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Federal Court of Australia |
Last Updated: 15 February 2000
Australian Competition & Consumer Commission v Rural Press Ltd [2000] FCA 66
TRADE PRACTICES - examinations conducted under s 155 before individual Commissioner - whether it is within power under s 25 to delegate power to conduct examination and receive evidence to individual Commissioner - whether reference to Commission in s 155 includes individual Commissioner - whether delegation properly made in circumstances.
TRADE PRACTICES - examinations conducted under s 155 - investigation of suspected contraventions ongoing - proceedings in contemplation - whether examinations for improper purpose in circumstances.
EVIDENCE - transcripts of examination under s 155 Trade Practices Act 1974 (Cth) - objection to evidence under s 138 Evidence Act 1995 (Cth) - whether delegation of Commission's power under s 25 of Trade Practices Act to conduct examination and to receive evidence - whether it is within power under s 25 to delegate to individual Commissioner the role of conducting examination and receiving evidence - whether improper purpose of examination under s 155 of Trade Practices Act when proceedings in contemplation.
Trade Practices Act 1974 (Cth) ss 4, 5, 6A, 7, 10, 18, 19(2), 19(7), 25, 26, 45, 46, 65Q, 77, 80, 155, 596B and 597; Parts 4A, 5, 6 and 12
Evidence Act 1995 (Cth) ss 135 and 138
Australian Securities and Investments Commission Act 1989 (Cth) s 5
Constantine v Trade Practices Commission (1994) 48 FCR 141 considered
Pioneer Concrete (Vic) Pty Limited v Trade Practices Commission (1982) 43 ALR 449
applied
Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450
distinguished
Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; (1985-1986) 162 CLR 24 applied
Bunning v Cross [1978] HCA 22; (1978) 141 CLR 54 considered
Cleland PR (1982) 43 ALR 619 considered
Brambles Holdings Ltd v Trade Practices Commission (No 2) (1980) 44 FLR 182 applied
Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328 applied
Kotan Holdings Pty Ltd v Trade Practices Commission (1991) 30 FCR 511 applied
AUSTRALIAN COMPETITION & CONSUMER COMMISSION v RURAL PRESS LIMITED (ACN 000 010 382), BRIDGE PRINTING OFFICE PTY LIMITED (ACN 007 547 024), IAN LAW, TREVOR McAULIFFE, WAIKERIE PRINTING HOUSE PTY LIMITED, PAUL TAYLOR and DARNLEY TAYLOR
S 56 OF 1999
MANSFIELD J
10 FEBRUARY 2000
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA |
|
SOUTH AUSTRALIA DISTRICT REGISTRY |
JUDGE: |
MANSFIELD J |
DATE: |
10 FEBRUARY 2000 |
PLACE: |
ADELAIDE |
1 In the course of the hearing of this matter the applicant ("the Commission") sought to tender against the fifth to seventh respondents certain transcripts of examinations conducted by the Commission under s 155 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act"). The sixth respondent, Paul Taylor, was examined on 25 August and 8 December 1998 and the seventh respondent, Darnley Taylor, on 25 August and 9 December 1998. The sixth and seventh respondents are directors of the fifth respondent, Waikerie Printing House Pty Ltd. No issue is taken that they did not have authority to speak on behalf of the fifth respondent or on behalf of each other in those examinations. Only part of the examination of the seventh respondent of 9 December 1998, and no part of his examination of 25 August 1998, was tendered. No complaint was made about that. It was not suggested that the selection of only part of his examination was unfair.
2 At the time, those examination transcripts were not tendered against the first to fourth respondents. Nevertheless I heard submissions from counsel for the first to fourth respondents, as the Commission indicated that it might seek to tender that evidence against the first to fourth respondents later. It seemed preferable to hear the general grounds of objection to admissibility from all parties. There may be particular passages in the examination transcripts which are not admissible against the first to fourth respondents in any event. Any such question will be determined apart from the matters of principle which these reasons address and only if the transcripts of examination were admitted against the fifty to seventh respondents, and if the Commission later sought to tender them against the first to fourth respondents.
