Coles Myer Limited & Anor v Fels & Anor S249/2001 [2001] HCATrans 570 (7 November 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S249 of 2001

B e t w e e n -

COLES MYER LIMITED and LIQUORLAND (AUSTRALIA) PTY LTD

Applicants

and

ALAN HERBERT MILLER FELS

First Defendant

AUSTRALIAN COMPETITION & CONSUMER COMMISSION

Second Defendant

Office of the Registry

Sydney No S238 of 2001

B e t w e e n -

WOOLWORTHS LIMITED

Applicant

and

ALAN HERBERT MILLER FELS

First Defendant

AUSTRALIAN COMPETITION & CONSUMER COMMISSION

Second Defendant

Applications for Interlocutory Injunctions

GAUDRON J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON WEDNESDAY, 7 NOVEMBER 2001, AT 10.40 AM

Copyright in the High Court of Australia

__________________

MR B.C. OSLINGTON, QC: May it please the Court, I appear with my learned friend, MR M.J. LEEMING, in the matter involving Coles. (instructed by Allens Arthur Robinson)

MR A.J. MYERS, QC: May it please your Honour, I appear for the defendants in that matter with MR J.C. SHEAHAN, SC and MR P.J. RENEHAN, and I appear for the defendants in the next matter too, your Honour. (instructed by the Australian Government Solicitor)

MR S.J. GAGELER, SC: If your Honour pleases, I appear with MR P.R. WHITFORD for the plaintiff in the Woolworths matter. (instructed by Clayton Utz)

HER HONOUR: Now, can these matters be heard together?

MR OSLINGTON: Yes, your Honour.

MR MYERS: Yes, your Honour.

HER HONOUR: Well, who wishes to go first? Does it matter?

MR OSLINGTON: I will. On 19 October this year a summons, which attached a statement of claim, was filed in the original jurisdiction of this Court seeking, in substance, to restrain an entitlement claimed by the defendant to have access to privileged communications - - -

HER HONOUR: Is it agreed that they are privileged or is that simply asserted?

MR OSLINGTON: No, we have evidence in an affidavit from Mr Bednall. On the same date a summons was filed in this Court seeking interlocutory relief, the summons being designed to restrain inspection of privileged communications until the final determination of the original summons.

The application today is supported by an affidavit of Timothy Gordon Bednall, sworn 19 October this year, and the second affidavit sworn 5 November this year which was filed yesterday. In that affidavit it is established that some of the documents which would otherwise be required to be produced pursuant to the section 155 notice are the subject of legal professional privilege.

HER HONOUR: They are the subject of the claim of legal professional privilege.

MR OSLINGTON: The subject of the claim of legal professional privilege.

Your Honour, the principles which, we submit, should be applied by this Court in deciding whether interlocutory relief should be granted have been expressed by Chief Justice Gibbs in the 1985 decision of Queensland v Telecom and in the decision of the present Chief Justice of this Court in the immigration case of Fejzullahu, each of which are referred to in paragraph 4 of our written submissions.

Those principles are also established by what your Honour said in Elliott v Seymour [1993] HCA 70; (1994) 68 ALJR 173 at 175 in which your Honour said that if there is:

a seriously arguable case which, leaving aside discretionary considerations, would justify final relief as claimed -

interlocutory relief should be granted. That decision by your Honour was cited with apparent approval by Justice Gummow in Marsden v Amalgamated Television Services (1996) 70 ALJR at 535.

HER HONOUR: That is the issue though, is it not: is there are sufficiently arguable case?

MR OSLINGTON: Yes.

HER HONOUR: Do you seek relief beyond the determination of the special leave application in Daniels' Case? You do at this stage?

MR OSLINGTON: Yes, we do, your Honour. I am sorry, if special leave is refused in Daniels, we possibly would have some difficulty in persuading this Court to grant us final relief but certainly we seek interlocutory relief until further order of the Court and it may be appropriate that that relief, if granted, ought to be granted until the hearing of the special leave application in Daniels with the matter relisted on that day to consider what, if any, relief ought to be granted beyond that time.

HER HONOUR: What has happened in Daniels, does anyone know? Have the documents been produced is really what I am asking?

