Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 3)

[2010] FCA 1131

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 3) [2010] FCA 1131

Citation:	Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 3) [2010] FCA 1131
Parties:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v CEMENT AUSTRALIA PTY LTD ACN 104 053 474, CEMENT AUSTRALIA HOLDINGS PTY LTD ACN 001 085 561, CEMENT AUSTRALIA (QUEENSLAND) PTY LTD FORMERLY QUEENSLAND CEMENT LTD ACN 009 658 520, POZZOLANIC ENTERPRISES PTY LTD ACN 010 367 898, POZZOLANIC INDUSTRIES PTY LTD ACN 010 608 947, CHRISTOPHER GUY LEON and CHRISTOPHER STEPHEN WHITE
File number(s):	QUD 295 of 2008
Judge:	GREENWOOD J
Date of judgment:	19 October 2010
Catchwords:	PRACTICE AND PROCEDURE – consideration of submissions in relation to the admission of evidence and rulings in relation to objections to the reception of opinion evidence having regard to ss 55, 59, 69, 76 and 79 of the Evidence Act 1995 (Cth)
Legislation:	Evidence Act 1995 (Cth), ss 55, 59, 69, 76 and 79
Cases cited:	Ringrow Pty Ltd v BP Australia (2003) 130 FCR 569 – cited and quoted Australian Securities and Investments Commission v Rich & Anor (2005) 191 FLR 385 – cited and quoted Jackson v Lithgow City Council [2008] NSWCA 312 - cited R v Whyte [2006] NSWCCA 75 - cited
Date of hearing:	15 October 2010
Date of last submissions:	15 October 2010
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	110
Counsel for the Applicant:	Mr S Couper QC with Mr D Kelly SC and Mr M Hodge
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondents:	Mr N Hutley SC, Ms S Brown, Dr R Higgins in the principal proceeding (Ms S Brown appearing on the application for non-publication orders)
Solicitor for the Respondents:	Gilbert and Tobin, Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 295 of 2008

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

CEMENT AUSTRALIA PTY LTD ACN 104 053 474
First Respondent

CEMENT AUSTRALIA HOLDINGS PTY LTD
ACN 001 085 561
Second Respondent

CEMENT AUSTRALIA (QUEENSLAND) PTY LTD FORMERLY QUEENSLAND CEMENT LTD ACN 009 658 520
Third Respondent

POZZOLANIC ENTERPRISES PTY LTD ACN 010 367 898
Fourth Respondent

POZZOLANIC INDUSTRIES PTY LTD ACN 010 608 947
Fifth Respondent

CHRISTOPHER GUY LEON
Sixth Respondent

CHRISTOPHER STEPHEN WHITE
Seventh Respondent

JUDGE:

GREENWOOD J

DATE OF ORDER:

19 OCTOBER 2010

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.The rulings in relation to evidence sought to be adduced by the applicant at the trial of the action contained within a tender bundle of 35 documents provided to the Court in support of submissions as to admissibility are the rulings contained within the reasons for judgment. 

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 295 of 2008

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

CEMENT AUSTRALIA PTY LTD ACN 104 053 474
First Respondent

CEMENT AUSTRALIA HOLDINGS PTY LTD ACN 001 085 561
Second Respondent

CEMENT AUSTRALIA (QUEENSLAND) PTY LTD FORMERLY QUEENSLAND CEMENT LTD ACN 009 658 520
Third Respondent

POZZOLANIC ENTERPRISES PTY LTD ACN 010 367 898
Fourth Respondent

POZZOLANIC INDUSTRIES PTY LTD ACN 010 608 947
Fifth Respondent

CHRISTOPHER GUY LEON
Sixth Respondent

CHRISTOPHER STEPHEN WHITE
Seventh Respondent

JUDGE:

GREENWOOD J

DATE:

19 OCTOBER 2010

PLACE:

BRISBANE

REASONS FOR JUDGMENT

1. These reasons address objections to evidence and provide the basis upon which rulings in relation to the objections are made. 

2. The applicant seeks to tender approximately 31 volumes of documents in support of its case.  A number of the documents are the subject of objections from the respondents.  The documents presently in issue are set out in a schedule to the applicant’s outline of submissions concerning the admissibility of the documents.  There are approximately 35 documents in issue divided into five categories.  The present point of contention concerns the admissibility of opinions contained in those documents.  The first category of documents concern opinions expressed by officers of one or more of the respondent companies where each author (and there may be more than one) is identified.  The second category concerns opinions expressed in documents where the author of the document is unidentified.  In this category, the applicant relies upon inferences the Court ought to draw from the contents of the document and other evidence that the opinions expressed in the documents are those of senior management of the relevant respondent corporation. 

3. The third category consists of documents which contain what are described as “apparent statements of opinion”.  These documents are said to principally fall within the period June 2004 to April 2005 and are said to address attempts by the relevant respondent corporation to “find a justification for the first and second elections to proceed with respect to the Millmerran contract”. 

4. The fourth category consists of documents in which a number of opinions are expressed most of which the applicant contends are opinions which were not genuinely held.  However, in respect of some documents, inferences are said to arise from the document and surrounding circumstances, including other documents, that a particular opinion expressed by a particular author (within senior management) is genuinely held.  An example is said to be a draft Board Briefing Paper dated 28 June 2004 (the author of which is Ms Sandra Collins) which expresses an opinion about the consequence for Pozzolanic’s (Pozzolanic Enterprises Pty Ltd (“PE”)) earnings before interest and tax (EBIT) should a competitor lower the particular commodity price by the amount nominated in the Paper. 

5. The fifth category concerns documents produced by third parties who are consultants to one or more of the respondents. 

6. On Friday, 15 October 2010, the parties addressed submissions in relation to the admissibility of the documents and the field of objections to particular opinions expressed in the documents.  Each category was examined in the context of one or two examples of a document falling within the category.  However, upon reviewing the submissions and the documents emblematic of each category, it became clear that it would be necessary to look at each of the documents to determine admissibility.  Accordingly, on Monday, 18 October 2010, I expressed preliminary observations about the principles applicable to the documents having regard to those that I had seen as examples of the categories.  I indicated that it would be necessary to look at each document and I requested the applicants to make a folder of each of the documents available to me during the course of Monday. 

7. As to the first category, the applicant contends that each document contains an expression of opinion of identified employees of the relevant respondent and the opinion is tendered as proof of the truth of the facts about which the opinion is expressed. The opinion is said to be admissible under s 69(2) of the Evidence Act 1995 (Cth). Secondly, the opinion is said to be that of individuals who, given their positions, have expressed opinions which fall within s 79 of the Evidence Act because the particular individual has specialised knowledge based on the person’s training, study or experience and the opinion is wholly or substantially based on that knowledge: s 79(1). I rather thought in the course of the applicant’s reply, the applicant also relied upon s 78 of the Evidence Act as to some documents. However, no reliance is placed upon s 78.

8. The applicant also says that the opinions expressed in the category 1 documents reflect the opinions of individuals who are market participants in the sense that they are responsible for making and implementing decisions concerning the industry in question and specifically the engagement by one or more of the respondents with other market participants.  Finally, as to this category, the applicant contends that the statements of opinion are “previous representations made by a person” which constitute admissions by PE and Cement Australia (Queensland) Pty Ltd (“QCL”). 

9. As to the second category, the expressions of opinion are tendered on the footing that they fall within s 69 of the Evidence Act and in the alternative they are admissible pursuant to s 79 of the Evidence Act. The statements of opinion are also said to constitute admissions by PE and QCL having regard to s 87(1)(b) of the Evidence Act. 

10. As to the third category, these documents are not tendered as proof of the fact to which the opinion relates as the applicant contends that the opinion contained in the document is not one which was genuinely held by the author of the document. 

11. As to the fourth category which is said to concern opinions genuinely held by the relevant author, the applicant contends that the opinion is admissible as proof of the facts to which it relates and, by reason of s 87(1)(b) of the Evidence Act, the opinion constitutes an admission made by PE and “Cement Australia”. 

