Australian Competition and Consumer Commission v Yazaki Corporation (No 2) - [2015] FCA 1304

FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Yazaki Corporation (No 2) [2015] FCA 1304

Citation: Australian Competition and Consumer Commission v Yazaki Corporation (No 2) [2015] FCA 1304

Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v YAZAKI CORPORATION and AUSTRALIAN ARROW PTY LTD ACN 071 956 057

File number: SAD 321 of 2012

Judge: BESANKO J

Date of judgment: 24 November 2015

Catchwords:
COMPETITION – allegation of contraventions of the Competition and Consumer Act 2010 (Cth) and the Competition Code of Victoria – where the first respondent was incorporated in Japan – where the second respondent was incorporated in Australia – where the second respondent was the wholly owned subsidiary of the first respondent – whether the first respondent was carrying on business in Australia – whether the first respondent was otherwise connected with the jurisdiction of Victoria – whether there was a market in Australia for the goods supplied by the respondents – whether the real place of competitive activity was in Australia or Japan – Competition and Consumer Act 2010 (Cth), Competition Code of Victoria ss 4E, 5.

COMPETITION – allegation of an overarching cartel agreement between the first respondent and another corporation in Japan – allegation that the first respondent and the other corporation entered into two separate agreements in relation to the supply of goods – whether the overarching cartel agreement and two agreements contained exclusionary provisions – whether the overarching cartel agreement and two agreements contained provisions controlling price – whether the first respondent gave effect to the overarching cartel agreement by making the two agreements – whether the first respondent gave effect to the two agreements by discussing, agreeing and submitting prices – whether the first respondent gave effect to the two agreements by directing the second respondent to submit the agreed prices in Australia – whether the submission of prices by the second respondent was an act of giving effect by the first respondent – where the first respondent admitted discussing, agreeing and submitting prices – whether the second respondent’s continued supply of goods was an act of continuing to give effect by the first respondent – whether the first respondent continued to give effect to the two agreements by not disclosing the existence of the agreements and not competing – whether acts of omission can give effect to an agreement – Competition and Consumer Act 2010 (Cth), Competition Code of Victoria ss 4D, 44ZZRK, 45(2), 45A.

COMPETITION – allegation that the second respondent and another corporation in Australia entered an agreement in relation to the supply of goods – whether the agreement contained exclusionary provisions – whether the agreement contained provisions controlling price – whether the second respondent gave effect to the agreement by discussing and agreeing prices – whether the second respondent gave effect to the two agreements made by the first respondent by submitting prices – whether the second respondent continued to give effect to the two agreements by not disclosing the existence of the agreements and not competing – whether a third party can give effect to a prohibited agreement – whether the third party is required to have knowledge of the agreement – Competition and Consumer Act 2010 (Cth), Competition Code of Victoria ss 4D, 44ZZRK, 45(2), 45A.

PRACTICE AND PROCEDURE – objections to evidence – whether evidence should be excluded under the general discretion to exclude evidence – whether evidence was admissible as an opinion of conduct and discussions observed by the witness – Evidence Act 1995 (Cth) ss 78, 135.

Held: First respondent contravened the Competition and Consumer Act 2010 (Cth) and the Competition Code of Victoria by giving effect to the overarching cartel agreement, and making, and giving effect to, the two separate agreements. Second respondent contravened the Competition and Consumer Act 2010 (Cth) and the Competition Code of Victoria by making and giving effect to the agreement in Australia.

Legislation: Competition and Consumer Act 2010 (Cth) ss 4, 4D, 4E 4F, 5, 8, 44ZZRD, 44ZZRK, 45, 75B, 77, 84
Competition Policy Reform (Victoria) Act 1995 (Vic) ss 5, 8
Evidence Act 1995 (Cth) ss 78, 135, 140
Interpretation of Legislation Act 1984 (Vic) s 38
Trade Practices Act 1974 (Cth) s 45A, 155
Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth)

Cases cited:
ACN 007 528 207 Pty Ltd (in liq) v Bird Cameron (Reg) and Others [2005] SASC 204; (2005) 91 SASR 570
Adams v Cape Industries plc [1990] 1 Ch 433
ASX Operations Pty Ltd and Another v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460
ASX Operations Pty Ltd and Another v Pont Data Australia Pty Limited (No 2) (1991) 27 FCR 492
Auskay International Manufacturing & Trade Pty Ltd v Qantas airways Limited (No 5) [2009] FCA 1464
Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (2001) ATPR 41-815
Australian Competition and Consumer Commission v Admiral Mechanical Services Pty Ltd [2007] ATPR 42-174
Australian Competition and Consumer Commission v Air New Zealand and Another (No 1) [2012] FCA 1355; (2012) 207 FCR 448
Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157; (2014) 319 ALR 388
Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6) [2010] FCA 704; (2010) 270 ALR 504
Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (1999) 92 FCR 375
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd and Others [2007] FCA 794; (2007) 160 FCR 321
Australian Competition and Consumer Commission v Prysmian Cavi E Sistemic Energia SRL (formerly Pirelli Cavi E Sistemi Energia SPA) and Others (No 4) [2012] FCA 1323; (2012) 298 ALR 251
Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd and Others [2011] FCA 973; (2011) 196 FCR 212
Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd and Others (No 3) [2007] FCA 1617; (2007) 244 ALR 673
Australian Competition and Consumer Commission v Yazaki Corporation [2014] FCA 1316
Australian Investments and Securities Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345
Bray v F Hoffman-La Roche Ltd and Others [2002] FCA 243; (2002) 118 FCR 1
Bray v F Hoffman-La Roche Ltd and Others (2003) 130 FCR 317
Chubb Insurance Company of Australia Ltd and Others v Moore and Others [2013] NSWCA 212; (2013) 302 ALR 101
Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379
Consolo Ltd and Others v Bennett (2012) 207 FCR 127
Emirates v Australian Competition and Consumer Commission [2009] FCA 312; (2009) 255 ALR 35
Federal Commissioner of Taxation v Tasman Group Services Pty Ltd [2009] FCAFC 148; (2009) 180 FCR 128
Giorgianni v The Queen (1985) 156 CLR 473
Hope v The Council of the City of Bathurst (1980) 144 CLR 1
Hughes v Western Australian Cricket Association (Inc) and Others (1986) 19 FCR 10
Industrial Equity Limited and Others v Blackburn and Others (1977) 137 CLR 567
J McPhee & Son (Australia) Pty Ltd and Others v Australian Competition and Consumer Commission (2000) 172 ALR 532
Jones v Dunkel (1959) 101 CLR 298
La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4; (2011) 190 FCR 299
Lipohar v The Queen (1999) 200 CLR 485
Lithgow City Council v Jackson (2011) 244 CLR 352
Mackay v Dick (1881) 6 App Cas 251
Meyer Heine Proprietary Limited v The China Navigation Company Limited and Another (1966) 115 CLR 10
Mobil Oil Australia Pty Limited v The State of Victoria and Another [2002] HCA 27; (2002) 211 CLR 1
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR 449; 67 ALJR 170
News Limited and Others v South Sydney District Rugby League Football Club Limited and Others (2003) 215 CLR 563
NMFM Property Pty Ltd and Others v Citibank Ltd (2000) 107 FCR 270
Norcast S.ár.L v Bradken Ltd and Others (No 2) (2013) 219 FCR 14
Pearce v Florenca (1976) 135 CLR 507
R v Portus and Another; Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428
Re Queensland Co-operative Milling Association Ltd (1976) ATPR 40-12; (1976) 8 ALR 481
Secured Income Real Estate (Australia) Limited v St Martins Investments Proprietary Limited (1979) 144 CLR 596
Seven Network Ltd and Another v News Ltd and Others [2009] FCAFC 166; (2009) 182 FCR 160
Smith, Stone & Knight Ltd v Lord Mayor, Alderman and Citizens of City of Birmingham [1939] 4 All ER 116
SPAR Licensing Pty Ltd v MIS QLD Pty Ltd (No 2) [2012] FCA 1116
Sydleman v Beckwith (1875) 43 Conn 9
Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286
Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1
Tradestock Pty Ltd v TNT (Management) Pty Ltd and Others (1978) 17 ALR 257
Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1
Walker v Wimborne and Others (1976) 137 CLR 1
Walplan Pty Ltd v Wallace (1985) 8 FCR 2
Wright Rubbish Products Pty Ltd v Bayer AG [2008] FCA 1510; [2008] ATRR 42-258
Wright Rubbish Products Pty Ltd v Bayer AG [2010] FCAFC 85
Yorke and Another v Lucas (1985) 158 CLR 661

Beaton-Wells C and Fisse B, Australian Cartel Regulations Law, Policy and Practice in an International Context, (Cambridge University Press, 2011)
Wigmore JH, Evidence in Trials at Common Law (Chadbourn rev, 1978) Vol 7

Dates of hearing: 3, 4, 5, 8, 11, 12 December 2014

Place: Adelaide

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 399

Counsel for the Applicant: Mr S Doyle SC with Mr D Tynan

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondents: Dr M Collins QC with Mr M Borsky and Ms T Spencer Bruce

Solicitor for the Respondents: King & Wood Mallesons

Table of Corrections

1 December 2015 In paragraph 41, “TMCA and its subsidiaries” has been replaced with “TMC and its subsidiaries”.

1 December 2015 In paragraph 217, “to submit the prices to AAPL” has been replaced with “to submit the prices to TMCA”.

1 December 2015 In paragraph 369, “should be conflated” has been replaced with “should not be conflated”.

1 December 2015 In paragraph 395, “did apply” has been replaced with “did not apply”.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 321 of 2012

BETWEEN:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:
YAZAKI CORPORATION
First Respondent

AUSTRALIAN ARROW PTY LTD ACN 071 956 057
Second Respondent

JUDGE:

BESANKO J

DATE OF ORDER:

24 NOVEMBER 2015

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:
1.The proceeding be adjourned to a date to be fixed for the making of orders and directions concerning relief.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 321 of 2012

BETWEEN:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:
YAZAKI CORPORATION
First Respondent

AUSTRALIAN ARROW PTY LTD ACN 071 956 057
Second Respondent

JUDGE:

BESANKO J

DATE:

24 NOVEMBER 2015

PLACE:

