reflecting those requirements that would be issued to tenderers as part of the request for tender”.

194    On 8 November 2019, Mr Nugraha informed Mr Davis by WhatsApp that a “Little bird told me Nathan Brownell had meeting with NGA”. Nathan Brownell was employed by Schneider and was formerly employed by Delta. The “little bird” referred to in the message from Mr Nugraha to Mr Davis was Mr Wilcomes.

195    On 25 November 2019, Ms Dagseven provided Mr Davis with a hard copy of the Honeywell service and maintenance contract at a meeting with Mr Davis and Mr Hanns, which had been signed by the NGA. The contract price was $28,314. Mr Davis countersigned the Honeywell service and maintenance contract.

196    In September and October 2019, Mr Davis had appreciated that there might possibly be difficulties in the future in integrating a Delta BMS at the NGA with the ALC BMS in the NGA Extension. As previously noted, I am not satisfied that the evidence establishes that this ever rose higher than a possibility, noting that such a possibility would always be on the cards for whoever installed a replacement BMS in the original NGA while the ALC BMS remained in the NGA extension.

197    When Mr McEvilly found out that Delta had been awarded the Honeywell service and maintenance contract, he was “surprised” and “disappointed” because he felt it was possible that it gave Delta an advantage with the upcoming upgrade to the Honeywell BMS.

198    Mr Davis did not attempt to contact Mr McEvilly in September, October, or November 2019 to obtain information for the purposes of preparing Delta’s proposal to replace the Honeywell BMS. This suggests that the possibility of integration or interface problems were not seen by him as being any major concern, or at least not such as to require making any approach to Mr McEvilly during that period.

Events of December 2019

199    As at 2 December 2019, LES was a real and credible competitive threat to Delta for the BMS Upgrade tender, and a competitor that Delta had to take seriously.

200    On 2 December 2019, Mr Sitauti called Mr Nugraha:

(a)    to tell him Mr Mandy and Mr Xirakis had decided to take the BMS Upgrade to a competitive tender;

(b)    to tell him NGA had initially wanted three tenderers – Schneider, Delta and LES – but there would now only be two tenderers, Delta and LES;

(c)    to tell him that he (Mr Sitauti) would be preparing the technical specification for the BMS Upgrade;

(d)    to seek from Mr Nugraha some documents that would highlight the differences between the Delta BMS and the ALC BMS; and

(e)    to tell Mr Nugraha that he wanted Delta to win the BMS upgrade tender.

201    Mr Nugraha relayed the information he had received from Mr Sitauti on 2 December 2019 to Mr Davis that same day via the following five immediately consecutive WhatsApp text messages sent in the space of some two minutes between 4.42 pm and 4.44 pm. It is not in dispute that “Tava” is a reference to Mr Sitauti, “Mark” is a reference to Mr Mandy, and “Nick” is a reference to Mr Xirakis. What was happening was that Mr Sitauti was conveying to Mr Nugraha information about the views of senior NGA officials about the BMS upgrade. The texts were as follows:

[4.42 pm]:    Tava just rang. Mark and Nick wanted to take the NGA project cutover to tender

[4.42 pm]    Initially they wanted Schneider, ALC and us.

[4.43 pm]    But now only us and Tony.

[4.43 pm]    Tava asked if we can send some documents that would highlight out differences to ALC.

[4.44 pm]    As he wants us on board.

202    Mr Davis regarded the information from Mr Sitauti as reliable. Mr Nugraha’s WhatsApp messages were the first time that Mr Davis had been told that there would be a competitive tender process for the replacement of the Honeywell BMS, confined to two tenderers, Delta and LES. Mr Davis and Delta also became aware from this time that that tender process envisaged by the NGA would involve an RFT (request for tender) mode of tender specification. When Mr Davis became aware that there would be even this limited competitive tender process, he regarded it as bad news for Delta. Mr Davis also expected from this time that any question about the extent to which integration or interface works would be required between the ALC BMS and any new BMS would be resolved as part of the tender process.