12. As to the fifth category consisting of documents produced by third party consultants engaged by one or more of the respondents, the applicant contends that the opinions expressed in the documents fall within s 79 of the Evidence Act as an exception to the opinion rule in s 76(1).

13. Subject to a discussion of the submissions on behalf of the respondents as to their objections to the tender of the material, I will now consider the categories of documents and the contentions of the applicant as to admissibility. 

14. Two documents said to be illustrative of category 1 are documents at Volume 9, Tab 23 of the tender bundle.  There are two documents under Tab 23.  The first is an email by Mr Ian Ridoutt (PE) dated 26 September 2003 addressed to the sixth respondent, Mr Christopher Leon (PE), under the title “Flyash Strategy in QLD” (9‑143).  The second document is described as a “Capex Expenditure Request Summary” (PE) dated 28 March 2002 (9‑144) to which is attached a Paper described as “Ash Market in SEQ March 2002” (PE) (9‑145 to 9‑147).  As to the email of 26 September 2003, Mr Ridoutt says this:

    Please find attached a Board paper from April 2002 requesting approval for capital expenditure that supported our strategy to win the new contracts at Tarong and Millmerran and maintain our single supplier status position in the QLD Flyash market.

    I thought this paper was more detailed but it was condensed for the Board meeting and although provides some interesting info probably it does not have the depth and detail to cover all the issues you are now facing. 

    It is very pleasing that this strategy has worked extremely well and performance has been much better than forecast, however like any matter it will need to be managed and tweaked a bit where necessary in the south Brisbane and Gold Coast to ensure that things are kept under control. 
      [emphasis added]

15. The portions in italics are the opinions upon which the applicant seeks to rely as evidence of the facts about which the opinions are expressed. 

16. As to the Capex Expenditure Request Summary, the document contains the following observation under the heading “Significant Strategic Benefits”:

    Securing the contracts at Tarong and Millmerran will maintain our ash sales to our existing customers.  Loss of either contract may result in a loss of up to [X] tonnes of flyash and an EBIT of $[Y] million. 

17. The particular tonnes and the dollar consequences for Pozzolanic’s EBIT are deleted for reasons of confidentiality.  The applicant relies upon the above expression of opinion as evidence of the facts about which the opinion is expressed.  The Capex Expenditure Request Summary is endorsed as having the “authorisation” of Mr Michael Wilson (Manager, PE) and Mr Ian Ridoutt (General Manager, Sales and Distribution, QCL) as the individuals who “prepared & proposed” the capital expenditure request on 2 April 2002.  The document was reviewed by the General Manager of Finance, and the Managing Director of QCL, Mr Arto, on 2 April 2002. 

18. The Paper entitled “Ash Market in SEQ” contains the following observation under the heading “Risks”: 

    Loss of either contract (Tarong or Millmerran) may result in a loss of up to [X] t of flyash and an EBIT of $[Y] million. 

19. The Paper also contains a table which sets out the average selling price of fly ash in dollars per tonne in terms of the actual price in 2001, the budgeted price for 2002 and an estimated price for 2003 on the assumption that PE secures both the Tarong and Millmerran contracts and spends the proposed capital the subject of the request.  The table marks the budgeted average selling price for 2002 with an asterisk which footnotes the observation that:

    Lower average selling price [in 2002] reflected a lower selling price due to loss of Millmerran ash contract. 

20. The applicant relies upon the above expression of opinion as evidence of the facts about which the opinion is expressed. As indicated earlier, the applicant also relies upon each of these opinions under s 79 and s 87(1)(b) of the Evidence Act and contends that they are admissible as the evidence of the industry participants. 

21. The Capex Expenditure Request Summary document is signed by Mr Wilson, Mr Ridoutt, the General Manager of Finance and the Managing Director. The applicant contends that the signatures permit the inference to be drawn that the opinions stated in the documents are opinions held by those men. The applicant also contends that the fact that the Manager of PE, the General Manager of Sales and Distribution for QCL and the Managing Director of QCL held the opinions relied upon, is relevant to the question of purpose with respect to the contention that PE and QCL took advantage of their substantial degree of power in the SEQ concrete‑grade fly ash market in contravention of s 46(1)(b) and (c) of the Trade Practices Act 1974 (Cth) (“TPA”). The s 46 purpose case is that entry into the contract was for the purpose of preventing the entry of any competing acquirer into the SEQ unprocessed fly ash market; deterring or preventing any person from engaging in competitive conduct in that market; preventing a competing supplier entering the SEQ concrete‑grade fly ash market; and deterring or preventing any person from engaging in competitive conduct in the SEQ concrete‑grade fly ash market. PE is said to have been knowingly concerned in those contraventions. The opinions of these individuals are also said to be relevant to the question of purpose under s 45(2) of the TPA. The contention is that PE contravened s 45(2)(a)(ii) by entering into the Millmerran contract for the purpose of substantially lessening competition in the SEQ unprocessed fly ash market and the SEQ concrete‑grade fly ash market. PE and QCL are said to have given effect to provisions of the contract which have that purpose.

22. Section 59(1) of the Evidence Act provides that evidence of a previous representation made by a person is not admissible to prove the existence of a fact that the person intended to assert by the representation.  Such a fact is referred to as an asserted fact. Section 59(1) excludes evidence of previously asserted facts as proof of those facts.

23. However, s 69(2) of the Evidence Act provides that the hearsay rule as to asserted facts does not apply to a document (so far as it contains previous representations as to asserted facts) if the representation was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or, made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.  A person is taken to have had personal knowledge of a fact if the person’s knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact). 

24. The displacement of the hearsay rule operates in relation to a document that either is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business or at any time was or formed part of such a record; and the document contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business. 

25. The documents at Volume 9, Tab 23 represent documents in relation to a capital expenditure request on the part of PE. These documents were produced to the applicant pursuant to a s 155 (TPA) notice. I accept that they form part of the records which either belong to the relevant respondent or are kept by that respondent in the course of and for the purposes of its business: s 69(1)(a). The question that arises is whether the documents contain a previous representation made by a person as to the existence of a fact that the person intended to assert by the representation. Section 69 applies to a document (within s 69(1)(a)) that contains an asserted fact. It does not expressly apply to an opinion. The question then is what is the asserted fact that engages s 69? An author’s state of mind or the opinion held by an author is itself a question of fact. In Ringrow Pty Ltd v BP Australia (2003) 130 FCR 569 Hely J observed at [18] that:

    Given that s 69 is to be construed broadly, and that at least in some contexts “fact” may include an opinion (without statutory extension), in my view s 69 of the Act is capable of operation even if the asserted fact is an opinion in relation to a matter of fact [the value of goodwill]. 
      [emphasis added]

26. In Ringrow, the asserted fact was an opinion in relation to a matter of fact, namely, the value of goodwill (based on an earlier bank valuation) attached to a service station business at a particular date (which was the subject of an unconscionable forfeiture contention under a lease).  Inferences about the fact in issue, namely the value of goodwill were said to be able to be imputed from the valuation opinion.  Later it was contended that the valuation contained a specific assertion that goodwill attached to the service station at a substantial value.  The asserted fact was an opinion as to the fact in issue, namely value at the relevant date. 

