Litigation under the Trade Practices Act 1974
Justice John Mansfield[1]
22 May 2008
Introduction
The program thus far has provided an excellent conspectus of the main provisions of the TP Act: what they are meant to do, how they
do it, and their significance. That ranged across the unfair practices/consumer protection provisions in Pt V, including the conditions
and warranties imposed upon consumer transactions; the very interesting provisions relating to unconscionable conduct in Pt IVA –
an area in which, I think, the jurisprudence is yet to be fully developed and which has a nascent potential; the access provisions;
and importantly, the anti-competitive provisions in Pt IV about which you have just heard, and of course remedies.
What more is to be said?
My presentation is more of a practical one than of a legal theoretical one. It is a primer not a thesis. It is a challenge in those
circumstances, given the content of earlier presentations, to make it interesting and stimulating. I hope I do not end the day with
a whimper rather than with a bang.
Let me first start by giving you a picture of the significance of the Act.
Dubai is one of the seven Emirates of the United Arab Emirates[2]. It is on the Persian Gulf and in the Arabian Desert. It has existed as a settlement for at least 1000 years, but was little more
than a minor community settlement until about the time the United Arab Emirates came together in December 1971. Its development stemmed
largely from the discovery of oil on the Arabian Peninsula in 1966. It did not have electricity or telephone connection until the
1950s. In 1975, its population was about 183,000.
As you know, it is a modern economic miracle. It has a population now in excess of 1.2 million people. Over the years since 1974,
it has seen a remarkable development of high rise properties including the tallest and some say the most significant hotel in the
world, rapid construction of private real estate, including such projects as the Palm Islands and the World Islands and Burj Dubai
extending into the Persian Gulf, and a skyline of residential, tourist and business constructions: a vast cement oasis in the desert.
The development continues apace. It is said to have some 15% of the world’s cranes in that small geographical area.
The Trade Practices Act did not enter quite such a desert in 1974, but it is a fair, if rough, analogy to compare the legal landscape it entered to the physical
landscape of Dubai at about that time. And it is also a fair, if rough, analogy to say that the Trade Practices Act 1974 (Cth) dramatically changed the landscape of competition law and consumer protection in Australia to a similar extent as the geographical
landscape of Dubai has been changed. That may be a graphic way to introduce what to many of you may seem a dry topic. But for those
of us who were in practice before 1974, such a strong picture is a realistic one.
I will briefly explain why.
In the United States, and to a lesser extent in the United Kingdom, there had been firm legislative action to protect competition[3]. The Australian story had been less successful. Australia had introduced a parallel of the US Sherman Act by the Australian Industries Preservation Act 1906 (Cth), but it proved to be largely ineffective for constitutional reasons and fell into disuse[4]. Australia’s next step was the Trade Practices Act 1965 designed to prevent in particular collusive bidding and tendering. In 1971 that Act was extended to make unlawful resale price maintenance.
Although moderately successful, it was not seen as achieving a great deal.
Until the Trade Practices Act 1965, the common law was really the major bulwark against anti-competitive practices. It made unenforceable agreements or clauses of agreements
which contained unreasonable restraints on trade, either in relation to the parties or in relation to the public. There were obvious
limitations. Until 1971 such contracts could only be attacked by one or other of the parties to them[5]. No third party had a right to complain of such agreements. As a consequence, generally speaking, it was only the unreasonableness
of the contract in relation to its effect upon one or other of the parties, rather than upon the public, which was the determining
factor in deciding its enforceability. Rarely were economic public interests considered or protected independently. Disputes were
mainly about the reasonableness or otherwise of restrictive covenants imposed upon the vendor of a business or upon ex-employees.
The landscape in respect of consumer protection legislation up to 1974 was also somewhat sparse. Each State and Territory had a Consumer
Affairs Department which handled individual consumer complaints. Often they were about concerns based on Acts such as the Sale of Goods Act 1893 (SA). But there was little legislative action addressing systemic problems, or requiring general compliance of the business community,
or insisting upon ethical practices. Probably South Australia was in the vanguard of developing legislative responses to more generalised
consumer protection requirement, for example by the Consumer Transactions Act 1972 (SA) and other legislation.
The Trade Practices Act was an attempt to coherently regulate the various practices which experience had shown had a potential to significantly affect competition,
and in addition to enhance and better protect consumers from deceptive trading practices. Thus, broadly speaking, the Trade Practices Act regulates two types of conduct. It seeks to promote competition and to promote honest markets, as it says (s 2) “to enhance the welfare
of Australians through the promotion of competition and fair trading and provision for consumer protection”. Although it has a more
extensive reach, its primary provisions, in terms of litigation at least, are the anti-competitive provisions in Pt IV and the unfair
trading practices provisions in Pt V Div 1, and potentially the unconscionable conduct provisions in Part IVA.