ADELAIDE

REASONS FOR JUDGMENT
Introduction

This is a proceeding brought by the Australian Competition and Consumer Commission (“the ACCC”) against Yazaki Corporation (“Yazaki”) and Australian Arrow Pty Ltd ACN 071 956 057 (“AAPL”) in which the ACCC seeks declarations, injunctions and pecuniary penalties in relation to alleged contraventions by Yazaki and AAPL of s 45(2) and s 44ZZRK(1) of the Competition and Consumer Act 2010 (Cth) (“the Act”). Prior to 1 January 2011, the Act was cited as the Trade Practices Act 1974 (Cth). The ACCC claims that the conduct also contravened the equivalent sections in the Competition Code of Victoria (“the Competition Code”) applied as a law of Victoria by s 5 of the Competition Policy Reform (Victoria) Act 1995 (Vic) (“the CPRA”). The reason the ACCC relies on both the Act and the Competition Code is because part of the alleged contravening conduct in this case occurred in Japan, and arguably, the Competition Code has a wider extra-territorial application than the Act. This is an issue I will address later in these reasons.
The alleged contravening conduct occurred over a period commencing in early 2003 and concluding in late 2009. It seems that the anti-competitive conduct was exposed in early 2010. This proceeding was commenced on 12 December 2012. Section 77 of the Act and the Competition Code provides that a proceeding for the recovery of a pecuniary penalty must be commenced within six years after the contravention. It follows that the ACCC may only seek a pecuniary penalty for contravening conduct that occurred on and after 13 December 2006.
At all material times, Yazaki was a body corporate incorporated pursuant to the laws of Japan and AAPL was a company incorporated in Australia. At all material times, AAPL was a wholly owned subsidiary of Yazaki.
The alleged contravening conduct involved Yazaki or AAPL making and giving effect to a prohibited arrangement, or arriving at and giving effect to a prohibited understanding in relation to goods, being wire harnesses (“WHs”), supplied or to be supplied to Toyota Motor Corporation (“TMC”) or its subsidiaries or related entities, including its subsidiary in Australia, Toyota Motor Corporation Australia Limited (“TMCA”). The other party to the alleged arrangement or understanding was Sumitomo Electric Industries Ltd (“SEI”) or SEWS Australia Pty Ltd (“SEWS-A”). At all material times, SEI was a body corporate incorporated pursuant to the laws of Japan, and SEWS-A was a company incorporated in Australia. At all material times, SEWS-A was a subsidiary of SEI. Sumitomo Electric Wire & Cable Works was founded in Japan in 1911 and it changed its name to SEI in 1939. Its registered office is in Osaka, and it has a number of branch offices in Japan. It is the parent company of the Sumitomo Electric group of companies which is a global corporate group comprising more than 300 consolidated companies located in over 30 countries around the world, primarily in Asia, Europe and the United States of America.
SEI and SEWS-A have cooperated with the ACCC in its investigations into the alleged conduct and most of the evidence of the contravening conduct alleged in this case has come from officers or employees of those companies (see generally my reasons in Australian Competition and Consumer Commission v Yazaki Corporation [2014] FCA 1316 at [15]).
WHs are electrical distribution systems which operate to distribute power and send electrical signals to other components within a motor vehicle. There are a number of different types of WHs designed to control different functions and parts of a motor vehicle. Mr Hideyuki Shigi was a witness in this case. In February 2002, he was employed by SEI in a position described within the company as General Manager, Sales Department, 1^st Electric Systems Sales Division and Branch Office Manager of the Toyota Branch Office (“TBO”). He described the different WHs in the following way:
For example, the engine WH is mounted on top of the engine in a motor vehicle and controls the engine; the engine room main WH is installed around the engine cavity, above the wheel housing and controls the headlights, the hazard lights and the indicators; the floor WHs control the seats of a motor vehicle; and the door WHs control the functions on the door of a motor vehicle.
(Emphasis added).
Each WH has a different part number. The most significant WH in terms of the facts of this case is the engine room main WH (Part Number 82111).
Two letters from TMCA to the ACCC were tendered in evidence in this case (“the TMCA letters”). In one of those letters, TMCA described WHs as cables that provide the means for supplying power to all electrical and electronic devices such as electronic computer units. They are also cables that allow for electronic signals to travel between sensors and electronic computer units. An example is the sensor which detects that a driver is not wearing the seat belt. TMCA also said that WHs are model specific because of different specifications, technologies and sizes. WHs cannot be interchanged between models or even between grades within the same model.
There are only a few major global manufacturers and suppliers of WHs. Mr Shigi said that the main global manufacturers and suppliers of WHs to the automotive industry are Yazaki, SEI, Furukawa Co Ltd, Lear Corporation and Delphi. SEI, Yazaki and Furukawa are companies based in Japan, whilst Lear and Delphi are companies based in the United States of America.
At all times material to this proceeding, TMC carried on the business of a motor vehicle manufacturer in Japan and it manufactured a motor vehicle known as the Toyota Camry. It manufactured a new model of the Toyota Camry every four or five years. Three models of the Toyota Camry are relevant in this case and they are the 2002 Toyota Camry, the 2006 Toyota Camry and the 2011 Toyota Camry. At all times material to this proceeding, TMCA carried on the business of a motor vehicle manufacturer in Australia manufacturing, among other motor vehicles, the Toyota Camry.
TMC did not manufacture WHs and it purchased them from suppliers such as Yazaki and SEI. Prior to the 1990s, TMC allocated contracts for the supply of WHs without engaging in a formal competitive process with potential suppliers. Mr Shigi said, and I accept, that TMC’s usual practice in the case of new models of existing motor vehicles was to reallocate the supply of automotive electronic components to the existing supplier. He said that from 1991 or 1992 TMC introduced a formal competitive tender process for the awarding of contracts for the supply of products, including WHs. That formal process was initiated by TMC issuing to potential suppliers a Request for Quotation (“RFQ”). In the usual case, TMC’s RFQ would seek a separate price for each automotive electronic component, including WHs. TMC would assess the responses to the RFQ submitted by each supplier and award supply for each component by component or part number. In the case of WHs, not all WHs for a particular model of motor vehicle were necessarily supplied by the same supplier.
The ACCC’s case against Yazaki is as follows. It alleges that from at least the mid-1990s, there was an arrangement or understanding between Yazaki and SEI which remained in existence and operative until at least late 2009. The arrangement or understanding contained a number of provisions which I will identify later in these reasons. The ACCC described the arrangement or understanding as the Overarching Cartel Agreement and, for convenience, I will use that description, although it is to be remembered that what the ACCC alleges is an arrangement or understanding.
The ACCC alleges that on or about 30 June 2003, Yazaki and SEI made an arrangement or arrived at an understanding in respect of the supply of WHs for the 2006 Toyota Camry by each of them and their subsidiaries to TMC and its subsidiaries. The arrangement or understanding contained a number of provisions which I will identify later in these reasons. The ACCC described the arrangement or understanding as the 2003 Agreement and, for convenience, and subject to the same qualification, I will use that description. The ACCC alleges that by making the 2003 Agreement, Yazaki gave effect to the Overarching Cartel Agreement in contravention of s 45(2)(b)(i) and s 45(2)(b)(ii) of the Act and the Competition Code. It also alleges that in making the 2003 Agreement, Yazaki contravened s 45(2)(a)(i) and s 45(2)(a)(ii) of the Act and the Competition Code. Finally, in relation to the 2003 Agreement, the ACCC alleges that by various acts and omissions, Yazaki gave effect to the 2003 Agreement and thereby contravened s 45(2)(b)(i) and s 45(2)(b)(ii) and, in relation to conduct on and after 24 July 2009, s 44ZZRK(1) of the Act and the Competition Code.

The ACCC alleges that in or about late April 2008, Yazaki and SEI made an arrangement or arrived at an understanding in respect of the supply of WHs for the 2011 Toyota Camry by each of them and their subsidiaries to TMC and its subsidiaries. The arrangement contained a number of provisions which I will identify later in these reasons. The ACCC described the arrangement or understanding as the 2008 Agreement and, for convenience, and again, subject to the same qualification, I will use that description. The ACCC claims that by making the 2008 Agreement, Yazaki gave effect to the Overarching Cartel Agreement in contravention of s 45(2)(b)(i) and s 45(2)(b)(ii) of the Act and the Competition Code. It further alleges that by making the 2008 Agreement, Yazaki contravened s 45(2)(a)(i) and s 45(2)(a)(ii) of the Act and the Competition Code. Finally, in relation to the 2008 Agreement, the ACCC alleges that by various acts and omissions, Yazaki gave effect to the 2008 Agreement and thereby contravened s 45(2)(b)(i) and s 45(2)(b)(ii) and, in relation to conduct on and after 24 July 2009, s 44ZZRK(1) of the Act and the Competition Code.
In summary, the ACCC’s case against Yazaki relates to three alleged arrangements or understandings (the Overarching Cartel Agreement, the 2003 Agreement and the 2008 Agreement). The Overarching Cartel Agreement is alleged by the ACCC to relate to motor vehicles generally, whereas the 2003 Agreement relates to the 2006 Toyota Camry, and the 2008 Agreement relates to the 2011 Toyota Camry.
The ACCC’s case against AAPL is as follows. It alleges that in April and May 2003, AAPL made an arrangement or arrived at an understanding with SEWS-A in respect of the supply of WHs for the 2002 Toyota Camry by them. The ACCC described the arrangement or understanding as the 2002 Toyota Camry Minor RFQ Agreement and, for convenience, I will use that description. The ACCC alleges that in making the 2002 Toyota Camry Minor RFQ Agreement, AAPL contravened s 45(2)(a)(i) and s 45(2)(a)(ii) of the Act and the Competition Code. The ACCC also alleges in relation to the 2002 Toyota Camry Minor RFQ Agreement that AAPL contravened s 45(2)(b)(i) and s 45(2)(b)(ii) of the Act and the Competition Code by giving effect to the 2002 Toyota Camry Minor RFQ Agreement. Finally, the ACCC alleges that by various acts and omissions, AAPL contravened s 45(2)(b)(i) and s 45(2)(b)(ii) of the Act and the Competition Code and, in relation to conduct on or after 24 July 2009, s 44ZZRK(1), by giving effect to the 2003 Agreement and by giving effect to the 2008 Agreement. In summary, the ACCC’s case against AAPL relates to the making and giving effect to of the 2002 Toyota Camry Minor RFQ Agreement and various acts and omissions said to have given effect to the 2003 Agreement and to the 2008 Agreement.
It is convenient at this point to set out the relevant legislative provisions as they were at the relevant times.
Section 45(2) and (3) of the Act and the Competition Code provided as follows:
45Contracts, arrangements or understandings that restrict dealings or affect competition
(2) A corporation shall not:
(a)make a contract or arrangement, or arrive at an understanding, if:
(i)the proposed contract, arrangement or understanding contains an exclusionary provision; or
(ii)a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; or
(b)give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision:
(i) is an exclusionary provision; or
(ii)has the purpose, or has or is likely to have the effect, of substantially lessening competition.
(3)For the purposes of this section and section 45A, competition, in relation to a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding, means competition in any market in which a corporation that is a party to the contract, arrangement or understanding or would be a party to the proposed contract, arrangement or understanding, or any body corporate related to such a corporation, supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the provision, supply or acquire, or be likely to supply or acquire, goods or services.
An exclusionary provision (referred to in s 45(2)(a)(i) and s 45(2)(b)(i)) was defined in s 4D in the following way:
4DExclusionary provisions
(1)A provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be taken to be an exclusionary provision for the purposes of this Act if:
(a)the contract or arrangement was made, or the understanding was arrived at, or the proposed contract or arrangement is to be made, or the proposed understanding is to be arrived at, between persons any 2 or more of whom are competitive with each other; and
(b)the provision has the purpose of preventing, restricting or limiting:
(i)the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons; or
(ii)the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons in particular circumstances or on particular conditions;
by all or any of the parties to the contract, arrangement or understanding or of the proposed parties to the proposed contract, arrangement or understanding or, if a party or proposed party is a body corporate, by a body corporate that is related to the body corporate.
(2)A person shall be deemed to be competitive with another person for the purposes of subsection (1) if, and only if, the first‑mentioned person or a body corporate that is related to that person is, or is likely to be, or, but for the provision of any contract, arrangement or understanding or of any proposed contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person, or with a body corporate that is related to the other person, in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision of the contract, arrangement or understanding or of the proposed contract, arrangement or understanding relates.
The purpose referred to in these sections may be one of a number of purposes, but it must be a substantial purpose (s 4F).
Before s 45A was repealed by the Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth), it contained a deeming provision in relation to conduct which was taken to have the purpose, or to have or be likely to have the effect, of substantially lessening competition within s 45. It provided relevantly:
(1)Without limiting the generality of section 45, a provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be deemed for the purposes of that section to have the purpose, or to have or to be likely to have the effect, of substantially lessening competition if the provision has the purpose, or has or is likely to have the effect, as the case may be, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, the price for, or a discount, allowance, rebate or credit in relation to, goods or services supplied or acquired or to be supplied or acquired by the parties to the contract, arrangement or understanding or the proposed parties to the proposed contract, arrangement or understanding, or by any of them, or by any bodies corporate that are related to any of them, in competition with each other.
The phrase give effect to was defined in s 4 as follows:
... in relation to a provision of a contract, arrangement or understanding, includes do an act or thing in pursuance of or in accordance with or enforce or purport to enforce.
The definition of competition in s 45(3) referred to market and s 4E was in the following terms:
4E Market
For the purposes of this Act, unless the contrary intention appears, market means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first‑mentioned goods or services.
The greater part of Yazaki’s alleged contravening conduct occurred in Japan and, as I have said, there is an issue as to the extra-territorial application of the Act and the Competition Code. In 2003, s 5 of the Act provided as follows, relevantly:
5 Extended application of Parts IV, IVA, V, VB and VC
(1)Part IV, Part IVA, Part V (other than Division 1AA), Part VB and Part VC extend to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia or by Australian citizens or persons ordinarily resident within Australia.
The ACCC alleges that at the relevant times, Yazaki was a body corporate carrying on business in Australia.
Section 5 was subsequently amended, but not in a way which affected the key criterion in this case of carrying on business in Australia.
At the relevant times, s 8(1) and (2) of the CPRA provided as follows:
8 Application of Competition Code
(1)The Competition Code of this jurisdiction applies to and in relation to –
(a)persons carrying on business within this jurisdiction; or
(b)bodies corporate incorporated or registered under the law of this jurisdiction; or
(c)persons ordinarily resident in this jurisdiction; or
(d)persons otherwise connected with this jurisdiction.
(2)Subject to subsection (1), the Competition Code of this jurisdiction extends to conduct, and other acts, matters and things, occurring or existing outside or partly outside this jurisdiction (whether within or outside Australia).
A “person” is defined in the Interpretation of Legislation Act 1984 (Vic) s 38 as including a body corporate as well as an individual.
In relation to the Competition Code, the ACCC alleges that Yazaki carried on business within Victoria. It also alleges that Yazaki was a body corporate otherwise connected with Victoria.
Finally, in relation to the legislative provisions, I set out s 84(2) because of an allegation that, at one point, AAPL was acting as Yazaki’s agent.
84 Conduct by directors, servants or agents
...
(2) Any conduct engaged in on behalf of a body corporate:
(a)by a director, servant or agent of the body corporate within the scope of the person’s actual or apparent authority; or
(b)by any other person at the direction or with the consent or agreement (whether express or implied) of a director, servant or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, servant or agent;
shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate.
The cartel provisions introduced by the Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (No 59 of 2009) came into effect on 24 July 2009. Section 44ZZRK provides that a corporation contravenes the section if a contract, arrangement or understanding contains a cartel provision and the corporation gives effect to the cartel provision. The section applies to contracts or arrangements made, or understandings arrived at, both before and after the commencement of the section. Cartel provisions are defined in s 44ZZRD. The ACCC alleges that both respondents in giving effect to each of the 2003 Agreement and the 2008 Agreement after 24 July 2009 until at least late 2009 contravened s 44ZZRK, and that those agreements contained cartel provisions within s 44ZZRK for the same reasons they fell within s 45(2)(a)(i) and s 45(2)(a)(ii).
Each party relied on documentary evidence in support of its or their case. In addition, the Court made orders before trial that each party file and serve the evidence-in-chief of its or their witnesses in the form of affidavits, and the affidavits were relied on as the evidence‑in‑chief of the deponents. The respondents made a broad admission to the effect that anti‑competitive conduct had occurred in Japan and, in addition, they made a number of admissions to specific allegations made by the ACCC in its Amended Statement of Claim concerning events in Japan. They did not call any witnesses from Yazaki about events in Japan and they did not seek to cross‑examine a number of the witnesses from SEI who gave evidence about events in Japan. The following are the witnesses who gave evidence as part of the ACCC’s case and who were not cross-examined by the respondents.
(1)Mr Shigi who I have already referred to (at [6]).
(2)Mr Akifumi Urata who was employed by SEI in a position described within the company as Manager, 1^st Harness Sales Department, Toyota Branch Office.
(3)Mr Tomoaki Nagano who was employed by SEI in a position described within the company as General Manager (responsible for Toyota RFQs).
(4)Mr Naoki Shida who was employed by SEI in a position described within the company as Assistant Manager, 1^st Sales Section, 1^st Automotive Systems Sales.
(5)Mr Nobuaki Kazahaya who was employed by SEWS-A as a senior manager, but who originally came from SEI.
(6)Mr Sebastiano Ianzano who was a project coordinator employed by SEWS-A.
(7)Mr Raymond Borg who was employed by TMCA in its Procurement Division.
In the case of the witnesses from SEI, in particular, their formal titles within the company changed over time, but I do not think that it is necessary for me to set out the details.
Mr Kouichi Nagasawa who, like Mr Kazahaya, was employed by SEWS-A as a senior manager who originally came from SEI was cross-examined by the respondents.
The respondents tendered an affidavit of a Mr Richard Woods who was the company secretary of AAPL between 1998 and 2009. He was not required for cross-examination. The respondents also tendered affidavits affirmed by Mr Craig O’Donohue and Mr Mattthew Ward. Mr O’Donohue was employed by AAPL in a position described by the company as the Senior Manager Corporate Strategy and Quality. Mr Ward was employed by AAPL in a position described by the company as Department Manager (Sales) between 2008 and 2011, and in a position described by the company as Business Unit Manager for TMCA and Mitsubishi between 2003 and 2008. Both Mr O’Donohue and Mr Ward were cross‑examined by counsel for the ACCC.
The witnesses who were cross-examined gave evidence about events which occurred some considerable time before the trial and that is a matter I have taken into account in assessing their evidence. I did not detect anything adverse in the demeanour of any of the witnesses who were cross-examined. For reasons I will give, I accept the substance of the evidence given by Mr Nagasawa and Mr O’Donohue. For reasons I will give, whilst I accept a good deal of the evidence of Mr Ward, I do not think that his evidence was correct on a couple of key matters.
The respondents objected to a number of passages in the affidavits the ACCC sought to tender. I ruled on those objections during the course of the trial. It is convenient for me to state my reasons for my rulings in the context of the particular agreements to which the evidence relates.
The respondents submit that in assessing the evidence the Court must take into account the gravity of the allegations against them. They submit that the allegations against them are serious and, subject to the limitation of time plea in relation to some of the conduct, could result in the imposition of pecuniary penalties under s 76 of the Act and the Competition Code. This is a civil proceeding where the standard of proof is on the balance of probabilities, but taking into account, among other things, the gravity of the matters alleged (Evidence Act 1995 (Cth) s 140). This does not create a third standard of proof as s 140 itself makes clear, and as was explained by the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR 449; 67 ALJR 170 at 170-171:
The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.
(Citations omitted).
I take into account the gravity of the allegations made against the respondents in assessing whether the ACCC has established its case against them. At the same time, as the ACCC pointed out, some of the matters in dispute in this case, such as whether Yazaki was carrying on business in Australia, do not raise this particular consideration.
Each party submitted that with respect to certain allegations, I can and should take into account the failure by the other party to call a material witness that that party might reasonably be expected to have called. For example, the ACCC relies on the respondents’ failure to call Mr Masahiro Okumura to contradict evidence given by Mr Nagasawa. Mr Okumura came from Yazaki and was for a time employed by AAPL in a position that company described as Program Manager, wire harness customer relations group and Automotives Planning Office Australasian Department. For their part, the respondents rely on the ACCC’s failure to call a witness from TMCA who might have addressed TMCA’s intention in seeking a price for the engine room main WH for the 2002 Toyota Camry in about April 2003, and who might have addressed whether TMCA was given prices by AAPL in about June 2008 in relation to the 2011 Toyota Camry. The ACCC did adduce evidence from Mr Borg from TMCA, but his evidence did not address the first matter, and it did not address directly the second matter. I will consider the Jones v Dunkel ((1959) 101 CLR 298) submissions in the particular factual contexts in which they arise. I note at this point that in the recent decision of Australian Investments and Securities Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 (“ASIC v Hellicar”) at 412‑414 [164]-[170], the High Court made it clear that a Jones v Dunkel inference should not be drawn unless the witness was a person presumably able to put the true complexion on the facts relied on by the party who is alleged to have failed to call the witness, and that it is necessary to be satisfied before drawing an inference that the party would be expected to have called the witness.
Stated broadly, the issues in this case relate to the Overarching Cartel Agreement, the 2002 Toyota Camry Minor RFQ Agreement, the 2003 Agreement, the 2008 Agreement, the extra‑territorial application of the Act and the Competition Code, and the issue of market in Australia. I will address the issues in that order.
The Overarching Cartel Agreement

