Dunlop Olympic Ltd v Trade Practices Commission

[1982] FCA 31

Re: DUNLOP OLYMPIC LIMITED AND K.D. NORRISH
And: TRADE PRACTICES COMMISSION AND RONALD SOLLEY GILBERT (1982) 62 FLR 145
No. VG 146 of 1981
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Fox(1), Deane(1) and Fisher(1) JJ.

CATCHWORDS

Trade Practices - validity of notices pursuant to s.155 of the Act - whether the recipient required to furnish information or produce documents where it might tend to expose him to a penalty for contravention of the Act - objections to requirements of notices - whether information acquired by representative of a company must be acquired in his capacity as such - whether notice requires recipient to act as "detective" - whether notice be confined to meetings of manufacturers "in competition with each other" - whether notice indefinite in point of time.

Trade Practices Act, 1974, ss. 45, 155

Trade Practices - Notices under s. 155 - Validity - Exposure to penalty - Information acquired by company representative at meeting - Capacity in which acquired - Whether within knowledge or control of company - Notices not limited to meetings of competing manufacturers - Whether meetings specified with particularity - Trade Practices Act 1974 (Cth), ss. 45, 155.

HEADNOTE

The respondents served upon the appellants notices under s. 155 of the Trade Practices Act 1974. The notices required the appellants to furnish to the respondents information specified in the notices. One requirement directed the appellants to state whether any representative of the appellant company attended a particular meeting of representatives of manufacturers in Australia of stated goods or any other meeting of representatives of manufacturers at any location in Australia at any time since a date specified in the notices. The requirement then sought information as to what was said at such meetings in relation to specified subject matters. The appellants sought to challenge the validity of the notices and the particular requirements to furnish information and produce documents. On appeal,

Held: (1) Compliance with the requirements of a s. 155 notice is not excused by reason that such compliance might tend to expose the recipient of the notice to a pecuniary penalty for contravention of the Act.

Melbourne Home of Ford Pty. Ltd. v. Trade Practices Commission (1979) 36 FLR 450; Pyneboard Pty. Ltd. v. Trade Practices Commission (1982) 57 FLR 368, applied.

(2) Regardless of whether a representative of the appellant company initially attended a particular meeting of manufacturers in his capacity as such, it is at least possible that his information as to what was said should, providing that he was an officer, employee or agent concerned with the subject matter at the appropriate level, be seen as the information of the appellant company.

(3) The recipient of a s. 155 notice is required by the notice only to furnish information which is in its knowledge or control including information, however obtained, which is held on its behalf by its officers, employees or agents who are concerned, on its behalf, with the relevant subject matter.

(4) The failure to confine the requirement of a s. 155 notice to meetings of manufacturers "in competition with each other" does not result in the information sought being incapable, in a broad investigative context, of being properly seen as related to the suggested contraventions of s. 45 of the Act which the notice specifies.

(5) A notice is not invalidated as indefinite in point of time where, as a matter of construction, the notice requires the information sought to be given in respect of meetings occurring at any time from a specified date up until the date on which the notice was served on the recipient.

(6) Information as to what a representative of the appellant company said and did in relation to specified subject matters is plainly capable, in a broad investigative context, of being related to possible contraventions of s. 45 of of the Act which the notice specifies regardless of whether, upon strict analysis, it can be said that the representative was acting in his capacity as such. The requirement that the appellant company furnish such information as may be within its knowledge or control is not invalidated by any reason of any lack of the necessary element of relatedness.

(7) Appeal dismissed.

Pyneboard Pty. Ltd. v. Trade Practices Commission (1982) 57 FLR 368, referred to.

HEARING

Sydney, 1981, November 19; 1982, March 24. #DATE 24:3:1982

APPEAL

Appeal from a judgment of the Federal Court of Australia constituted by Northrop J., dismissing applications by the appellants challenging the validity of notices under s. 155 of the Trade Practices Act 1974.

P.C. Heerey, for the appellants.

A.C. Archibald, for the respondents.

Cur. adv. vult.

Solicitors for the appellants: Moule Hamilton & Derham.

Solicitor for the respondents: B.J. O'Donovan, Commonwealth Crown Solicitor.

H.W. FRASER

ORDER

1. THE appeal be dismissed with costs. Appeal dismissed with costs.

JUDGE1

Dunlop Olympic Limited ("Dunlop") is a company incorporated in Victoria. Among other activities, it manufactures replacement lead-acid automotive batteries. Mr. K.G. Norrish is the General Manager of Dunlop's Battery Division.