27. In the present case, the asserted fact concerning the documents at Volume 9, Tab 23 is the fact of an opinion held. The opinion is not of the purpose but is relevant to the purpose of entry into the Millmerran contract. The passages relied upon by the applicant contain mixed assertions of fact and opinion. The fact of the opinion held by the relevant officers of the particular respondent corporations is admissible as relevant to purpose. In the document at 9‑143, apart from the opinion, the statement that Pozzolanic is seeking Board approval to support its [existing] “strategy to win the new contracts at Tarong and Millmerran and maintain our single supplier status position in the Queensland flyash market” is an asserted fact as to a strategy and the status of the supplier as a single supplier. As to s 69(2), those individuals who prepared and proposed the request and who authorised it are sufficiently senior so as to enable an inference to be drawn that the person who made the assertions of fact and opinion had or might reasonably be supposed to have had personal knowledge of the asserted fact or opinion, or did so on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact or opinion. At 9‑144, an opinion is expressed that “securing the contracts at Tarong and Millmerran will maintain our ash sales to our existing customers”. The opinions reflected in the documents at Volume 9, Tab 23 also concern projections or speculation about what might happen should particular events occur. For example, loss of either contract might result in the loss of up to a certain volume of fly ash sales and might give rise to a loss of EBIT of a certain order of magnitude.

1. The approach then to the documents at Volume 9, Tab 23 is that they are admissible as to the opinion of the authors, as the fact that the authors held such an opinion is a relevant matter going to purpose. Secondly, as to the opinions relied upon by the applicant, those opinions are admissible as an “asserted fact” within s 69 to prove the matter of fact about which the opinion is expressed, asserted within a document falling within s 69(1)(a). The opinions, to the extent that they reflect speculation or hypothesis as to future matters, are simply admissible as to the opinion held and not as evidence of the facts about which the opinion is expressed. An opinion as to what might happen should particular events occur is not an opinion as to a matter of fact but simply an hypothesis.

2. A second question arises as to whether evidence of an “asserted fact” admissible on the footing that the hearsay rule in s 59(1) is displaced by s 69, to the extent that the asserted fact is an opinion, is rendered inadmissible by s 76(1) of the Evidence Act which, of course, provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.  The applicant contends that if the opinion rule applies, it is displaced as to the opinions contained in the Volume 9, Tab 23 documents because the opinion is prepared and proposed and ultimately authorised by senior officers of PE and QCL and that by reason of their position an inference arises that they have specialised knowledge as to the subject matter of the opinions, based on their training, study or experience and that the opinion of those persons is wholly or substantially based on that specialised knowledge. 

3. It is very common for senior officers of corporations such as the Chief Executive Officer, Chief Financial Officer, Senior Managers with portfolio responsibility for particular topics to generate emails, reports, Board reports and memoranda which contain views, observations, opinions about matters central to the business of the organisation. The business conduct of corporations would not function in the absence of such activities. The authors of these documents would mostly not turn their mind to articulating a detailed process of reasoning which would exhibit all of the foundation facts leading to a particular view which would expose whether the opinion is wholly or substantially based on specialised knowledge arising out of the author’s training, study or experience. Facts asserted by the officers of corporations or opinions they hold contained within documents kept by the organisation for the purposes of the business are the subject of specific treatment in Division 3 of Part 3.2 of the Evidence Act. I am not persuaded that the thinking of senior officers of corporations reflected in opinions about relevant matters (and facts perceived by authors of opinions to be relevant to those opinions) recorded in their business documents are, in terms of admissibility in the forensic examination of matters in controversy, subject to a further test of whether the opinions fit within s 79 so as to stand outside the prohibition contained in the opinion rule in s 76(1) of the Evidence Act. It seems to me that the position in relation to asserted facts (including opinions) contained within business records is intended by the Act to be addressed solely by Division 3 of Part 3.2. In that regard, I agree with the observations of Austin J in Australian Securities and Investments Commission v Rich & Anor (2005) 191 FLR 385 at [205] to [215]. The position seems to me to be different in the case of an expert who seeks to express an opinion about matters in controversy in aiding the Court (rather than being an advocate for the party) in disposing of the controversy against the background of an expert’s understanding of the practice direction in relation to matters of expert evidence.

4. However, if the opinions of officers of the corporation are subject to the opinion rule and in turn subject to the exception contained in s 79, I find it difficult to determine whether the elements of s 79 are enlivened as I do not know the extent of the experience (or training or study) of the authors of the Volume 9, Tab 23 documents and thus I do not know whether they have specialised knowledge based on their training, study or experience and I am not able to determine whether opinions expressed by them are wholly or substantially based on that specialised knowledge. No doubt some or perhaps all of the individual signatories to the Volume 9, Tab 23 documents are trained in aspects of business management, financial management or have experience in aspects of business or financial management. Nevertheless, I am not in a position to determine those matters on the face of the material I have before me.

5. Similarly, I am not presently in a position to determine whether an asserted fact made by a person ought to be taken to be an admission by a party as I am not satisfied whether the integers within s 87(1)(b) are satisfied.

6. It may be that other evidence within the tender bundle of documents or in the case more generally goes to those matters in s 79 or s 87(1)(b) of the Evidence Act and I therefore reserve for final submissions, submissions as to those matters. As already indicated, I take the view that the documents are admissible on the basis indicated, that is, the opinions (contained within the documents at Volume 9, Tab 23) are relevant as to the fact that those officers at that date held the opinions and admissible as “asserted facts” within s 69 as probative of the matters of fact about which the opinion is expressed.

7. I have addressed the question of the Volume 9, Tab 23 documents in some detail as these documents were said to be emblematic of each of the category 1 documents.  However, on Monday I requested the applicant to provide a copy of each of the documents in issue and I now consider each of the remaining category 1 documents. 

   The First Category

8. As to the document at Volume 4, Tab 39 (a QCL inter‑office memorandum by Peter Klose dated 2 April 2002 entitled “Update on QCL Group Position Analysis and Strategic Options 2000‑2005”), the comments under the heading “Flyash” at 4‑292 and 4‑293 comprise mixed matters of opinion and asserted fact.  The opinion is admissible to prove the existence of facts about which the opinion is expressed. 

9. As to the document at Volume 9, Tab 4 (an email from Peter Klose to Mr Bob Smith dated 15 July 2003) (9‑42), the comments comprise mixed matters of opinion and asserted fact.  The opinion is admissible to prove the existence of facts about which the opinion is expressed. 

10. As to the document at Volume 12, Tab 13 (12‑181) entitled “Market Issues – Millmerran Flyash” – 8 June 2004 – the introductory observation comprises mixed matters of fact and opinion.  The opinion is admissible to prove the existence of facts about which the opinion is expressed. 

11. As to the document at Volume 13, Tab 1 (13‑1) entitled “Queensland Fly Ash Development Plans”, the opinion comprises matters of fact and opinion under the heading “Executive Summary” and the opinion is admissible as evidence of the facts about which the opinion is expressed.  The opinion however expresses the view that PE enjoys a highly profitable monopoly of the Queensland fly ash market and its position in that regard is under threat from new entrants (and who they are).  The opinion is not admissible as to the economic notion of a monopoly but is admissible as to the expression of opinion that the undertaking of PE is highly profitable and that the Queensland fly ash market and PE’s position is under threat from new entrants. 

12. As to the document at Volume 13, Tab 2 (13‑6) comprising an email by Sandra Collins to Mr Murray Adams dated 28 June 2004, the document has been admitted into evidence previously on the footing that it contained an estimate of fly ash available and used in 2003, in a matrix on an attachment.  The question of the weight that attaches to the document remains to be determined. 

13. As to the document at Volume 18, Tab 4 (18‑12) comprising a matrix setting out fly ash scenarios, the document sets out predictions of what would occur in the event that various alternative scenarios eventuated.  The scenarios show in most cases price easing upon competitors entering the market and in one case price reduction would cause fly ash sales to increase.  Since the matrix postulates a series of predictions, the document is admitted on the footing that it reflects the opinion held at the relevant time by Mr Murray Adams, Strategy and Business Development Manager for Cement Australia Pty Ltd. 