The ACCC’s case is that from at least the mid-1990s to at least late 2009 there was an arrangement or understanding between Yazaki and SEI which contained provisions to the following effect.
First, there was a provision that when an RFQ was issued to Yazaki and SEI by a motor vehicle manufacturer for the supply of WHs for a particular model of motor vehicle they, by their nominated representatives, would meet and communicate in relation to that matter. Secondly, there was a provision that at such meetings and in such communications they would seek to agree upon the intended allocation between them of the WHs to be supplied to the motor vehicle manufacturer by each of them and their subsidiaries or agents in each of the countries in which the particular model of motor vehicle was manufactured. Thirdly, there was a provision that after Yazaki and SEI had reached agreement as to the allocation of WHs, they would give effect to the allocation by exchanging and agreeing on the prices for each of the WHs that they would submit, or that they would cause their subsidiaries or agents to submit, to the motor vehicle manufacturer in each of the countries in which the particular model of the motor vehicle was manufactured. Fourthly, there was a provision that the agreed prices would be such as to ensure, as far as possible, that the motor vehicle manufacturer would award supply of the WHs in accordance with the agreement reached between Yazaki and SEI as to the intended allocation of WHs. Fifthly, there was a provision that once the award of WH supply had been made, neither Yazaki nor SEI would compete against each other, and each would cause their respective subsidiaries or agents not to compete with each other, in relation to the supply of any WH where supply of that WH had been awarded to the other. Finally, there was a provision that neither Yazaki nor SEI (nor their subsidiaries or agents) would disclose the existence of the Overarching Cartel Agreement to the relevant motor vehicle manufacturer, or to any of its agents or subsidiaries, or to any regulatory authority.
The ACCC alleges that the Overarching Cartel Agreement contained an exclusionary provision within s 45(2)(a)(i) and s 4D of the Act and the Competition Code (and were cartel provisions within s 44ZZRD) and contained a provision which had the purpose, or would have or be likely to have the effect of substantially lessening competition within s 45(2)(a)(ii) and s 45A of the Act and the Competition Code (and were cartel provisions within s 44ZZRD).
The ACCC does not seek relief in relation to the making of the Overarching Cartel Agreement. However, it does claim relief in relation to conduct said to constitute giving effect to the Overarching Cartel Agreement. It claims that in making the 2003 Agreement and in making the 2008 Agreement, Yazaki gave effect to the Overarching Cartel Agreement.
The following points should be made at the outset.
First, the ACCC pleads that the Overarching Cartel Agreement related to any RFQ issued to Yazaki and SEI by a motor vehicle manufacturer for the supply of WHs for a particular model of motor vehicle. However, the evidence adduced by the ACCC did not go beyond RFQs issued from time to time by TMC or its subsidiaries or related companies. In view of the evidence, if there is to be a finding of an Overarching Cartel Agreement, then it will be restricted to RFQs issued by TMC or its subsidiaries or related companies.
Secondly, the ACCC’s plea as to the provisions of the Overarching Cartel Agreement is limited to the action which would be taken by Yazaki and SEI when an RFQ was issued. However, it is clear from the evidence that these supply arrangements were very significant financial arrangements from the point of view of both the supplier and the purchaser, and that TMC and its subsidiaries and related companies as purchasers were regularly seeking proposals from an existing supplier that might lead to a reduction in prices. This involved regular requests from TMC or its subsidiaries and related companies for such proposals. These requests were described in the evidence as price down requests. There was evidence of communications between Yazaki and SEI, and between AAPL and SEWS-A, at the time of these requests with a view to preventing one of them undercutting the other and price erosion. I admitted evidence of these communications because it seemed to me to be relevant to the existence of the Overarching Cartel Agreement.
Thirdly, the ACCC’s plea in relation to the Overarching Cartel Agreement is that from at least the mid-1990s, there existed an arrangement or an understanding between Yazaki and SEI which remained in existence and operative until at least late 2009. In other words, the ACCC pleads the existence of an arrangement or an understanding from at least the mid‑1990s, but is unable to plead when the arrangement was made or the understanding arrived at. In theory, there are two possibilities. First, an arrangement could have been made or an understanding arrived at on a particular day and thereafter implemented. Secondly, the arrangement or understanding may have developed over time and settled into a practice. The ACCC does not know which of these possibilities occurred.
By a request for further and better particulars of the Statement of Claim dated 25 January 2013, the respondents sought the usual particulars in relation to the alleged Overarching Cartel Agreement between Yazaki and SEI. The usual particulars were defined in the request as follows:
AWhere you are asked to give the ‘usual particulars’ of any ... arrangement, understanding ... say whether it was wholly or partly in writing, oral or to be implied, and:
(a)insofar as it was in writing, identify each document constituting any part of it and say where a copy of the document(s) may be inspected, and if any such document has been lost or destroyed give the material substance of the document and say to the best of your ability when, where and in what circumstances the document was lost or destroyed;
(b)insofar as it was oral, say when, where and between what actual persons, and whether face to face or by way of telephone, each conversation constituting any part of it took place and give the material substance of each such conversation;
(c)insofar as it was to be implied, state all acts, facts, matters, circumstances or things from which the implication is to be drawn,
and if it was made, entered into, carried out or done by a person acting or purporting to act on behalf of or with the authority of another, give the usual particulars as sought above of the authority (express, implied or ostensible) of that person to act on behalf of that other .
The ACCC responded to the request on 22 February 2013 and with respect to the Overarching Cartel Agreement said the following:
The Overarching Cartel Agreement was, as a matter of history and as alleged in these proceedings, in the nature of an agreement or understanding that had developed over time between the parties. The relevant provisions of the Overarching Cartel Agreement are those pleaded at sub-paragraphs 23.1 to 23.6 of the SOC. Without excluding the possibility of a document or documents or a discussion or discussions evidencing the existence of the Overarching Cartel Agreement, its existence and its provisions, are to be inferred from the conduct of the Respondents (and SEI/SEWS‑A) alleged in relation to the 2002 Toyota Camry, 2006 Toyota Camry and 2011 Toyota Camry and pleaded in the SOC. Further particulars may be provided following discovery.
In a note to its response, the ACCC alleged that some of the particulars sought were not a proper request for particulars, but rather were a request for evidence. The ACCC said:
Nevertheless, in order to assist the respondents, the ACCC has referred to information and documents, to the extent that such information and documents are within the ACCC’s knowledge or in its possession.
The ACCC’s reference in its response to an agreement or understanding developing over time between the parties suggest that its case is that the Overarching Cartel Agreement arose in the second of the two ways referred to above.
The ACCC sought to establish the existence of the Overarching Cartel Agreement by evidence from SEI officers or employees. That evidence was of a practice adopted upon the receipt of an RFQ from TMC or its subsidiaries and related companies, not of the making of an arrangement or the reaching of an understanding on a particular day.
There was no dispute between the parties about the meaning to be attributed to the words “contract”, “arrangement” and “understanding”. In Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd and Others [2007] FCA 794; (2007) 160 FCR 321, Gray J described an “arrangement” and an “understanding” in the following terms (at 331‑332 [26] and [27]).
The word “arrangement” is less clearly understood, and more susceptible of elasticity as to its meaning. In general, it appears to connote a consensual dealing lacking some of the essential elements that would otherwise make it a contract. For instance, a dealing that would otherwise be a contract may be described as an “arrangement” if the parties to it intended not to create a legally binding relationship, but only to give expression to their intentions as to the obligations that each felt morally bound to adhere to in relation to what was to pass between them, or to be carried out by them. Of course, an arrangement might be a broader concept than this, because it is a term the boundaries of which have not been fixed in the traditional understanding of lawyers. The Oxford English Dictionary gives as the apparently appropriate meaning of the word “arrangement” “a settlement of mutual relations or claims between parties; an adjustment of disputed or debatable matters; a settlement by agreement”, or alternatively, “disposition of measures for the accomplishment of a purpose; preparations for successful performance.” The ordinary understanding of what amounts to an “arrangement” makes it difficult to envisage that an arrangement could come about without express negotiations between the parties, although there have been suggestions that an arrangement can be tacit. See Federal Commissioner of Taxation v Cooper Brookes (Wollongong) Pty Ltd (1979) 10 ATR 128 at 146 per Fisher J, with whom Brennan and Deane JJ agreed, referred to by Franki J in Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 24 in the context of s 45(2) of the Trade Practices Act. At the very least, there must be some express communication between the parties, although what is said may not amount to offer and acceptance for the purposes of the law of contract. The need for express communication is also suggested by the use of the verb “make” in conjunction with both “contract” and “arrangement” in s 45(2)(a) of the Trade Practices Act. It is hard to see how two parties could “make” an “arrangement” without doing so expressly, at least as to the substance of the arrangement, even if the acceptance by one party of what the other has communicated is implicit in some act, rather than expressed in words.
The word “understanding” is obviously intended to connote a less precise dealing than either a contract or arrangement. This is so because of the meaning of the word “understanding” itself, and because, in the terms of s 45(2)(a), the parties to it may “arrive at” it instead of making it. Once again, the Oxford English Dictionary supplies an appropriate definition: “a mutual arrangement or agreement of an informal but more or less explicit nature.” It is the informal and less explicit nature of an understanding that led Smithers J to describe the concept of an understanding as “broad and flexible” in L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 89.
His Honour went on to say that there cannot be an understanding without a consensual dealing between parties, and a consensual dealing must involve a meeting of minds. The consent may be tacit, but it must be clear that there is consent. Justice Gray cited the following passage from the reasons for judgment of Smithers J (with whom Evatt J agreed) in Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286 at 291:
... by parity of reasoning it would follow that the existence of an arrangement of the kind contemplated in s 45 is conditional upon a meeting of the minds of the parties to the arrangement in which one of them is understood, by the other or others, and intends to be so understood, as undertaking, in the role of a reasonable and conscientious man, to regard himself as being in some degree under a duty, moral or legal, to conduct himself in some particular way, at any rate so long as the other party or parties conducted themselves in the way contemplated by the arrangement.
It seems to me also that an understanding must involve the meeting of two or more minds. Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of the maintenance of a particular state of affairs, or the adoption of a particular course of conduct, it would seem that there would be an understanding within the meaning of the Act.
(See also Norcast S.ár.L v Bradken Ltd and Others (No 2) (2013) 219 FCR 14 (“Norcast v Bradken”) at 78-79 [263] per Gordon J.)
In addition, the following observations of Perram J in Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157; (2014) 319 ALR 388 (“ACCC v Air New Zealand”) are relevant (at 486-487):
(1) …
... Whatever else is involved it seems this means that at least one party assumes an obligation to another or gives an assurance or undertaking that it will act in a certain way: Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452 at 464 [45] applying the remarks of Lindgren J in Australian Competition and Consumer Commission v CC (NSW) Pty Ltd(No 8) (1999) 92 FCR 375 at 408 [141].
...
(4)On the other hand, there will be no understanding where one party decides unilaterally to act in a particular way in response to a pricing manoeuvre by a competitor. A deliberate decision to follow the pricing of a competitor does not give rise, by itself, to an arrangement or understanding to which s 45 applies. In a sense, this is a corollary of the need for a consensus.
(5)Consequently, there can be no understanding because one party hopes or expects (in a non-normative sense) that another party will act in a particular way: Apco Service Stations v ACCC at 464 [45]; ACCC v CC (NSW) Pty Ltd at 408 [141].
I should also make the point that there is nothing conceptually wrong in having a general arrangement or understanding followed by a specific arrangement or understanding in a particular case. Nor is there anything conceptually wrong with the parties having an arrangement or understanding as to how they will deal with RFQs issued by TMC or its subsidiaries or related companies in the future, and then a specific arrangement or understanding when an RFQ is issued in relation to a particular model of motor vehicle: Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd and Others (No 3) [2007] FCA 1617; (2007) 244 ALR 673 per Heerey J at 681-682 [41]‑[47]; Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6) [2010] FCA 704; (2010) 270 ALR 504 (“April International Marketing”) at 529 [92] per Bennett J. Ultimately, whether it is appropriate to infer from a series of specific agreements an overarching cartel agreement is a question of evidence and relevant matters include, but are not limited to, similarities between the specific agreements and the circumstances in which the parties entered into the specific agreements.
As I have said, in order to establish the Overarching Cartel Agreement, the ACCC relies on evidence from SEI officers or employees. The respondents objected to evidence from SEI officers or employees which was not directed to the conduct alleged in relation to the 2002 Toyota Camry, the 2006 Toyota Camry, and the 2008 Toyota Camry on the ground that, by reason of its further and better particulars, the ACCC was restricted to that conduct insofar as it sought to prove the existence of the Overarching Cartel Agreement. The respondents had other objections to the evidence and they included objections based on the form of the evidence, hearsay objections, and objections based on a contention that the evidence is unfairly prejudicial or otherwise within s 135 of the Evidence Act.
It is true that in its further and better particulars the ACCC refers to the conduct of the respondents in relation to the 2002 Toyota Camry, the 2006 Toyota Camry and the 2011 Toyota Camry and not to conduct in relation to any other models of motor vehicles manufactured by TMC or its subsidiaries and related companies. However, I do not think that this precludes the ACCC from leading evidence of arrangements or understandings with respect to such other models. I say that for two reasons. First, the ACCC’s “further and better particulars” expressly state that the ACCC does not exclude the possibility of a document or documents, or a discussion or discussions evidencing the existence of the Overarching Cartel Agreement. This is a significant qualification on what follows in its “further and better particulars”. Secondly, I doubt that the reference to the respondents’ conduct in relation to the 2002 Toyota Camry, the 2006 Toyota Camry and the 2011 Toyota Camry is, in fact, a further and better particular. Rather, it seems to me to be a matter of evidence from which the Court is asked to infer the existence of the Overarching Cartel Agreement and its provisions. It is not part of the usual particulars which were the subject of the request, and it is to be borne in mind that there is a difference between an implied arrangement or understanding, and the evidence from which an arrangement or understanding should be inferred. In addition, I note that had it been necessary to consider an amendment, the ACCC would have had a good case for leave. The respondents had the evidence from the SEI witnesses for approximately 10 months before trial. For these reasons, I did not uphold any of the respondents’ objections on the ground that the ACCC was limited by its “further and better particulars” in the manner the respondents alleged.
As I have said, there were other objections to the evidence from SEI officers or employees based on the evidence not being in a proper form or hearsay or within s 135 of the Evidence Act. Rather than going through each objection, I will illustrate my reasons for ruling as I did by reference to the “strongest” objections raised by the respondents.
I start with the evidence of Mr Urata as set out in his affidavit affirmed on 24 January 2014. In three paragraphs (paras 6 to 9 inclusive), Mr Urata gives evidence of conduct by SEI and Yazaki between 1983 and 1993 concerning price down requests made by TMC. In paragraph 7, he states that from time to time TMC required its suppliers to provide it with information about matters such as the supplier’s total sales volume (including projected sales) and its financial position. Having received this information, TMC would assess it and provide the supplier with a percentage price reduction target it expected the supplier to achieve. Mr Urata states in paragraph 6 of his affidavit that within a few years of commencing his role in SEI’s Toyota sales team in 1983, he became aware that representatives from SEI periodically met with competing WH manufacturers (including Yazaki) to exchange information and engage in pricing discussions in respect of the business that each of them conducted with Toyota. Mr Urata attended and participated in such meetings. In paragraph 8, Mr Urata states that representatives of SEI and representatives of Yazaki met to discuss the information to be provided to TMC and met again to discuss their respective responses to TMC’s price down request. Mr Urata states that at the meetings he attended, the representatives of SEI and Yazaki exchanged and discussed information, including their respective sales volumes, financial positions and percentage price reduction requests, and that he participated in these discussions. He states that if representatives of either party believed that the other party was providing inaccurate information, then that would be debated. The respondents submitted that this evidence should be excluded because it falls within s 135 of the Evidence Act. I overruled this objection and I will explain my reasons when I come to deal with another paragraph in Mr Urata’s affidavit which was said by the respondents to be the “strongest” example of a paragraph which fell within s 135 of the Evidence Act.