Part V Div 1 of the TPA was the first attempt by the Federal government to regulate deceptive and misleading practices on a general
basis[6]. Unlike Pt IV, its introduction was not contentious and was readily received. It has been adopted as a model in all States and Territories
under their respective fair trading enactments[7].
So what about litigation under the Trade Practices Act?
Jurisdiction
It is first important to know the Courts in which litigation under the Trade Practices Act should be instituted. As they are the major source of litigation under the Act, I will largely confine my comments to proceedings
concerning anti-competitive conduct under Part IV and the unfair practices provisions in Part V. Proceedings under Part IVA (unconscionable
conduct) also fall under the same jurisdictional rubric as Part V proceedings.
Section 86(1) confers jurisdiction on the Federal Court in any matter arising under the Act. That includes Part IV and Part V matters.
Section 163A also confers power on the Federal Court of Australia to make declarations and to grant administrative law remedies in
relation to a matter arising under the Act. It covers declarations as to the validity of any act or thing done, proposed to be done
or purporting to have been done under the Act, and where orders in the nature of certiorari prohibition or mandamus are sought. Generally
such relief concerns the effect of the Act on the activities of the ACCC. It is sometimes the more appropriate procedure to adopt,
especially where it provides a shorter way home to the resolution of a particular dispute.
Proceedings by the ACC and by the Minister are instituted in the Federal Court.
The Federal Magistrates Court also has jurisdiction in Part V civil matters, subject to its jurisdictional limit. There are subtleties
about its jurisdiction under certain Divisions of Part V set out in s 86(1A).
The State courts also have concurrent jurisdiction with the Federal Court and the Federal Magistrates Court in matters arising under
most of Part V: see s 86(2) of the Act. Again, there are subtleties upon the jurisdiction of those courts under certain Divisions
of Part V set out in s 86(2), but for the most part those subtleties do not arise in the more common actions.
Thus, broadly speaking the Federal Court has exclusive jurisdiction in Part IV matters and concurrent jurisdiction with State courts
in other matters. If a proceeding instituted in a State court gives rise to an issue involving a claim under Part IV, it is defined
as a “special federal matter” and must, except in special circumstances, be transferred to the Federal Court: s 6(1) Jurisdiction of Courts (Cross Vesting) Act 1987 (Cth).
In the early days, there was some uncertainty about the extent of the jurisdiction of the Federal Court in what were called associated
issues going apparently beyond the express grant of federal jurisdiction. That uncertainty has now been dissipated, so a litigant
is not faced with any uncertainty about the jurisdiction of the Federal Court (or the Federal Magistrates Court) to deal with all
issues arising in a matter.
The jurisdiction of the Federal Court to deal with all issues arising in a proceeding is called its accrued or associated jurisdiction.
Associated jurisdiction is conferred by s 32 of the Federal Court of Australia Act 1977 (Cth) (“FCA Act”) which states that it is “…in respect of matters not otherwise within the Court’s jurisdiction that are associated
with matters in which the jurisdiction of the Court is invoked”. This extends to appellate matters.[8] It cannot operate unless there is first, a matter in respect of which original jurisdiction has been vested in the Court by a law
of the Commonwealth Parliament.[9] Barwick CJ in Philip Morris Inc v Adam P Brown Male Fashions (1981) 148 CLR 457 at 476 (“Philip Morris”), explained that “…the word ‘associated’ [in s 32] embraces matters which may be disparate from each other” or in other words
it involves matters not within the Court’s accrued jurisdiction. The operation of s 39B(1A)(c) of the Judiciary Act 1903 (Cth), has also lessened the need to refer to the operation of s 32 of the FCA Act.[10]
A succinct description of the legal principles relevant to “associated or accrued” jurisdiction, and the relevant case authorities,[11] appeared in Boyapati v Rockefeller Management Corporation [2006] FCA 897 at [9]- [12] per Kenny J. That case related to a claim under s 52 of the Act, as well as a claim for breach of copyright, and it also involved
a cross-claim for defamation.[12] Her Honour (at [10]) cited Mason, Murphy, Brennan and Deane JJ in Fencott v Muller (1983) 152 CLR 570 at 607-608 (“Fencott”) to refer to “the formula of common transactions and facts”. Her Honour said (at [10]):
…[if a matter] shares a ‘common substratum of facts’ with the principal proceeding, or if the claims are related in the sense
that the determination of one is essential for the determination of the other… [then it meets the requisite test for jurisdiction].