14. As to the document at Volume 18, Tab 21 (18‑146) comprising an email from Mr Murray Adams to Mr Colin Zeitlyn (General Manager – Sales and Marketing, Cement Australia from 20 September 2004 to the present), the email attaches four slides concerning fly ash production.  At 18‑146, Mr Zeitlyn says that the fly ash market is vulnerable to margin erosion through competitor actions and any margin erosion would require Cement Australia to aggressively reduce its fixed costs (that is, royalties).  Mr Zeitlyn also says that the concrete market is essentially saturated with fly ash and moving volumes or introducing competitors would not generate any more sales.  He also says (18‑149) under the heading “Options” as part of a document entitled “Fly Ash Briefing” (10 February 2005) by reference to the option of “Terminate the agreement” that a “Con” of doing so is “potential competitor entry at Millmerran.  The opinions contain matters of fact and opinion.  The opinion is admissible to prove the existence of facts about which the opinion is expressed. 

15. As to the document at Volume 19, Tab 6 (19‑23) (23 March 2005) consisting of an email by Mr Chris Leon, Mr Leon expresses an opinion that QCL had and Cement Australia inherited a large, very profitable fly ash business.  He says that this business exists in the midst of a market that has a huge supply/demand imbalance with supply vastly outstripping demand.  He also says that QCL had managed to maintain their high margins by managing the supply‑side very astutely.  He also says that when Millmerran was built it posed a major risk to the business and QCL needed to move decisively to protect its existing business.  The admissibility of these opinions are to be the subject of further submissions on Tuesday morning. 

16. As to the document at Volume 9, Tab 25 (9‑156) (1 October 2003) consisting of an email from Mr Blackford to Mr Leon attaching minutes of a discussion between Mr Cadzow, Mr Leon, Mr Blackford and others (30 September 2003), Mr Cadzow, a Director of Cement Australia expresses the opinion that fly ash is over‑priced in Queensland and should come down.  The opinion is admissible to prove the existence of facts about which the opinion is expressed. 

17. As to the document at Volume 25, Tab 23 (25‑279) consisting of a letter by Mr White, Manager Ash, Pozzolanic Enterprises to Mr Russell Anderson (Commercial Manager – Tarong Energy) dated 21 April 2006, Mr White sets out observations about total first off‑take rights sought by Pozzolanic.  The letter is not admissible as to any implied opinion.  At 25‑281, Mr White sets out facts as to the substantial volume of ash still available after Pozzolanic takes its considerable volume.  The letter is admissible as to the asserted fact of remaining volumes. 

18. As to the document at Volume 26, Tab 11 (26‑80) consisting of a document entitled “Tarong Options Explained” and attaching a table headed “Ash Demand and Logistics Planning ex Tarong 2007‑2012”, the document sets out south east Queensland demand from 2006 to 2012, Tarong supply, Swanbank supply and particular requirements in relation to Tarong.  The document is admissible as to the statistics contained in the table at 26‑81. 

19. As to the document at Volume 30, Tab 8 (30‑431) comprising an email from Michael Wilson to Ian Ridoutt concerning the subject of “Ash Report”, Mr Ridoutt attaches a report dated March 2002 entitled “Ash Market in SEQ” under the heading “Pozzolanic Enterprises”.  At 30‑433, Mr Wilson says that the report will look at the ash market in south east Queensland and in particular the report will address the issues surrounding the contracts for the new power station at Millmerran and the new and existing power stations at Tarong.  The applicant relies upon the first sentence concerning an examination of the market in south east Queensland as suggesting an implied opinion contained in the document that south east Queensland represents a distinct geographical market.  The opinion concerning the ash market in south east Queensland is admissible to prove the existence of facts about which the opinion is expressed.  At 30‑436, Mr Wilson outlines the financial performance of the fly ash business of PE in 2001.  A table is then set out which estimates the financial performance in south east Queensland in 2003 upon certain assumptions.  One assumption concerns a particular dollar increase in the price and observes that that price increase is conditional on securing both contracts and goes on to observe that if only one of the contracts is secured PE would expect the price of ash to fall by a certain amount.  That opinion ought not to be admitted as proof of the existence of facts about which the opinion is expressed.  It is simply an opinion on price movements should particular events occur in the future. 

    The Second Category

20. All of the documents falling in the second category are documents in respect of which the author is unidentified.  A number of the documents are endorsed with the heading “Pozzolanic Enterprises” or, for example, “Millmerran Power” and “Pozzolanic Industries”.  Some documents are more sophisticated than others.  For example, one document dated October 2001 endorsed Pozzolanic Enterprises is an expression of interest submitted to Tarong Energy by which PE submits an expression of interest in response to an invitation from Tarong Energy Corporation Limited for the sale and removal of fly ash at Tarong and Tarong North Power Stations.  I infer that an expression of interest in response to such an invitation was lodged with the approval of the guiding minds of the Senior Executives of PE.  Similarly, one document consists of a sales and distribution business plan for the period 2002 to 2005 headed “Nov 2001 Update”. 

21. The documents are these. 

22. As to the document at Volume 2, Tab 9 (2‑199) consisting of a document entitled “Fly Ash Strategy Workshop” (2 March 2001) reciting the aim “To develop definite strategies to protect the fly ash market with new power[s] stations being built”, the document at 2‑203 sets out a handwritten table consisting of six columns which identifies a particular power station the total ash produced, available useable ash, potential useable ash, required Capex and competitor Capex. The document was produced by PE pursuant to an s 155 notice. However, the matrix appears to have been completed as part of a strategy workshop. The participants are unclear and the basis upon which a conclusion could be reached that s 69(2) is engaged is unclear. The document can be admitted simply on the basis that at 2 March 2001 participants from Pozzolanic engaged in a workshop which produced certain statistical information which may or may not be correct. At 2‑201 there is a further handwritten document which sets out the titles of a number of companies with information about them. This document falls into the same category as 2‑203. At 2‑205, a series of scenarios are set out under the title “Country QLD and South East QLD”. The same position applies in relation to that document.

23. As to the document at Volume 3, Tab 6 (3‑274), the document consists of four pages under the logos of Pozzolanic Enterprises and Millmerran Power addressing the topic of “Ash market” and “Ash testing” concluding with reference to “referees”.  The document contains a reference on each page to the topic “Ash Sales Response to Meeting 18 Oct 01”.  The document is a Pozzolanic Enterprises document.  It bears the company’s logo and is configured in the same formatting and typeface as all of its correspondence.  Since the document is responsive to a meeting on 18 October 2001 and takes up matters outlined in an earlier offer concerning Millmerran, I infer that the document was made by a person who had or might reasonably be supposed to have had reasonable knowledge of the asserted facts in the document or was made on the basis of information directly or indirectly supplied by a person (to the author) who had or might reasonably be supposed to have had personal knowledge of the facts asserted in the letter.  The applicant relies upon that part of the paragraph set out below in italics:

    As outlined in our offer, the concrete market in South East Queensland is currently saturated with fly ash.  With Millmerran there will be three power stations supplying concrete grade ash in the region, not including the ash that comes up from New South Wales power stations.  Due to current environmental restrictions, the use of other grades of fly ash is limited.  Figure 1 shows an estimate of the quantity of ash used and produced in South East Queensland in the year 2000.  This indicates a utilization factor of under 20%.  This figure will drop to just over 10% with Millmerran, given that the amount of concrete grade ash used will not change (other than cyclic fluctuations). 

24. That opinion is supported by a graph described as “Figure 1:  Ash utilisation in South East Queensland (Year 2000 estimate)”. 

25. The opinion supported by the graph is admissible to prove the existence of facts about which the opinion is expressed. 

26. As to the document at Volume 3, Tab 9 (3‑343), the document consists of an expression of interest dated October 2001 under the logo of Pozzolanic Enterprises. It is an expression of interest submitted to Tarong Energy. The document adopts a similar form style and typeset to the earlier document just mentioned and endorses at the top of each page both the logos of Tarong Energy and Pozzolanic Enterprises. It is a formal expression of interest by which Pozzolanic identifies itself and its representative, Mr Michael Wilson, and sets out Pozzolanic’s experience and the key elements of its approach to performing work at Tarong. It identifies the services and the resources to be deployed and other matters. I infer that the document was assembled by persons who enliven the operation of s 69(2). At 3‑348, the document recites the view that the concrete market in south east Queensland is currently saturated with fly ash which limits the amount of fly ash that can be sold into the market. That expression of opinion is admissible as probative of the existence of facts about which the opinion is expressed.

