Kotan Holdings Pty Ltd v Trade Practices Commission
[1991] FCA 453
•07 AUGUST 1991
Re: KOTAN HOLDINGS PTY LTD AND BIG ROCK PTY LTD and COLIN SAUL ROCKMAN
And: TRADE PRACTICES COMMISSION
No. G319 of 1991
FED No. 453
Trade Practices
(1991) 13 ATPR 41-134/102 ALR 51
30 FCR 511
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Lockhart(2) and Foster(1) JJ.
CATCHWORDS
Trade Practices - s.155 notices requiring attendance for oral examination - whether such notices may be issued when decision made to institute legal proceedings for contraventions of the Trade Practices Act - factors relevant to the issue of such notices - whether s.155 notice may be issued for the purpose of obtaining evidence for use in legal proceedings - whether s.155(1) inquiry limited to the ascertainment of whether a contravention of the Act has occurred - meaning of "matter" in s.155(1) - whether Statement of Claim manifestly untenable.
Trade Practices Act 1974 (Cth) - s.155
HEARING
SYDNEY
#DATE 7:8:1991
Counsel for the appellants: Mr C.A. Sweeney QC and Mr C.P. Comans
Solicitors for the appellants: Clayton Utz
Counsel for the respondent: Mr D.R. Williams QC and Mr S. Owen-Conway
Solicitor for the respondent: Australian Government Solicitor
ORDER
The appeal be dismissed.
The Appellants pay the Respondent's costs of the appeal.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an appeal by leave from an order of a single judge of the Court striking out the statement of claim filed in an application brought by Kotan Holdings Pty Limited, Big Rock Pty Limited and Colin Saul Rockman seeking relief against notices issued by the Chairman of the Trade Practices Commission ("the Commission") under s.155(1) of the Trade Practices Act 1974 (Cth) ("the Act").
Section 155(1) reads:-
"(1) Where the Commission, the Chairman or the Deputy Chairman has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to the making of a decision by the Commission under sub-section 93(3), a member of the Commission may, by notice in writing served on that person, require that person -
(a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information;
(b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or
(c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents." Crucial paragraphs of the statement of claim read:- "16. On a date or dates unknown to the applicants:-
(i) the Commission;
(ii) the officers of the Commission having the conduct of the matter;
(iii) the solicitor acting for the Commission in the matter; had decided that proceedings should be instituted against the addressees of the Notices, or alternatively the first applicants.
17. The Second Notices and the Third Notice were issued and the examinations have been conducted for the purpose, alternatively for purposes that include the purpose of:-
(i) providing the Commission with admissible evidence intended to be tendered in the envisaged proceedings for contravention;
(ii) relieving the Commission from the effects of its inability to obtain discovery or to interrogate in penalty proceedings;
(iii) depriving the proposed defendants of the effective benefits of their immunity from discovery and interrogation;
(iv) effectively removing from the jurisdiction of the Court the power to restrict discovery and interrogation;
(v) obtaining evidence to be used in penalty proceedings on the question of quantum of any penalty. ...
19. In the premises, the issue of the Second Notices and the Third Notice and the Examinations pursuant to them constitute:-
(i) the exercise of a statutory power for an improper purpose;
(ii) the abuse of a statutory power;
(iii) conduct beyond power."
Before the trial Judge and in this appeal, the senior counsel for the appellants (applicants), Mr C.A. Sweeney QC, submitted inter alia that, once a decision had been taken by the Commission or its officers that legal proceedings should be instituted in relation to a contravention of the Act, as is alleged in paragraph 16 of the Statement of Claim, then the Commission could not use s.155(1) to gather evidence and deliver the companies and individuals concerned into penalty proceedings in the Court "on a slab as though it were a mortuary, all trussed up, no loose ends anywhere, absolutely nothing to be said about it." As can be seen, this submission includes elements which were not expressed in the statement of claim.
