Australian Competition & Consumer Commission v Boral Ltd - [1999] FCA 889

Australian Competition & Consumer Commission v. Boral Ltd [1999] FCA 889

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v BORAL LTD

NO. VG 79 OF 1998

HEEREY J

25 JUNE 1999

MELBOURNE

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

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

#DATE 25:06:1999
JUDGE:
HEEREY J
DATE: 25 JUNE 1999
PLACE: MELBOURNE

REASONS FOR JUDGMENT

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

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

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

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

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

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] FCA 889
Decision Date: 25 JUNE 1999

CaseChat Overview and Summary

The Federal Court of Australia in Melbourne considered a case involving the Australian Competition and Consumer Commission (ACCC) suing Boral Ltd and Boral Besser Masonry Limited (BBM) for alleged contraventions of section 76(1)(a) of the Trade Practices Act 1974. Boral Ltd denied engaging in the market for concrete masonry products, while BBM admitted to such engagement. The ACCC sought to amend the statement of claim to include a case of secondary liability against Boral under sections 76(1)(c), (d), or (e) of the Act. The proposed amendments were based on new economic analysis evidence from Professor Hay and Mr Kus, which suggested a connection between Boral's financing and BBM's pricing practices.

The legal issues before the court included whether the proposed amendments were permissible under the circumstances, specifically considering the late timing of the request, the need for a new case to be raised at such a late stage, and the potential impact on the respondents' ability to prepare their defence. The court examined the nature of the amendments, whether they were merely particularising existing evidence, and the implications of allowing the amendments for the conduct of the trial. The court also considered whether the economic analysis proposed by the respondents could impact the legal determination of BBM's defence and whether this warranted secondary liability against Boral.

Justice Heerey determined that the application for amendment should be refused. He found that the proposed amendments introduced a new case at a late stage, which would impose an undue burden on the respondents and likely necessitate an adjournment of the trial. Justice Heerey emphasised the importance of allowing the trial to proceed as scheduled, highlighting the contrast with cases where amendments were sought before the trial date was fixed. The court concluded that the amendment would likely lead to a significant delay in the proceedings, affecting the efficient administration of justice. Consequently, the application for amendment was dismissed, and the costs of the motion were awarded to the respondents.

Orders