This is sometimes referred to as ascertaining whether matters fall within the one “controversy”.[13] This was clearly referred to in the joint judgment of Gummow and Hayne JJ in Re Wakim; Ex Parte McNally (1999) 198 CLR 511 (Re Wakim),[14] a case which reviewed three other important cases relevant in this context.[15] In particular, Gummow and Hayne JJ perceived the “central task” as being “to identify the justiciable controversy”.[16]
Heydon has also said that the question of what is an associated matter is one of degree and it is no hindrance to “association” of
certain matters that different legal principles must be applied to each of them.[17]
An example of the operation of s 32 in relation to trade practices matters is that of Allied Mills Industries Pty Ltd v Trade Practices Commission (No 1 ) [1981] FCA 11; (1981) 34 ALR 105. There was a cross-claim against the Trade Practices Commission involving common law and equitable causes of action, namely breach
of confidence, breach of copyright, an action in detinue and wrongful inducement.[18] The claim brought by the Commission alleged breaches of s 45 of the Act.[19] Sheppard J found that s 32 gave the Court jurisdiction to determine the cross-claim because the Trade Practices Commission was an
emanation or agency of the Crown and the matter was therefore one in which the Commonwealth was a party within the meaning of s 75(iii) of the Constitution.[20]
The accrued jurisdiction has a wider foundation.
Accrued jurisdiction arises because Parliament makes laws in respect of any “matters” mentioned in ss 75 and 76 of the Constitution, when it vests jurisdiction in a federal court or when it vests a state court with federal jurisdiction.[21] In the trade practices context, the Federal Court is given jurisdiction over the proceedings mentioned in s 86(1) of the Act but
also accrued jurisdiction over claims that are “attached”.[22] It was said in Fencott at 607-610 that when jurisdiction is conferred on the Federal Court with respect to a “matter” it has jurisdiction to determine all
the questions that are raised by the “matter” and not questions which are federal in nature.[23]
A “matter” includes a cause of action arising under a non-federal law or a claim falling to be determined otherwise than by reference
to a federal law alone.[24] On the issue of “matter”, the common transactions and facts test (also relevant to defining the one “controversy”) arose as relevant
in Fencott.[25]
Once federal jurisdiction is enlivened by a claim made in respect of a contravention of a provision of the Trade Practices Act, e.g. s 52, then the Court has jurisdiction over the “matter”. It may deal with any claims made or causes of action arising in the
matter. That jurisdiction extends to addressing claims against a respondent who was not a subject of the alleged breach of the Act,
but was caught up in the common substratum of facts in which the alleged breach occurred.[26] It also extends to claims made or causes of action arising in the matter even if the cause of action invoking federal jurisdiction
has been disposed of or dismissed, provided the federal claim was not merely a device to invoke the jurisdiction of the Federal Court.
Some Practical Issues
What about the practical approach to litigation under the Trade Practices Act? The following comments apply whether the proceeding is in the exclusive jurisdiction of the Federal Court in respect of a Part IV
claim, or is brought in the Federal Court or one of the State courts in respect of a Part V or similar contravention.
In 1986, in a horror film called The Fly, Jeff Goldblum played a nutty scientist called Brundle who started to mutate into an insect.
An observer said to him, when he asked whether he should worry: “Be afraid, be very afraid.” That is simply inapplicable to litigation
under the Trade Practices Act. In essence, it is the same as any litigation. There is not the slightest reason to be afraid when considering conducting such litigation.
True, it presents challenges. The provisions are complex, particularly the provisions in Part IV. The concepts are complex. Sometimes
the evidence is quite complex and sophisticated. But complexity is commonplace in litigation now, whether prompted by the complexity
of facts, or by the complexity of legislation. On the other hand, many cases are not complex. Many cases under Part V are quite straightforward.
They are heard in the District Court or in the Federal Magistrates Court. They proceed in the normal manner: pleadings, discovery
(to the extent to which it is permitted), evidence (depending upon the jurisdiction, given in writing by statement or affidavit adopted
at the hearing and then cross-examined upon) and closing submissions followed by a judgment.
Litigation under the Trade Practices Act is now commonplace, and quite extensive. It is also often exciting and challenging. It still gives rise to novel issues on occasions
(I have referred briefly to the potential of Part IVA in that regard). It can give rise to very complex litigation. As you have heard,
the remedies available are extensive, probably more so in some respects than those available at common law.
Available statistics disclose the volume of litigation in the Federal Court under Parts IV and V of the Act. That statistical material
is somewhat limited. It probably does not pick up many cases between parties other than the ACCC in which one or other of the provisions
of Part V Div 1 are invoked, and it does not pick up the many claims where one of the Fair Trading Acts is the primary source of
the cause of action. Statistical information about litigation in other jurisdictions in which s 52 or its analogues in the Fair Trading
Acts are not readily available.
The picture is that there is a significant amount of litigation in which a provision of the Trade Practices Act provides the primary source of relief claimed, and as you would anticipate substantially from Part V. Section 52 is now a commonplace
starting point for claims based upon perceived improper commercial behaviour.