The statement of claim seems to reflect principles which have been developed for the exercise of the power of a court to order an investigation pursuant to s.597 of the Corporations Law and the equivalent provisions in the Companies Acts of the United Kingdom. Thus, in In re Castle New Homes Ltd (1979) 1 WLR 1075, Slade J. distinguished a case where a liquidator was "seeking information for the purpose of assisting him in proceedings which he had already commenced or which he has made a firm decision to commence", in which case an order would not ordinarily be made, from a case where the liquidator was seeking an examination "for the purpose of eliciting information which will or may enable him to decide whether or not his company has a valid claim ... and whether or not he should bring proceedings designed to enforce such a claim", in which case an order was appropriate. See p 1089. Likewise in In re Spiraflite Ltd (1979) 1 WLR 1096, Megarry J. said at pp 1099-1100:-
"I subscribe wholeheartedly to the view that the courts should not allow the section to be used so as to enable a litigant in an action that is in being to obtain an advantage over his opponent, as in the North Australian case (In re North Australian Territory Co (1890) 45 ChD 87). At the same time, where there is no litigation in being, I should be slow to refuse an order under the section which is fairly required by the liquidator in order to discharge his difficult task merely because what emerges on the examination is likely to show that an action ought, or ought not, to be brought against the examinee, or that the examination will probably yield information which may be helpful in an action." action."
But it should be noted that, even under those principles, the mere fact that litigation is on foot will not necessarily preclude the granting of an examination order. See In re Rolls Razor Limited (1968) 3 All ER 698. What is important is the purpose of the inquiry. Thus, in In re London and Northern Bank; Ex parte Archer (1901) 85 LT 698, Vaughan Williams L.J. at p 970, referred to:-
"the rule laid down in In re North Australian Territory Co 45 ChD 87, which is to the effect that the Court in its discretion will refuse to order an immediate examination in a case where the examination has been asked for for the purpose of disturbing the ordinary course of the action to the advantage of the liquidator of the company."
Similarly, in In re Spiraflite Ltd at p 1100, Megarry J. said:-
"In this sort of case I do not think that the right approach is to embark upon an analysis of phrases such as `about to start', `imminent,' or `contemplated.' Purely as a matter of evidence I am far from satisfied that it is established that any of these expressions is applicable to the present case. However, in any case, I think the real question is one of purpose rather than degree of imminence. What primarily must be considered is why the liquidator is seeking the order. The essence of the matter is that the powers conferred by the section are given to the court in order to enable the liquidator the better to discharge his functions as such: they are not given in order to enable a litigant to improve his prospects of litigious success by giving him rights which other litigants lack, even if he is a liquidator. In all normal circumstances, to give such rights to a litigant as such is to misuse the section. What may properly be given to a liquidator qua liquidator will not be given to a liquidator-litigant qua litigant."
The power conferred by s.155(1) is, of course, different from the Corporations Law power in major respects. In the first place, the Act specifically confers upon the Commission the function of applying for an injunction in appropriate cases (see s.80(1)), and of instituting and conducting proceedings for a penalty for breaches of the Act (see s.77(1)). Accordingly, these are functions of the Commission in respect of which, as in respect of the other functions conferred upon the Commission, the power given by s.155(1) is given in aid.
Another respect in which s.155 differs from the provision of the Corporations Law is that the power is conferred upon the Commission, an administrative body carrying out administrative functions, and not upon a court. Section 597 of the Corporations Law and its equivalent provisions vest a discretion in a court, to be exercised judicially. The principles which guide the exercise of that discretion may be relevant to but do not determine the validity of an administrative decision made by the Commission. That validity must be determined according to the ordinary principles of judicial review.
The power conferred by s.155(1) is not an arbitrary power but an authority which is intended to aid the Commission in the performance of its functions. It should be exercised only for the purpose for which it was granted, that is to say, for the performance of the Commission's functions under the Act and it ought to be exercised having regard to the circumstances in which it will operate. If a s.155 notice is issued to achieve an extraneous purpose or without regard to the effect which its issue may have on the recipient of the notice, the notice will be invalid. As Northrop, Deane and Fisher JJ. said in Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 at 374:-
"it is a condition of a valid exercise of the power that it be used in good faith for the purpose for which it was conferred and with regard to the effect that the exercise of the power will have upon the person affected thereby (see Federal Commissioner of Taxation v Australian and New Zealand Banking Group Ltd (1979) 53 ALJR 336)."