MR OSLINGTON: The order made by the Full Federal Court in Daniels was that Daniels should not refuse to produce the documents. It seems that the documents had not been produced up until that time. So far as we can ascertain, there was no application for a stay of the order in Daniels, so it may be either that Daniels has voluntarily handed over the documents or, alternatively, the ACCC has agreed not to require production of the documents until the hearing of the special leave application, but we do not know.

HER HONOUR: We will find that out in due course.

MR MYERS: I can inform your Honour. It is the latter. By agreement with the ACCC, the documents have not been produced pending the hearing and determination of the application for special leave.

HER HONOUR: Thank you. Have inquiries been made of the Registry as to when that matter is likely to be heard?

MR OSLINGTON: In the Commission's affidavit, it is suggested that inquiries reveal that the application is likely to be heard in about the middle of next year.

HER HONOUR: It seems it is more likely than not that it will be heard on 15 February of next year.

MR OSLINGTON: That, no doubt, is more accurate information than that contained in the affidavits.

Your Honour, the ACCC, in evidence which it has filed before this Court, has sought to paint a picture, the substance of which is that its investigation will be thwarted, proposed actions will be delayed and it will be in all sorts of problems if access is not granted to the privileged material. The suspicion expressed in the 155 notices which are said to justify their issue is a suspicion, in substance, of exclusionary agreements being entered into consequent upon third party applications to the Licensing Court for a liquor licence. The substance of the agreement is to resolve those contested applications before the liquor court, or Licensing Court.

It is very difficult to see, with respect, why non-access to privileged material by the ACCC is going to have any substantial effect on either the investigation or any proposed proceedings. Litigation in this country and administrative investigations in this country have been conducted over the years by and large without access to privileged material. If there are exclusionary provisions in agreements, the existence of privilege will not prevent the agreements being provided. If there are oral arrangements or understandings giving rise to agreements, the existence of privilege will not prevent the ACCC inquiring about them, using its powers under section 155.

It has the benefit of Pyneboard which many other investigatory bodies do not have but to suggest, as is suggested in the ACCC's affidavit, that there is going to be any significant impediment in relation to this particular investigation or in relation to commencing proceedings, in our respectful submission, does not bear close scrutiny, particularly as now we have learnt that the special leave application in Daniels will be heard in February of next year.

A further argument advanced by the ACCC is that the test which ought to be applied in deciding whether an interlocutory injunction ought to be granted is the same test which is applied in deciding whether this Court ought to grant a stay of execution. We would respectfully submit that that argument cannot be sustained. Justice Kirby in Ampolex explained why extraordinary or special circumstances were required before this Court would grant a stay of a judgment from which - - -

HER HONOUR: Yes, but you are not in that territory. You are in the original jurisdiction of this Court under section 75(v).

MR OSLINGTON: No, well, we are not. I am really addressing a major argument which is advanced but we would submit that the - - -

HER HONOUR: Yes. You are just in that ordinary territory where you are seeking relief as if in - well, as at first instance as if in the equity jurisdiction of another court. You have to show an arguable case and the balance of convenience, do you not?

MR OSLINGTON: Yes. Now, your Honour, the reason we say the case is arguable is articulated in our written submissions. In substance, our submissions are as follows: first, it is section 155(1) which empowers the Commission to require production of documents and, in our submission, it is that subsection which ought to be viewed in order to decide whether the power of the Commission includes a power to require privileged documents and unless one can find an express abrogation of the common law right to legal professional privilege or its abrogation by necessary implication within the terms of subsection (1), the privilege is not abrogated.

The work which section 155(5) has to do is to require production of those documents which the Commission, under subsection (1), is entitled to require production of and states that "A person shall not refuse" to produce those documents if he "is capable of" so doing. We would respectfully submit that the scope of the documents the Commission is entitled to require production of is not determined by subsection (5) but, in fact, is determined by subsection (1). What the Full Court did in Daniels is to decide the case with reference to subsection (5). The Full Court in Daniels never considered whether or not subsection (1) had the effect of abrogating legal professional privilege.

The second argument we advance is that legal professional privilege is different than the right to silence. Part of the reasoning of each member of the Full Court in Daniels was that a necessary implication of abrogation of the right to silence arose because it was said the right to silence would frustrate the very purpose of section 155 which was to enable investigations into contraventions of the Act. That effect does not flow from maintenance of the right of legal professional privilege.