Some Cases
The reference to some recent cases of significance, either because of their profile or of their jurisprudential interest, will provide
a flavour of some of the “top end” litigation under the Act.
ACCC v Visy Industries Holdings Pty Ltd (No 3) (2007) ATPR 42-185; [2007] FCA 1617 (“Visy”)
This case involved two prominent companies in the corrugated fibreboard packaging market who had contravened the Act in breach of
s 45. Interestingly, their conduct was similar to the contravening conduct in a much earlier proceeding known as the TNT case.[27] One of the companies, Amcor, was granted immunity under the ACCC’s immunity policy and was not prosecuted. Visy and its managing
director Mr Pratt admitted liability. Very significant penalties were imposed, including $36 million against Visy. The Court said
the cartel was “…extremely destructive of competition…” and was “carefully and deliberately concealed” by people who
were “fully aware” of its unlawfulness.[28]
Not surprisingly, much media publicity ensued from Visy, widely described as a “cartel” case.[29] A “cartel” is not a legally defined term under the Act.[30] Regardless, the term has emerged in the common vernacular. The ACCC has adopted the term to describe when two or more competitive
businesses engage in either price-fixing or market sharing (including bid rigging or customer sharing), or a combination of these.[31]
In the current context, the prosecution of “cartel” conduct is a significant priority for the ACCC, especially given that substantial
penalties against offending corporations have been secured in the last seven years.[32] Interestingly, more private parties are said to have brought claims in the wake of several successful ACCC prosecutions.[33]
The flow on effect of the Visy case is evident on many levels. At a litigation level, “thousands of businesses ripped off” by the Visy-Amcor cartel are reported
to be filing class actions for compensation as victims of the widespread cartel.[34] Some of the key figures in the cartel are also facing proceedings by the New Zealand Commerce Commission along a similar line to
the ACCC proceeding.[35] It is evident that a strong focus has shifted to cartels with the spotlight on other multinational companies, for example with Bayer
AG and Chemtura Corporation (and their Australian divisions) subject to a class action litigation initiated against them relating
to a rubber chemicals industry cartel.[36] Also on an international level, it has been reported that the ACCC “is poised” to commence proceedings for civil penalties against
Qantas and other international airlines for a cartel concerning a form of freight pricing following the increase in fuel costs in
the airline industry.[37]
Qantas pleaded guilty in the United States to an illegal price-fixing agreement and was fined $61 million (US) by the US Department
of Justice in November 2007.[38] The first of several Qantas executives has been convicted in relation to that conduct and sentenced to serve eight months in jail
and pay a $21,000 fine.[39] Qantas is also bound to offer full cooperation with ongoing investigations against the other airlines involved.[40]
These events were expected to facilitate class actions in America, Europe and Australia.[41]
British Airways and Korean Air made similar guilty pleas to the US Justice Department and were fined $300 million (US) each.[42] British Airways was also fined £121.5 million by the UK Office of Fair Trading.[43] Lufthansa received conditional immunity for paying an $85 million fine in America.[44] Following earlier investigations, authorities in the European Union also commenced anti-trust proceedings in December last year.[45] Investigations towards prosecutions are continuing in America.[46]
Emirates and Singapore Airlines had recently resisted attempts by the ACCC to access documents relating to their air freight business
and launched action in the Federal Court arguing that the ACCC has limited powers to “police cross-border transactions”.[47] The hearing of the case is continuing.[48]
On the political front, the Visy case provided an injectus to reintroduce plans for legislative reform in relation to cartels.[49] The proposed legislation would amend the Act and introduce cartels as a legally defined term.[50] There will be criminal sanctions for cartel conduct which has been described in the media as sanctions for “hardcore cartel conduct”.[51] The draft bill aims to introduce two criminal offences for cartels under Part IV of the Act, namely the making of, as well as the
giving effect to, a cartel arrangement.[52] Several other changes are also proposed including changes to the way cartel investigations are conducted and also to civil offences.[53]The suggested reforms have been subject to public debate since their exposure in January 2008,[54] particularly in relation to how civil and criminal offences are to be distinguished in the proposed amendments, and the final form
of the proposed legislation has not yet emerged.[55]
ACCC v Leahy Petroleum Pty Ltd (2007) 160 FCR 321; [2007] FCA 794 (“Leahy”)
A particular industry that has been at the forefront of litigation and media publicity is the petrol industry. Despite two successfully
prosecuted cases relating to the petrol industry in 2005, the ACCC failed in Leahy to prove that the parties to an alleged “cartel” were ‘committed’ to a price fixing arrangement relating to the price of unleaded
petrol in the Geelong petrol market.[56] The Court criticised this gap in the ACCC’s case. Gray J found that conduct to contravene s 45 must involve an element of commitment