To like effect are the oft-cited comments of Mason, Murphy, Brennan and Deane JJ. in O'Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1 at 48:-
"Like all statutory powers, that power must be used bona fide for the purposes for which it was conferred and that involves that its exercise be not excessive in the circumstances of the case."
Their Honours' reference to excessiveness reflects the point that, as with the exercise of other statutory powers, a s.155 notice ought not to be issued without regard being had to all relevant factors, including the effect of the exercise of the power, and that an excessive use of the power might be an indication that relevant factors were not taken into account or that the power was exercised for an extraneous purpose or that the exercise of the power was unreasonable in the sense expounded by Lord Greene M.R. in Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223. In Pyneboard, in the Federal Court, Northrop, Deane and Fisher JJ. referred to such factors in these terms at 377-8:-
"The mere fact that compliance with a requirement to furnish information or to produce documents would be burdensome will not invalidate that requirement in a s.155 notice (see Melbourne Home of Ford v Trade Practices Commission (No. 3) (1980) 47 FLR 163; Riley McKay Pty Ltd v Bannerman (1977) 31 FLR 129). Nor will objective harshness, unreasonableness or oppressiveness of a requirement in such a notice constitute an independent ground of invalidity. If invalidity by reference to these qualities is to be established, it must be by reference to the implied general limitation upon the power conferred by s.155(1) of the Act to which reference has already been made, namely, that it is a condition of a valid exercise of the power that it be used in good faith for the purpose for which it was conferred and with regard to the effect that the exercise of the power will have upon those affected thereby. It is only if the harshness, oppressiveness or unreasonableness of a requirement in a s.155 notice is, in all the circumstances, such as to warrant the conclusion that the requirement could not have been imposed in good faith or could only have been imposed to achieve a collateral purpose or without regard to the burden which it would impose upon the recipient, that harshness, oppressiveness or unreasonableness will result in invalidity."
In Brambles Holdings Ltd v Trade Practices Commission (No. 2) (1980) 44 FLR 182, Franki J. held that the issue of a notice under s.155 upon a respondent to pending proceedings in which the Trade Practices Commission was an applicant constituted a contempt of court and was beyond the power vested by s.155. Nevertheless, the fact that legal proceedings are on foot may not necessarily carry with it the result that the power to issue a s.155 notice has ceased. In Trade Practices Commission v Pioneer Concrete (Vic.) Pty Ltd (1981) 55 FLR 77 at 96, Deane J. said:-
"It is, however, in my view, plain that the mere fact that proceedings are pending in a court does not mean that any collateral or related administrative inquiry, conducted for proper administrative purposes, constitutes an interference with the due administration of justice by that court. In particular, the existence of civil proceedings in respect of certain activities does not, in my view, preclude proper administrative inquiries as to whether penal proceedings should be instituted in respect of those activities."
That view was upheld by the High Court of Australia in Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460. At 468, Gibbs C.J. said:-
"In the present case it was not shown that the person who gave the notice had any intention to interfere with the course of justice, or that there was a real risk that the exercise of the powers under s.155 would in the circumstances have that effect. The power is a drastic power and is capable of abuse and must be exercised with care. However it was not shown that its exercise in the present case would amount to a contempt of court."
Likewise, Mason J., at pp 473-4, expressed his opinion in terms of there being no contempt of court, treating that as the determining factor for authority to issue the notice. Murphy and Brennan JJ. did not express any view on this matter.
This approach follows that adopted in the United Kingdom in the cases we have mentioned, whereby an examination may be ordered notwithstanding that legal proceedings are on foot, if in all the circumstances of the case it is appropriate to do so.