If I could give, by way of example, your Honour, an officer of my client going along to his solicitor and saying, "Coles have entered into these agreements and I have had these conversations with these people which may amount to contracts, arrangements or understandings. Please advise me as to my legal rights." That communication is protected by legal professional privilege but, nevertheless, if that officer of Coles was examined pursuant to section 155, even if - and we submit it would not be the case, but even if it was the case that disclosure of the conversations and agreements may tend to incriminate, he would not be entitled to refuse to disclose fully those conversations and those circumstances which he told his solicitor about. He would not be obliged to disclose whether he told his solicitor about them or not. But that, in our respectful submission, would be of no great moment in the investigation.

So, although it might be said that maintenance of the right to silence could have the effect of frustrating or defeating the purpose for which section 155 was enacted, that feature does not apply if legal professional privilege is maintained. So, an argument of an implied abrogation of that privilege does not arise from that fact.

We would respectfully submit, your Honour, that there is a reasonably arguable case which we have to advance. The answer to our case is not, as thought by the Full Court in Daniels, dictated by the High Court decision in Pyneboard which dealt with a different type of privilege. Those are our submissions, if your Honour pleases.

HER HONOUR: Yes, thank you. Do you wish to add to that, Mr Gageler?

MR GAGELER: Very briefly, your Honour, yes. Your Honour, as a matter of formality, I move on a summons dated 11 October 2001 and read in support an affidavit of Kirsten Mary Webb.

HER HONOUR: Yes. You can take that as read.

MR GAGELER: If your Honour pleases. There are two affidavits of Ms Webb. Your Honour might note that paragraph 10 of the first affidavit identifies the documents in question and describes them in a way which demonstrates that legal professional privilege, at least prima facie, attaches to those documents.

HER HONOUR: Yes.

MR GAGELER: Your Honour, the serious question to be tried is whether section 155 of the Trade Practices Act 1974 abrogates legal professional privilege. There are three steps in the plaintiff's argument. One is that legal professional privilege is a fundamental common law right; two is that a statutory intention to abrogate such a right must be clearly manifested by unmistakable and unambiguous language; and, three, one does not find language of that nature in section 155(1) which is the relevant source of power, or in section 155(5)(a) which is the obligation to comply.

Your Honour, the three propositions that I have stated are consistent with the way in which the privilege and its abrogation have been approached in recent cases of this Court - if I can give your Honour some pages references - in Propend, 188 CLR 501. Your Honour might note pages 505, 540, 552, 564 to 565 and 582 to 583, and importantly also, Coco v The Queen 179 CLR, particularly at pages 426 to 428, stating the test for determining whether there is a statutory intention to abrogate a fundamental common law right.

In our submission, Daniels does not stand in the way of your Honour being satisfied that there is a serious question to be tried. One: it is, of course, not binding on your Honour but, two: it fails to address any of the steps that I have identified. It fails to cite either of the two cases that I have referred your Honour to and it fails to recognise legal professional privilege as a fundamental common law right. It then applies the wrong test to the wrong statutory provision. It focuses on section 155(5)(a) rather than section 155(1).

So far as the balance of convenience is concerned, the injunction is, in our submission, clearly necessary to preserve the utility of the principal proceedings and to answer a point sought to be made in our learned friend's submissions. It may be a very nice question whether the compulsory disclosure of the documents in question to the Commission would destroy the privilege for all purposes but that is not the point. The point is that the plaintiff relies on the privilege as an answer to compulsory disclosure. So, if forced to hand the documents over in advance, it has lost the battle before beginning the fight.

Saying that the documents - as my learned friends seek to say the documents will, of course, be handed back, if we were to win, is no answer either. The documents will have been used. Their contents will have made their way to the thinking of the Commission and even if the documents and every copy of them were to be handed back, the knowledge of the Commission, improperly obtained in those circumstances, could not be expunged.

Against that powerful factor, it appears to us that the defendant is really saying three things. One is that there is a public interest in the speedy conduct of its investigation. Two is that there is a possibility of harm to competitors and consumers from the conduct being investigated and, three, that there is a prospect of the expiration of limitation periods. In our submission, on analysis, none of those factors, even if made out, would be sufficient to outweigh the factor in the plaintiff's favour. But none of them, on analysis, your Honour, really amount to very much at all.