or obligation to the arrangement in question, and that that feature was lacking.[57]
Worldplay Services Pty Ltd v ACCC [2005] FCAFC 70; (2005) 143 FCR 345 (“Worldplay”) and
ACCC v 1Cellnet LLC [2004] FCA 1210 (“1Cellnet”)
Pyramid selling schemes are illegal primarily under ss 65AAA-65AAE but may also infringe other parts of the Act including ss 52 and
45.[58] The Act has wide ranging application in that so long as the conduct proscribed by s 65AAC is engaged in within Australia, it is immaterial
that people who make payments to take part in a pyramid scheme within the meaning of s 65AAD(1)(a) are not within Australia.[59] It is clear that the pyramid selling provisions have, since their inception, never been limited by a requirement of a territorial
nexus with Australia.[60]
In Worldplay, the Full Court explained that the facts of the case concerned a scheme operated in relation to a global internet online business
which provided gaming services in over fifty countries, though principally in Scandinavia.[61] The business appeared to be owned by a company incorporated in the British Virgin Islands.[62] Two corporations involved in the scheme were also registered as corporations in Australia.[63] At first instance, the scheme was held to be an illegal pyramid scheme.[64] The appeal concerned the application of the Act’s pyramid scheme provisions outside of Australia including whether objects of the
Act, extended to the protection of foreign, as well as Australian consumers.[65] The Full Court came to the conclusion that as long as a scheme exists and there is conduct amounting to participation in Australia,
it is irrelevant where the scheme is carried out.[66]
There was no reason to limit the effects of the Act to effects only upon Australian consumers.[67] It observed that participation in schemes outside Australia by foreign corporations carrying on business in Australia might be caught
by s 5(1) of the Act.[68]
The case of 1Cellnet is another relatively recent instance of the Courts considering, even at the interlocutory stage, that the pyramid selling provisions
are not limited to the confines of Australia even with the dynamic of the internet coming into play.[69] Interestingly, consideration of this issue before Nicholson J raised the relevance of cases relating to private international law.
This is an area of law where issues of a “conflict of law” between various legal systems is raised.[70] The relevance of private international law cases was also evident in Worldplay,[71] and it may suggest that analogies with private international law cases may become more commonplace as the consideration of internet
based pyramid selling schemes develops before the Courts.
Spiteri litigation
There has also been developing media interest in a little used provision under Part V of the Act. Christine Spiteri, a reporter employed
by the Nine Network recently commenced proceedings in the Federal Court against her employer following a failed claim lodged with
the Human Rights and Equal Opportunity Commission. [72] Her Federal Court claim alleges a breach of an oft litigated provision of the Act, s 52, but also a breach of s 53B, a provision
used not nearly as often.[73] Generally, s 53B states that a company must not engage in conduct liable to mislead persons seeking certain employment opportunities.
Recent media reports have commented that there is “plenty of scope” in the provision even though earlier cases attempting to bring
employment law issues under the Act have failed because of the Act’s “in trade or commerce requirement”. [74] The case is yet to proceed to hearing.[75]
Most of those examples involve the ACCC as the applicant. Statistics indicate that it is a party in the Federal Court in less than
10% of matters in which the Act is the source of the cause of action. As it is rarely, if ever, a party to proceedings in the State
courts, it is not a party, and (as most suspect) most actions based upon s 52 of the Act are now brought in the District Court and
courts of similar jurisdiction interstate, the extent to which the Act has provided a source for relief against anti-competitive
or unfair business practices becomes more obvious.[76]
It is also a convenient point to mention criminal proceedings under the Trade Practices Act. At present, neither the contravention of any section of Part IV or the contravention of any section of Part V may give rise to a
criminal prosecution. However, from 2001, s 79 of the Act operated to make contraventions of ss 75AZB-75AZI a criminal offence.[77] Those provisions mirror the Div V Part 1 provisions other than s 52. So breach of those provisions may lead to a criminal prosecution.
Section 163(2) gives the Federal Court jurisdiction to hear those criminal prosecutions.
Conduct of Litigation
As with any litigation of substance, litigation under the Trade Practices Act will be subject to a case management regime. That is designed to ensure the efficient and fair disposition of cases in the interests
of the public as well as the interests of the parties.
Order 10 r 1(2) of the Federal Court Rules empowers the Court to order that no more than a specified number of expert witnesses may
be called, that a case management conference be conducted to clarify the real issues and to give directions for the efficient disposition
of the matter, and to consider the most economic and efficient means of bringing the proceedings to trial and in the conduct of the
trial. There are parallel provisions in the rules of the State courts.