3 There were two submissions in opposition to the tender. Firstly, was it was submitted that the circumstances in which the examinations took place amounted to the proposed evidence being obtained "improperly or in contravention of an Australian law" under s 138 of the Evidence Act 1995 (Cth) ("the Evidence Act"). Secondly, it was submitted that the Commission had not established that the desirability of admitting the evidence outweighed the undesirability of admitting the evidence.
4 The improprieties alleged were:
(a) that the conduct of the examinations, which were carried out by and before Sitesh Bhojani ("Mr Bhojani"), a member of the Commission, was not in accordance with s 155 of the Trade Practices Act because s 155 requires the examination to be conducted before the Commission, and not before some other person even if that other person is a Commissioner, and
(b) that Mr Bhojani was not entitled to conduct the examinations because the Commission had not delegated to him the power to do so in accordance with s 25 of the Trade Practices Act, and
(c) in respect of the examinations conducted on 8 and 9 December 1998, they took place for a purpose not authorised by s 155 of the Trade Practices Act because, by that time, the Commission had resolved to proceed to litigation; it was said to amount to an abuse of the power granted to the Commission by s 155 to conduct those examinations in those circumstances.
It was accepted that s 138 of the Evidence Act applies to the instant proceedings.
5 It was also argued that substantial parts of the examinations were unfair because certain questions put legal and factual conclusions without any proper foundation of law or fact for them, or because certain questions were argumentative only, or because certain questions were too complex. The objection was to the whole of the transcripts of examination on the basis that the alleged unfairness permeated them to such an extent that it should not be received at all, or alternatively that portions of those examinations should not be received. It was not contended that an examination under s 155 of the Trade Practices Act may not put questions which test answers given by an examinee, or which put propositions of fact to an examinee for comment. The submission was based upon the particular terms of the examinations. It was submitted also that the Court could, and should, exclude the proposed evidence or parts of the proposed evidence under s 135 of the Evidence Act.
6 These reasons deal only with the submissions on the matters of principle. I ruled that the transcripts of examination were able to be received in evidence because I did not consider that there was any impropriety in the circumstances in which the examinations were conducted, so s 138 of the Evidence Act did not come into play. I then separately considered and addressed the particular examinations in the light of the objections referred to in par 5 above. For reasons I expressed briefly at the time, I indicated several passages of the transcripts of examination which I excluded from the tender. Those reasons are found in the transcript of hearing. Subject to those limited exclusions, I received the transcripts of examination as evidence against the fifth to seventh respondents.
7 Section 155(1) provides:
"... [Where the] Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to ... the making of a decision by the Commission under subsection 93(3) ... a member of the Commission may, by notice in writing served on that person, require that person:
(a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information;
(b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or
(c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents."
8 It was contended that, even though the powers of the Commission may be delegated under s 25 of the Trade Practices Act, and assuming they were properly delegated to Mr Bhojani, it is not possible to delegate to another person the function of being the person or entity before whom a proposed examinee must appear to give evidence. It was contended that it was a function of the Commission, rather than one of its powers, to receive evidence given by a person obliged to appear before it under s 155(1)(c). Counsel pointed to the difference in wording in s 155(1)(c), which empowers the Commission or its delegate to require a person "to appear before the Commission ... to give any such evidence ...", with the words in s 155(1)(b) which empowers the Commission or its delegate to require a person "to produce to the Commission, or to a person specified in the notice acting on its behalf, ... any such documents."