If your Honour were to look at Mr Cassidy's affidavit, paragraph 2 - and I do not ask your Honour to do so now - your Honour will see that the genesis of the current investigation was a complaint made on 29 January this year by a single applicant for the grant of a liquor licence and that was a complaint made not against my client but against three hotel proprietors. Your Honour will also see from that paragraph that the Commission has chosen "In recent months" to broaden the inquiry and to extend it back for a six-year period.

The notice with which we are concerned was one that was issued on 16 August. It asked a large number of questions and sought a number of categories of documents and it is the case, your Honour, that all of the questions have been answered and all of the documents, including the agreements in question, have been identified and handed over. It is only the documents in respect of which legal professional privilege is claimed that have not been provided. It is pure speculation, in those circumstances, that the privileged documents would make any difference and it is pure speculation at this stage that there is any actual harm to either competitors or consumers.

So far as the limitation point is concerned, your Honour, this is perhaps rather technical but a point is made in paragraph 21(iv) of my learned friend's submissions to the effect that the relevant limitation period will expire under the Act in August 2002. Even if that is right, it is still quite a way out. In our submission, that is not right, and by looking at the transitional provisions, what one can show is that the limitation period will not expire until 27 July 2004. I can explain how one gets to that, your Honour.

I can hand to your Honour the relevant amending Act. Your Honour will recall that sections 82 and 87 previously provided for a three-year limitation period under the Trade Practices Act. That three-year limitation period was amended to a six-year limitation period by the amending Act that I have just handed to your Honour. Schedule 1 commenced on 26 July 2001. The amendment to section 82(2) your Honour can see in item 20 and in item 21 your Honour can see a transitional provision dealing with the application of item 20. It says:

The amendment made by item 20 applies in relation to conduct engaged in on or after the commencement of that item.

That is on or after 26 July 2001. Then it provides:

The amendment made by item 20 also applies in relation to conduct engaged in before the commencement of that item, but only if the period that:

(a) relates to the conduct; and

(b) applied under subsection 82(2) of the Trade Practices Act before the commencement of that item;

had not ended when that item commenced.

So, what one does to apply that is to take the date 26 July 2001, go back three years, so if conduct was still within the limitation period then it can still be caught and the limitation period for that conduct three years ago is extended for six years, so one looks three years in advance, and that is how one gets to 27 July 2004. If your Honour pleases.

HER HONOUR: Thank you, Mr Gageler. Yes, Mr Myers.

MR MYERS: Thank you, your Honour. We rely upon and read the affidavit of Brian David Cassidy, sworn 2 November 2001, and your Honour has that, I am sure.

HER HONOUR: Yes, I have read that.

MR MYERS: Your Honours, the applicants are seeking orders which will subsist beyond the time of the hearing of the application for special - - -

HER HONOUR: You need not trouble yourself on that issue because the orders would not be made beyond that date, if they were made at all, and if orders were made, the matter would be made returnable before the same Bench as hears the Daniels' special leave application.

MR MYERS: Yes. Thank you, your Honour. There is an element of artificiality in the applications today in this respect, that, in truth, the outcome of these two proceedings, which have been instituted in the original jurisdiction of the High Court, will be determined by the special leave application in Daniels.

HER HONOUR: I am not too sure about that. You see, one possibility might be this, that it would be decided that these matters should go forward and the Daniels' special leave application should await the outcome. That is one possibility.

MR MYERS: It is a possibility, with respect, your Honour, that is unlikely to be appealing because - - -

HER HONOUR: One thing that is not appealing, I suppose, is that there are three different sets of counsel arguing the same matter, even at the same time. Much worse if they are arguing it at different times.

MR MYERS: Which is why we say, your Honour, there is an element of artificiality here because the substance must be that the Daniels' matter will go forward. The special leave application will be determined. If it is not granted, that is the end of Daniels and these matters.

HER HONOUR: Not necessarily. No, it is not. One might like to think so but there are applications here for final relief and they cannot be disposed of on a special leave application, I should not have thought. I should have thought that the people are entitled to their day in Court. They have invoked the original jurisdiction. They have a substantive action.