Although we think the preferable view is to the contrary, we accept that there may be an arguable case that the power to issue a s.155 notice ceases when the Commission has formally resolved that legal proceedings be instituted. However, that circumstance is not pleaded in paragraph 16 of the Statement of Claim. The allegation is that, on a date or dates unknown, the Commission, officers of the Commission, and the solicitor acting for the Commission had decided that proceedings should be instituted. We cannot read this paragraph as pleading that the Commission had resolved that proceedings be instituted forthwith. The words "should be" are used not only in relation to the Commission but also with respect to the officers of the Commission and the solicitor acting for the Commission, none of whom had power to institute the relevant proceedings. The fact alleged is no more than that a firm view had been formed that this was a case in which action by way of the institution of proceedings should be taken.
Paragraph 16 therefore does not propound an arguable case that the power vested by s.155 had ceased. Nor do we read the facts alleged in paragraph 16 as founding an arguable case that the notice which issued was issued for a wrongful purpose or that the issuance of the notice was unreasonable. An investigation may be appropriate even at a late stage prior to the institution of proceedings and even when a firm view has been formed that proceedings should be and will be instituted. See e.g. In re Castle New Homes Ltd cited above and In re Spiraflite Ltd cited above.
Though it was not his preferred way of dealing with what he alleged were the facts of the case, Mr Sweeney went so far as to contend that a s.155 notice may not be issued for the purpose or for purposes that include the purpose of "providing the Commission with admissible evidence intended to be tendered in envisaged proceedings for contravention", the allegation made in paragraph 17(i) and 17(v) of the Statement of Claim. In this respect, we agree with the view taken by the trial Judge that it is not arguable that a s.155 notice may not be used for the purpose of obtaining evidence for use in contemplated legal proceedings.
Mr Sweeney's contention was that the issue of a s.155 notice was limited to assisting the Commission to obtain information which would enable it to determine whether or not proceedings by way of an application seeking an injunction or a penalty for infringement of the Act should be instituted. Mr Sweeney relied heavily upon the many occasions in which Justices of the High Court and others have used the noun "investigation" and the verb "investigate" in relation to a proceeding initiated by a s.155 notice and Mr Sweeney relied also upon the fact that, in Pyneboard Pty Ltd v Trade Practices Commission (1982-1983) 152 CLR 328, the High Court of Australia held that, in an investigation under s.155, the ordinary grounds of privilege to withhold information or documents which might lead to exposure to penalties was abrogated. Mr Sweeney referred to the remarks of Mason ACJ., Wilson and Dawson JJ. at 341 where their Honours referred to the point that the privilege may be impliedly excluded and that:-
"This is so when the object of imposing the obligation is to ensure the full investigation in the public interest of matters involving the possible commission of offences which lie peculiarly within the knowledge of persons who cannot reasonably be expected to make their knowledge available otherwise than under a statutory obligation." (the emphasis is ours).
However, s.155(1) does not contain the limitation which Mr Sweeney sought to impose on it. It is sufficient that the Commission, the Chairman or the Deputy Chairman has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of the Act or is relevant to the making of a decision by the Commission under sub-s.93(3). That is the condition expressed by the section, not a provision that the inquiry be limited to the ascertainment of whether or not a contravention of the Act has occurred.
The inquiry must relate to "a matter that constitutes, or may constitute, a contravention of this Act". The content of "matter" was discussed in Pyneboard in the Federal Court at 375-6 and in S.A. Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 369-70. If a person is capable of furnishing information or producing documents or giving evidence relating to a matter that constitutes or may constitute a contravention of the Act, that is a proper basis for the giving of a notice. It is not required that the notice be given so as to enable the Commission to ascertain whether or not a contravention of the Act has occurred. The Commission is entitled to make a full investigation, even though satisfied that there has been a contravention of the Act.
Thus, when in Pioneer Concrete Mason J. described the functions of the Commission, for the purpose of which s.155 should be exercised, his Honour said at 472:-
"These functions include the investigation of alleged breaches, the acquisition of information and the obtaining of evidence for submission to the Court in proceedings in respect of contravention."
Similarly, in Pyneboard at 343, Mason ACJ., Wilson, and Dawson JJ. said:-
"Without obtaining information, documents and evidence from those who participate in contraventions of the provisions of Part IV of the Act the Commission would find it virtually impossible to establish the existence of those contraventions. The consequence would be that the provisions of Part IV could not be enforced by successful proceedings for a civil penalty under s.76(1)."