9 To consider that submission, it is necessary to refer to certain other provisions in the Act. The Commission is established by s 6A of the Trade Practices Act. It is a body corporate and may sue or be sued in its corporate name. Section 7 prescribes that the Commission is constituted by a chairperson and members as appointed from time to time. Section 10 empowers the appointment of a deputy chairperson. Under s 18 of the Act the chairperson, or the deputy chairperson in the chairperson's absence, is to preside at a meeting of the Commission. Three members of the Commission form a quorum. Section 19(1) provides:
"The chairperson may, by writing signed by him or her, direct that the powers of the Commission under this Act in relation to a matter shall be exercised by a division of the Commission constituted by the Chairperson and such other members (not being less than two in number) as are specified in the direction."
10 Section 19(7) empowers a division of the Commission to exercise powers of the Commission under the Act notwithstanding that another division of the Commission is exercising powers of the Commission at the same time.
11 Section 25 of the Act deals with the Commission's powers of delegation. It provides:
"(1) The Commission may, by resolution, delegate to a member of the Commission, either generally or otherwise as provided by the instrument of delegation, any of its powers under this Act, the Telecommunications Act 1997 or Rules of Conduct under Part 20 of the Telecommunications Act 1997, other than this power of delegation and its powers to grant, revoke or vary an authorization.
(2) A power so delegated may be exercised or performed by the delegate in accordance with the instrument of delegation.
(3) A delegation under this section is revocable at will and does not prevent the exercise of a power by the Commission."
12 That power of delegation is restricted to delegation to a member of the Commission. Section 26 deals separately with delegation by the Commission to a staff member of the Australian Securities and Investments Commission ("ASIC"), within the meaning of s 5 of the Australian Securities and Investments Commission Act 1989 (Cth), of its functions and powers in relation to the unconscionable conduct and to the consumer protection parts of the Trade Practices Act. The power of delegation contained in s 26 is in respect of any of the Commission's functions and powers under Parts 4A, 5 and 6 of the Trade Practices Act, and any of its powers under Part 12 of that Act. Section 155 is in part 12. The power of delegation contained in s 25 is expressed to permit delegation of powers generally under the Trade Practices Act or other specified legislation, and does not refer to functions.
13 The respondents made much of the distinction between the capacity to delegate powers under s 25 on the one hand and, by way of contrast, the capacity to delegate powers and functions under s 26 on the other. It was contended that listening to or receiving the evidence upon an appearance before the Commission under s 155(1)(c) was a function of the Commission which was not capable of being delegated under s 25 of the Trade Practices Act. However, it is necessary to have regard to the definition of "the Commission" in s 4 of the Trade Practices Act. It provides:
"Commission means the Australian Competition and Consumer Commission established by section 6A, and includes a member of the Commission or a Division of the Commission performing functions of the Commission."
As expressed, the definition provision provides for a division of the Commission under s 19, or a member of the Commission, to perform the functions of the Commission where the legislation contemplates that that may occur.
14 Counsel also pointed out the difference in wording between s 155(1) and s 65Q of the Trade Practices Act which relates to the power to obtain information, documents and evidence in relation to potentially harmful goods. The power contained in s 65Q authorises the Minister:
(a) to furnish to the Minister certain information
(b) "to produce to the Minister, or to the authorised officer" certain documents, or
(c) "to cause a competent officer of the corporation to appear before the Minister or the authorised officer" to give evidence.
It was argued that, where it is contemplated that the function of receiving evidence may be capable of being exercised by a person other than the Commission, the Trade Practices Act in s 65Q has addressed that very question. It is of course noteworthy that s 65Q is a power given to the Minister or to an officer authorised by the Minister to carry out for the purposes of s 65Q, whereas s 155 is restricted to the Commission. It was also pointed out that s 65Q contains no equivalent to s 155(7) of the Trade Practices Act, which expressly provides that a person is not excused from furnishing information or producing or permitting the inspection of a document on the ground that the information or document may tend to incriminate that person.
15 Counsel also relied upon the significance of the obligation under s 155(3) of the Act to give the evidence on oath or affirmation with the consequences that that entails.
16 The submission broadly speaking is that there is only a delegable power to require attendance, but not to alter the person before whom the evidence must be given.