MR MYERS: The Court, in my submission, would refer these matters to the Federal Court to be dealt with in the ordinary way; else everyone who disagrees with the decision of the Federal Court from which special leave to appeal has not been granted will commence an action in the original jurisdiction of the High Court and have the matter determined thus. In my respectful submission, your Honour, that is not a realistic hypothesis. In any event, our submission is that, in substance, these matters will be determined by the Daniels' proceeding.

Your Honour, the basis upon which the applicants are seeking relief, which is, in substance, the same as the final relief they seek in the proceedings, is that it is necessary to grant the interlocutory relief to preserve the subject matter of the application. They address two things, really, the merits of their arguments as to the meaning and effect of section 155 and the balance of convenience or discretionary elements on the other hand.

Your Honour, the decision of the Full Court of the Federal Court in Daniels represents the law in Australia today. It has not been overturned on appeal. There has been no grant of special leave to appeal from Daniels. In the second place, the criticisms that are made of the reasoning in Daniels are misplaced.

The criticisms focus on a distinction between subsection (1) and subsection (5) of the Act. With respect, the provisions of section 155 should be read as a whole. One cannot determine the issue of abrogation of legal professional privilege by reference to subsection (1) alone or primarily by reference to subsection (1) alone.

If the argument that has been adumbrated this morning before your Honour were correct, one would have the peculiar circumstance that the Commission would not be empowered to issue a notice which related to documents which were the subject of a proper claim for legal professional privilege. But one cannot know that at the instant the notice is issued which is, no doubt, the reason for, or a possible reason for, the way in which the Act has been drafted, referring first to the power in subsection (1) and then, secondly, in subsection (5), to the obligation of a person to produce documents.

The words of subsection (5) are very clear:

A person shall not:

(a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it -

plainer words one cannot imagine.

Daniels is supported by the earlier decisions of this Court in Pyneboard which has stood for very many years and also the reasoning of all the Judges in Yuill's Case, including the dissentients, Justice McHugh and your Honour.

HER HONOUR: I think Justice McHugh actually referred to it with approval but I did not. I think that is the case.

MR MYERS: I beg your Honour's pardon. I thought you were altogether but I am sure your Honour's recollection is better than mine.

HER HONOUR: I thought there was a difference between myself and Justice McHugh.

MR MYERS: Yes. In any event, certainly, even in the minority, Justice McHugh referred to Pyneboard with approval. Your Honour, as often in these cases, the question really comes down to practical considerations as to balance of convenience and discretion and so on.

The contention that is at the heart of what is put by the two applicants today is that it would be futile to prosecute the actions if they did not get their injections but that is not so.

HER HONOUR: But I suppose one question is why should they be put in any worse position than Daniels with whom you have made an agreement. Having made that agreement, it seems to suggest or I would take the inference that the inconvenience is not as great as you might otherwise claim.

MR MYERS: It is a matter of private agreement and there is no evidence before the Court as to the terms of the private agreement. Your Honour asked a question and the Commission answered it. There are some things that one would be naturally concerned about: the running of time for the purposes of a limitations period. Now, there are two categories of limitations period. My learned friend, Mr Gageler, did not apparently notice that the submission that he referred to, being part of our written submissions, related to section 77 of the Trade Practices Act 1974 and not section 82. He made a very good point about something that we had not advanced in argument. The limitation period in relation to section 77 has not been altered by the statute to which he referred. Section 77 deals with penalties. So, that is still the three-year period.

In any event, the Commission is concerned about individuals who might be affected by contravening conduct being unable to bring actions for damages and certainly the limitation period in relation to events that occurred yesterday might not elapse for a considerable period of time, but this investigation is going back six years and even with the extended limitation period, as each day and each month and, perhaps, each year goes by, persons who might have an action for damages will find limitation periods expiring.

HER HONOUR: What actions for damages are we talking about here?

MR MYERS: Actions by citizens against contravening parties for damages.

HER HONOUR: What is the contravention?

MR MYERS: Contravention of Part IV of the Trade Practices Act that the Commission is investigating, if there is a contravention.

HER HONOUR: Yes, but would you concretise it a little bit for me? I mean, if you are relying on it, I need to know what, in general, you say I am depriving the citizens of.