27. As to the document at Volume 3, Tab 13 (3‑370), the document is the November 2001 Update of the Sales and Distribution Business Plan for the Years 2002 to 2005.  The document does not contain any identifying titles or logos.  It addresses an overview of the Australian domestic cement market identifying market cycles, production, volumes, sales forecasts based on construction activity and the market overview of competition identifying nine participants.  The document then examines the ownership structure in 2000 of the Australian cement industry.  It contains a slide consisting of a market overview of industry capacity and clinker capacity utilisation from 2003.  The market overview identifies cement market segmentation with particular reference to QCL cement sales and QCL fly ash sales from 2001.  The document identifies QCL’s strengths and weaknesses and key market objectives.  I infer that the document is a QCL document and I further infer having regard to its emphasis and content that it was prepared within QCL by persons who had or might reasonably be supposed to have had personal knowledge of the facts asserted or alternatively the material contains representations as to the particular subject matter on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the facts.  The applicant relies upon an opinion expressed at 3‑382 under the heading “QCL’s Strengths/Weaknesses” – “currently enjoy single supplier status for Ash in Queensland”.  In identifying QCL’s weaknesses at 3‑383, the document says “large oversupply of fly ash”.  As 3‑385, the document under the heading “Ash Supply” says “Any loss of single supplier status will adversely impact QCL’s annual EBIT by $Xm to $Ym pa”.  The opinions are admissible as probative of the existence of facts about which the opinion is expressed. 

1. As to the document at Volume 5, Tab 20 (5‑88) consisting of a document entitled “Briefing Note Millmerran Ash Sales” - 28 June 2002, the document under the heading “Ash Market” recites that the fly ash market is truly saturated in Queensland thanks to the efforts of Pozzolanic over a number of years. The document is marked with a Pozzolanic document number and consists of two pages. The status of the document is not clear. It is not in the nature of one of the more sophisticated documents earlier mentioned and, of course, the author is unidentified. I am not satisfied that s 69(2) is properly engaged.

2. As to the document at Volume 5, Tab 30 (5‑143), the document consists of a three page Paper entitled “Ash Market in SEQ – September 2002” under the logo of Pozzolanic Enterprises.  The document is a report providing an update on the ash sales contracts with Millmerran and Tarong Power Stations.  It comments on the strategy presented to the Board in March 2002 and reflects upon elements of those contracts.  It speaks about the current status of the negotiation for the Millmerran Ash Purchase Agreement.  It talks about the negotiations for the Sales Agreement with Tarong being ongoing and identifies the key elements of the current draft.  It then addresses the implications of a loss of the Tarong Ash Contract.  At 5‑144, the report observes that “If we do not sign the agreement [Millmerran Ash Purchase Agreement] Millmerran will negotiate an agreement with TransPacific (Peabody) who are particularly keen to re‑enter the ash market in Queensland, and will with all probability match our offer”.  At 5‑145, the report says under the heading “Loss of Tarong” “if we do not secure the Tarong ash contract it will go to Flyash Australia, a joint venture between Blue Circle (Boral) and Australian Cement (CSR and Pioneer).  At 5‑145, the report says “Securing a contract at Millmerran at a volume of 45kt per annum would be marginally profitable, as follows”.  The document then sets out a matrix under the heading “Profitability of Stand Alone Millmerran Operation”.  Under the matrix, the report says “Based on year‑end forecasts, the loss of the Tarong supply would result in an EBIT loss of about $YM”. 

3. Having regard to the heading on the letter, Pozzolanic’s logo, the format of the letter, the content of the matters addressed by the document and the reference to the letter from Pozzolanic’s lawyers (and the reference to the attached letter) in relation to the negotiation of the Millmerran Ash Purchase Agreement, I infer that the document is one which was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted facts or was made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted facts. 

4. I am satisfied that the opinions expressed are admissible as probative of the existence of facts about which the opinion is expressed. 

5. As to the document at Volume 7, Tab 21 (7‑149) consisting of an “Ash Report” dated May 2003 endorsed with the logo of Pozzolanic Enterprises and bearing the name Holcim, the document consists of an outline of the building industry, ash market, ash sales, ash quality, ash management, ash development, the QCL Group and related matters. The document contains a series of charts and graphs about those matters. I infer that it is a document prepared in a way which engages s 69(2) of the Act. At 7‑153, the document under the heading “Addition of Callide C, Millmerran and Tarong North” expresses the observation that “concrete market saturated”. The opinion is admissible on the same basis.

6. As to the document at Volume 12, Tab 9 (12‑137) consisting of a document under the heading “Cement Australia” and bearing the logo of Cement Australia, the document sets out an analysis of the budget for the financial year 2004 and a forecast of 2005 budget matters concerning “Pozzolanic Enterprises”.  At 12‑143, the document sets out a series of budget assumptions under the heading 2005/2006 in which the observation is made that production cost per tonne in 2004 will reduce from $X/t in 2004 to $Y/t and $Z/t in 2005 and 2006 respectively in $ of the day.  At 12‑143, the document records as a further assumption that “production of Flyash at Tarong will increase from Bkt in 2004 to Ckt in 2005 and to Dkt in 2006”.  These matters are expressions of opinion as to the assumptions underlying the 2005/2006 budget for that financial year.  They are simply that.  They are predictions of what might be likely to occur with sufficient predictability to become assumption underpinning the budget for the financial year ending 2006.  However, they do not represent opinions which can be probative of those matters.  They represent an expression of opinion as to what is likely to occur in the 2006 financial year with sufficient predictability to justify underpinning the budget on that assumption.  The opinion is admissible on the footing of an opinion held at the relevant date and not as probative of facts about which the opinion is expressed. 

7. As to the document at Volume 18, Tab 10 (18‑57) consisting of a Queensland Fly Ash Analysis Part 1 dated 21 January 2005 under the heading “Cement Australia”, the document sets out a review of Cement Australia’s Queensland fly ash strategy, the size of the Queensland fly ash problem, fly ash usage in Queensland, volumes by customer in Queensland and Victoria, margins by customer, SEQ margins, power station profitability, competitor costs and conclusions arising out of the analysis.  The document also sets out a range of scenarios that could eventuate in the market.  It sets out strategies for maximising profit margins and strategies to be applied to fly ash.  The document contains a range of statistics across each of those topics.  Having regard to the content of the document I infer that it has been prepared by a person or persons who had or might reasonably be supposed to have had personal knowledge of the asserted facts or made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted facts.  The document at 18‑58 recites that:

   Cement Australia make an average EBIT margin of approximately $X/te on fly ash in Queensland and supplies approximately 95% of the market.  There is oversupply of concrete grade fly ash available in Qld with only 600ktpa out of a potential 3000ktpa being used in concrete.  A number of small competitors have recently entered the market in SE and Central Qld in the form of Nucon ex Bayswater, Global at Callide and Transpacific at Comalco.  This may introduce lower prices that through CA [Cement Australia] supply agreements would affect the CA prices for 80% of customers. 

8. At 18‑67, the document records the observation that “Fly ash pricing in SEQ is high enough to allow Nucon to economically import fly ash from Bayswater”. 

9. The observations are admissible on the footing that they are probative of the existence of facts about which the opinion is expressed. 

