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Federal Court of Australia |
Last Updated: 16 September 1999
ACCC v Australian Safeway Stores Pty Ltd [1999] FCA 1269
Evidence Act 1995 (Cth): s 55, s 97(1), s 135
Trade Practices Act 1974 (Cth)
Australian Competition Consumer Commission v CC (NSW) Pty Ltd [1999] FCA 954 (14 July 1999) distinguished
CDJ v VAJ [1998] HCA 67; (1998) 157 ALR 686 cited
Papakosmas v The Queen [1999] HCA 37 (McHugh J, 12 August 1999) cited
Odgers Uniform Evidence Law 3rd ed 1998
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AUSTRALIAN SAFEWAY STORES PTY LTD & ORS
VG 762 of 1996
GOLDBERG J
MELBOURNE
14 SEPTEMBER 1999
IN THE FEDERAL COURT OF AUSTRALIA |
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VICTORIA DISTRICT REGISTRY |
JUDGE: |
GOLDBERG J |
DATE: |
14 SEPTEMBER 1999 |
PLACE: |
MELBOURNE |
1 The applicant ("the Commission") has sought to tender two invoices from Tip Top Bakeries to Cheapa Food Barn, Forest Hill numbered N290546 and N295469 for deliveries of bread made to Cheapa Food Barn in the weeks respectively ended 10 July 1994 and 17 July 1994. That tender is the subject of objection by the first respondent ("Safeway") and the third respondent who submit that I should reject the tender pursuant to s 135 of the Evidence Act 1995 (Cth) on the grounds that the invoices have no probative value or alternatively that any such probative value is substantially outweighed by the danger that they might be unfairly prejudicial to the first and third respondents.
2 The invoices show the deliveries of bread made by Tip Top to the Cheapa Food Barn at Forest Hill on each of the days from Monday 4 July 1994 to Sunday 17 July 1994 (both inclusive) and the returns of bread made on the same days. In particular, they show that on Monday 4 July through Saturday 9 July 1994 there were deliveries of three promotional products, Hot Baked Toast 680g, Hot Baked White 680g and Hot Baked Wholemeal, each of which was priced at a unit price of $1.62 with a discount of 62 ¢ leaving a net cost price of $1.00 per unit. No such deliveries were shown on the invoices to have been made on the days on and between 10 July and 17 July 1994.
3 The Commission seeks to tender the invoices not as part of the proof of a particular pleaded contravention of the Trade Practices Act 1974 (Cth) ("the Act"). Rather, the tender is put on the basis that the invoices are relevant to the issue that Safeway had a policy of deleting or withdrawing plant bakers' products from a Safeway supermarket when at the same time the plant bakers were supplying bread to an independent supermarket or retailer at such discounted wholesale prices as enabled the retailer to sell the bread at prices lower than the price at which Safeway supermarkets in the vicinity were retailing similar bread. The Commission has pleaded that such deletions or withdrawals would occur and last while the plant bakers' products were being sold by the independent supermarkets or retailers at a special or discounted price: Fifth Further Amended Statement of Claim par 6D(h).
4 The Commission has pleaded that this policy was implemented in a number of particular instances which are set out in the Fifth Further Amended Statement of Claim. One such contravention relied upon is the deletion of Buttercup products from the Safeway supermarket at Vermont between mid July and 8 October 1994. The Commission wishes to use the invoices in support of the proposition that there was a further application of the policy by deleting Tip Top products at the Safeway Vermont Supermarket from 23 June to 11 July 1994.
5 The gravamen of the respondents' objection to the admissibility of the invoices is that neither the Tip Top deletion from the Safeway supermarket at Vermont nor any suggestion that Mr Jones instructed the Tip Top deletion was put to Mr Joseph Carroll, the owner of the Cheapa Food Barn at Forest Hill or to Mr Jones.
6 As the tender of the invoices was sought to be made on the 57th day of the trial, in the course of cross-examination of Mr Ralph Hanna the former store manager of the Safeway Vermont Supermarket, it is necessary to understand how the issue has arisen.