MR MYERS: Well, persons who are affected by agreements preventing them from undertaking trade in the liquor industry where those agreements are in contravention of the Trade Practices Act.

HER HONOUR: I see. The general allegation being that these people may have colluded with others to keep people out of the liquor industry?

MR MYERS: That is so, your Honour, and the limitation periods for any such contraventions are running.

HER HONOUR: Yes, but I take it they are not beyond the wit of these people who have been locked out of the liquor industry, if such there be - and, again, that is entirely hypothetical.

MR MYERS: Yes, it is.

HER HONOUR: We have no evidence one way or another but I assume it is not beyond the wit of these hypothetical people to commence actions?

MR MYERS: Your Honour, small traders will not commence actions against Coles and Woolworths before the Commission has completed its investigation.

HER HONOUR: No. The Commission can take action on their behalf, can it?

MR MYERS: Yes, it can.

HER HONOUR: It is not beyond the wit of the Commission to - - -

MR MYERS: But it cannot do that until it has completed the investigations, your Honour.

HER HONOUR: Why? Because it would be an abuse of process?

MR MYERS: Well, it would, your Honour. Certainly, the Commission would not commence actions - - -

HER HONOUR: So, we are talking at this stage entirely in the realms of the hypothetical? We do not know if there is any such citizen, is that right? We do not know if there is any action; we do not know if it is statute barred; we do not know if such person wants to bring proceedings and we know that the Commission does not at this stage?

MR MYERS: No. We know that the Commission is undertaking an investigation, your Honour, and the Commission, acting responsibly, could only institute proceedings after it has become satisfied that there are grounds for doing so. Its means of becoming so satisfied are by conducting an investigation.

HER HONOUR: As I understand it, these people have given you everything except the material for which they claim legal professional privilege.

MR MYERS: Which is most of the material. As the affidavit shows, by a considerable extent, the bulk of the material is material for which legal professional privilege has been claimed. One can weigh documents or count pages or whatever but it seems that there are about two-thirds of the documents - this appears from Mr Cassidy's affidavit - are documents for which legal professional privilege has been claimed. Your Honour, it is undoubted that if the Commission's investigation is delayed because - - -

HER HONOUR: If it is delayed beyond 15 February?

MR MYERS: If it is 15 February, I can only say that is three months, your Honour. That is three months. I do understand that. Any delay, nonetheless, means that limitation periods may expire, either in respect of penalties, the three-year period, or in respect of actions for damages, the now extended period. If your Honour were disposed to grant an injunction, one of the undertakings or conditions of the injunction could be that no point would be taken in relation to limitation periods that might have expired by reason of the delay caused by the granting of the injunction.

HER HONOUR: But that would be covered by the normal undertaking as to damages, would it not?

MR MYERS: No, with respect, it would not because if the limitation period expired then there would be no damages.

HER HONOUR: Well, I am not too sure. If it were your action, the normal undertaking as to damages would cover any damages you were unable to recover because of the operation of a limitation period, would it not? I think it would.

MR MYERS: Your Honour, we rather thought that it would not and that if a limitation period expires by reason of the lapse of time during which action cannot be taken because of an injunction, that is not covered by the undertaking as to damages. As Mr Sheahan has pointed out to me, it certainly would not cover penalties, your Honour.

HER HONOUR: But these are proceedings - if any proceedings are commenced pursuant to Part IV of the Act - the undertaking you would seek, "in any proceedings pursuant to Part IV of the Act with respect to matters, the subject of the present investigation by the ACCC", then these people, the applicants, would not raise any limitation period in answer to them.

MR MYERS: Yes. We have taken the precaution, your Honour, in case the argument went this way to frame some possible undertakings. If it would be of assistance to your Honour, I could - - -

HER HONOUR: Yes. Well, perhaps you should show them to the other end of the Bar table.

MR MYERS: They are typed differently on the page but they are, in substance, the same, your Honour. The first is the usual undertaking as to damages. It is based on the form that the Federal Court now utilises, your Honour.

HER HONOUR: Yes.

MR MYERS: And then the second undertaking is not to rely upon a time delay and that is what I have been adverting to, your Honour. If your Honour were disposed to grant an injunction for a short period of time, say, to the hearing and determination of the special leave application, we would respectfully suggest that it should be on those undertakings. If your Honour pleases.