In the case of mega-litigation,[78] his Honour expressed some views following his conduct of the C7 case. He thought that appropriate case management conferences in
a long case might include making orders limiting the number and length of expert reports, considering whether the probative value
of the proffered evidence would be outweighed by the danger that the evidence must result or cause undue waste of time (s 135 of the Evidence Act 1995 (Cth) empowers the Court to exclude evidence on that basis). As you know, in exercising Federal jurisdiction, the Supreme Court will
apply the Evidence Act. Sackville J also discussed orders restricting the categories of discoverable documents, controlling the cost of discovery so that
it is proportionate to that which is at stake in the proceedings; identifying particular issues for focus; specifying a maximum length
for the trial; and allocating the available time between parties; imposing limits on the presentation of lay evidence including cross-examination;
imposing limits on the length of written submissions and oral submissions; imposing a template to be followed in making submissions
to form a framework for the judgment and facilitating dealing with interlocutory issues.
Those issues are especially significant where there is expert economic evidence. Expert economic evidence is of course a commonplace
in Part IV Trade Practices Act cases because the concepts are economic ones to a significant degree. Orders 34-34B of the Federal Court Rules outline procedures
relating to the use of experts in court proceedings. Order 34A in particular provides judges with a range of means for taking expert
evidence, primarily to enhance the quality and content and limit the volume of such evidence in proceedings. It includes the power
to conduct a concurrent examination of expert witnesses – colloquially known as “hot-tubbing”. That procedure recognises that an
expert economist, in expressing an opinion, is in effect arguing a particular point of view about a complex fact relevant to the
determination of a claim: eg the nature of a relevant market, or the extent of the impact upon a particular market of such conduct.
The practice direction on guidelines for expert witnesses in proceedings in the Federal Court, apart from emphasising that an expert
witness has an overriding duty to assist the Court on matters relevant to the expert’s area of expertise, so the expert witness is
not an advocate for the party, provides for the structure of the report and for a direction, if appropriate, for the experts to confer
prior to giving evidence with a view to reaching agreement about matters of expert opinion and with a view to defining where the
real disputes between them lie.
For those of you not familiar with the “hot-tub” means of giving evidence, it is roughly along the following lines, but refined for
each case. The experts for opposing sides submit written statements, which they may modify or supplement at the hearing. The experts
are sworn in at the same time and each in turn provides oral exposition of their expert opinion on the issues arising from the evidence,
and comments upon the opinions expressed by the other expert or experts. During that process the judge acts as a monitor to ensure
the exchange is both professional and useful, and directed to identifying the real issues between the experts and the areas of contention
between them and their arguments in support of their particular conclusions. It is only at the conclusion of that process that counsel
cross-examined the experts one after the other, including, if appropriate, questions to all or any of the experts in respect of a
particular issue. Re-examination is then conducted on the same basis.
That process has been used for instance by Heerey J in Australian Competition and Consumer Commission v Boral Ltd [1999] FCA 1318; (1999) 166 ALR 410 (accounting evidence) and in BHP Billiton Iron Ore Pty Ltd v National Competition Counsel [2007] ATPR 42-141; [2006] FCA 1764 by Middleton J (economic evidence). Not all agree with the “hot-tub” means of giving expert evidence and the decision as to whether
to have evidence adduced in that manner is ultimately for the judge in the particular case and in its particular circumstances.
Other than those procedures, the standard procedures in any lengthy case are applicable to trade practices litigation. That is, witness
statements are exchanged (whether in the form of statements or affidavits). Objections to the form of the statements are addressed
informally by the parties and, subject to particular issues, are accommodated by a revision of the witness statement prior to the
hearing. The evidence in chief is confined or largely confined to the adoption of the witness statement, and cross-examination then
takes place. Procedures are undertaken to endeavour to limit the extent of discovery to that which is necessary for a fair trial.
Written submissions are prepared and, as Sackville J indicated, generally prepared within a template agreed upon by the parties so
as to facilitate the ready understanding of the submissions and their relationship each to each other when the judgment is being
considered. So much is now commonplace.
Conclusion
The message with which I want you to go, therefore, is this: Litigation under the Trade Practices Act is challenging because often the concepts are complex and difficult, and the issues substantial. However, that should be a matter
of satisfaction to a litigator rather than a matter of fear. And in the process of preparation and presentation of the case, subject
to the particular matters which I have identified and which are becoming more commonplace in general commercial litigation in any
event, the procedures which are adopted are those with which legal practitioners are readily familiar.
[1] I acknowledge the considerable assistance of Carmen Labbozzetta, Research Assistant, Federal Court of Australia in the preparation
of this paper.
[2] For the information on Dubai contained in this speech, see Williamson R, Dubai Lifestyle – The History of the City and Day to Day Life in Dubai (Enzine Articles.com, 2004) available at ; Oryx Real Estate, About Dubai – History (oryx Real Estate, 2007) available at ; Sawchuck D, Photos of Dubai’s Rapid Development (DS Photographic, 2006) available at
[3] See the US Sherman Act 1890, the Clayton Act 1914, the Federal Trade Commission Act 1914 etc and in the UK the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948.