10. As to the document at Volume 18, Tab 23 (18‑153) which consists of a document under the heading Cement Australia and described as “Executive Committee Meeting” Friday 18 February 2005 endorsed with the name “Greg Blackford”, the document at 18‑158 observes that in the market for fly ash in south east Queensland “Fly ash was of variable quality but in most cases needed only to pass a threshold level to be merchantable”.  That opinion is reported in the minutes as the expression of opinion by Mr Murray Adams who at that date was the Strategy and Business Development Manager for Cement Australia.  To the extent that Mr Adams was of the opinion that fly ash was of variable quality but in most cases needed only to pass a threshold level to be merchantable, the opinion is admissible simply as an opinion of Mr Adams.  The references to threshold level are entirely unclear. 

11. As to the document at Volume 3, Tab 9 (3‑343), the document consists of a further copy of the Expression of Interest by Pozzolanic Enterprises to Tarong Energy dated October 2001 for the sale and removal of bulk fly ash.  The document is prepared by those who had or might reasonably be supposed to have had personal knowledge of the asserted facts.  At 3‑348, the document makes reference as earlier mentioned to the concrete market in south east Queensland being currently saturated with fly ash which limits the amount of fly ash that can be sold into the market.  The expression of that opinion is probative of the existence of facts about which the opinion is expressed.

12. As to the document at Volume 26, Tab 23 (26‑138), the document consists of an Expression of Interest by Pozzolanic Enterprises to Tarong Energy dated 28 July 2006.  The document is a submission to Tarong setting out the key elements of Pozzolanic’s proposals for ash supply from Tarong and Tarong North Power Stations.  The document is an important commercial document and I infer that it was prepared by persons who had or might reasonably be supposed to have had personal knowledge of the asserted facts or made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the material facts.  At 26‑143, an observation is made in a summary matrix under a section headed “Volume” that “Expected volumes between X and Y tonnes per annum.  First right to a fixed annual volume [Zt] with suitable daily/weekly rights and continued priority during reduced ash production periods.  The fixed annual volume can be reviewed if demand increases”.  At 26‑146, under the heading “Ash Supply Requirements” the document observes as to “First Rights to Fixed Volume” that:

    To achieve this a first right to ash up to a capped annual volume of Z tonnes is proposed.  This right would be structured as follows.

    First rights to sufficient TPS and/or Tarong North Power Station (TNPS) run of station non‑concrete grade ash (ROSNCG) to manufacture concrete grade ash up to Zt per annum. 

    Pozzolanic would be able to request an increase in the fixed annual volume subject to availability.  At current generation rates over W million tonnes of fly ash and over P tonnes of furnace ash are available at TPS and TNPS. 
      [emphasis added]

13. The applicant relies upon the passages in italics as suggesting an implied opinion on the part of Pozzolanic that at least Z tonnes of concrete‑grade fly ash is able to be extracted by Pozzolanic from Tarong and Tarong North.  The document ought to be admitted on the footing that it reflects the opinion held by Pozzolanic at the date of the document as to its expectation as to volumes of fly ash from Tarong and Tarong North. 

14. As to the document at Volume 32, Tab 2 (32‑10) which consists of a “Sales & Marketing Review” under the logo of QCL (which seems to bear the further endorsement Group Conference Presentation Sales & Marketing 26 April 2000), the observation is made at 32‑16 under the heading “Increasing Competition” that “Threat of losing the dominant position in Queensland/Threat of price decrease”.  The document contains statistical data and has emanated from the sales and marketing area within QCL.  I infer that the opinions expressed are those made by persons who might reasonably be supposed to have had personal knowledge of the asserted facts and thus the opinions are probative of the existence of facts about which the opinion is expressed. 

15. As to the document at Volume 32, Tab 3 (32‑48) consisting of a document described as “The Challenges for Sales & Distribution” under the logo of QCL, the document sets out a series of slides concerning the sales and distribution of QCL products, the objectives of the division, a graph as to cement price trends, a graph as to volume trends (2000 actual, 2001 budget, 2001 actual), a graph setting out volume trends by region for cement sales July 2000 to October 2001, market share statistics by cement company and by end‑use segment, organisational structure and sales statistics.  At 32‑67, the document sets out a chart showing the total ash produced at each power station, the available useable ash for each power station and the potential useable ash.  The document is admissible as to the asserted facts of production statistics.  The matrix setting out the ash volumes does not identify the year or period involved.  The document however is compiled in January 2001 and seems to address the 2000 year.  The opinion as to ash volumes is admissible as probative of the production volumes at the power stations. 

    The Fourth Category

16. This category consists of documents where a particular opinion is expressed which the applicant contends is an opinion genuinely held as to matters and facts upon which the opinion is based.  That description of the category is set against the applicant’s contention that there are other documents within the tender bundle where opinions are expressed within the documents of the respondents which, according to the applicant, are not genuinely held views but represent opinions designed to obfuscate the true position.  However, as to the category 4 documents, the applicant contends that they reflect opinions held based upon an assessment of facts relevant to the issues in controversy. 

17. Volume 12, Tab 18 (12‑194) consists of a document described as “Queensland Fly Ash Development Plans” dated 28 June 2004.  It is described as a “Board Briefing Paper” which addresses a range of topics.  It is attached to an email from Sandra Collins, Cement Australia’s Business Manager Fly Ash, under the subject heading “Edited Board Paper”.  The document seems to be in draft form and Ms Collins is distributing the Paper with suggested changes particularly in relation to the background matters, contractual arrangements and ash sourcing.  At 12‑197, an opinion is expressed that “If a competitor lowers the price by [a particular amount], about $Z million per annum in SEQ and $X around Callide would be reduced from the Pozzolanic EBIT.  Although the opinion represents a projection of the consequences that might occur should a particular price adjustment be made, the opinion is not simply a projection but a precise estimate of what is likely to occur having regard to a particular price adjustment.  The opinion as to that matter has been added to the document by Ms Collins who is the Business Manager responsible for fly ash and thus a person who might reasonably be supposed to have had personal knowledge of the asserted fact as to the likely consequences for Pozzolanic’s EBIT should a particular price reduction occur.  However, the opinion is admissible simply as to the view Ms Collins held at that date. 

18. The document at Volume 12, Tab 20 (12‑198) is an email from Sandra Collins to particular addressees dated 17 June 2004.  The email attaches a further version of the Board Briefing Paper to be dated 28 June 2004.  At 12‑204, is a copy of the Managing Director’s Report (Mr Chris Leon) to the Board dated May 2004 which seems to have been circulated for consideration at the Executive Committee Meeting of Cement Australia to be held on Monday, 21 June 2004.  Attached to that document is a further copy of the Board Briefing Paper for 28 June 2004 and at 12‑245 (page 2 of the Briefing Paper) the following observation is made:

    To relinquish the contract would see Millmerran seek an alternative partner.  FAA could be blocked, a likely contender could be Boral, a customer of CAPL, who would establish an owner supply and competitor facility with significant impact on fly ash market dynamics in Queensland. 

19. At 12‑246, the Paper records that “Concrete grade fly ash is available from Tarong North at [a particular volume]. 

20. The opinion as to the Tarong North concrete‑grade fly ash available is probative of the existence of facts about which the opinion is expressed.  The opinion as to the steps Millmerran might take and speculation as to who might be blocked is admissible simply as to the opinion held. 

21. As to the document at Volume 13, Tab 35 (13‑277) which consists of a Cement Australia Board Report of 23 August 2004 under the heading “Supply Strategy” and under the name of Mr Chris Leon, the following observation is made at 13‑303:

    The fly ash business will install new classification equipment at Millmerran and Callide C.  Delaying these projects will risk losing the current contract to competitors. 

22. Mr Leon’s opinion is admissible simply as to the opinion held by him at that date. 

23. As to the document at Volume 14, Tab 16 (14‑270) which consists of a copy of the Managing Director’s Board Report dated September 2004 circulated for consideration at the Executive Committee Meeting of Cement Australia on Thursday, 14 October 2004, the document attaches at 14‑308 a series of slides addressing the fly ash strategy of Cement Australia.  In those slides at 14‑313, the observation is made that:

    CAPL recommend an investment at Millmerran, which will take advantage of the current $Z [million] take or pay contract that is in place and may deter other fly ash investors. 