7 The Commission filed witness statements of Mr Carroll, the owner of a number of Cheapa Food Barn stores including Forest Hill. The statements were dated 23 October 1997 and 26 September 1998 and he was called to give evidence on 9 March 1999. Mr Carroll said that up to around 3 July 1994 he purchased from Tip Top a brand of bread called "Hot Baked" which he purchased for less than 99¢ a loaf and was able to retail for 99¢ a loaf. He was told around the end of June 1994 by the Tip Top sales representative that the deal on Hot Baked bread was going to have to end and that the rebate of 63¢ would be withdrawn. In his first witness statement he annexed a copy of a Tip Top invoice for the week ending 26 June 1994 showing the supply of Hot Baked bread at a cost price, after discount, of 99¢ per unit. He then contacted Buttercup and started buying Black and Gold bread from Buttercup in July 1994 which he retailed at 99¢ a loaf. He ceased purchasing Hot Baked bread for his Forest Hill store from Tip Top in July 1994.
8 I allowed evidence to be led (subject to objection) about the cessation or supply of the Hot Baked Tip Top bread to Mr Carroll's store on the basis that it was relevant to the manner in which the policy, for which the Commission was contending, was implemented as a matter of practice. I made further similar rulings in relation to evidence of incidents said to have occurred by way of implementation of the Safeway policy, albeit not alleged as contraventions of the Act in the statement of claim.
9 At the time Mr Jones was cross-examined, Safeway had filed a witness statement by Mr Ralph Hanna the store manager at Safeway Vermont dated 14 December 1998 in which he gave evidence of two conversations with Mark Jones in or about June 1994. In these conversations he told Mr Jones he needed a bread to sell at 99¢ to match Cheapa Food Barn, that Mr Jones told him that he had arranged for Captain Cutless to be delivered for sale at 99¢, that they could not get the same deal from Buttercup and had therefore made the decision to withdraw the Buttercup product from Safeway Vermont. Mr Hanna did not give evidence of any withdrawal of Tip Top bread from the Safeway Vermont supermarket. Mr Jones did not recall ever having a telephone conversation with Mr Hanna and said that he did not know Mr Hanna and he had never heard of him.
10 After Mr Jones' evidence was concluded, Safeway served a supplementary statement of Mr Hanna dated 20 July 1999 in which he corrected his evidence as to the dates on which he had been store manager at Safeway Vermont. In his first statement he said that he had become store manager at Safeway Vermont on 13 September 1993 and remained there for approximately twelve months. In his supplementary statement he annexed his employment records which showed that he commenced annual leave for four weeks on 11 July 1994 and did not return to Safeway Vermont but acted as relief store manager at Safeway Mentone and thereafter became store manager at Safeway Hampton.
11 Scan data records in evidence showed that Captain Cutless was first introduced into the Safeway Vermont Supermarket on 23 June 1994 and that Buttercup products were not delivered to the Safeway Vermont Supermarket in the period 16 July 1994 to 25 October 1994. Although Mr Hanna's recollection was that Captain Cutless was in the supermarket when he went on annual leave on 8 July 1994 and that Buttercup products were not then being sold, he could not explain why the scan data indicated that Buttercup products were not withdrawn until 16 July 1994.
12 Thus, on one view of the evidence, the conversations Mr Hanna said he had with Mr Jones in or about June 1994 could not have related to the withdrawal of Buttercup bread. The Commission wishes to tender the Tip Top invoices for the purpose of inviting the Court to draw an inference that Mr Hanna did have a conversation with Mr Jones about competing with Cheapa Food Barn's 99¢ bread but that Mr Jones did not refer to getting the same deal from Buttercup and withdrawing Buttercup products but rather, referred to Tip Top products. In this way the Commission seeks to establish an implementation of the Safeway policy as the Commission alleges it existed and was implemented.
13 It is apparent from other evidence that Captain Cutless was introduced into the Safeway Vermont Supermarket from 23 June 1994 and that Tip Top products were deleted from the Safeway Vermont Supermarket after that date up until 11 July 1994.
14 The Commission submits that the two invoices are relevant to the manner in which it contends the Safeway policy was established and implemented. The Commission contends that the invoices have probative value in relation to that policy and its implementation as they demonstrate that the dates of the Tip Top promotion at Cheapa Food Barn Vermont coincided with the period during which Tip Top bread was deleted from the Safeway Vermont Supermarket.
