Bradken Limited v Norcast S.ár.L

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FEDERAL COURT OF AUSTRALIA

Bradken Limited v Norcast S.ár.L [2013] FCAFC 123

Citation: Bradken Limited v Norcast S.ár.L [2013] FCAFC 123
Appeal from: Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235
Parties: BRADKEN LIMITED, NICHOLAS FRANK HUGO GREINER and BRIAN HODGES v NORCAST S.ÁR.L
File number: VID 291 of 2013
Judges: ALLSOP CJ, MANSFIELD J & JACOBSON J
Date of judgment: 8 November 2013
Catchwords:

PRACTICE AND PROCEDURE – application to allow an appeal by consent under section 25(2B) of the Federal Court of Australia Act 1976 (Cth)
Legislation:

Australian Consumer Law, s 18
Competition and Consumer Act 2010 (Cth), ss 44ZZRB, 44ZZRD, 44ZZRJ, 44ZZRK, 75B
Federal Court of Australia Act 1976 (Cth), s 25(2B), (2BB), (2C)

Federal Court Rules 2011 (Cth), rr 36.41(1)(g), 39.05(f), 39.11

Cases cited:

Citigroup Pty Ltd v Mason (2008) 171 FCR 96 (discussed)
Commonwealth Bank of Australia v Walker (2012) 289 ALR 674 (discussed)
Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235 (discussed)
Norcast S.ár.L v Bradken Limited (No 3) [2013] FCA 283 (discussed)
Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64 (discussed)

VTAG v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 141 FCR 291 (cited)

Date of hearing: 30 October 2013
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 38
Counsel for the Appellants: A Archibald QC and M O'Bryan SC
Solicitor for the Appellants: King & Wood Mallesons
Counsel for the Respondent: C Scerri QC, M Borsky and A Barraclough
Solicitor for the Respondent: Allens Linklaters
Counsel for the Intervener: J Sheahan SC
Solicitor for the Intervener: Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 291 of 2013
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

BRADKEN LIMITED
First Appellant

NICHOLAS FRANK HUGO GREINER
Second Appellant

BRIAN HODGES
Third Appellant
AND:

NORCAST S.ÁR.L
Respondent

JUDGES:

ALLSOP CJ, MANSFIELD J & JACOBSON J

DATE:

8 NOVEMBER 2013

PLACE:

MELBOURNE

REASONS FOR JUDGMENT (DECISION)

OVERVIEW

  1. On 30 October 2013 the Court indicated to the parties (and to the Australian Competition and Consumer Commission (ACCC) which was granted a limited right to intervene) that the Court was not prepared to make orders by consent allowing an appeal from the primary judge.  Our reasons for declining to make the orders are set out below.

  2. The essential reasons why we decided not to make the orders sought stem from an existing decision of a Full Court of this Court referred to later.  The principle is that the exercise of the power to allow an appeal by consent is dependent upon the identification, to the satisfaction of the Court, of arguable appellable error in the decision below.  The Court’s satisfaction as to what amounts to arguable error depends upon the nature and complexity of the proceeding and the nature of the error that is identified.

  3. Here, the proceeding was of considerable complexity and public importance.  The primary judge made detailed factual findings and determined…

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Details
Case
[2013] FCAFC 123
Decision Date

CaseChat Overview and Summary

The case of Bradken Limited v Norcast S.ár.L involved an application to allow an appeal by consent, under section 25(2B) of the Federal Court of Australia Act 1976 (Cth), concerning the resolution of commercial disputes between Bradken Limited, Castle Harlan, Inc, and Norcast Wear Solutions, Inc. The primary issues before the Court were whether the Full Court should allow an appeal by consent and if it should make orders setting aside the primary judge's findings and orders. The appeal was initiated by Bradken Limited, along with two individuals associated with the company, contesting the primary judge's findings of bid rigging and misleading or deceptive conduct, and the subsequent declarations and orders made against them.

The legal issues the Court needed to decide centred on the Court's power to allow an appeal by consent under section 25(2B) of the Federal Court of Australia Act 1976 (Cth) and the necessity of demonstrating an arguable appealable error to justify such an allowance. The Court examined the precedents set in Telstra Corporation Limited v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64, which established that the Court must be satisfied of the existence of an appealable error as a condition for allowing an appeal by consent. The Court also considered the applicability of the approach in Citigroup Pty Ltd v Mason (2008) 171 FCR 96; 250 ALR 7, which further clarified the requirements for satisfying the Court of the presence of an arguable appealable error.

The Court, after considering the submissions and the relevant authorities, concluded that it was under a duty to be satisfied that there was an appealable error before it could allow an appeal by consent. The Court found that the primary judge's determination of the existence of bid rigging and misleading or deceptive conduct, along with the consequential declarations and orders, constituted significant findings that warranted the Court's consideration. Given the importance of these findings and the potential implications for the parties involved, the Court was not prepared to allow the appeal by consent without further examination. The Court also noted that the parties, including sophisticated commercial clients advised by experienced lawyers, were aware of the availability of using Part 39 of the Federal Court Rules 2011 to set aside the orders in the original jurisdiction. However, the Court declined to exercise its appellate jurisdiction to allow the appeal by consent, as it was not convinced that there was an arguable appealable error present in the case.