24. At 14‑316, in another of the slides, the observation is made by reference to a map identifying intersecting circles of supply and demand areas that “There are two distinct supply demand areas (i) N & C Queensland and Victoria [with shipping of product out of Gladstone to Melbourne] and (ii) SE[Q] Queensland”.  The applicant relies upon the opinion as to demand and supply areas as probative of the fact of a separate market for south east Queensland.  The opinion is admissible on that footing.  The observation concerning whether an investment at Millmerran may deter other fly ash investors is admissible simply as to the fact of the opinion held. 

    The Fifth Category

25. The fifth category consists of documents made by external consultants to one or more of the respondent corporations.  The first document consists of a document at Volume 1, Tab 6 (1‑259) which is described as a Final Progress Review of “Project Enterprise” on behalf of the QCL group of companies dated 29 January 2000.  The document is said to have been prepared by McKinsey & Co and addresses an understanding of the volumes required by QCL, marketing strategies to defend the margins and improve EBIT performance and other such analytical matters.  The document reflects a major financial analysis of the business undertaking.  At 1‑268, a reference is made to steps to be taken to avoid significant EBIT losses and in that context the following comment is made:

    Existing risk to lose further margin due to new entrants and reduction of current price premium > $Zm. 

26. At 1‑296, in the context of a discussion of the “current set up of the fly‑ash business, threatening to lower QCL’s margins on fly‑ash” an observation is made that “cost mainly determined by transport cost”.  At 1‑296 under the heading “Increasing Competition” the observation is made:

    Threat of losing the dominant position in Queensland

    Threat of price decrease

27. The applicant seeks to rely upon these opinions of McKinsey & Co as probative of the existence of facts about which the opinion is expressed.  The McKinsey & Co document is prepared by an external third party.  The document no doubt forms part of the business records of McKinsey & Co and having regard to its content in relation to the activities of the QCL group of companies, its strategic content, the confidential nature of the matters reviewed and the central examination of the undertaking, the document comprises a business record of QCL.  The author of the document is not identified but the organisation responsible for conducting the analysis is identified.  I infer, having regard to the matters I have just mentioned, that the document was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact or made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.  The asserted fact is the opinion itself.  It rests however on other facts. 

1. The opinions identified above contained within the document are opinions admissible as to proof of the existence of facts about which the opinion is expressed. However, a question arises as to whether the general discretion conferred by s 135 of the Evidence Act ought to be exercised to exclude the evidence on the footing that its probative value is, it might be said, substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party; or be misleading or confusing; or cause or result in undue waste of time. Alternatively, a general discretion might be exercised under s 136 of the Evidence Act to limit the use of the evidence if there is a danger that a particular use of the evidence might be unfairly prejudicial to a party or be misleading or confusing.

2. Part of the reason why admission of the material or unlimited use of it might be unfairly prejudicial to a party is that the applicant does not propose to call the authors of the McKinsey & Co Report with the result that the respondents will not be in a position to cross‑examine the author as to the opinion expressed or facts upon which the opinion rests.  On the other hand, the report represents a reasonably significant analysis of the structure and conduct of QCL’s undertaking and the factors influencing its financial performance in the various facets of its business.  QCL, Cement Australia and their advisers would, I infer, be likely to be entirely familiar with the document.  It is one of the documents of the respondents. 

3. The question of whether the general discretion ought to be exercised is considered in the context of the objections raised by the respondents. 

4. The documents contained at Volume 9, Tabs 12 and 20 fall into the same category.  They represent a strategic review both in terms of an interim discussion document of 20 August 2003 and a final discussion document of 24 September 2003 formulated by L.E.K. Consulting Pty Ltd on behalf of Cement Australia.  The documents reflect a strategic review of the fly ash markets, fly ash economics, pricing, production and transport costs across cement, slag and fly ash.  The final report of 24 September 2003 is more comprehensive although it addresses the same topics.  The following observations in italics relied upon by the applicant are made in the interim report at 9‑68, 9‑69 and 9‑71:

   Many new fly ash contracts are priced in a fashion that lowers unit cost as offtake increases.  It appears that competitive forces may well drive prices down in Queensland.

   Recent trends suggest that the value of Pozzolanic’s contracts will be threatened in the near future. 

   Fly ash is a mature and increasingly competitive business

   - all fly ash marketers have excess capacity serving a saturated market.

5. At Volume 9, Tab 20 (9‑98), in the final discussion report the following observations in italics relied upon by the applicant are made at 9‑124 and 9‑128:

   Substituting slag for fly ash is economically attractive for CAPL in Victoria, but not in Queensland.

   There are several potential scenarios involving increased competition for Pozzolanic.  Lower fly ash prices in Queensland would almost certainly be reflected in lower concrete prices. 

6. The final discussion report sets out comments about the circumstances in which increased competition for Pozzolanic in Queensland might arise in the medium term from one or other of two events and concludes that independent entry could have a particular effect on market prices and reduce those prices to cost levels.  The interim and final reports of LEK Consulting Pty Ltd no doubt represent documents which form part of the records kept by LEK Consulting Pty Ltd in the course of or for the purposes of its business.  The reports also from their tenor and content represent consulting reports which form part of the records belonging to or kept by Cement Australia in the course of or for the purposes of its business and those documents contain representations both as to opinions and asserted facts for the purposes of the business of Cement Australia.  Like the McKinsey & Co Report, Cement Australia would be familiar with both the interim and final discussion reports and would not be taken by surprise by either or both documents of LEK Consulting Pty Ltd.  However, the applicant does not propose to call the author of the interim or final report and thus Cement Australia will not be able to cross‑examine the author as to the opinions held or the factual basis for those opinions.

7. Accordingly, a question arises as to whether the general discretion should be exercised to either exclude the reports or limit the use to be made of the evidence. 

8. That raises more generally the submissions made by the respondents as to the basis upon which objections are taken to the proposed tender of the opinions contained in the 35 documents in issue. 

   The objections to the material on behalf of the respondents

9. A threshold matter (which is also raised in the objections taken by the respondents) is this. 

10. The opinions sought to be relied upon by the applicant are opinions expressed in approximately 35 documents. The submissions in support of the tender proceeded on the footing that each of the opinions was identified in a schedule to the submissions and the Court was taken to documents which were said to be emblematic of the position in relation to each of the documents in each of the categories. In respect of the emblematic document, the applicant sought to identify the basis upon which the opinion contained within the document, as an assertion of fact, is relevant to a matter raised on the pleadings. Evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding: s 55(1). However, examining the opinions extracted into the schedule is ultimately unhelpful in deciding the question of admissibility because the opinions need to be examined in the context of the document in which the opinion is expressed especially having regard to the question of whether inferences about other matters can be drawn (such as the s 69(2) matters among others). Therefore, it is necessary to look at each of the documents, understand the matters the document addresses and thus place in context the expression of opinion which is sought to be relied upon. That also raises the matter of isolating in respect of each and every opinion, the relevant matters which would determine whether the opinion is relevant. Those matters include the participants, the timeframe, the subject matter, the document and the opinion and, of course, the controversy on the pleadings to which the document or opinion could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.

11. A better course is to address each of the documents in the schedule of opinions (and the expression of opinion within them) and identify quite precisely the matters attracting the relevance of the document and thus its admissibility under s 56(1) of the Evidence Act subject, of course, to the relevant exclusionary rules and exceptions to those exclusionary rules. 

12. The parties seeking to tender the evidence must demonstrate the relevance of the evidence and it is not a matter for the respondents or the Court to assume the footing upon which the evidence is said to be relevant especially in the context of a challenge, at large, to admissibility. 