15 The respondents submit that it is unfair to tender these invoices as Mr Jones has not had the opportunity to respond to the allegation that there was a deletion of Tip Top products from Safeway Vermont between 23 June 1994 and 11 July 1994 which he implemented. However, Mr Jones has denied that he knew or ever spoke to Mr Hanna.
16 The complaint of unfairness made by the respondents is that when Mr Jones was cross-examined he was cross-examined extensively in relation to the Safeway Vermont incident, the thrust of which related to the withdrawal of Buttercup bread only. It was never suggested that there was any withdrawal of Tip Top bread. However, at that point of time the evidence which it appeared would be led by the respondents from Mr Hanna was that the withdrawal at that time from the Safeway Vermont Supermarket was of Buttercup bread only. It was only after Mr Hanna's supplementary statement that it became apparent that the conversations with Mr Jones to which Mr Hanna had earlier referred might well refer to a Tip Top deletion rather than a Buttercup deletion.
Relevance and probative value
17 I have already ruled on earlier occasions that evidence of what is loosely called a "deletion" of a plant bakers' product from a Safeway supermarket is admissible as being relevant to an issue in the proceeding, notwithstanding the fact that such particular deletion is not said to be a contravention of the Act upon which the Commission relies for the purpose of imposing a penalty. In general terms, the rationale of those rulings is that the Commission alleges that Safeway had a particular bread policy which it implemented in a particular way resulting in contraventions of the Act whereas Safeway contends that it had a different policy which was implemented in a different manner with the consequence that no contraventions of the Act occurred. I consider that any evidence of the implementation of the policy as said to exist by either Safeway or the Commission is relevant and has probative value in the sense in which those terms are used in s 55 and s 135 of the Evidence Act. That is to say, evidence of the nature, content and terms of the policy and the probability of the manner in which the Safeway policy was implemented from time to time could rationally affect the assessment of the probability of the manner in which a particular deletion relied upon as a contravention occurred. To that extent therefore, such evidence is relevant for the purposes of s 55 and has probative value for the purposes of s 135.
18 Mr Glick who appears for the third respondent, Mr Jones, drew my attention to the recent decision of Lindgren J in Australian Competition Consumer Commission v CC (NSW) Pty Ltd [1999] FCA 954 (unreported, 14 July 1999) in which there was an issue whether representatives of four construction contractors in the building industry had had a meeting for the purposes of reaching an arrangement that the successful tenderer for a particular project would pay a special fee to the Australian Federation of Construction and Contractors and also pay an unsuccessful tenderers' fee to the unsuccessful tenderers. Evidence was sought to be led of similar meetings in relation to other projects on the basis that such evidence showed a tendency by the relevant respondents to have such meetings. Lindgren J had to determine whether such evidence was admissible pursuant to s 97(1) of the Evidence Act on the basis that it had "significant probative value" which is defined in the following terms in the dictionary in the Evidence Act:
"Probative value of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue."
19 His Honour held that the evidence of meetings held in relation to the other projects did not pass the "significant probative value" test of s 97. His Honour said at [101]:
"None of this evidence went to the primary facts by which the arrangements or understandings in respect of other projects were made or arrived at."
His Honour continued at [102]:
"I accept that the evidence establishes a practice in the construction industry of the payment of Special Fees to the AFCC and UTFs to unsuccessful tenderers in respect of substantial construction projects. But I think that this evidence does not, either by itself or having regard to the other evidence adduced by the Commission, have significant probative value in relation to the precise question whether, at the Meeting in early October 1988 the AFCC and the Tenderers reached the Special Fee understanding and the Tenderers reached the UTF understanding, involving in each case, at base and at least, mutual commitments or undertakings that each Tenderer would, if the successful one, pay the fees (see below). Therefore I reject the evidence relating to other projects in so far as it is relied on for the purpose mentioned."
20 I should also observe that Lindgren J would have exercised his discretion under s 135 of the Evidence Act against admitting the evidence if it had a significant probative value on the basis that that probative value was substantially outweighed by the danger that the evidence might be unfairly prejudicial to the respondent. He took into consideration the fact that although the proceeding was not a criminal proceeding it was one where a substantial penalty was sought.