The Court's decision was based on the need to ensure that the Court's power to allow an appeal by consent was exercised judiciously and with due consideration of the significance of the primary judge's findings. By declining to allow the appeal by consent, the Court upheld the importance of the appellate process and the necessity for the Court to be satisfied of the presence of an arguable appealable error before exercising its jurisdiction in such matters.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

ALLSOP CJ, MANSFIELD J
The Court notes that the appeal did not proceed in any event. Following the Full Court’s decision on 30 October 2013, the parties reached a different agreement to resolve the issues between them by consent. On 1 November 2013, the parties secured the orders in terms of (2) and (3) in [7] above under Rules 39.05(f) and 39.11 of the Federal Court Rules 2011 in the original jurisdiction of the Court, and then, in effect simultaneously, discontinued the appeal, with no order as to costs. It should be stated at the outset that this method of consensual settlement, clearly available under the Rules, was always available to the parties. The parties (especially such sophisticated commercial clients, advised by such highly experienced lawyers) should be taken to have been aware at all times of the availability of the use of Part 39 to set aside the orders in the original jurisdiction. The parties, however, invoked the appellate jurisdiction of the Court – to have the appeal allowed and have orders by an appeal court (by consent) set aside the orders at first instance. It was that course that this Court was not prepared to undertake, for the reasons that follow.The primary judgment The primary judge found that the first appellant, Bradken Limited (Bradken), had entered into a bid rigging arrangement with Castle Harlan, Inc (Castle Harlan) by 8 March 2011 whereby Castle Harlan agreed to bid for Norcast Wear Solutions, Inc (NWS) and Bradken agreed not to do so, and had thereby contravened s 44ZZRJ of the CC Act, and further that Bradken, by giving effect to that arrangement between 8 March 2011 and 6 July 2011, had contravened s 44ZZRK of the CC Act. Castle Harlan also contravened s 44ZZRJ of the CC Act and, by giving effect to that arrangement between 8 March 2011 and 6 July 2011, contravened s 44ZZRK of the CC Act. Declaratory orders were made accordingly. In addition, Bradken was declared to be a person involved within the meaning of s 75B of the CC Act in the contraventions by Castle Harlan. The second appellant, Nicholas Greiner, and the third appellant, Brian Hodges, were at all material times the Chairman of the Board of Directors of Bradken, and its Managing Director respectively. They were found to be persons involved within the meaning of s 75B in the contraventions by Bradken and Castle Harlan, and declarations were also made on that topic. The second set of findings, and consequential declaratory orders, concerned Bradken engaging, in the period late February 2011 to 6 July 2011, in misleading or deceptive conduct, or conduct likely to mislead or deceive, in trade or commerce in contravention of s 18 of Sch 2 to the CC Act, that is s 18 of the Australian Consumer Law (ACL), by its silence about the bid rigging arrangement and about its cooperation with Castle Harlan for the purpose of acquiring NWS and the back to back sale arrangement between them. Castle Harlan was found to have engaged in the same contravening conduct, as well as contravening s 18 of Sch 2 by representations made on 12 or 13 May 2011 and 27 May 2011. Bradken was declared to be a person involved in the contravention by Castle Harlan, and both Mr Greiner and Mr Hodges were found to be involved in the contraventions by Bradken and Castle Harlan.

Ratio Decidendi

Legal Principle Established

Established by: ALLSOP CJ, MANSFIELD J

The appellants had applied under Rule 36.41(1)(g) of the Federal Court Rules 2011 for their application to be dealt with without an oral hearing, as it was to be made with the consent of the parties. However, the Court did not accede to that request, given the significance of the conduct as determined by the primary judge and the fact that the Court was not of the view that it would make the orders, without further assistance.CONSIDERATION There is some room for debate about the circumstances in which the Court’s power to allow an appeal by consent under s 25(2B) is enlivened. For present purposes, it is not necessary to enter further upon that debate. Senior counsel for the appellants was content for the Court to proceed upon the basis that the Court must be satisfied that there is appellable error: Telstra Corporation Limited v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64 (Telstra). The Full Court, after reviewing relevant authorities at [40]-[50] concluded at [51] that it was under a “duty to be satisfied, as a condition of the exercise of its power to allow an appeal by consent, that there was an appealable error”. The Court in Telstra accepted that the satisfaction may be derived by a process less than hearing the full appeal. In Commonwealth Bank of Australia v Walker (2012) 289 ALR 674 (Walker), Perram J (with whom Rares and Flick JJ agreed) said of that conclusion at [4]-[5]:That statement, however, needs to be understood in the context of their later statement at [52]-[54], which appears to proceed on the basis that demonstration of an arguable appealable error is all that is required.This test was applied by a later Full Court in Citigroup Pty Ltd v Mason (2008) 171 FCR 96; 250 ALR 7; [2008] FCAFC 151 at [3]-[7] (Citigroup), and it is upon that basis that it seems to me appropriate to proceed. It was not explicitly argued before this court that it should now depart from the Full Court’s reasoning in Telstra, and we have not heard argument as to its correctness. In that circumstance there is no reason to depart from it. In Telstra at [54] the Full Court concluded that “without descending into the merits of the appeal, there is sufficient basis for the existence of error by his Honour to enliven the power of the Court to allow this appeal”. Their Honours then explained why they were so satisfied. It is therefore neither necessary nor appropriate to explore the correctness of that approach. The observations in Citigroup Pty Ltd v Mason (2008) 171 FCR 96 at [8]-[15] (Mason) about whether the decision in Telstra should be followed do not need to be considered. In Mason, when applying that test, counsel and the Court also proceeded on that basis. The Court notes that in Mason at [7] the Court as then constituted made the orders only because of the concession made by senior counsel [for the respondent] that arguable appellable error of law was established. That observation should be read in the context that nevertheless the responsibility of the Court is to make such an assessment, albeit no doubt assisted by the submissions of counsel.