On or about 28 August, 1980, a document in the form of a notice under s.155 of the Trade Practices Act, 1974 ("the Act") and addressed to Dunlop was served upon Dunlop. A document in similar form, addressed to Mr. Norrish, was served upon him. Each document was signed by the Deputy Chairman of the Trade Practices Commission, Mr. Ronald Solley Gilbert, and stated that Mr. Gilbert had reason to believe that the recipient was "capable of furnishing information and producing documents relating to matters that constitute, or may constitute, contraventions of s.45 of the Act" namely that Dunlop and certain other manufacturers in Australia of replacement lead-acid automotive batteries had since 1 July, 1977:
"(a) made arrangements or arrived at understandings containing provisions that have the purpose or effect (or likely effect) of fixing, controlling or maintaining -

(i) the price for, or a discount, allowance, rebate or credit in relation to, the goods supplied by the parties to the said arrangement or understanding, or by any bodies corporate that are related to any of them, in competition with each other; and

(ii) the price for, or discount, allowance, rebate or credit in relation to, a re-supply of the goods by dealers being persons to whom the goods are supplied by the parties to the said arrangement or understanding, or by any bodies corporate that are related to any of them; and

(b) given effect to provisions of the kind referred to in (a)(i) and (ii) above".
Each notice required the recipient to furnish, in writing, the information specified in Schedule I to the notice and to produce the documents specified in Schedule II.

In these proceedings, Dunlop and Mr. Norrish challenge the effectiveness of the notices. They say, first, that neither of them can be required to furnish the information or produce the documents which the notices seek for the reason that so to do "might tend to expose either or both of them to a penalty for contravention of the Act". In this regard, they seek to overturn the decision of a Full Court of this Court in Melbourne Home of Ford Pty. Limited v. Trade Practices Commission (No. 1) ((1979) 36 F.L.R. 450) where it was held that the fact that the furnishing of information or the production of documents might tend to expose a person to a penalty for contravention of the Act did not invalidate a request in a notice under s.155 that such information be furnished or that such documents be produced or provide a valid excuse for a refusal to answer such questions or produce such documents on the part of the person to whom the notice was given. Alternatively, Dunlop and Mr. Norrish attack a number of particular requirements to furnish information and to produce documents contained in each notice. The attacks on particular requirements are based on a variety of grounds.

Northrop J., who dealt with the proceedings at first instance, rejected both the general attack on the validity of the notices and the attacks on particular requirements to furnish information. His Honour dismissed the proceedings and ordered that Dunlop and Mr. Norrish pay the Commission's and Mr. Gilbert's costs. The present appeal is from his Honour's Judgment and Orders to that effect.

During the course of argument on the appeal, the Court indicated that it proposed to follow the decision of the previous Full Court in the Melbourne Home of Ford Case (No.1) (supra), to the effect that compliance with the requirements of a s.155 notice is not excused by reason of the consideration that such compliance might tend to expose the recipient of the notice to a penalty for contravention of the Act. The reasons which led us to adopt that approach correspond with the reasons set out in the joint judgment of the Full Court in Pyneboard Pty. Limited v. Trade Practices Commission (24 February, 1982, unreported). The general attack on the validity of the notices accordingly fails.

The particular requirements to furnish information which Dunlop and Mr. Norrish attack are those set out in requirements 3, 4, 5, 6, 7, 8, 9 and 10 in Schedule I of the notices. The objections to particular requirements to produce documents are either based upon, or correspond with, objections to particular requirements to provide information: if the latter objections fail, the former will fail with them.

As has been mentioned, the notices served upon Dunlop and Mr. Norrish are in similar terms. It is convenient to adopt the course followed in argument and refer only to the notice given to Dunlop. We shall refer to that notice as "the notice".
Definitions

The notice contains a number of definitions of terms which it uses. For present purposes, it is relevant to mention the following:

""goods" or "the goods" means replacement lead-acid automotive batteries of any voltage;

"manufacturer" means any person whose business at any time since 1 July 1977 has included the manufacture in Australia of any of the goods;

"representative" means any officer, employee or agent; and

the singular includes the plural and the plural includes the singular".

He shall, in referring to particular requirements, use the words "goods", "the goods", "manufacturer" and "representative" in the above defined sense. We turn to a consideration of the validity of the various impugned requirements in Schedule I of the notice addressed to Dunlop.
Requirement 3

This requirement directs Dunlop to state whether any representative of Dunlop attended a meeting of representatives of manufacturers at the Sydney premises of the Royal Automobile Club on or about 10 February, 1978 or any other meeting of representatives of manufacturers at any location in Australia at any time since 1 July, 1977, at which any person present said anything to any other person relating to a number of specified matters. The specified matters are:

"(c) any list price (whether a recommended list price or otherwise) for any of the goods;

(d) any price charged, or to be charged, for any of the goods by any manufacturer or any dealer;

(e) any discount, allowance, rebate, or credit given or allowed, or to be given or allowed, in relation to the supply of any of the goods by any manufacturer or any dealer;

(f) any other term or condition in relation to the supply of any of the goods by any manufacturer or any dealer; or

(g) the dates on which the prices, discounts, allowances, rebates, credits or any other terms or conditions referred to in (3)(c), (d), (e) or (f) became, or were to become, effective".