21 I agree, with respect, with his Honour's reasoning in relation to the facts which were before him but, in my opinion, the facts presently before me are different and are presented for different reasons. The allegations against the respondents involve two aspects. First, the existence of the policy and its nature and terms; secondly, the manner in which the policy was implemented. In my opinion, the evidence constituted by the invoices is relevant to primary facts which are in issue in the proceeding and could rationally affect, either directly or indirectly, the assessment of the probability of the nature of the Safeway policy and the manner in which it was implemented.
22 Notwithstanding his Honour's reasoning I am satisfied in the circumstances presently before me that there is probative value in the Tip Top invoices as, taken together with other evidence already before the Court such as the scan data (N333-4) and evidence that there were other deletions not the subject of pleaded contraventions of the Act from time to time, they are relevant and have some probative value in relation to whether there was an implementation of Safeway's policy, as the Commission would contend, in late June or early July 1994. I express no view at the present time on the weight to be given to this evidence or as to any ultimate finding I may make in relation to it or in reliance upon it.
Prejudice
23 The respondents contend they will be substantially prejudiced because the Commission will be seeking to rely upon the invoices in support of the proposition that Mr Hanna had a conversation with Mr Jones which could not have been about a Buttercup deletion but must have been about a Tip Top deletion and that Mr Jones has not had the opportunity of answering this allegation. Put another way, the Commission will seek to use the Tip Top invoices to show that there was an application of a policy of deletion whereby Mr Jones, either himself or through his category manager's assistant, gave a specific instruction to delete Tip Top without asking for a case deal in order to punish Tip Top for discounting.
24 It is true that the specific allegation that he gave an instruction to delete Tip Top at Safeway Vermont was not put to Mr Jones. However, Mr Jones did give affirmative evidence that he denied he had a conversation with Mr Hanna about withdrawing Buttercup products from the Safeway Vermont Supermarket and that Mr Hanna's recollection was incorrect (Transcript 3048(30) & 3909 (17-25)). He said he did not know Mr Hanna and had never heard of Mr Hanna.
25 It is true that the issue only arose on Day 57 of the trial in the course of cross-examination of Mr Hanna (Transcript 5075(17)) and it had not emerged before Mr Hanna's supplementary statement was filed on or about 20 July 1999 from which it appeared that Mr Hanna had not been working at the Safeway Vermont Supermarket at the time of the Buttercup deletion because he was then away on holidays. It is for this reason that the issue arises in relation to a claim by the Commission of a deletion in accordance with the policy by reference to Tip Top products. It is said that admission of invoices into evidence will work a gross injustice to Mr Jones because he has never had an opportunity to respond to the allegations. That may be true in the sense that the particular issue has not been directly put to him in the same manner as it was with Mr Hanna, but the issue of a deletion, albeit of Buttercup products, occurring at Safeway Vermont as a result of a telephone conversation between Mr Hanna and Mr Jones has been a live issue. Mr Jones has specifically responded to Mr Hanna's evidence about that conversation by saying variously that he denied such a conversation and that he did not recall ever having a conversation with Mr Hanna. If there is to be any finding that there was a deletion of plant bakers' product at the Safeway Vermont Supermarket which was initiated by a conversation between Mr Hanna and Mr Jones then Mr Jones has already responded to that allegation by denying any such conversation. Mr Jones' denial of any such conversation in its terms, covers any conversation with Mr Hanna at all, no matter what plant bakers' bread was raised in it.
26 The evidence in respect of which the invoices are said to have probative value is not evidence of a circumstance or event which is a pleaded contravention of the Act relied upon by the Commission. The Commission seeks to use the evidence to demonstrate a particular implementation of the policy which it contends existed. In my opinion, the probative value of this evidence is not "substantially outweighed" by the danger that the evidence might be unfairly prejudicial to the respondents. Like Lindgren J in CC (NSW) (supra) I am conscious of the fact that although the proceeding is not a criminal proceeding it is one where the Commission seeks the imposition of substantial penalties. I do not consider that in the circumstances there is a danger that in the context of all the evidence I will look at the evidence constituted by the invoices in a manner which will result in unfair prejudice to the respondents.
27 The respondents also relied upon the rule in Browne v Dunn [1894] 6R 67 and said that the reasoning in relation to the application of that principle ought to guide the exercise of the discretion I have under s 135 of the Evidence Act. However, I do not consider that the analogy with that principle is relevant having regard to the fact that Mr Jones has denied knowing Mr Hanna or having any conversation with Mr Hanna and has had put fairly to him the fact of a conversation with Mr Hanna which he has denied. Of course, what weight is to be given to Mr Hanna's evidence and the Tip Top invoices is a matter for further submission and I express no view on that issue in this ruling.