17 So far as the research of counsel and of myself goes, the point is a novel one. Constantine v Trade Practices Commission (1994) 48 FCR 141 provides an illustration of an examination before a member of the Commission. No point was taken of the nature of the present point.
18 In my view, the Commission may properly delegate under s 25 its power to require a person to give evidence before the Commission to a member of the Commission. It is a matter of construction whether there is a dichotomy between powers and functions, as urged in argument, in the particular circumstances. I do not think it is. I do not consider that the difference in wording in s 155(1)(b) and s 155(1)(c) is significant. Section 155(1)(b) empowers the Commission to require the production of documents to the Commission or to a person specified in the notice acting on its behalf. There may be circumstances in which the production need not take place at the Commission's premises. It is not clear in what circumstances that may occur, but it simply enables that circumstance to be catered for. Section 155(1)(a) and s 155(1)(c) contemplate the furnishing of material to the Commission, or the appearing to give evidence before the Commission, at a time and place to be specified in the notice. The different wording in subclause (b) does not involve the specification of a time and place. I consider that the difference in wording is, therefore, simply to accommodate the different circumstances which may apply. It does not have the additional significance for which the respondents contended.
19 I also am of the view that there is no clear division in s 155(1)(c) of powers of the Commission on the one hand and its functions on the other. I consider that, upon its proper construction, s 155(1)(c) provides compendiously for the exercise of the power to require someone to appear before the Commission to give evidence. Section 155(1)(c) has its focus on the obligation to give evidence, rather than the function of the Commission in receiving it. The receipt of the evidence is but an incident of the fulfilment of the obligation. The power is to oblige a person to appear before the Commission to give evidence. The provision does not separately identify it as a function of the Commission to receive that evidence once the power to require attendance is exercised. It is implicit that the person who may impose the obligation to appear is the person who will receive that evidence. That person must be a member of the Commission in any event, because of the terms of s 25. The definition of the Commission means that, in appropriate circumstances, the Commission will include a member of the Commission performing the functions of the Commission. To the extent to which s 155(1)(c) involves the performance of functions by the Commission, the definition of "Commission" in my view contemplates that, for the purposes of s 155(1)(c), a member of the Commission may be the Commission. Consequently, by the combination of the delegation (assuming for the moment that it is valid) and those provisions, in my view the member of the Commission to whom the delegation was granted may receive the evidence under s 155(1)(c).
20 I also consider that the comparison with s 26 fortifies that conclusion. Section 26 empowers the Commission, by resolution, to delegate any of its powers under Pt 12, including s 155, to a staff member of ASIC. It seems very unlikely that it was intended that power, once delegated, would nevertheless have required the examination to be conducted before the Commission. There is no special reason why that should be so. The administrative inconvenience in that course of action is manifest. Furthermore, there is no particular reason why the receiving of such evidence should not then be given before an officer of ASIC. Such officers are empowered by other provisions in the Australian Securities and Investment Commission Act (1989) (Cth) to do so. Division 2 of Pt III of that Act provides for the compulsory examination of persons by ASIC, and s 19(2) of that Act empowers ASIC to require a person to appear before a specified member of ASIC or a staff member of ASIC as an inspector for examination on oath and to answer questions. Subject to certain provisions, the examination is then admissible in other proceedings.
21 Mason J said in Pioneer Concrete (Vic) Pty Limited v Trade Practices Commission (1982) 43 ALR 449 at 457 that the purpose of s 155 is to aid the Commission in the discharge of its functions under the Act, including the investigation of alleged breaches, the acquisition of information and the obtaining of evidence for submission to the Court and proceedings in respect of contravention of the Act. At least implicitly, those observations reflect the view that s 155 is a power in aid of the functions of the Commission rather than containing within it a discrete function of the Commission in the way that has been contended.