It was argued, on behalf of Dunlop and Mr. Norrish, that requirement 3 is objectionable for the reason that it extends to require information about meetings which officers, employees or agents of the company might have attended other than in their capacity as such. Such information would not, so the argument proceeded, be in the knowledge of the company since it would be in the knowledge of the particular representative other than in his capacity as an officer, employee or agent of the company. To require the company to furnish such information would be to require it to act in the role of "detective" and to ascertain information which it did not possess. That so, it is said, is not a permissible use of s.155 of the Act.

One difficulty of the above argument is that it appears to assume, as an unqualified proposition, that any information acquired by a representative of a company other than in his capacity as such remains discretely compartmentalized and is to be regarded as irrelevant both to his activities as a representative of the company and to the assessment of corporate activity and information. Another difficulty is that the argument seems to assume that it is possible to draw a clear and precise line between when an officer of a company is acting as a representative of the company and when he is acting in some other capacity. These assumptions appear to us, at least in the context of requirement 3, to be somewhat unreal. The subject matters which requirement 3 specifies are plainly subject matters related to Dunlop's business. Information as to any discussion between any representative of Dunlop and a representative or representatives of another manufacturer or other manufacturers on those subject matters is, at the least, liable to be of legitimate concern and interest to Dunlop. One would expect that such information would, as a matter of course, commonly be passed on to others in the employ of Dunlop or made use of by the representative in the course of his activities as such. Regardless of whether the representative in question initially attended the particular meeting in his capacity as such, it is at least possible that his participation in the particular discussion could not be isolated from his position as a representative of Dunlop and that his information as to what was said should, provided he was an officer, employee or agent concerned with the subject matter at an appropriate level, be seen as the information of Dunlop.

We also find difficulty with the unqualified proposition that a s.155 notice cannot legitimately require the recipient to act as a "detective". It is true that the recipient of a notice can only be required to furnish information which is in his knowledge or control and cannot be required to undertake a general investigation of matters beyond his control. That is not however to say that compliance with the requirements of a s.155 notice may not well involve a degree of investigation to determine matters which are properly to be seen as being within the information or control of the recipient of a notice. This is particularly the case where the recipient is a company. Apart from documentary and computerized material which it owns, the knowledge and information of a company will ordinarily be the knowledge and information of its officers. The officer of a company responsible for formulating its response to a s.155 notice will commonly find it necessary to make inquiries of responsible officers, employees and agents as to relevant information in the same way as is necessary when a company is required to provide particulars, answer interrogatories or discover and produce documents in compliance with court orders in litigation or to provide information in compliance with the requirements of innumerable statutory provisions.

The real answer to the appellants' argument is, however, to be found in the nature of the requirement which the notice imposes. The basis of the notice is, as the notice expressly recites, that Mr. Gilbert has reason to believe that Dunlop "is capable of furnishing information and of producing documents". In using that formulation, the notice follows the express words of s.155 of the Act. Those words do not mean that the recipient of a notice is capable, by acting as a "detective", to ascertain information or obtain possession of documents which are not within its knowledge, possession or control. They mean that the recipient of the notice is capable of furnishing information or producing documents which lie, in the case of information, within its knowledge or control or, in the case of documents, within its possession or control. In other words, Dunlop is required by the notice only to furnish information which is in its knowledge or control including information, however obtained, which is held on its behalf by its officers, employees or agents who are concerned, on its behalf, with the relevant subject matter.

The second ground upon which requirement 3 is attacked is that it is not confined to meetings of manufacturers "in competition with each other". This ground corresponds to a ground of attack which was rejected in Pyneboard Pty. Limited v. Trade Practices Commission (supra). It suffices to say, for the purposes of the present case, that we do not consider that the failure so to confine the requirement results in the information sought being incapable, in a broad investigative context, of being properly seen as related to the suggested contraventions of s.45 of the Act which the notice specifies.

The third objection to requirement 3 is that it is indefinite in point of time for the reason that there is no "cut-off date". The answer to this argument is that, as a matter of construction, the notice, in our view, requires the information sought to be given in respect of meetings occurring at any time from 1 July, 1977 up to the date on which the notice was served upon Dunlop. It is not to be assumed that if requirement 3 had referred to meetings taking place up to the date on which the information sought is provided, we would necessarily have been of the view that the requirement was for that reason, invalid.