28 I have proceeded on the basis that I have a discretion to refuse to admit the invoices in evidence by reason of the provision of s 135 of the Evidence Act. I have reservations whether the discretion granted by s 135 arises in the context of the present application. The discretion to refuse to admit evidence on the grounds of prejudice is well-known to the criminal law but less relevant in a civil context particularly with a judge sitting alone. As one commentator has said:
"Plainly, it is likely that this `danger' will usually only have significance in a jury trial. Where the trial is by a judge without a jury, it will be an unusual judge or magistrate who is prepared to concede that a danger exists that he or she might be `unfairly prejudiced' by evidence. On the other hand, the provision is not limited to misuse of the evidence by the Tribunal of fact. Unfair prejudice may arise from procedural considerations. Thus an opposing party may be significantly prejudiced by hearsay evidence if unable to cross-examine on a crucial issue in the litigation. Alternatively, the opposing party may be unfairly prejudiced by evidence if prevented from properly challenging its reliability."
(Odgers Uniform Evidence Law 3rd edition, 1998 at p 443.)
29 Recent dicta in the High Court have cast some uncertainty over the scope of s 135. In CDJ v VAJ [1998] HCA 67; (1998) 157 ALR 686 McHugh, Gummow & Callinan JJ said in a footnote (80) at 721:
"It is highly doubtful whether at common law, in proceedings other than criminal proceedings, otherwise admissible evidence could be rejected on the grounds of prejudice. However, ss 135 and 136 of the Evidence Act 1995 (Cth) have now introduced such a rule conferring a very wide discretion upon trial judges."
More recently in Papakosmas v The Queen [1999] HCA 37 (unreported, 12 August 1999) McHugh J said at [93]:
"Some recent decisions suggest that the term `unfair prejudice' may have a broader meaning than that suggested by the Australian Law Reform Commission and that it may cover procedural disadvantages which a party may suffer as the result of admitting evidence under the provisions of the Act 1995. In Gordon (Bankrupt), Official Trustee in Bankruptcy v Pike (No 1), Beaumont J used his discretion under s 135(a) to exclude the transcript of a bankrupt, which would otherwise have been admitted as an exception to the hearsay rule pursuant to s 63, on the basis that the prejudicial effect of being unable to cross-examine the maker of the representation on a crucial issue in the litigation substantially outweighed the probative value of the evidence. In Commonwealth of Australia v McLean, the New South Wales Court of Appeal also used s 135(a) to exclude hearsay evidence otherwise admitted via the exception contained in s 64 on the basis that the defendants were prevented by other evidentiary rulings from effectively challenging the evidence. It is unnecessary to express a concluded opinion on the correctness of these decisions, although I am inclined to think that the learned judges have been too much influenced by the common law attitude to hearsay evidence, have not given sufficient weight to the change that the Act has brought about in making hearsay evidence admissible to prove facts in issue, and have not given sufficient weight to the traditional meaning of `prejudice' in a context of rejecting evidence for discretionary reasons."
30 I have proceeded on the basis that I have a discretion under s 135 of the Evidence Act whether to admit the invoices into evidence. For the reasons to which I have referred I am not satisfied that the probative value of the invoices is substantially outweighed by the danger that the invoices and their admission into evidence might be unfairly prejudicial to either Safeway or Mr Jones. The invoices will be admitted in evidence marked Exhibit A82.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. |
Associate:
Dated: 14 September 1999
Counsel for the Applicant: |
Mr JI Fajgenbaum QC and Mr RA Brett QC with Mr TJ Ginnane and Mr D Star |
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Solicitor for the Applicant: |
Australian Government Solicitor |
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Counsel for the First Respondent: |
Mr TF Bathurst QC and Mr RM Smith SC with Mr PR Whitford |
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Solicitor for the First Respondent: |
Clayton Utz |
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Counsel for the Third Respondent: |
Mr L Glick |
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Solicitor for the Third Respondent: |
Corrs Chambers Westgarth |
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Date of Hearing: |
24 August 1999 |
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Date of Ruling: |
14 September 1999 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/1999/1269.html