22 Although I was referred to the decision of the Full Court in Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450, one of the seminal decisions under s 155 and 163A of the Trade Practices Act, I do not think that that decision is of particular relevance to the present issue. The notice under review in that case was a notice requiring the production of documents to the Commission (relevantly for the present purposes) by specifying a person to whom the information was to be given under s 155(1)(a) and (b). It was therefore a notice requiring that information furnished to the Commission and documents produced to the Commission be made to nominated persons at a time and place. The issue relevantly was whether a notice given under s 155 of the Act may lawfully require the provision of information or the production of documents to a member of the staff of the Commission, not being the Commission or a member of the Commission. The Full Court decided that it may lawfully do so. At 476 Franki and Northrop JJ observed:
"Section 155 (1) (b) provides that the notice may require the person to whom it is given "to produce to the Commission, or to a person specified in the notice acting on its behalf" the required documents while s. 155 (1) (a) provides that the notice may require the person "to furnish to the Commission" the required information. If the word "commission" stood alone in s. 155 (1) it should, in our opinion, be construed as empowering a notice under s. 155(1) to direct that the information required be furnished to a specified member or to specified members of the staff appointed to assist the commission provided the choice of the member or members was not unreasonable. There can be no doubt that by definition the notice validly could direct that the information be furnished to a member of the commission including the chairman. Since by definition the word "commission" means the body corporate as well as the meaning as extended by s. 4, the commission of necessity must be able to specify members of staff appointed to assist it who are to receive information furnished to the commission. The doubt, if any, arises from the inclusion in par. (b) of the words "or to a person specified in the notice acting on its behalf". These words are to be read as in extension and not in limitation of the meaning of the word "commission".
23 There is also a practical reason why the contention should not be accepted. There seems to be no real administrative benefit in empowering the Commission to delegate the power to require a person to attend for examination (which would have to be the subject of a resolution by the Commission), but then obliging the Commission itself to receive that evidence. In Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; (1985-1986) 162 CLR 24 at 38, in discussing the proposition that the absence of an express statutory power of delegation does not necessarily exclude the existence of an implied power to delegate, or to act through the agency of others, Mason J said:
"The cases in which the principle has been applied are cases in which the nature, scope and purpose of the function vested in the repository made it unlikely that Parliament intended that it was to be exercised by the repository personally because administrative necessity indicated that it was impractical for him to act otherwise than through his officer or officers responsible to him."
For those reasons, I reject the first contention of the respondents.
24 The contention that there was no delegation to Mr Bhojani under s 25 to exercise power under s 155(1)(c) in respect of the examinations is, in reality, no more than a contention of fact.
25 On 19 August 1998, a meeting of the Commission was minuted under the heading "Delegations, Instruments and Authorities" as follows:
"On 19 August 1998, Commissioners Smith, Lieberman, Shogren and Johns signed a s.25(1) delegation to delegate the powers of the Commission under s.155(1) of the Act to Commissioner Sitesh Bhojani in respect of the appearances before the Commission of ... Paul Harry Gilmore Taylor and Darnley Harry Gilmore Taylor."
26 The minutes of the meeting of the Commission of 25 November 1998, under the same heading, record:
"On 25 November 1998 Alan Fels, Alan Asher and Rod Shogren signed a section 25 delegation pursuant to section 155(1)(c) to Sitesh Bhojani in relation to Paul Taylor, Darnley Taylor and [another person]"
27 The delegations are also in evidence. The delegation dated 19 August 1998 is in the following terms:
"The Australian Competition and Consumer Commission ("the Commission"), by resolution passed at a meeting of the Commission on the 19th day of August 1998 attended by the members of the Commission as undersigned, HEREBY DELEGATES, pursuant to section 25(1) of the Trade Practices Act 1974 ("the Act"), to Sitesh Bhojani, a member of the Commission, the Commission's powers under section 155(1) of the Act in respect of the appearances before the Commission of Anthony Rae Kirkby Robinson, John David Pick, Paul Harry Gilmore Taylor and Darnley Harry Gilmore Taylor pursuant to the following Notices:
(a) Notices dated 7 August 1998 issued to Anthony Rae Kirkby Robinson, John David Pick, Paul Harry Gilmore Taylor and Darnley Harry Gilmore Taylor by the Deputy Chairperson of the Commission pursuant to section 155(1)(c) of the Act;
(b) Any other Notices which might be hereafter issued to those said persons pursuant to section 155(1)(c) of the Act requiring their appearances at another time and/or place to give evidence relating to the same matters referred to in the Notices referred to in sub-paragraph (a) hereof."