Mr Urata states that based in part on his participation in the discussions at the meetings, he understood that the process adopted by SEI and Yazaki in relation to TMC’s price down requests was intended to avoid the companies submitting information which would lead to excessive price reduction requests, and that it was aimed at allowing the companies to monitor each other’s shares in an effort to avoid TMC awarding one company an excessive share in the Toyota WH business. It was not entirely clear that this particular evidence was objected to on the basis that it infringed the opinion rule, but evidence of a similar nature was objected to on that basis, and it is convenient to deal with that matter now.
I think the evidence is evidence expressed as an opinion of conduct and discussions at meetings at which the witness was present. I infer that Mr Urata had exhausted his recollection of these meetings. In my opinion, the evidence was admissible under s 78 of the Evidence Act which is in the following terms:
78 Exceptions: lay opinions
The opinion rule does not apply to evidence of an opinion expressed by a person if:
(a)the opinion is based on what the person saw, heard or otherwise perceived about a matter or event; and
(b)evidence of the opinion is necessary to obtain an adequate account or understanding of the person’s perception of the matter or event.
In Lithgow City Council v Jackson (2011) 244 CLR 352, French CJ, Heydon and Bell JJ discussed the reasons for the common law rule which permitted the reception of non-expert opinion evidence in certain cases (at 370‑371 [45]) and then said at 376-377 [57]:
... The common law rule does not require a full statement by witnesses of perceptions and observations – though gaps of this kind may well go to weight. Indeed the whole point of the common law rule is that it cures the difficulty that an observer may be confident about a conclusion reached from observations without being able to perceive, remember or state the primary materials which led to it. There is nothing in s 78(b) to suggest any different position. It is possible to conclude – not in this case, but in other cases – that a person’s opinion is based on what that person perceived without the person providing an exhaustive list of what the person perceived. It is true, though, that the less the witness or other observer states his or her primary perceptions, the harder will it be for the tendering party to establish the condition of admissibility in s 78(a) (because of the difficulty of establishing that the opinion is “based” on the perceptions) and the condition of admissibility in s 78(b) (because of the difficulty of establishing that the opinion is necessary to obtain an adequate account or understanding of the person’s perceptions).
French CJ, Heydon and Bell JJ also referred with approval to the following passage cited by Wigmore (Wigmore JH, Evidence in Trials at Common Law (Chadbourn rev 1978) Vol 7 p 13) from Sydleman v Beckwith (1875) 43 Conn 9 at 12-14:
[O]n the ground of necessity, where the subject of the inquiry is so indefinite and general as not to be susceptible of direct proof, or where the facts on which the witness bases his opinion are so numerous and so evanescent that they cannot be held in the memory and detailed to the jury precisely as they appeared to the witness at the time.
(See Australian Competition and Consumer Commission v Air New Zealand and Another (No 1) [2012] FCA 1355; (2012) 207 FCR 448 at 464 [71]-[72] per Perram J.)
The scope of s 78 of the Evidence Act was discussed by White J in Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379. In the course of his reasons, his Honour said (at [22] and [27]):
... In my view the combined effect of ss 76 and 78 is to exclude non-expert opinion evidence if it is not based on personal perception (ss 76 and 78 (a)), or, if it is superfluous because all of the facts can be told to the tribunal so as to put it in as good a position to draw the inference as the person expressing the opinion (ss 76 and 78 (b)).
... In my view if the person giving the opinion had the opportunity to form a correct understanding of the effect or outcome of the discussion so that there is a rational basis for his or her understanding to satisfy the test of relevancy under s 55, and provided the witness has exhausted his or her recollection of what was said so that s 78 (b) is satisfied, s 78 operates so that the witness’s opinion about the effect or outcome of a conversation is not excluded by s 76.
I should say in case I am wrong about the admission of the evidence summarised in paragraph 55 above under s 78 of the Evidence Act, that I think the evidence summarised in paragraph 54 of two suppliers who would ordinarily be competitive with each other, meeting after a purchaser has initiated a process and exchanging what would otherwise be highly confidential pricing information in the context of information to be provided to the purchaser would lead as a matter of inference to the matters summarised in paragraph 55.
In eight paragraphs (paras 11 to 18), Mr Urata gives evidence of discussions between representatives of SEI and representatives of Yazaki concerning the responses of those companies to RFQs issued by Toyota with respect to the Toyota Avalon and the Toyota Solara in North America. At the heart of this evidence is evidence by Mr Urata of a meeting between representatives of SEI, being Mr Ehara and himself, and representatives of Yazaki, being Mr Asakawa, Mr Iwaki and possibly another person. He states that he does not have a clear recollection of the precise discussions which occurred at the meeting in about 1990. However, he recalls that the substance of the discussions was that SEI representatives proposed to Yazaki that each company should exchange information and coordinate regarding the upcoming Solara and Avalon. In my opinion, that evidence was admissible and, if it is opinion evidence, it falls within the terms of s 78 of the Evidence Act.
Mr Urata states that by participating in the meeting and subsequent discussions, his understanding was that the aim of the discussions was to allocate each company’s share in the Toyota WH business and, at the same time, to avoid excessive price competition. That evidence is admissible under s 78 of the Evidence Act for the same reasons the evidence identified in paragraph 55 is admissible.
Mr Urata states that at the meeting the representatives of the two companies agreed as to which company should “win” the supply of WHs and that they agreed as to which company would submit lower quotes. Mr Urata states that the representatives of the two companies said that they would continue to cooperate and work together regarding future Toyota models. In my opinion, that evidence was admissible and, if it is opinion evidence, it falls within the terms of s 78 of the Evidence Act. Mr Urata states that he understood that there was an agreement between SEI and Yazaki to the effect that once supply was allocated by TMC, the unsuccessful party would respect that allocation, although that was not expressly discussed in his presence. I will not use that evidence beyond evidence of what Mr Urata understood the agreement to require.
The respondents’ “strongest” example of evidence which fell within s 135 of the Evidence Act was the evidence Mr Urata gave in paragraph 23 of his affidavit which was in the following terms:
During this period Toyota released numerous RFQs to supply WHs both for new vehicles and for new models of vehicles that were currently being manufactured. To the best of my recollection, Toyota conducted a major competitive RFQ process for WHs on average about yearly. Throughout the period from 1995 to 2002, I estimate that I was involved in responding to around 10 Toyota WH RFQs for major models. In respect of many of these RFQs, representatives of SEI, including me, met with representatives from Yazaki and discussed and agreed to submit prices designed to influence the manner in which Toyota allocated the supply of WHs to each company. I do not now recall all of these meetings but I do recall that they generally included discussions about how to allocate WH supply and what prices should be submitted by each company similar to the Avalon and Solara discussions referred to above.
Section 135 of the Evidence Act is in the following terms:
135     General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a)       be unfairly prejudicial to a party; or
(b)       be misleading or confusing; or
(c)       cause or result in undue waste of time.
I accept that Mr Urata’s evidence in paragraph 23 of his affidavit is very general in its terms. The major models are not identified and the parties to the conversations, the dates of the conversations and the substance of the conversations are not provided. On the other hand, the precise content of the conversations are not the critical aspect of the evidence in the sense that the case does not turn on what prices were provided or market allocations made during these meetings. Furthermore, I am not satisfied that the respondents could not obtain instructions so as to be able to cross-examine Mr Urata. This is not the type of case which might fall within s 135 of the Evidence Act as identified by the Full Court in La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4; (2011) 190 FCR 299 at 312-316 [61]-[73]. I did not consider that the evidence fell within any of the paragraphs in s 135 of the Evidence Act.
Finally, by way of example, I refer to eight paragraphs in Mr Nagasawa’s affidavit (paragraphs 9 to 16 inclusive) where he gives evidence of his understanding of meetings or discussions between representatives of SEI and Yazaki. I ruled that those paragraphs should not be admitted. It is clear from these paragraphs that Mr Nagasawa did not attend meetings between the representatives of the two companies. In addition, in some passages Mr Nagasawa said that his evidence was based on his general understanding without explaining what he meant by that. In my opinion, the evidence was inadmissible because it was evidence of his understanding alone and was not based on any conduct of Yazaki which he saw, heard or otherwise perceived.
I turn to the other evidence (other than the conduct in relation to the 2002 Toyota Camry, the 2006 Toyota Camry, and the 2011 Toyota Camry) relied on by the ACCC in support of the existence of the Overarching Cartel Agreement.
Mr Nagano commenced employment with SEI in 1985 and from that date until September 1995 he was a member of SEI sales staff and he specialised in the sale of WHs to TMC. From 1986 he noticed that Yazaki and SEI would contact each other when TMC sought price-related information or was conducting a “semi-annual” price review. Representatives of the companies would meet and discuss prices and Mr Nagano was involved in these discussions. Generally, Yazaki and SEI would try to agree on a common approach to the response to be provided to TMC. In the case of the “semi-annual” price review, the discussions were directed towards minimising differences between Yazaki and SEI in the price reduction proposals to be submitted to TMC. Mr Nagano formed the view that the purpose of the discussions was to preserve market share for each company and to prevent the erosion of price.
Mr Nagano described a practice involving Yazaki and SEI that was followed whenever TMC issued an RFQ. That practice (broadly expressed) involved representatives of the two companies meeting when TMC issued RFQs and agreeing upon an allocation of the supply of WHs with the guiding principle being the retention by each company of existing market shares. The representatives of the two companies would then coordinate their prices with a view to influencing TMC to allocate the supply of the WHs in accordance with the agreed allocation. The price differential was generally in the order of 2% to 3%. The prices provided to TMC included the prices of component parts and Mr Nagano said that it was important that the prices had a rational basis and could be justified. The base prices were coordinated. Although there were discussions between the companies about VE proposals, there was less coordination about these proposals. I describe what is meant by VE proposals below (at [182]). Mr Nagano’s involvement in this practice began in about 1999 when he held the position of Manager responsible for WH sales to Toyota in the 1^st Automotive Electronics Systems Sales Department, in SEI’s Toyota office in Toyota City, Japan. He was involved in the practice in the case of the following models of motor vehicles manufactured by TMC: Harrier, Sienna, Corolla and Vitz (Yaris) and a further RFQ for the Vitz (Yaris) between late 2007 and early 2008. Mr Nagano said that to the best of his recollection in relation to the RFQs referred to above, TMC awarded supply in accordance with the allocations agreed between Yazaki and SEI.
Mr Shigi said that in July 1990, he was the Deputy Group Manager of the 1^st Harness Section of SEI’s Automotive Sales Division and that, from about that time, he participated in meetings with representatives of Yazaki where Yazaki and SEI discussed prices. These meetings generally took place after TMC had made a price down request, and the discussions at the meetings were directed towards reaching agreement between Yazaki and SEI as to the appropriate level of price reductions. Mr Shigi also described a practice adopted whenever TMC issued an RFQ. The practice he described was similar to that described by Mr Nagano, although his description was less detailed. It began with the RFQ for the 1994 Toyota Celica. Mr Shigi’s view was that the practice was designed to ensure that Yazaki and SEI maintained their existing market shares and that prices were not eroded.
Mr Urata commenced employment with SEI in November 1983. From then until August 1993, he worked as a member of SEI’s sales staff in the Harness Section of the Automotive Sales Department of the Chubu Branch. Within a few years after he commenced employment, he observed and then himself was involved in price exchange and coordination meetings with representatives of Yazaki after TMC had issued a price down request. Mr Urata said that there was an agreement between Yazaki and SEI in about 1990 as to the allocation of the supply of WHs to TMC in relation to the Toyota Avalon and Toyota Solara in North America. Yazaki and SEI agreed that Yazaki would win the supply of WHs for the Toyota Solara and SEI would win the supply of WHs for the Toyota Avalon. The proposed “winner” would issue lower quotes with a view to achieving this result. TMC awarded supply in accordance with the allocation agreed between Yazaki and SEI. Mr Urata could not remember the precise details, but he said that the practice he identified of Yazaki and SEI agreeing market allocation and the prices to be submitted with a view to TMC making that allocation was adopted in relation to many of the 10 Toyota WH RFQs for major models issued between 1995 and 2002. He gave evidence of the practice being adopted in respect of the period from 2004 to 2008.
Mr Shida gave evidence that he was involved in price coordination discussions with representatives of Yazaki in 1999 regarding the Toyota Harrier and that, between July 2000 and May 2007 while he was employed at Sumitomo Electric Wiring Systems, Inc (North America), he was involved in price coordination discussions with Yazaki personnel in North America relating to the sale of WHs to Toyota Motor Manufacturing North America, Inc.
Mr Kazahaya was a member of SEI’s Toyota Business Office from January 2003 to the beginning of 2008. Over this period, he accompanied Mr Nagano to meetings with representatives of Yazaki. The pricing of electrical wires, WH protective covering and WH tapes was discussed at these meetings. Mr Kazahaya said that he had discussions with Mr Kiyotaka Kawatake of AAPL in April or May 2008 when price information was exchanged in relation to annual price down requests by TMCA.
Mr Nagasawa gave evidence about his contact with representatives of Yazaki following price down requests from TMCA. In late 2001 or early 2002, he had a telephone conversation with Mr Hitoshi Ukita of AAPL where the later said “... we should respect each other’s territories”. He had discussions with Mr Okumura and Mr Kawatake of AAPL in 2007 concerning a TMCA price down request and AAPL and SEWS-A exchanged information about the extent of the price reductions each of them was considering.
In addition to the evidence I have summarised above, the ACCC relies on the conduct of Yazaki and AAPL on the one hand, and SEI and SEWS-A on the other, in relation to the 2002 Toyota Camry, the 2006 Toyota Camry and the 2011 Toyota Camry. My findings in relation to that conduct are set out later in these reasons.
The respondents submit that the evidence is too general to support a finding of an Overarching Cartel Agreement. It is true that some of the evidence is very general, but then other parts of the evidence are quite specific, and it is the evidence as a whole which must be considered. The respondents submit that the three agreements (i.e., the 2002 Toyota Camry Minor RFQ Agreement, the 2003 Agreement and the 2008 Agreement) are free-standing agreements and that the evidence of them does not necessarily lead to an inference of an Overarching Cartel Agreement. It is true the agreements are free-standing agreements. However, to stop at that point would be to ignore that, not only are the agreements consistent with an Overarching Cartel Agreement, but one can go further and say that the parties’ conduct in assuming how they would behave implies the existence of the Overarching Cartel Agreement. Furthermore, there is, by way of example, Mr Shigi’s evidence of his reference to the “dominant principle” during the discussions in 2003 (at [155]). The respondents submit that there was evidence suggesting that the parties did not adopt the practice on every occasion or, at least evidence throwing doubt on whether it happened on every occasion, and that it followed from that that there could not have been an Overarching Cartel Agreement in the terms pleaded. For example, Mr Nagano said the practice “usually” involved the stages he described and Mr Urata said that the practice was followed “[i]n responding to a number of these RFQs”. I do not accept this submission. It seems to me that I have to consider the evidence as a whole and, in doing that, there is a strong body of evidence in support of an Overarching Cartel Agreement.
I am satisfied that there was an Overarching Cartel Agreement. As to the particular provisions alleged by the ACCC, as I have already said, the evidence supports a finding in relation to TMC, but not motor vehicle manufacturers generally. As to the second and third provisions and, contrary to the respondents’ submission, I think there is evidence that the RFQs which were the subject of the Overarching Cartel Agreement related to all countries and not just Japan (e.g., see Mr Nagano’s evidence) and that subsidiaries or agents were from time to time required to submit prices to support the conclusion that these were provisions of the Overarching Cartel Agreement.
As to the fifth and sixth provisions (i.e., no competition and no disclosure), I accept the respondents’ submission that the evidence does not support a conclusion that these were provisions of the Overarching Cartel Agreement. In one sense, one might readily infer that the parties must have had these type of commitments in mind. However, I am not satisfied I should make such a finding having regard to the following. First, none of the witnesses from SEI gave evidence of such provisions. As I understood it, the ACCC accepted that there was nothing express. Secondly, and more importantly, I cannot be satisfied that if asked the parties might not proffer some qualifications or exceptions to such broad obligations and it follows, I think, that there was not the required meeting of minds and commitment. I do not think that the fact that they might be considered as “necessary and sensible” (as the ACCC put it) is sufficient.