HER HONOUR: Yes, thank you, Mr Myers. What do you say about the undertakings, Mr Oslington?

MR OSLINGTON: I was armed with instructions when I came to Court with the usual undertaking as to damages and I am still armed with those instructions. The precise formulation of that I am just getting instructions on now.

HER HONOUR: What about the time delay?

MR OSLINGTON: The time delay, your Honour. It is the first notice we had about that and I have no instructions about that whatsoever. Might I possibly make this observation: the undertaking as presently formulated does not seem to contemplate the need for any causal link between the delay and whether or not any proceedings have been started in the meantime. If there is an action which can be brought now and that could be established, the mere fact that the Commission may wait three months to bring it, in our respectful submission, should not deny us the right to claim the benefit of a limitation period. But I do need to get instructions on the form of undertaking, your Honour.

HER HONOUR: Yes. Well, Mr Gageler?

MR GAGELER: Your Honour, I am in exactly the same position. I am in the position to give the usual undertaking as to damages. I need some instructions on the second undertaking.

HER HONOUR: Very well. Subject to some acceptable formulation as to undertakings being agreed between the parties - in the result that it is not that I would work one out for myself - I would be minded to grant the interlocutory orders sought up to and including 15 February 2002 and to make the matters returnable before the Bench constituted for hearing the special leave application of Daniels on that day.

Now, what do you want to do about the undertakings? Do you want some time to talk about it or do you want to come back this afternoon or do you want to deal with the Registry? Mr Myers does not want to be left waiting around Sydney in the wet weather. He has plenty of that where he comes from.

MR OSLINGTON: Except that it is not always easy to reach an accommodation with the ACCC over forms of orders because of their administrative processes, it - - -

HER HONOUR: Well, I will list the matter - shall I give you an hour?

MR OSLINGTON: Yes, your Honour.

HER HONOUR: Is that suitable to you, Mr Myers?

MR MYERS: Yes, that is very satisfactory and we may be able to dispose of it before lunch.

HER HONOUR: Yes. Well, the Court will resume in one hour's time.

AT 11.28 AM SHORT ADJOURNMENT

UPON RESUMING AT 12.16 PM:

HER HONOUR: Yes, have we sorted something out?

MR OSLINGTON: Mr Gageler will take the running for both of us.

MR GAGELER: Almost, your Honour. Can I hand your Honour a refined version of the second undertaking. What your Honour will see is that paragraphs (a) and (b) remain exactly the same but the introductory words are now different, and the introductory words are that:

The Plaintiff undertakes to the Court that, in the event that these proceedings are dismissed, it will not rely on any delay caused by the grant of the interlocutory injunction -

Now, your Honour, there are three differences between this version and the earlier version. I think only one of the differences is controversial. The first difference is that it omits any reference to wholly-owned subsidiaries which, in the case of Woolworths, in any event, is an irrelevant reference. The second is that it applies only in the event that the proceedings are dismissed, and I think that is uncontroversial. But what is or appears to be controversial is the causal link between the biting of the undertaking and the delay in the commencement of the proceedings. So, the current version requires there to be a causal link between the delay in the commencement of the proceedings and the operation of the undertaking. That is, it looks only to the adverse effect of the undertaking on the commencement of the proceedings which mirrors, your Honour, the usual undertaking as to damages.

HER HONOUR: Yes. Thank you. Mr Myers, you do not like that?

MR MYERS: There are two things that we do not like, your Honour. We accept that the words "in the event that these proceedings are dismissed" should go in if they are not implied. We do not like the omission of the words "on behalf of each wholly owned subsidiary". It is too easy in these complex company families for things to be done by a subsidiary which might have been done by a parent company and we cannot see, from a practical point of view, why we should not have the security of mind, as it were, of having each wholly-owned subsidiary covered as well.

The third issue is the introduction of the causal connection. There are three things that we say about that. The first is that the introduction of the word "cause" as opposed to the words we had creates, potentially at least, a complex factual dispute about whether the ACCC could have commenced the proceedings a week, a month or some other period earlier and - - -

HER HONOUR: But that would seem to be fair, would it not? You cannot have undertakings with respect to the consequences of things that are not related to it. I mean, it may leave that matter open but I would have thought that was inevitable.