28 It is signed by the four Commissioners who are named in the minute. There is a similar delegation in material terms in the same wording dated 25 November 1998 signed by those Commissioners referred to in the minute of the Commission's meeting of that date and Mr Bhojani.
29 The argument was that the minute in each instance does no more than record an historical fact, and does not constitute a resolution of the Commission under s 25. It was submitted that a resolution must be a formal determination at an organised meeting, following a motion that the proposed resolution be considered by the meeting and be formally voted upon. It was contended that the minutes did not record that process at all but, in effect, simply noted the conduct of certain Commissioners.
30 As I noted, the question whether the Commission has, by resolution, delegated to Mr Bhojani, as a member of the Commission, its powers under s 155 in terms of the instrument of the delegation is one of fact. In my judgment, as a matter of fact, that delegation has been made by resolution. Although the minutes of the Commission of 19 August 1999 and of 25 November 1998 are not expressed in terms of a resolution, it is apparent from the minutes that the topic of whether Mr Bhojani should be given the power under s 155 of the Commission was addressed. It is apparent that the instrument of delegation or the proposed instrument of delegation was available to, or before, the Commission. Those Commissioners who were present at the meeting saw it and adopted it. The instrument itself refers to the fact of a resolution, and is signed in each case by Commissioners of the Commission who were present at the meeting in question. I accordingly find that there was a resolution in terms of the instrument of delegation, albeit that the terms of the minutes are a little unhappily worded.
31 The third submission was that, under s 138 of the Evidence Act, the Court should not admit the examinations of 8 and 9 December 1998 of the sixth and seventh respondents because that evidence was obtained improperly, or in contravention of an Australian law.
32 It is apparent that the discretionary power in s 138 is available in civil proceedings (including civil proceedings to recover a civil penalty under the Trade Practices Act), as well as in criminal proceedings. It largely reflects the existing judicial discretionary approach to the receipt of improperly obtained evidence: Bunning v Cross [1978] HCA 22; (1978) 141 CLR 54; Cleland PR (1982) 43 ALR 619. The Australian Law Reform Commission Interim Report No 26 (Evidence, Vol 1 AGPS, 1985, par 964) makes clear that the existing discretionary foundation for decision making is preserved, but with some amendments to meet certain criticisms of that process. For the purposes of this case, it was not contended that those alterations had any significance. See also the Law Reform Commission Report No 38 "Evidence" AGPS 1987 par 164(a).
33 The remaining impropriety alleged is that it was unfair or improper to conduct those s 155 examinations in December 1998, because by that time the Commission had determined to proceed to bring these proceedings in any event. In Brambles Holdings Ltd v Trade Practices Commission (No 2) (1980) 44 FLR 182, Franki J held in the circumstances of that case that service of a notice to furnish information under s 155 of the Trade Practices Act against the respondents by the Trade Practices Commission against the respondents was beyond the power vested by s 155 and constituted a contempt of court. The notice had been issued in existing proceedings under ss 77 and 80 of the Trade Practices Act for alleged contraventions of s 45 of that Act and those proceedings were then thought to be ready for trial. His Honour determined that s 155 did not vest a power in the Commission to serve a notice upon a respondent in proceedings which had already been commenced by the Trade Practices Commission for a penalty under s 77 of the Act.