203    On 3 December 2019, Mr Sitauti attended a stakeholder consultation meeting with Manteena and representatives of the NGA. The same day, Mr Sitauti called Mr Nugraha and asked him to provide some dot points setting out the advantages of the Delta BMS when compared to the ALC BMS, consistently with the fourth text message from Mr Nugraha to Mr Davis on 2 December 2018. Also the same day, Mr Nugraha spoke with Mr Davis, relayed his conversation with Mr Sitauti, and discussed the content of Mr Nugraha’s WhatsApp messages of 2 December 2019. Mr Nugraha also consulted Mr Davis about an email to be sent to Mr Sitauti, by sending a draft email setting out the requested dot points as to the advantages of Delta over ALC as well as some specification language. Mr Davis asked Mr Nugraha to add an additional dot point (point 4) about the ARCnet protocols used by the ALC BMS in contrast to BACnet, and approved Mr Nugraha sending the amended email. Mr Nugraha sent the email to Mr Sitauti later that day. Mr Davis considered Mr Sitauti to be a reliable source of information in relation to the BMS upgrade in October and December 2019.

204    On 10 December 2019, Mr Sitauti called Mr Nugraha and arranged to meet with him to discuss the BMS upgrade tender specification that he (Mr Sitauti) was drafting. The same day, Mr Nugraha informed Mr Davis that he was meeting with Mr Sitauti that week to discuss the upgrade specification that Mr Sitauti was writing for the BMS upgrade tender.

205    On 12 December 2019, Mr Sitauti and Mr Nugraha met. Mr Nugraha showed Mr Sitauti the network architecture and maintenance backup plan that Delta had put together. The same day, Mr Nugraha emailed Mr Sitauti, copied to Mr Davis, further information to include in the specification brief for the NGA’s BMS Upgrade Tender. Mr Davis was asked about this meeting in cross-examination.

206    During cross-examination, Mr Davis confirmed that he knew Mr Nugraha had been assisting Mr Sitauti in developing a client brief that included technical specifications beneficial to Delta from December 2019 to January 2020. His cross-examination evidence on this issue is as follows (emphasis added):

You’re aware that there was further communication between Tava and Hendra in relation to this issue on – a little later in December?---Sorry. I don’t recall that, sorry.

You recall that there was a meeting at Delta’s offices on 16 December that was attended by Tava, Hendra and yourself?---No. I didn’t attend. [NB. The reference to 16 December appears to be an error, whether in the question or in the transcription, as the meeting that Mr Nugraha deposed to took place on 12 December 2019]

Well, I suggest you did attend, albeit briefly, and you briefly spoke with Tava?---Maybe a greeting. I don’t recall being part of any technical conversation.

A greeting and a short presentation of network architecture, I suggest.

A greeting and, “Hello, how are you?” And, “I have got work to do.”

And you were eager to see Tava at that time, weren’t you?---Sorry, rephrase eager.

You wanted to see Tava on 16 December 2019. You made a point of joining the meeting to say hello to Tava?---I didn’t arrange the meeting, if that’s the question.

That’s not the question. I appreciate you didn’t arrange to meet him, but you made sure you stopped by, correct?---I actually don’t recall speaking to Tava at that meeting. I may have done. I just don’t recall it, I’m sorry.

…

… Delta’s offices typically close on the Friday the week before Christmas, correct?---That’s typical, yes.

And after that, Hendra [Mr Nugraha] went away to Indonesia for a holiday?---He may have done, yes. I’m not disputing that.

You may or may not recall that. He arrived back in late January, and in the latter part of January, he worked with Tava on a client brief. Do you recall that?---Yes.

And that was a client brief for the NGA?---Yes.

And you were aware that he was doing that at the time?---Yes.

And you know also that he was working with Tava on the tender specifications for the BMS upgrade at the time?---Yes.

And you know that just as you did in December 2019, in January 2020 he was continuing to assist Tava by proposing language for the BMS – sorry, for the NGA client brief and for the BMS upgrade technical specification that would favour Delta?---Advantage. Yes.

That would advantage Delta?---Yes.

But you were aware of that?---Yes.

You were aware of it at the time?---Yes

207    On or about 16 December 2019 or 17 December 2019 (I find below it was 17 December 2019), Mr Davis called Mr McEvilly and they arranged to meet on 18 December 2019 at the Tulips Café in Canberra. Beyond the fact of agreeing to meet, the content of this conversation is in dispute. That dispute and its resolution takes place later in these reasons at [235]–[253].

208    Telephone records for 18 December 2019 indicate that:

(a)    at 10.02 am, Mr McEvilly called Mr Davis; the duration of that call was 26 seconds;

(b)    at 10.03 am, Mr Davis called Mr McEvilly; the duration of that call was 61 seconds;

(c)    at 10.03 am, Mr McEvilly called someone else; the duration of that call was 6 minutes and 47 seconds.