13. So far as this question is concerned, I have addressed the basis upon which the evidence is admissible having regard to each of the opinions expressed in the context of the relevant documents on the footing of the operation of s 69 and its intersection with s 59. I have also made observations about matters going to s 79 and its intersection with s 76. I have also made observations about the extent to which inferences can be drawn for the purposes of s 87(1)(b).

14. The views I have expressed about the s 69 matters which, in my view, give rise to the reception of the evidence do not address, other than in the case of the Volume 9, Tab 23 documents, the relevance of the evidence in the case of each opinion within each document. Plainly enough, some of the material is self‑evidently relevant to an issue on the pleadings. However, to the extent that the applicant seeks to rely upon the evidence received on the footing indicated in these rulings, it remains necessary as and when such reliance arises to identify the relevance of the evidence.

15. As to the s 69 matters, the respondents acknowledge that there is authority for the proposition that an opinion may be treated as an “asserted fact” falling within s 69(2) which would render the asserted fact (that is the opinion) admissible. Hely J, in Ringrow (supra) (at [25] of these reasons) held that s 69 of the Act is capable of operation even if the asserted fact is an opinion in relation to a matter of fact. In Ringrow, the asserted fact was an opinion about a matter of fact going to value and the valuers had personal knowledge of the “asserted fact” because they had formed the opinion themselves. The respondents say that a point of distinction might relevantly arise in a case such as this because whilst valuers might have personal knowledge of the matters of fact, the persons expressing opinions in this case being officers and employees of the relevant corporations at various levels of management may or may not have personal knowledge of the matters of fact about which the opinion is expressed. In any event, the respondents say that the opinion admitted under s 69(2) in Ringrow was the opinion of an expert and thus the opinion was formed by someone with relevant expertise. 

16. Notwithstanding these observations, it seems to me that officers of corporations engaged in the daily business of the undertaking who form views or opinions about particular matters may very well do so in relation to matters about which they have personal knowledge of the “asserted fact” or might do so on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact. Provided the integers of s 69(2) are satisfied, the expression of opinion is capable of constituting an admissible asserted fact.

17. More fundamentally, the respondents say that evidence of an opinion is admissible only on the footing that an exception to the opinion rule contained in s 76(1) of Part 3.3 of the Evidence Act is made out.  The respondents acknowledge that Austin J in Australian Securities and Investments Commission v Rich & Anor (supra) (at [30] of these reasons) expressed the view that an opinion admissible under s 69 of the Evidence Act does not have to comply with either s 78 or s 79 of the Evidence Act.  The respondents contend that ASIC v Rich in that regard is wrongly decided.  There is academic support for that view in the sense that, if that view is correct, the anomaly identified by Odgers in Uniform Evidence Law, 9^th Ed. 2010 at para 1.3.4180 might arise. The respondents say that Part 3.3 of the Evidence Act is designed to ensure that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed unless the exceptions in ss 77, 78 or 79 are satisfied.  Those who would seek to give evidence by expressing an opinion about a fact in issue must, it is said, demonstrate the statutory conditions of reception, in this case, the integers of s 79 of the Evidence Act. 

18. Although there are authorities in which the question of the application of s 78 was considered in relation to a business record admissible under s 69, it is correct to say that the question of the application of Part 3.3 to an opinion contained in the business record otherwise admissible under s 69(2) was not argued or alternatively was conceded: Jackson v Lithgow City Council [2008] NSWCA 312; R v Whyte [2006] NSWCCA 75.

19. For the reasons I have already indicated, it seems to me that the Evidence Act treats asserted facts (which can include an expression of opinion) contained within a business record as admissible provided the elements of s 69 are satisfied. Evidence of opinion outside a business record whether by experts giving evidence about a matter in controversy in a proceeding or other evidence of opinions (not contained in a business record) fall within the limitations of the opinion rule and exceptions to it in Part 3.3.

20. In this case, the opinions are the opinions of officers of the respondent corporations expressing views about the undertaking of the particular corporation contained within documents which have been kept by the corporation in the course of and for the purposes of its business or at relevant times formed part of its records. 

21. If s 79 applies, I have already indicated that I am not presently satisfied about the matters to which s 79 is directed although I am willing to receive further submissions in final submissions about whether the evidence in the case (recognising that none of the tender bundle documents is presently before the Court apart from 35 documents presently in issue) establishes the integers of s 79 and might thus make the reception of the particular opinion admissible on that footing. Those submissions would also need to address the relevance of the opinion to a matter in controversy.

22. Similarly, I am not satisfied, on the basis of the present material, that the integers of s 87(1)(b) are satisfied although I am willing to receive further submissions on that question in final submissions.

23. There are three further matters which are important.  The first concerns the subject matter of the opinions upon which reliance is placed.  The respondents say that those opinions either in part or in whole go to matters which are not simply opinions about a matter of fact in issue.  They are opinions which are directed to predictions as to the effect of certain conduct on competition or prices in the event of entry by competitors into the market or other predictions as to matters of predicted sales having regard to price adjustments.  These matters are said to be properly the subject of expert opinion and if the opinions are sought to be tendered on the footing that they are probative of facts about which the opinion was expressed, the Court can have no confidence that the opinions are reliable and probative of those facts. 

24. In the course of these reasons I have indicated the opinions which are capable of being received on the footing that the opinion as an asserted fact is probative of the matters about which the opinion is expressed.  I have indicated that speculation or projections are received only on the footing that they reflect an opinion of an author at a relevant moment in time.  It may, of course, be ultimately shown to be important that a particular person in a particular role held a particular opinion at a particular moment in time.  However, that is a matter ultimately for the totality of the evidence and final submissions. 

25. The second matter concerns the question of drafts of documents.  Some opinions may be expressed in a draft document which of course does not reflect a final opinion in any event.  Drafts along the way to a final document which contain opinions may be received but the weight attributed to them is likely to be slight. 

26. The third matter concerns the question of whether the general discretion ought to be exercised under either s 135 or s 136 to either exclude the opinion evidence or limit the use to be made of it on the footing that either reception or broader use of it would be unfairly prejudicial to the respondents. I am not satisfied that the opinions expressed by officers of the respondent corporations falling within the business records of the relevant corporations ought to be excluded or limited except to the extent already indicated in these reasons. It is difficult to understand the basis upon which reception or use of the evidence of the opinions of senior officers of the respondent corporations across the period of the conduct in issue ought to be excluded on the footing that its reception or use might be unfairly prejudicial to the respondents. The test is simply whether the evidence might be unfairly prejudicial not whether it will be unfairly prejudicial.  However, the evidence in question (subject to comments below) is not the evidence of external third parties who have expressed opinions in reports or documents which are now sought to be tendered in circumstances where the respondents have had no engagement with that party or have had no opportunity to understand the factors informing the expression of the opinion.  Authorities which deal with reports or opinions of that kind are in an entirely different category to this case.  One can well imagine that an attempt by a party to rely upon a pre‑existing report of a particular expert prepared at an earlier moment in time on a certain basis or for a certain party (such as a bank) outside the frame of reference of the parties to the controversy, might well give rise or simply might give rise to the possibility of unfair prejudice.  Where the documents are those of the very parties to the proceeding, generated in the internal analysis of the business conduct and the rationale and purposes for doing particular things, it seems to me that reception of material within that context does not raise the possibility that reception or use of it might be unfairly prejudicial to the respondents. 

27. A similar conclusion might well arise in relation to reports prepared by third parties which were commissioned by the respondents, provided to the respondents and, one infers, read, absorbed and debated within the corporation.  Opinions expressed within those reports are unlikely to come as any surprise to the respondents. 

28. However, in the case of commissioned third party reports, I am satisfied that the discretion ought to be exercised to limit the use of those reports so that they are received simply on the footing that they are evidence of opinions expressed by those authors and communicated to the recipients of the documents at the relevant moment in time. 

29. Accordingly, the discretion under s 136 will be exercised to limit the use of those reports to the fact of the expression of the opinion and the communication of it to the recipients.

I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

Associate:

Dated:        19 October 2010