34 In Pioneer Concrete (Vic) Pty Limited v Trade Practices Commission [1982] HCA 65; (1982-1983) 152 CLR 460 at 472 Mason J said:
"Section 155 ... is a power given to the Commission, not to the Court. Accordingly, it is not a power which is an element in the proceedings of a court. Its purpose, and this will have a bearing on its construction, is to aid the Commission in the discharge of its functions under the Act. These functions include the investigation of alleged breaches, the acquisition of information and the obtaining of evidence for submission to the Court in proceedings in respect of contravention. There is nothing in the nature of the power, nor in its terms, to suggest that its sole, substantial or immediate object is to aid the Court in its function of hearing and determining cases. Of course, a legitimate exercise of the power, one designed to enable the Commission to discharge its statutory functions, may yield information which the Commission presents in the form of evidence in proceedings in court."
35 There can be no doubt that it is permissible to use the procedure contemplated by s 155 of the Trade Practices Act for the purpose of obtaining evidence for use in contemplated proceedings for contravention of that Act: Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9; (1983) 152 CLR 328 at 343; Kotan Holdings Pty Ltd v Trade Practices Commission (1991) 30 FCR 511 ("Kotan"). In Kotan, Davies and Foster JJ at 514-515 explained why the power conferred by s 155(1) is different from the examination powers contained in Pt 5.9 (in particulars ss 596B and 597) of the Corporations Law. Their Honours then said:
"The power conferred by s 155(1) is not an arbitrary power but an authority which is intended to aid the Commission in the performance of its functions. It should be exercised only for the purpose for which it was granted, that is to say, for the performance of the Commission's functions under the Act and it ought to be exercised having regard to the circumstances in which it will operate. If a s 155 notice is issued to achieve an extraneous purpose or without regard to the effect which its issue may have on the recipient of the notice, the notice will be invalid."
36 Their Honours had earlier in their reasons observed that it is part of the function of the Commission in appropriate cases to apply for an injunction and to institute and conduct proceedings for a penalty for breaches for contraventions of the Act (ss 77 and 80). Consequently, those are functions of the Commission in respect of which the power given by s 155 may be used in aid. Accordingly, their Honours observed (after referring to the decision of Franki J in Brambles) that the fact that legal proceedings are on foot may not necessarily carry with it the result that the power to issue a s 155 notice has ceased. Their Honours concluded:
"Although we think the preferable view is to the contrary, we accept that there may be an arguable case that the power to issue a s 155 notice ceases when the Commission has formally resolved that legal proceedings be instituted." (at 516)
37 In Kotan, the Court was asked to rule upon an application to set aside the notice given under s 155 when, on the allegations, the Commission had reached no more than a firm view that the case was one in which action by way of the institution of proceedings should be taken. Lockhart J, in a separate judgment, also addressed the question whether the Commission may exercise its powers under s 155 after it has commenced substantive proceedings against the addressees to the notices when the subject matter to be inquired into relates to the same subject matter as the proceedings. His Honour said at 521:
"Whatever be the answer to this question it is a quite different proposition that the mere making by the Commission of a decision to institute proceedings against persons bars the Commission from thereafter issuing s 155 notices against them or constitutes an abuse of the power. A decision of the Commission to institute proceedings is revocable and may be made for a variety of reasons. As at present advised I am inclined to the view that the Commission's power to issue notices under s 155 does not end and is not abused merely because the Commission has made a decision to institute proceedings in a court against the addresses of the proposed notices. Whether in fact there could be an abuse of power by the issue of the notices is a matter that would depend upon the circumstances."
38 As in Kotan, the present circumstances relate to the exercise of the power under s 155 before the institution of proceedings by the Commission. I respectfully agree with the decision of the judges in Kotan that it is a matter to be determined in all the circumstances as to whether the exercise of the power under s 155 is for an improper purpose. It is not necessary to decide whether the exercise of the power after the institution of proceedings is necessarily an abuse of the power. The Court in Kotan seems to indicate that that need not be so. I do not consider that, in the present circumstances, the purpose for the exercise of the power under s 155(1)(c) to conduct the examinations in December 1995 was an improper one.