209    On 18 December 2019, Mr Davis and Mr McEvilly met at the Tulips Café. The contents of their discussion is in dispute. Again, that dispute and its resolution takes place later in these reasons at [328]–[385].

210    Delta’s offices typically close on the Friday the week before Christmas, which would have been the Friday of that week, 20 December 2019.

211    In December 2019, Delta was desperate to win the BMS upgrade tender, falling short of being essential for Delta’s business, as reflected in the conduct in providing tender specification information to Mr Sitauti for use in preparing the tender documents.

212    Mr Davis and Mr McEvilly did not speak again about the BMS upgrade after the BMS upgrade tender documentation was released, or at all.

Events of January 2020 onwards

213    The NGA Switchboard Project went out for tender on 29 November 2019.

214    In January 2020, Manteena engaged LES to complete the NGA Switchboard Project.

215    On 21 January 2020, Mr Sitauti told Mr Nugraha that Steensen Varming would be rewriting the client brief and the technical specification for the tender for the BMS upgrade to suit Delta. The same day, Mr Nugraha relayed this “good news” to Mr Davis.

216    Between 22 and 28 January 2020, Mr Sitauti and Mr Nugraha emailed each other about the specification that Mr Sitauti was preparing for the NGA BMS upgrade project. Among the emails sent in that period was an email from Mr Nugraha to Mr Sitauti on 23 January 2020 copied to Mr Davis and attaching “Client-Brief BMS Upgrade V2 Received – Manteena DBA markup.docx”. In December 2019 and January 2020, Mr Davis was aware that Mr Nugraha was assisting Mr Sitauti to adopt language in the tender specification documents that would be in the interests of Delta.

217    On 6 March 2020, Mr Jason Bills of Manteena sent Mr McEvilly a “show cause notice” formally advising him that LES was in default of its contract in relation to the Switchboard Project for not submitting shop drawings that were due for submission on 28 February 2020 and 4 March 2020. On 12 March 2020, Mr McEvilly and Mr Mitton spoke on the telephone during which they discussed the status of the shop drawings, Mr McEvilly’s concerns about the requests and follow ups coming from the NGA, and Mr McEvilly’s recollection of his call and meeting with Mr Davis.

218    On 16 March 2020, Mr McEvilly met with Mr Mitton at Manteena’s office during which Mr McEvilly recalled his 18 December 2019 meeting with Mr Davis.

219    On 25 March 2020, Mr McEvilly received a telephone call from Mr Mitton. Mr Mitton gave Mr McEvilly the details of an employee of the ACCC named Joseph Chan, and asked Mr McEvilly to call Mr Chan. Mr McEvilly called Mr Chan by telephone at about 3.25 pm. This was Mr McEvilly’s first contact with the ACCC about his allegations against Mr Davis and Delta.

220    On 16 May 2020, LES completed the NGA Switchboard Project.

221    On 24 July 2020, the BMS upgrade tender went out to market.

222    The BMS upgrade tender requested separate pricing and description of a fully comprehensive maintenance program for a period of 5 years and included the provision of a high level interface to the ALC BMS, being the existing and continuing BMS for the NGA Extension, and the ability to display graphic images from the ALC BMS. The scope of the BMS upgrade tender included an ongoing maintenance contract and the provision of operation and maintenance manuals.

223    Northrop, and not Steensen Varming, ultimately prepared the technical specification included in the BMS upgrade tender.

224    On 13 August 2020, Manteena conducted a site inspection for the tenderers. The attendees were Mr Mark Wright and Mr Danny Chak from C&E, Mr McEvilly and Mr Nugraha.

225    In August 2020, Manteena issued seven “RFT – NGA BMA Upgrade” addendums.

226    On 27 August 2020, C&E submitted a bid to the NGA in response to the BMS upgrade ender. The amount for which C&E tendered was $1,052,330 (excluding GST), or $1,157,563 (including GST). C&E allowed the sum of $14,520 for interface with the meters in the NGA Extension, and $3,300 for the interface with the BMS alarm panel in the NGA Extension.

227    On 28 August 2020, Delta submitted a bid to the NGA in response to the BMS upgrade tender. The amount for which Delta tendered was $745,300 (excluding GST), or $819,830 (including GST).

228    On 28 August 2020, LES submitted a bid to the NGA in response to the BMS upgrade tender. The amount for which LES tendered was $1,070,465 (including GST). LES allowed the sum of $2,310 for interface with the meters in the NGA Extension, and made no allowance for the interface with the BMS alarm panel in the NGA Extension because it was not necessary for LES to redo that work.