[4] See discussion in Heydon JD, Trade Practices Law (Law Book Company, Subscription Service) at [1.80] (December 2007) (“Heydon”).
[7] See Spier H, Submission to the Productivity Commission: Inquiry on Consumer Policy Framework (Productivity Commission, 2007) available from . For an example of implementation in fair trading enactments see Fair Trading Act 1987 (SA) Pt 10 Div 2.
[8] See Federal Court of Australia Act 1977 (Cth) s 32(2).
[9] The Honourable Justice Kevin Lindgren, A Day in the Federal Court (Seminar for the College of Law, 26 October 2001) at 2 (“Lindgren J”).
[10] The Honourable Justice James Allsop, An Introduction to the Jurisdiction of the Federal Court of Australia (October 2007) at 13 (‘Accrued and Associated Jurisdiction’) (“Allsop J”).
[12] The cross-claim on defamation was held to be within Federal Court's associated jurisdiction because it shared common substratum of
facts with principal proceedings. See [2006] FCA 897 at [12]- [13].
[14] See Lindgren J at 3-7 for detail on Re Wakim.
[16] (1999) 198 CLR 511 at [139]. See also Lindgren J at 5. For an analysis of jurisdiction post-Wakim, see Justice Ronald Sackville, “The Re-emergence of Federal Jurisdiction in Australia” (2001) 21 Australian Bar Review 133.
[22] Heydon at [1.930]-[1.940].
[27] [2007] FCA 1617 at [291]- [292] stated that Visy contravened s 45 (by virtue of s 45A) in arriving at the relevant agreements; and also by giving effect to them. As for the similar factual circumstances,
see Trade Practices Commission v TNT Australia Pty Ltd [1995] ATPR 41-375 (conduct not to poach customers and to provide compensation) and cf with ACCC v Visy Industries Holdings Pty Ltd (No 3) [2007] FCA 1617 (agreed price increases, agreement not to deal with opposition’s customers, compensation where customers changed from one party to
another). For a brief discussion of the TNT case, see Fels A, “Watersheds, Minefields and the Role of the Commission” in Steinwall R (ed), 25 Years of Australian Competition Law (Butterworths, 2000) p 31.
[29] See eg Sexton E, “To Catch a Cartel”, Sydney Morning Herald (21 March 08) p 35; Drummond M, “Judge joins call for cartel jail option”, Australian Financial Review (27 November 2007) p 5; Christopher A and Foster G, “Cartel Instigators Belong Behind Bars” Australian Financial Review (6 November 2007) p 63.
[30] This can be seen by a perusal of the section. Note that not all cases under s 45 are described as cartel cases, including the very first case under s 45, Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) ATPR 40-004 (this is the first reported s 45 case in the first volume of the ATPR reports).
[31] McNeill J , "Understanding Prohibited Cartel Behaviour In Order to Minimise the Risk of Prosecution" Lexis Nexis Trade Practices Conference (Sydney, 9 September 2004) p 1. (“McNeill”). Available from .
[32] Watts K and Mortensen J, “Recent developments in cartel investigations and prosecutions” (2007) 23(4) TPLB 61. (“Watts and Mortensen”).
[33] Watts and Mortensen at 61.
[34] See Speedy B, “Victims demand refunds from Visy” Australian (30 November 2007) p 8. (“Speedy”). This article mentions that there are more than 17,000 claimants against Visy and Amcor, with
one of the recent actions referred to. A search of the Court’s intranet reveals this is NSD 702 of 2006 where there have so far been
three interlocutory judgments delivered, namely [2006] FCA 1802; [2007] FCA1559 and [2008] FCA 391.
[36] Drummond M, “Class Action Over Rubber Cartel” Australian Financial Review (3 December 2007) p 7. Note that this article also discusses cartel prosecutions in other countries namely, Canada and America.
[37] Rochfort S, “ACCC ready to clip air cartel wings” Age (10 March 2008) p 1. This article discusses the far reaching international implications of this cartel, including the American investigations
into the conduct.
[38] US Department of Justice, Qantas Airways Agrees To Plead Guilty and Pay Criminal Fines
For Fixing Prices on Cargo Shipments (media release, Washington, 27 November 2007 (“US media release”). See also The Australian, Cartel Probe names Qantas Executives (News Ltd, 16 January 2008) available at (“News Ltd article”).
[39] Hellard P, “Qantas Boss Jailed for Price Fixing” The Advertiser (10 May 2008) p 18.
[40] See, US media release.