In the result, Dunlop and Mr. Norrish have failed to make good the attack on the validity of requirement 3.
Requirement 4

Requirement 4 directs Dunlop, in the event of an affirmative answer to requirement 3, to state, in respect of each relevant meeting, particulars relating to: the date and time of the meeting, where it was held, who attended it, who called it, who chaired it, what was said in relation to any of the matters specified in requirement 3 and any consensus arrived at or decision made in relation to those matters.

The first ground of attack on requirement 4 is that the requirement, being postulated on an affirmative answer to requirement 3, falls with requirement 3. Since requirement 3 remains undemolished, this ground of attack fails.

The other ground of attack is that requirement 4 refers to what representatives of Dunlop may have done or said other than in their capacity as such. In part, this ground of attack corresponds to the argument against requirement 3 which has already been considered and rejected. It is also argued that the failure to limit the requirement to things said by representatives of Dunlop in their capacity as such has the consequence that the information sought by the requirement lacks the requisite element of "relatedness" to the "matter" which the notice specifies as constituting or possibly constituting contraventions of s.45 of the Act (see, generally, Pyneboard Pty. Limited v. Trade Practices Commission (supra)). We are not persuaded that that is so. Information as to what a representative of Dunlop said and did in relation to the specified subject matters is plainly capable, in a broad investigative context, of being related to the possible contraventions of s.45 of the Act which the notice specifies regardless of whether, upon strict analysis, it can be said that the representative was acting in his capacity as such. The requirement that Dunlop furnish such information as may be within its knowledge or control is not invalid by reason of any lack of the necessary element of relatedness.

Requirements 5 and 6

Requirements 5 and 6 direct Dunlop to state whether, at any time since 1 July, 1977, any communication has passed between representatives of Dunlop (requirement 5) or between Dunlop or any representative thereof and any other manufacturer or any representative thereof (requirement 6) relating to any meeting referred to in 3 or anything said, discussed, done or proposed thereat. Requirement 6 (communications with any other manufacturer or representative thereof) also refers to communications relating to any of the specified matters in requirement 3. Requirement 5 (communications between representatives of Dunlop) also refers to communications relating to any communication referred to in requirement 6.

The grounds of attack on requirements 5 and 6 correspond to grounds which have already been examined and rejected. Both requirements, it is said, are bad because they contain "no cut-off date". Both requirements are also attacked for the reason that they are not limited to communications between manufacturers "in competition with each other" and are not limited to representatives of Dunlop "acting in their capacity as such". The considerations which led us to reject these various arguments when advanced in relation to other requirements lead us to reject them when advanced in relation to requirements 5 and 6.
Requirement 7

Requirement 7 directs Dunlop to furnish certain information in the event that the answers to "any part of (5) or (6)" was in the affirmative. The attack on requirement 7 was built on the foundation of the alleged invalidity, in whole or in part, of the requirements 5 and 6. It falls with the failure of its foundation.
Requirement 8

Requirement 8(a) requires Dunlop to state, in respect of any of the goods, whether, at any time since 1 July, 1977, the company or any representative thereof has sent a copy of any price list issued by it to any other manufacturer or any representative thereof or has received a copy of any price list issued by or on behalf of any other manufacturer or any representative thereof. Requirement (b) requires, in the event of an affirmative answer to requirement 8(a), certain information in respect of each such price list.

The objections made to requirement 8 correspond to objections which have already been considered and rejected, namely, the lack of a "cut-off date", the fact that the reference to "representatives" is not confined to representatives "acting in the capacity as such" and the fact that the reference to "manufacturers" is not limited to manufacturers in competition with Dunlop. The reasons given for rejecting these objections in relation to other requirements lead us to reject them in relation to requirement 8.
Requirements 9 and 10

Requirement 9 requires Dunlop to provide certain information, as at 1 July, 1977, in respect of goods supplied by it. Requirement 10 requires details, in respect of the goods supplied by the company, of any relevant variations since 1 July, 1977. Objection is taken to requirement 10 because of the alleged lack of "a cut-off date". Objection is taken to requirements 9 and 10 because they are not limited to goods sold in competition with other manufacturers. Again, for reasons already given, we would reject these objections.
Schedule II

Schedule II sets out a number of categories of documents whose production is required. As has been mentioned, the attack on parts of Schedule II was linked to the attack made on various parts of Schedule I. Rejection of the arguments advanced in support of the attack on particular parts of Schedule I leads inevitably to the rejection of the attack on Schedule II.
Conclusion

In the result, Dunlop and Mr. Norrish have failed to show that Northrop J. was in error in wholly rejecting their attacks on the s.155 notices. The appeal should be dismissed with costs.