MR MYERS: It does introduce, potentially at least, a very messy factual issue and these are undertakings, and - - -

HER HONOUR: But you always have that in an undertaking as to damages, anyway.

MR MYERS: Yes, but this is not an undertaking as to damages.

HER HONOUR: No.

MR MYERS: It is not, your Honour. It is just concerning the limitation period and so there will be a preliminary question, potentially, in every case whether at some earlier point of time the ACCC could have commenced proceedings but it was dilatory in doing so or whatever, and we say that it is best to avoid that potential controversy, not only in the interests of the ACCC and the public but also in the interests of the party who is giving the undertaking.

Finally, your Honour, there is no reason to suppose that the ACCC, if it be in a position in its own estimation to commence proceedings, would delay in doing so, and so the introduction of that causal requirement is unnecessary as well as likely to cause dispute. If your Honour pleases.

HER HONOUR: Yes, thank you. Mr Oslington, you have some wholly-owned subsidiaries, do you?

MR OSLINGTON: Yes. We are not concerned about "wholly-owned subsidiaries" being included.

HER HONOUR: You are happy to give undertakings on their behalf?

MR OSLINGTON: Yes, your Honour.

HER HONOUR: And you accept, do you, Mr Myers, that Mr Gageler's client does not have wholly-owned subsidiaries?

MR MYERS: No, we do not, your Honour. We do not know.

HER HONOUR: You do not know?

MR MYERS: No.

MR GAGELER: Your Honour, I can say this: I thought it was uncontroversial but if it is controversial, I am happy enough to put it in there. So long as my learned friend does not take it as a representation that we have any relevant wholly-owned subsidiaries.

HER HONOUR: Very well.

In each of these matters, upon the plaintiffs giving the usual undertaking to damages as formulated in the draft undertakings handed to the Court this day by Mr Myers and upon each of the plaintiffs in these matters further undertaking, on their own behalf and on behalf of each wholly-owned subsidiary, that they, in the event that these proceedings are dismissed, will not rely on any delay caused by the grant of the interlocutory injunction either:

(a) for the purpose of any defence in any proceedings brought against it by the Australian Competition and Consumer Commission or any other person and which relates to any of the allegations which are described in Schedule 2 to the notice under section 155 of the Trade Practices Act addressed to the relevant plaintiff and dated 16 August 2001, or

(b) for the purpose of resisting any relief which may be sought in any such court proceedings taken by the ACCC or any other person,

interlocutory injunctions will be issued restraining the defendants and each of them from taking any steps or doing anything by themselves or their servants or agents pursuant to the said notices to the extent that they purport to require the provision of documents or information to which legal professional privilege attaches. Such order to operate up to and including 15 February 2002.

Each of the matters will be returned before the special leave Bench constituted to sit in Sydney on 15 February 2002. Costs of today to be costs in the cause. I certify for the attendance of counsel on today's proceedings.

Now, before I let you all go, you gentlemen will not be seeking to intrude yourselves into the Daniels' matter on 15 February. We do not need three lots of argument, you understand, do you? Surely, you can liaise with counsel in that matter, do you think? Mr Oslington? I mean, this was not an invitation to you to seek to intervene in the special leave application. That is what I am saying.

MR OSLINGTON: We have not sought to intervene, your Honour.

HER HONOUR: No, I do not want you to take it as an invitation so to do.

MR OSLINGTON: Clients do not always wait for invitations to seek leave to appear before the Court.

HER HONOUR: There may be some need for you to address the issues that arise in these cases in the event that special leave is refused but I would not understand that it would be strictly necessary for everybody to be separately represented or to seek to engage a lot of time in that exercise. Do you follow?

MR OSLINGTON: I follow, your Honour. It will be necessary or no doubt we will be instructed to seek a continuation of the injunction.

HER HONOUR: Exactly.

MR OSLINGTON: And possibly instructed to do so, whatever the outcome of the leave application.

HER HONOUR: Yes, that is what I am suggesting but your interests will be the same, will they not? If that happens, I can tell you now, the total allocated time between the two of you would be 20 minutes.

MR OSLINGTON: The lights will be on.

HER HONOUR: Very well, the Court will now adjourn.

AT 12.26 PM THE MATTERS WERE CONCLUDED