I said that the answer to the first question was an important indicator of whether or not there was an agency relationship. I also cautioned about placing too much emphasis on control as an indicator of whether or not there was an agency relationship. In the result, I found that the company was not the agent of the firm or partnership.
Bray v Hoffman-La Roche addressed the very issue involved in this case, that is to say, whether foreign corporations were carrying on business in Australia under the Trade Practices Act at the time of alleged contraventions of s 45(2) of the Act. The issue arose in an application under O 9 r 7 of the Federal Court Rules 1979 (Cth) to set aside service of the originating process upon them or, in the alternative, to discharge the order giving leave to serve that process.
The case involved a class action against companies in the Hoffman-La Roche, Aventis and BASF groups of companies which were alleged to have entered into and carried into effect an international price fixing and market sharing arrangement in respect of vitamin products manufactured and sold by them and their subsidiaries. A number of the respondent companies were foreign corporations and leave to serve them outside Australia was required. That leave was granted ex parte.
Merkel J considered the application of the Trade Practices Act to conduct outside of Australia. That issue turned on whether the foreign respondents were carrying on business in Australia at the time of the alleged contraventions. Merkel J said that that was the relevant time and not the time of the service of the proceeding.
Merkel J said that Parliament could have included a provision which gave the Act extra‑territorial operation where the conduct had consequences in Australia (Meyer Heine Proprietary Limited v The China Navigation Company Limited and Another (1966) 115 CLR 10). However, it did not do so and the expression of carrying on business should be given its ordinary or usual meaning (18 [60]). His Honour said that whether a corporation was carrying on business in Australia was a question of fact and he referred to authorities which have considered the meaning of the word, “business”. His Honour said that it was not necessary that a foreign corporation have a place of business in Australia before it could be said that it was carrying on business in Australia (at 19 [63]). His Honour noted that the Australian subsidiaries of the foreign respondents carried on business in Australia and the question was whether they did so on their account or on account of their parent companies.
His Honour referred to Smith, Stone & Knight v City of Birmingham and Adams v Cape Industries and then addressed a submission put to him that, in effect, the companies, including the parent and the subsidiary, were a group of companies operating at a global level and that the subsidiary should be seen as an integrated part of a global enterprise and, therefore, as the agent of the parent. Merkel J rejected this submission on the basis that it was not consistent with established authority (21 [72]).
His Honour decided that the Australian subsidiaries were conducting their own businesses and not their parent’s business. He relied on the following matters:
(1)the Australian subsidiaries held their own assets (including bank accounts) in their own names and employed employees and purchased and sold products in their own names;
(2)their businesses were not confined to the class vitamins (i.e., the vitamins the subject of the proceeding) or to products supplied by other companies in their respective groups;
(3)the accounts of each of the subsidiaries were included in the Consolidated group accounts, but that was commonplace with subsidiaries and accorded with established accounting and regulatory requirements;
(4)there may have been some overlapping board appointments in respect of the subsidiaries and the regional or parent companies in the respective groups but, for the most part, the subsidiaries had different boards to the European or regional parent;
(5)the evidence did not suggest that the Australian subsidiaries were not maintained as distinct or separate entities or that the parents had disregarded corporate boundaries;
(6)the European and regional parents did not appear to hold assets in Australia, save for intellectual property rights and shares in the Australian subsidiaries. They had no premises, offices or employees in Australia and, in general, did not purport to engage in business activities in Australia;
(7)in terms of foreign direction and control, his Honour said that something more was required than indirect legal and commercial capacity of the parent companies to control and direct the subsidiaries, plus the parent’s involvement in implementing the cartel arrangement, before the corporate veil between the subsidiaries and their parents is lifted on a finding made that each of the subsidiaries is carrying on its business as agent for the parent;
(8)his Honour was not satisfied at that stage that the foreign respondents were carrying on business in Australia. That conclusion might need to be revisited if the applicant was able to establish that some of the foreign respondents engaged in sufficient business activity in Australia in their own right (for example, by supplying group products to an Australian subsidiary) or that the parent’s involvement in the implementation of the cartel arrangement in Australia was sufficient to constitute carrying on business in Australia (at 22-23 [77]-[81]).
In April International Marketing Bennet J considered an application to set aside service of a proceeding on an overseas corporation to discharge the order giving leave to serve. Her Honour appears to have taken the view that implementation of a cartel arrangement was sufficient to constitute carrying on business in Australia. Her Honour said (at 523 [72]):
The Commission has established a prima facie case that APP Singapore carried on business in Australia through its branch office, APP Australia, which acted under its direct control. The involvement of the APP overseas respondents in implementing the AAA Club arrangements in Australia is also sufficient to constitute their carrying on business in Australia. Finally, there is prima facie evidence that Indah Kiat carried on business in Australia by supplying paper to customers in Australia through its agent, APP Australia.
The test of when a corporation incorporated overseas and with a subsidiary operating in Victoria/Australia is carrying on a business in Victoria/Australia involves a consideration of a number of factors and the evaluation of the significance of the various factors before reaching a conclusion. Although the English Court of Appeal in Adams v Cape Industries and Merkel J in Bray v Hoffman-La Roche refer to agency or lifting the corporate veil, I do not think they are using those terms in a narrow sense. By that I mean I do not think the notion is confined to the ability to enter into contracts on another’s behalf. That is, according to the English Court of Appeal, a powerful factor but it is not a decisive factor. A number of matters are to be considered.
I think that the relevant matters are those identified by Merkel J in Bray v Hoffman-La Roche rather than those identified by the English Court of Appeal in Adams v Cape Industries, some of which are not particularly relevant to the issue before me. Nevertheless, there are some common matters.
Yazaki did provide substantial capital to AAPL and from time to time it has provided guarantees, indemnities and letters of comfort in respect of AAPL. As far as control is concerned, and leaving aside AAPL’s supply of WHs to TMCA, Yazaki appears not to have exercised any significant control over AAPL’s business with its other major customers, such as GMH and Mitsubishi Australia. There does not appear to have been any substantial control exercised in practice through the board of directors. AAPL had no general authority to enter into contracts on behalf of Yazaki and, in fact, I do not think there was any evidence of a specific authority conferred by Yazaki on AAPL. The additional matters identified by Merkel J in Bray v Hoffman La-Roche, favour the respondents. AAPL held its own assets (including bank accounts) in its own name and employed employees and purchased and sold products in its own name. AAPL produced its own financial accounts. There was some use by AAPL of Yazaki branding. AAPL conducted a substantial business in terms of turnover and employees, and I do not think it can be said that it was not maintained as a distinct and separate entity. Yazaki itself had no premises, offices or employees in Australia and it did not purport to engage in business activities in Australia.
I am not aware of any norm in terms of the relationship between an overseas holding company and its local subsidiary. I am prepared to accept that Yazaki exercised a fairly high level of control over AAPL. The matters which the ACCC identified and which I think are of particular significance are as follows:
(1)the extensive power Yazaki had under AAPL’s articles;
(2)the fact that AAPL was making losses and was only surviving because of Yazaki’s support;
(3)the fact that there were agreements under which Yazaki determined the rate of consideration; and
(4)the frequency with which AAPL reported to, and communicated with, Yazaki as illustrated by the document referred to above (at [316]).
Despite these matters, I think the matters earlier identified (at [360]) mean that it cannot be said that AAPL was acting as Yazaki’s agent or that both Yazaki and AAPL were conducting the whole of the business apparently conducted by AAPL.
The ACCC’s alternative argument that both Yazaki and AAPL were conducting the business in Victoria/Australia of supplying WHs to TMCA is much stronger. That is because of the degree of direction and control exercised by Yazaki over the supply of WHs to TMCA. I refer to the findings set out above (at [336]-[343]). If one looks at the process of supply as a continuum from bidding for the supply contracts to the actual supply some years later, Yazaki had a substantial involvement in the process. The first crucial step involved Yazaki to the exclusion of AAPL. Yazaki made the bids for supply of WHs in Australia and by reason of its anti-competitive conduct, the decision as to which bids would be genuine. AAPL supplied certain parts to TMCA. Insofar as the supplier had control over what those parts were to be, the “supplier” was Yazaki not AAPL. Insofar as there were local bids, they were, as the respondents submit albeit in a different context, “by way of formality only”. As to the post allocation of supply stage, although there was a good deal of contact between AAPL and TMCA after the awarding of supply, it is apparent that Yazaki maintained a level of control over and involvement in the process. That can be seen from Mr Ward’s evidence-in-chief where he refers to the need for approval from Yazaki for the idea to combine the floor WHs, the prices put forward in June 2004, the “Obeya” meetings, the Australian prices to be submitted by Yazaki in July 2005, reviewing position with Yazaki in May 2006, and the contact which Mr Nagasawa had with the TBU, including draft requests for approval in relation to the 2002 Toyota Camry Minor RFQ.
I think that Yazaki’s involvement in the supply of WHs to TMCA was such that, in relation to that business, Yazaki and AAPL were carrying on business in Australia.
Was Yazaki otherwise connected with the jurisdiction of Victoria?
The particular connections referred to in s 8(1) of the CPRA are persons carrying on business within the jurisdiction ((1)(a)), bodies corporate incorporated or registered under the law of the jurisdiction ((1)(b)), persons ordinarily resident in the jurisdiction ((1)(c)), and persons otherwise connected with the jurisdiction ((1)(d)). Section 8(2) provides that in the case of those persons or bodies corporate referred to in s 8(1), the Competition Code extends to conduct, and other matters and things, occurring or existing outside or partly outside the jurisdiction (whether within or outside Australia).
There is a difference between the structure and wording of s 5(1) of the Act, and the structure and wording of s 8(1) and (2) of the Competition Code. Section 5(1) of the Act states expressly that it extends to the engaging in conduct outside Australia by the nominated entities, including (and relevant to this case) bodies corporate carrying on business within Australia. By contrast, s 8(1) identifies the entities to which the Competition Code applies and then s 8(2) identifies the extension of the Competition Code to conduct outside the jurisdiction. However, I do not think this difference in structure and wording leads to any difference in result. The plain intent of s 8(1) and (2) is to extend the application of the Competition Code to conduct outside the jurisdiction of Victoria by those persons and entities falling within one of the categories in s 8(1). My conclusion that Yazaki was carrying on business in Australia, including Victoria, in relation to the supply of WHs to TMCA, means that the Competition Code also applies to Yazaki and its conduct outside of Australia.
In case I am wrong in my conclusion that Yazaki was carrying on business in Australia, including Victoria, in relation to the supply of WHs to TMCA, the ACCC advanced an alternative argument that Yazaki was a body corporate otherwise connected with the jurisdiction of Victoria. The ACCC said that the concept of otherwise connected was one of broad import and included any connection provided it was not too remote. The outer limits were provided by the boundaries of constitutional competence and those boundaries have been the subject of a number of High Court authorities, including Pearce v Florenca (1976) 135 CLR 507 and Mobil Oil Australia Pty Limited v The State of Victoria and Another [2002] HCA 27; (2002) 211 CLR 1. In the latter case, Gaudron, Gummow and Hayne JJ said (at 34 [48]):
It is clear that legislation of a State parliament “should be held valid if there is any real connection – even a remote or general connection – between the subject matter of the legislation and the State”. This proposition has now twice been adopted in unanimous judgments of the Court and should be regarded as settled. That is not to say, however, that there may not remain some questions first, about what is meant in a particular case by “real connection” and, secondly, about the resolution of conflict if two States make inconsistent laws.
(See also Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 14; Lipohar v The Queen (1999) 200 CLR 485 at 534-535 [123] per Gaudron, Gummow and Hayne JJ.)
The ACCC submits that the matters it identified in support of its argument that Yazaki carried on business within Australia, either in the broad sense or in the more constrained sense, support a conclusion of a real connection between Yazaki and the jurisdiction of Victoria such that Yazaki falls within s 8(1)(d) of the Competition Code.
The respondents submit that s 8(1)(d) should not be construed in the expansive way advanced by the ACCC. First, it submits that the question of constitutional competence and the question of the proper construction of s 8(1) should not be conflated. In other words, it should not be assumed that the Parliament of Victoria has legislated to the limits of its constitutional competence. The section first needed to be interpreted in the usual way (Chubb Insurance Company of Australia Ltd and Others v Moore and Others [2013] NSWCA 212; (2013) 302 ALR 101 at 132-133 [147] per Emmett JA and Ball J). That proposition is correct. The second and third submissions overlap and concern the proper construction of s 8(1) and (2). They are that, having regard to the extrinsic material, it was not an object of the Competition Code to go any further than the extra-territorial application of the Act. As I understand it, the effect of this submission in a case such as the present is that the Competition Code extends no further than a company carrying on business within Australia. In addition, or alternatively, (and this was the respondents’ third submission) s 8(1)(a), (b) and (c) identifies a genus and that is a person, including a body corporate that has a legal or physical presence in Australia, and s 8(1)(d) should be construed to cover that class of case and no more. The submission was that Yazaki had neither a legal nor a physical presence in Australia and, therefore, was not otherwise connected with Australia, including Victoria.
The Explanatory Memorandum for the CPRA stated that the reform of competition policy was recommended in the Hilmer Report being a report delivered to the Heads of Government in Australia on or about 25 August 1993 and endorsed by Australian Governments. It stated that the object of the CPR Bill was to enact legislation that would give effect to that reform. The Explanatory Memorandum explained how the scheme was to operate throughout Australia and it contained a statement that the principal purpose of the scheme was to apply Part IV of the Trade Practices Act to those persons and things that did not or may not fall within the constitutional competence of the Commonwealth, in particular individuals and partnerships. It did that by applying Part IV to all persons, including corporations as well as individuals and partnerships. The Explanatory Memorandum stated that clause 8 made it clear that the Competition Code is not to be construed as merely applying in the territorial area of the State and that the extra-territorial competence of the legislature of the State is being used.
The Second Reading Speech for the CPRA Bill refers to the agreement of Heads of Government to implement the proposals in the Hilmer Report for a national competition policy. The Speech refers to the policy that all jurisdictions will co-operate to ensure that universal and uniformly applied rules of market conduct apply to all market participants regardless of their form of ownership. The Speech contains the following statement:
This bill deals principally with the application of the Competition Code to persons within the State’s legislative competence and allows for a national scheme to administer the code. The code is created by the Commonwealth’s Competition Policy Reform Act 1995 and essentially consists of part IV as applied to persons rather than corporations as well as the remaining relevant provision of the Trade Practices Act.
The Hilmer Report contained a recommendation that a slightly modified version of the rules currently contained in Part IV of the Trade Practices Act should apply universally to all business activity in Australia. It referred to areas not subject to Part IV of the Trade Practices Act because of limits on the Commonwealth’s power: some government-owned businesses, some professions, and other unincorporated businesses. The Report makes the point that in terms of the regulation of market conduct, the exceptions have no rational basis and states by reference to overseas experience that no other jurisdiction appeared to discriminate between businesses depending on the legal form of ownership. The Report discusses the possible options for extending the rules to cover currently exempt non-incorporated businesses. It contains a number of recommendations, including the following:
15.2The exemptions from the general conduct rules for certain non-incorporated businesses be removed by a referral of powers from the States to the Commonwealth. If this could not be agreed, the Committee would favour States enacting application legislation to the same effect. If this were not to occur in a timely manner, the Committee considers that the Commonwealth should expand the application of the conduct rules by reliance on existing constitutional heads of power.

