Australian Competition & Consumer Commission v Boral Ltd [1999] FCA 889 (25 June 1999)

Last Updated: 9 July 1999

No Question of Principle

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Boral Ltd

[1999] FCA 889

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v BORAL LTD

NO. VG 79 OF 1998

HEEREY J

25 JUNE 1999

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 79 OF 1998

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	BORAL LTD (ACN 000 051 696) First Respondent BORAL BESSER MASONRY LIMITED (ACN 000 223 718) Second Respondent

JUDGE:	HEEREY J
DATE:	25 JUNE 1999
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 I have decided that I should refuse the amendment sought to the statement of claim. I think it comes far too late.

2 When this case commenced on 5 March 1998 the statement of claim raised a case of primary contraventions of s 76(1)(a) of the Trade Practices Act 1974 (Cth) by both Boral Ltd and Boral Besser Masonry Limited (BBM). The defence denied engagement by Boral Ltd in the relevant market for concrete masonry products while admitting that BBM was so engaged. In that setting it was obviously open to the applicant to consider whether it should mount a case of secondary liability against Boral under s 76(1)(c), (d) or (e). In making such a decision the applicant had the advantage of the information obtained by an investigation prior to the commencement of proceedings under s 155 of the Act.

3 In support of the amendment, it is said that the recently delivered draft evidence of Professor Hay and Mr Kus shows a new defence. I accept the argument of counsel for the respondents that there is no necessary or obvious connection between the economic analysis now advanced, in particular by Professor Hay, and the question whether Boral did in fact engage in conduct amounting to aiding, abetting, etc, as alleged in the proposed amendments. As counsel points out, the evidence of Professor Hay is not reflected in the terms of the amendments themselves. Moreover, the question of upstream profits is not new and has been dealt with in some of the statements of the applicant's experts.

4 It can also be said that if the costs of Boral cannot affect the costs of BBM, that may be a ground for ultimately rejecting the latter's case that its costs were less than its revenue and thus no predatory pricing occurred. But that does not necessarily make it fair for the applicant to seek to raise what is a new case at this very late stage.

5 Of course there will no doubt be an issue at trial whether, for the purposes of s 76(1)(a), a separate legal entity like BBM can ignore contractual pricing arrangements with upstream suppliers merely because they are part of the same corporate group. If the economic analysis advanced by the respondents is found not to be determinative of the legal consequences, then BBM's defence may fail. And if the applicant succeeds against BBM, it is difficult to see what extra practical effect in terms of penalty, injunctive relief, deterrent effect and the like would be achieved by succeeding against Boral also.

6 I do not think it is enough to say that the proposed amendments give particulars which are confined to material already in evidence. In any event that is not completely true. For example, par 17A(f) alleges:

"Boral finances the losses incurred by BBM in selling concrete masonry products below its costs of manufacture and supply of those products."

No particulars at all are given. Similarly, par 17A(h) alleges:

"As the ultimate holding company of, and the body in a position to control BBM, Boral approved or acquiesced in the conduct and purposes of BBM referred to in paragraphs 10, 11 and 16 herein."

Again no particulars are given.

7 But quite apart from that, a party, having raised a new case, cannot confine evidence to the matters that it particularises. It is open to the opposing party to mount its own positive case. In the present instance that would open up the whole area of the corporate management and financing of the Boral group. The trial has been fixed from at least late last year, to commence on Monday week, today being a Friday. This is in marked contrast to Queensland v J L Holdings Ltd [1997] HCA 1; (1997) 189 CLR 146 where the application for amendment was made before a date was fixed for hearing and the date when fixed was six months ahead: 189 CLR at 154.

8 It would impose, I think, an intolerable burden on the practitioners acting for the respondents to have to analyse this new case, take instructions and prepare evidence. That would be bad enough, even if they did not have plenty to occupy themselves in preparing for the case as it already exists. If the amendment were allowed it would, almost inevitably follow that an adjournment would have to be granted. Because of the length of the case and other commitments of the court, such an adjourned trial could not be heard certainly until next year, and quite possibly the latter half of next year. All these sorts of considerations are referred to in the judgment of Kirby J in J L Holdings: 189 CLR at 169 to 172. The judgment of Kirby J was a concurring one. His Honour's detailed consideration of the factors relevant to the exercise of judicial discretions of the present kind is not in my respectful opinion inconsistent with the judgment of the majority (Dawson, Gaudron and McHugh JJ).

9 The application for amendment is refused. The costs of the applicant's motion will be the respondents' costs in the cause.

Liberty to apply generally is reserved.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

Associate:

Dated: 25 June 1999

Counsel for the Applicant:	Mr D Shavin QC with Mr M J Crennan and Mr N O'Bryan
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondents:	Mr A Archibald QC with Mr C Maxwell QC and Mr I Stewart
Solicitor for the Respondents:	Blake Dawson Waldron
Date of Hearing:	25 June 1999
Date of Judgment:	25 June 1999