39 The only improper purpose alleged, in effect, was that the examinations were "with an eye to litigation". Reliance was placed upon an affidavit of a senior investigation officer of the Commission in which she deposes that, following investigations conducted from 22 May 1998, Commissioners of the Commission met and directed that the matters under investigation in respect of which these proceedings are now brought "be prepared for litigating in court". The minutes of the meeting to which she refers are minutes of an Enforcement Committee meeting of the Commission of 30 October 1998, in which reference is made to the alleged agreement between the first and fifth respondents for the sharing of print advertising market in the Lower Murray Region of South Australia. It notes that evidence then obtained under s 155 suggests that the fifth respondent may be a victim, rather than a perpetrator, because the alleged agreement may result from a possible contravention of s 46 by the first respondent. The decision then taken was that that aspect be pursued, inter alia, by a new s 155(1)(c) notice "referring to ss 45 and 46" to the sixth and seventh respondents. Although it appears from that minute that the allegations concerning s 45 of the Act were to remain alive, the focus at the time was upon whether there had been a contravention of s 46 of the Trade Practices Act. It could not be said, from that material, that the decision had then been taken to institute proceedings.
40 Additional evidence on this application indicates the process of decision making was even more detailed than that. On 30 June 1999 a submission was prepared for the Enforcement Committee of the Commission which, inter alia, referred to the decision of the Enforcement Committee of 30 October 1998 to investigate the possible contravention of s 46 by seeking advice from counsel, by issuing new s 155 notices to the sixth and seventh respondents, and by formally interviewing officers of the first respondent. By the time of that submission, a draft statement of claim had been prepared. Issues for decision were whether proceedings should then be instituted, and if so against whom. On 2 July 1999, the Enforcement Committee of the Commission met and decided that the matter should be referred to the Commission, with a recommendation that these proceedings be instituted. On 14 July 1999, a meeting of the Commission took place at which it was resolved to institute these proceedings, effectively in the terms in which they are now brought. I do not think it is made out, therefore, that at October and December 1998 the Commission had decided to bring proceedings against any of the respondents. Indeed the evidence tends to suggest that the Commission was still investigating the question of whether or not it should do so in relation to the first respondent in respect of an alleged contravention of s 46. It is unclear whether, informally, the view had been reached that proceedings under s 45 would be instituted or were likely to be instituted, but again the decision to do so was not made until 14 July 1999. It is clear, in my view, that the examinations in December 1998 are not shown to have been for a purpose other than that of fulfilling the function of the Commission of investigating possible contraventions of the Act and of procuring evidence which might ultimately come to be used in the event of proceedings being brought for such contraventions. That purpose falls squarely within the Act.
41 In my view, the examinations conducted on 8 and 9 December 1998 of the sixth and seventh respondents under s 155(1)(c) of the Trade Practices Act were not carried out improperly or in a contravention of an Australian law.
42 In view of my conclusions, there was no occasion to have regard to the provisions of s 138 of the Evidence Act. In particular, the balancing of considerations which s 138 then would call for was not required. I ruled that the transcripts of examinations of the sixth and seventh respondents conducted under s 155(1)(c) of the Trade Practices Act, as tendered, are admissible against the fifth to seventh respondents.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield. |
Associate:
Dated: 10 February 2000
Counsel for the Applicant: |
Mr J S Hilton SC with him Mr S White |
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Solicitors for the Applicant: |
Australian Government Solicitor |
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Counsel for the First to Fourth Respondents: |
Mr A Sullivan QC with him Mr T Blackburn |
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Solicitors for the First to Fourth Respondents: |
Deacons Graham & James |
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Counsel for the Fifth to Seventh Respondents: |
Mr S W Tilmouth QC with him Mr M Hutton |
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Solicitors for the Fifth to Seventh Respondents: |
Lynch & Meyer |
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Dates of Hearing: |
10, 13 and 14 December 1999 |
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Date of Decision: |
10 February 2000 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2000/66.html