The extrinsic material establishes that one of the principal purposes or objects of the CPRA was to apply the rules prohibiting anti-competitive conduct to all businesses regardless of their form of legal ownership. Other than the passage in the Explanatory Memorandum to which I have referred, there is no reference in the extrinsic material to the extra-territorial operation of the CPRA. There is nothing to suggest that it was intended to operate more widely than the Act. Equally, there is no express statement to the effect that it was not intended to operate any more widely than the Act.
There are a number of difficulties with the respondents’ submission. First is the one I have already mentioned that there is no express statement that the Competition Code is not to have any wider application than the Act. Another is that I do not think that the terms of the section are unclear or ambiguous in any way. Ambiguity may not be necessary before the Court can consider the extrinsic material, but it is another thing to allow what at the very best would be an implication in the extrinsic material to determine the meaning of a section which is otherwise clear. Yet a further difficulty with the respondents’ argument is that the construction they advance would give s 8(1)(d) very limited work to do. A legal presence in the jurisdiction presumably means incorporated in the jurisdiction, and physical presence in the jurisdiction presumably means an office or a factory in the jurisdiction. It is difficult to think that an overseas company with an office or factory here would not be carrying on business in the jurisdiction.
In my opinion, there is no reason for restricting the scope of s 8(1)(d) by reference to a genus of legal or physical presence in the jurisdiction said to arise by reason of s 8(1)(a), (b) or (c). The use of the word “otherwise” is significant because it means any real connection other than those identified in the preceding paragraphs of s 8(1) is sufficient. I note that in Australian Competition and Consumer Commission v Prysmian Cavi E Sistemic Energia SRL (formerly Pirelli Cavi E Sistemi Energia SPA) and Others (No 4) [2012] FCA 1323; (2012) 298 ALR 251 at 285 [264]-[265], Lander J construed the section in the same way.
If I am wrong in concluding that Yazaki was carrying on business in Australia in relation to the supply of WHs to TMCA, I hold that, for the same reasons, Yazaki was otherwise connected with the jurisdiction of Victoria. I do not need to decide whether Yazaki was otherwise connected with the jurisdiction of Victoria by reason of its involvement with AAPL’s business as a whole.
A Market in Australia
An element of the contravention of s 45(2)(a)(ii) and (b)(ii) is that the provision of the arrangement or understanding has the purpose, or would have or be likely to have the effect of substantially lessening competition, and competition means, by reason of s 45(3) and s 4E, competition in a market in Australia in which the corporation or a body corporate related to the corporation supplies goods or but for the provision would be likely to supply goods.
The respondents contend that a market in Australia is also an element of the contravention of s 45(2)(a)(i) and (b)(i). This contention raises a question of statutory construction.
Neither party disputes that proof of a market in Australia is not an element of a contravention of s 44ZZRK, that is, giving effect to a cartel provision. However, in view of my earlier findings, that section is not relevant.
On the one hand, s 45(3) defines “competition”, but that word is not used in s 45(2)(a)(i) or s 45(2)(b)(i). Nor is the word used in s 4D(1) which contains a definition of an exclusionary provision and refers not to competition as such, but to persons who are competitive with each other. Furthermore, there is a deeming provision in s 4D(2) as to when a person is competitive with another person, and that does not refer to a market in Australia. On the other hand, there is no reason apparent from the sections themselves for a difference based on whether or not there is a market in Australia between the two types of contraventions.
It seems to me that the first group of matters are the more compelling and, in any event, I think the matter is probably covered by authority. In ASX Operations Pty Ltd and Another v Pont Data Australia Pty Limited (No 2) (1991) 27 FCR 492 the Full Court said (at 495):
In Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 74, Franki J pointed out that in s 4D no mention is made of “market”. Whilst “competition” as it appears in s 45 (and s 45A) is defined in s 45(3) by reference to competition in a “market”, the term “competition” does not appear in those limbs of s 45 which proscribe exclusionary provisions. In dealing with exclusionary provisions, s 4D(1) itself requires that the parties in question be “competitive” with each other, and s 4D(2) deems persons to be competitive only if the criteria it specifies are met. But those criteria are not framed in terms of competition in a “market”.
These provisions were introduced by the Trade Practices Amendment Act 1977 (Cth), which followed upon the presentation in August 1976 of the report of the Trade Practices Review Committee (the Swanson Committee). In its report (pars 4.116‑4.117) the Swanson Committee had recommended the prohibition of what are now styled exclusionary provisions and had said that in its view “such matters are appropriate to be listed by reference to their competitive effect between the parties and other persons, and not by reference to market”.
(See Norcast v Bradken at 78 [261] per Gordon J.)
The respondents referred to authorities which they submit support a contrary view: Wright Rubbish Products Pty Ltd v Bayer AG [2008] FCA 1510; [2008] ATRR 42-258; Wright Rubbish Products Pty Ltd v Bayer AG [2010] FCAFC 85; SPAR Licensing Pty Ltd v MIS QLD Pty Ltd (No 2) [2012] FCA 1116. I reject that submission because it seems to me that those cases proceed by reference to the way in which the applicant pleaded its case and they did not address this particular issue of statutory construction.
In my opinion, there is no need for the ACCC to establish a market in Australia in relation to the alleged contraventions of s 45(2)(a)(i) and s 45(2)(b)(i). The fact that in the general section of its Amended Statement of Claim the ACCC has pleaded a market in Australia does not preclude it from establishing contraventions of s 45(2)(a)(i) and s 45(2)(b)(i) without proving a market in Australia.
As to the alleged contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii), the ACCC alleges in its Amended Statement of Claim that at all material times there has been a market in Australia for the supply of Toyota Camry WHs. It describes this market as the Australian Toyota Camry WH market. It pleads in support of this case that there was demand in Australia for Toyota Camry WHs from TMC and TMCA, and that that demand was met by manufacturers and suppliers of Toyota Camry WHs, including Yazaki and SEI or their respective subsidiaries, AAPL or SEWS-A or both.
The Trade Practices Tribunal in Re Queensland Co-operative Milling Association Ltd (1976) ATPR 40-12; (1976) 8 ALR 481 at 517 described the concept of market in the following terms:
We take the concept of a market to be basically a very simple idea. A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them. ... Within the bounds of a market there is substitution — substitution between one product and another, and between one source of supply and another, in response to changing prices. So a market is the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive. Let us suppose that the price of one supplier goes up. Then on the demand side buyers may switch their patronage from this firm’s product to another, or from this geographic source of supply to another. As well, on the supply side, sellers can adjust their production plans, substituting one product for another in their output mix, or substituting one geographic source of supply for another. Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives.
It is the possibilities of such substitution which set the limits upon a firm’s ability to “give less and charge more”. Accordingly, in determining the outer boundaries of the market we ask a quite simple but fundamental question: If the firm were to “give less and charge more” would there be, to put the matter colloquially, much of a reaction? And if so, from whom? In the language of economics the question is this: From which products and which activities could we expect a relatively high demand or supply response to price change, i.e. a relatively high cross-elasticity of demand or cross-elasticity of supply?
The respondents submit that there was no market in Australia because the relevant “consumer choices” or demand side substitution decisions were made in Japan by TMC, not by TMCA in Australia, and the relevant competition between the sellers accordingly was (or would have been but for the anti-competitive conduct) in Japan between Yazaki and SEI, not in Australia between AAPL and SEWS-A. That is to say, despite the fact that the goods were supplied in Australia by companies with substantial operations in this country to a company which also had a substantial operation here, there is no market in Australia because the competition between potential suppliers and the purchaser’s decision as to which entity was to supply occurred in Japan and not in Australia.
The market in Australia pleaded by the ACCC is a market for the supply of Toyota Camry WHs. The competition which may take place in Australia between AAPL and SEWS-A in relation to the supply of WHs to other motor vehicle manufacturers is not relevant.
In relation to the supply of Toyota Camry WHs in Australia, the bid or tender for supply and the allocation of supply occurred in Japan. Prices were resubmitted in Australia, but that was a matter of formality only. The prices submitted in Japan were a starting price in terms of the prices at which the WHs will be supplied in Australia in the manner I have described earlier in these reasons. There is then a period in the order of three years where there are fairly intense communications and discussions between the supplier in Australia (i.e., AAPL and SEWS-A) and TMCA where consideration is given to design changes, other variations and VE proposals and revised prices are submitted. Where AAPL was involved, Yazaki kept a close watch over these events, but at the same time, AAPL exercised some autonomy and discretion. Once supply commenced, it took place in Australia between two companies in Australia and the purchase price was paid in Australia. The contract for the supply of any particular WH or batch of WHs was made between the two companies in Australia with the purchaser (i.e., TMCA) advising the supplier from time to time of the quantity of WHs it required. The Australian purchaser was regularly, both before and after supply commenced, seeking price reductions from the Australian supplier. The Australian purchaser placed significant pressure on the Australian supplier in terms of the prices at which WHs were supplied and it no doubt had high quality control standards which were to be met.
It might be said in a very broad sense that the presence of SEWS-A in Australia brought competitive pressure to bear on AAPL and its relationship with TMCA in relation to the supply of WHs in Australia. However, the real place of competitive activity in terms of the supply of WHs to TMCA in Australia was in Japan and it involved Yazaki, SEI and TMC.
In Emirates v Australian Competition and Consumer Commission [2009] FCA 312; (2009) 255 ALR 35 (at [66]), Middleton J said that the place of contracting was not determinative of the geographic locality of the relevant market. His Honour suggested that the fact that some marketing and negotiating occurred in Australia was relevant to the question of whether there was a market in Australia.
In Auskay International Manufacturing & Trade Pty Ltd v Qantas airways Limited (No 5) [2009] FCA 1464 (at [40]), Tracey J agreed that the place of negotiations and where the contracts were entered into are relevant, but not decisive considerations. His Honour expressed the view that for there to be a market in Australia, there must be competitive activity in Australia. The competitive activities he identified included advertising campaigns, offers of efficient services or superior goods, or better quality after-sales service, or the ready availability of spare parts. His Honour said that it had yet to be authoritatively determined whether there is a market in Australia where there is competitive activity in Australia, but the terms and conditions upon which goods or services are provided are negotiated and agreed upon wholly outside Australia. In the case before me, the actual contracts of supply of WHs in Australia were almost certainly entered into in Australia, but the competitive activity took place in Japan.
In ACCC v Air New Zealand, Perram J considered whether there was a market in the case of international air freight involving inbound air cargo services between Hong Kong and Sydney. His Honour considered whether the provision of services in Australia in relation to the inbound cargo provided a foundation for finding a market in Australia. His Honour said that the correct question was “where are the relevant substitutable services provided to consumers of those services” (at 456 [321]). He found that the substitutable services were provided in Hong Kong, being that of taking possession of the cargo and loading it onto the airlines. The ground handling services provided in Sydney were not substitutable for the services provided in Hong Kong.
His Honour considered the significance of the fact that there were market participants in Australia. He did not think that that was in any way decisive because the key consideration was not where the “switching decision” was made, but where it was given effect (i.e., in Hong Kong) (at 457 [323]). His Honour concluded that the relevant markets for the transport of cargo to ports in Australia from Hong Kong were not markets in Australia.
Not without some hesitation, I have concluded that there was no market in Australia for the supply of Toyota WHs. In my opinion, the key consideration is whether all or some of the competitive activity in relation to the supply of Toyota WHs in Australia took place in Australia. I do not think that it did. Such competitive activity as there was in relation to the supply of Toyota WHs in Australia took place in Japan.
This conclusion means that s 45(2)(a)(ii) and s 45(2)(b)(ii) did not apply to the Overarching Cartel Agreement, the 2003 Agreement or the 2008 Agreement.
Conclusions
The ACCC has established that AAPL contravened s 45(2)(a)(i) and s 45(2)(a)(ii) of the Act and the Competition Code by making an arrangement or arriving at an understanding described in these reasons as the 2002 Toyota Camry Minor RFQ Agreement and that AAPL contravened s 45(2)(b)(i) and s 45(2)(b)(ii) by giving effect to that agreement in the manner described in these reasons.
The ACCC has established that Yazaki contravened s 45(2)(a)(i) by making an arrangement or arriving at an understanding described in these reasons as the 2003 Agreement and that Yazaki contravened s 45(2)(b)(i) by giving effect to the agreement in the manner described in these reasons. Furthermore, in making the arrangement or arriving at the understanding Yazaki contravened s 45(2)(b)(i) by giving effect to the Overarching Cartel Agreement.
The ACCC has established that Yazaki contravened s 45(2)(a)(i) by making an arrangement or arriving at an understanding described in these reasons as the 2008 Agreement and that Yazaki contravened s 45(2)(b)(i) by giving effect to the agreement in the manner described in these reasons. Furthermore, in making the arrangement or arriving at the understanding Yazaki contravened s 45(2)(b)(i) by giving effect to the Overarching Cartel Agreement.
I will hear from the parties as to appropriate orders in light of these conclusions and further directions concerning relief.