[41] Rochfort S, “US deal has Qantas talking, ACCC soon to strike” Age (12 March 2008) p 3. (“Rochfort”)
[42] Drummond M, “Airline Cartel Claim Widened” Australian Financial Review (9 August 2007) p 7 (“Drummond”).
[45] Done K and Tait N, Cartel Investigations Close in on Airlines (UK Finance, 21 December 2007) available at . McKay R, “Cleaner taking Airlines to Court” Lloyds List DCN (8 February 2007) p 12.
[47] Sharp A, “Airlines trying to stop ACCC action” Age (3 May 2008) p 3.
[48] This matter (Emirates v ACCC &Anor) is Federal Court file number VID252/2008 and is listed as part-heard and adjourned.
[49] The 2003 Dawson Review first introduced the suggestion of criminal penalties for cartel conduct. See Department of Treasury, Discussion Paper: Criminal penalties for serious cartel conduct (Department of Treasury, Canberra, 2008). Available from . (“Cartel Discussion Paper”).
[51] There have been criticisms of such a description, see Shirrefs D, “No Simple Legal Fix for Cartels” Australian Financial Review (22 October 2007) p 63.
[52] Cartel Discussion Paper, at 1-2.
[53] Cartel Discussion Paper, at 2-3.
[54] See Bowen C, (Assistant Treasurer and Minister for Competition Policy and Consumer Affairs), Jail terms for serious cartel conduct (media release, Parliament House, Canberra, 11 January 2008). Available from .
[55] There are several ways to distinguish civil and criminal offences under the Bill but it is the “dishonesty test” attracting significant
debate and criticism. See eg Crowe D, “Cartel Execs To Face Five-Year Jail Terms” Australian Financial Review (12 January 2008) p 5; Beaton Wells C and Fisse B, “Criminalising Serious Cartel Conduct: Issues of Law and Policy” Seminar on Criminalising Cartel Conduct: Centre for Corporate Law and Securities Regulation (University of Melbourne, Melbourne, 25 February 2008);
The Honourable Justice Peter Heerey, “Commentary on the Paper of Brent Fisse and Caron Beaton-Wells” Seminar on Criminalising Cartel Conduct: Centre for Corporate Law and Securities Regulation (University of Melbourne, Melbourne, 25 February 2008).
[57] [2007] FCA 794 at [37]- [38], [948]-[949]. See also Wood L, “Judge Blasts Consumer Watchdog Over Petrol Price Probe” Age (27 July 2007) p 4.
[58] The Australian Competition and Consumer Commission, ACCC Update: Issue 11 June 2002 at 16.
[59] Heydon JD, Trade Practices Law (Vol 2) (Lawbook Co, subscription service) at [14.130] (update 91, June 2006).
[60] See Miller RV, Miller’s Annotated Trade Practices Act (29th ed, Thomson Lawbook Co, 2008) p 611 at [1.65AAC.40] citing for eg Wells v John R Lewis (International) Pty Ltd (1975) 25 FLR 194; 1 ATPR 40-007. For an indication of internet based pyramid schemes being an ACCC focus see Drummond M, “Top Scam Prize is Time in Jail” Australian Financial Review (11 January 2006) p5 .
[69] This case was brought under ss 65AAC, 65AAD of the Act.
[70] Most notably, in [2004] FCA 1210 at [10], the case of Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 at 607 was cited by the Court and it is a case that examined issues of jurisdiction relating to allegedly defamatory
articles published on the internet.
[72] The Federal Court proceeding is NSD 232 of 2008. Ms Spiteri is seeking $564,278 in damages. See Schulze J, “Reporter sues Nine in
Federal Court” Australian (26 February 2008) p 3. (“Schulze”).
[73] See Schulze at 3. As for discussion on s 53B, see Pelly M, “Plenty of Scope in Trade Practices” Australian (7 March 2008) p 29. (“Pelly”). The latter article discusses the nature of s 53B and the frequency with which it is used. It also
describes it as one of the provisions on the “outer limits” of the Act with plenty of scope to be explored by the Courts.
[75] The Federal Court’s online public search facility, “E-Court” lists the matter as “adjourned pre-hearing”.
[76] In the period 2003-2007 inclusive, there were 1284 actions commenced in the Federal Court in which the Trade Practices Act 1974 (Cth) was the basis of the primary claim (Federal Court of Australia Annual Report 2006-2007, Commonwealth of Australia, Canberra, 2007) and 129 actions commenced in which the ACCC was applicant (Australian Competition and Consumer Commission Annual Report 2006-2007, Commonwealth of Australia, Canberra, 2008).
[77] As a result of amendments introduced by the Treasury Legislation Amendment (Application of Criminal Code) Act (No 1) 2001 (Cth) Sch 1.
[78] Sackville J “Mega-litigation: Towards a New Approach” - Paper delivered to the Supreme Court of New South Wales Annual Conference:
17-19 August 2007