I certify that the preceding three hundred and ninety-nine (399) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.
Associate:
Dated: 24 November 2015

Citation:	Australian Competition and Consumer Commission v Yazaki Corporation (No 2) [2015] FCA 1304
Parties:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v YAZAKI CORPORATION and AUSTRALIAN ARROW PTY LTD ACN 071 956 057
File number:	SAD 321 of 2012
Judge:	BESANKO J
Date of judgment:	24 November 2015
Catchwords:	COMPETITION – allegation of contraventions of the Competition and Consumer Act 2010 (Cth) and the Competition Code of Victoria – where the first respondent was incorporated in Japan – where the second respondent was incorporated in Australia – where the second respondent was the wholly owned subsidiary of the first respondent – whether the first respondent was carrying on business in Australia – whether the first respondent was otherwise connected with the jurisdiction of Victoria – whether there was a market in Australia for the goods supplied by the respondents – whether the real place of competitive activity was in Australia or Japan – Competition and Consumer Act 2010 (Cth), Competition Code of Victoria ss 4E, 5. COMPETITION – allegation of an overarching cartel agreement between the first respondent and another corporation in Japan – allegation that the first respondent and the other corporation entered into two separate agreements in relation to the supply of goods – whether the overarching cartel agreement and two agreements contained exclusionary provisions – whether the overarching cartel agreement and two agreements contained provisions controlling price – whether the first respondent gave effect to the overarching cartel agreement by making the two agreements – whether the first respondent gave effect to the two agreements by discussing, agreeing and submitting prices – whether the first respondent gave effect to the two agreements by directing the second respondent to submit the agreed prices in Australia – whether the submission of prices by the second respondent was an act of giving effect by the first respondent – where the first respondent admitted discussing, agreeing and submitting prices – whether the second respondent’s continued supply of goods was an act of continuing to give effect by the first respondent – whether the first respondent continued to give effect to the two agreements by not disclosing the existence of the agreements and not competing – whether acts of omission can give effect to an agreement – Competition and Consumer Act 2010 (Cth), Competition Code of Victoria ss 4D, 44ZZRK, 45(2), 45A. COMPETITION – allegation that the second respondent and another corporation in Australia entered an agreement in relation to the supply of goods – whether the agreement contained exclusionary provisions – whether the agreement contained provisions controlling price – whether the second respondent gave effect to the agreement by discussing and agreeing prices – whether the second respondent gave effect to the two agreements made by the first respondent by submitting prices – whether the second respondent continued to give effect to the two agreements by not disclosing the existence of the agreements and not competing – whether a third party can give effect to a prohibited agreement – whether the third party is required to have knowledge of the agreement – Competition and Consumer Act 2010 (Cth), Competition Code of Victoria ss 4D, 44ZZRK, 45(2), 45A. PRACTICE AND PROCEDURE – objections to evidence – whether evidence should be excluded under the general discretion to exclude evidence – whether evidence was admissible as an opinion of conduct and discussions observed by the witness – Evidence Act 1995 (Cth) ss 78, 135. Held: First respondent contravened the Competition and Consumer Act 2010 (Cth) and the Competition Code of Victoria by giving effect to the overarching cartel agreement, and making, and giving effect to, the two separate agreements. Second respondent contravened the Competition and Consumer Act 2010 (Cth) and the Competition Code of Victoria by making and giving effect to the agreement in Australia.
Legislation:	Competition and Consumer Act 2010 (Cth) ss 4, 4D, 4E 4F, 5, 8, 44ZZRD, 44ZZRK, 45, 75B, 77, 84 Competition Policy Reform (Victoria) Act 1995 (Vic) ss 5, 8 Evidence Act 1995 (Cth) ss 78, 135, 140 Interpretation of Legislation Act 1984 (Vic) s 38 Trade Practices Act 1974 (Cth) s 45A, 155 Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth)
Cases cited:	ACN 007 528 207 Pty Ltd (in liq) v Bird Cameron (Reg) and Others [2005] SASC 204; (2005) 91 SASR 570 Adams v Cape Industries plc [1990] 1 Ch 433 ASX Operations Pty Ltd and Another v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 ASX Operations Pty Ltd and Another v Pont Data Australia Pty Limited (No 2) (1991) 27 FCR 492 Auskay International Manufacturing & Trade Pty Ltd v Qantas airways Limited (No 5) [2009] FCA 1464 Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (2001) ATPR 41-815 Australian Competition and Consumer Commission v Admiral Mechanical Services Pty Ltd [2007] ATPR 42-174 Australian Competition and Consumer Commission v Air New Zealand and Another (No 1) [2012] FCA 1355; (2012) 207 FCR 448 Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157; (2014) 319 ALR 388 Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6) [2010] FCA 704; (2010) 270 ALR 504 Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (1999) 92 FCR 375 Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd and Others [2007] FCA 794; (2007) 160 FCR 321 Australian Competition and Consumer Commission v Prysmian Cavi E Sistemic Energia SRL (formerly Pirelli Cavi E Sistemi Energia SPA) and Others (No 4) [2012] FCA 1323; (2012) 298 ALR 251 Australian Competition and Consumer Commission v TF Woollam & Son Pty Ltd and Others [2011] FCA 973; (2011) 196 FCR 212 Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd and Others (No 3) [2007] FCA 1617; (2007) 244 ALR 673 Australian Competition and Consumer Commission v Yazaki Corporation [2014] FCA 1316 Australian Investments and Securities Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 Bray v F Hoffman-La Roche Ltd and Others [2002] FCA 243; (2002) 118 FCR 1 Bray v F Hoffman-La Roche Ltd and Others (2003) 130 FCR 317 Chubb Insurance Company of Australia Ltd and Others v Moore and Others [2013] NSWCA 212; (2013) 302 ALR 101 Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 Consolo Ltd and Others v Bennett (2012) 207 FCR 127 Emirates v Australian Competition and Consumer Commission [2009] FCA 312; (2009) 255 ALR 35 Federal Commissioner of Taxation v Tasman Group Services Pty Ltd [2009] FCAFC 148; (2009) 180 FCR 128 Giorgianni v The Queen (1985) 156 CLR 473 Hope v The Council of the City of Bathurst (1980) 144 CLR 1 Hughes v Western Australian Cricket Association (Inc) and Others (1986) 19 FCR 10 Industrial Equity Limited and Others v Blackburn and Others (1977) 137 CLR 567 J McPhee & Son (Australia) Pty Ltd and Others v Australian Competition and Consumer Commission (2000) 172 ALR 532 Jones v Dunkel (1959) 101 CLR 298 La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4; (2011) 190 FCR 299 Lipohar v The Queen (1999) 200 CLR 485 Lithgow City Council v Jackson (2011) 244 CLR 352 Mackay v Dick (1881) 6 App Cas 251 Meyer Heine Proprietary Limited v The China Navigation Company Limited and Another (1966) 115 CLR 10 Mobil Oil Australia Pty Limited v The State of Victoria and Another [2002] HCA 27; (2002) 211 CLR 1 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others (1992) 110 ALR 449; 67 ALJR 170 News Limited and Others v South Sydney District Rugby League Football Club Limited and Others (2003) 215 CLR 563 NMFM Property Pty Ltd and Others v Citibank Ltd (2000) 107 FCR 270 Norcast S.ár.L v Bradken Ltd and Others (No 2) (2013) 219 FCR 14 Pearce v Florenca (1976) 135 CLR 507 R v Portus and Another; Ex parte Federated Clerks Union of Australia (1949) 79 CLR 428 Re Queensland Co-operative Milling Association Ltd (1976) ATPR 40-12; (1976) 8 ALR 481 Secured Income Real Estate (Australia) Limited v St Martins Investments Proprietary Limited (1979) 144 CLR 596 Seven Network Ltd and Another v News Ltd and Others [2009] FCAFC 166; (2009) 182 FCR 160 Smith, Stone & Knight Ltd v Lord Mayor, Alderman and Citizens of City of Birmingham [1939] 4 All ER 116 SPAR Licensing Pty Ltd v MIS QLD Pty Ltd (No 2) [2012] FCA 1116 Sydleman v Beckwith (1875) 43 Conn 9 Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286 Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 Tradestock Pty Ltd v TNT (Management) Pty Ltd and Others (1978) 17 ALR 257 Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 Walker v Wimborne and Others (1976) 137 CLR 1 Walplan Pty Ltd v Wallace (1985) 8 FCR 2 Wright Rubbish Products Pty Ltd v Bayer AG [2008] FCA 1510; [2008] ATRR 42-258 Wright Rubbish Products Pty Ltd v Bayer AG [2010] FCAFC 85 Yorke and Another v Lucas (1985) 158 CLR 661 Beaton-Wells C and Fisse B, Australian Cartel Regulations Law, Policy and Practice in an International Context, (Cambridge University Press, 2011) Wigmore JH, Evidence in Trials at Common Law (Chadbourn rev, 1978) Vol 7
Dates of hearing:	3, 4, 5, 8, 11, 12 December 2014
Place:	Adelaide
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	399
Counsel for the Applicant:	Mr S Doyle SC with Mr D Tynan
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondents:	Dr M Collins QC with Mr M Borsky and Ms T Spencer Bruce
Solicitor for the Respondents:	King & Wood Mallesons

Table of Corrections
1 December 2015	In paragraph 41, “TMCA and its subsidiaries” has been replaced with “TMC and its subsidiaries”.
1 December 2015	In paragraph 217, “to submit the prices to AAPL” has been replaced with “to submit the prices to TMCA”.
1 December 2015	In paragraph 369, “should be conflated” has been replaced with “should not be conflated”.
1 December 2015	In paragraph 395, “did apply” has been replaced with “did not apply”.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 321 of 2012

JUDGE:	BESANKO J
DATE OF ORDER:	24 NOVEMBER 2015
WHERE MADE:	ADELAIDE

JUDGE:	BESANKO J
DATE:	24 NOVEMBER 2015
PLACE:	ADELAIDE