It follows that paragraphs 17(i) and (v), read either on their own or in combination with paragraph 16, do not disclose tenable grounds that the s.155 notices had been issued for a purpose other than the purpose authorised by the statute or in excess of the power conferred by s.155, or unreasonably, in the sense that no reasonable decision maker could have issued the notices for that purpose at that time. None of the contentions made in paragraph 19 are supportable on these grounds.
Paragraphs 17(ii), (iii) and (iv) could, if read on their own, stand in a different position. These paragraphs, if read on their own, could be taken to allege a positive intent on the part of the Commission to interfere with the due process of and the course of the envisaged legal proceedings. Such a purpose could be an ulterior purpose which could invalidate the issue of the s.155 notice. The s.155 power was not conferred for such a purpose but to aid the Commission in the carrying out of its functions under the Act.
However, paragraphs 17(ii), (iii) and (iv) were not separately relied upon before the trial Judge or in the appeal and were not separately referred to in the notice of appeal. Before the trial Judge and in the appeal, these paragraphs were treated as another way of putting the points made in paragraphs 17(i) and (v), namely, that the s.155 power ought not to be used for the purpose of enabling the Commission to obtain evidence which could be used in the envisaged legal proceedings, evidence which could not be obtained in those proceedings through the ordinary process of discovery in those proceedings.
As this is the way the matters have been put rather than as positive separate claims, and as indeed paragraphs 17(ii), (iii) and (iv) appear as if they are another way of putting the matters raised in paragraphs 17(i) and (v), the matters which these paragraphs raise do not provide an arguable case.
We agree with the trial Judge that the proper course was to strike out the statement of claim. As the application remains on foot, this step will, of course, not preclude the applicants from seeking leave to replead should they wish to rely upon an arguable claim, if there be one, such as that the decision to issue the notice was unreasonable in the Wednesbury sense, or that the action was excessive, in the sense we have explained, or undertaken for an ulterior purpose, such as to coerce or intimidate the appellants or others in the industry. Such matters were not expressed by the statement of claim though they were hinted at by Mr Sweeney.
We would dismiss the appeal with costs.
JUDGE2
This is an appeal, by leave, from the interlocutory judgment of a Judge of the Court striking out the appellants' statement of claim. The issue before his Honour was whether the allegations in the statement of claim were so manifestly untenable (see Dey v Victorian Railways Commissioners (1949) 78 CLR 62 per Dixon J. at 91 - 93 and General Steel Industries Inc. v Commissioner for Railways (N.S.W.) (1964) 112 CLR 125 per Barwick C.J. at 129, 130 and 138) that they should be struck out, rather than await the trial.
Kotan Holdings Pty Ltd and Big Rock Pty Ltd are companies which deal in new and used Toyota motor vehicles in Western Australia under the business names Midland Toyota and Big Rock Toyota respectively. Michael Bruce Shannahan is a director of Kotan Holdings Pty Ltd and Colin Saul Rockman is a director of Big Rock Pty Ltd. The learned primary Judge observed that this proceeding represents "the third round in litigious sparring in which the companies and their directors seek to prevent the Trade Practices Commission from continuing with oral examinations of Messrs. Shannahan and Rockman pursuant to its powers under s. 155(1)(c) of the Trade Practices Act 1974" ("the Act").
His Honour reviewed the history of the matter in this Court in Western Australia. He correctly stated the test to be applied in striking out applications when saying:
"On a motion to strike out a statement of claim for failure to disclose a reasonable cause of action however, the order sought will not be made unless it appears that the cause of action is manifestly untenable."
I attach to my reasons for judgment a copy of the statement of claim for ease of reference, but shall set out in full at this point the contents of paragraphs 16, 17, 18, and 22 as they are, in my view, the critical paragraphs and were so treated in argument before us by the parties.
"16. On a date or dates unknown to the applicants:-
(i) the Commission;
(ii) the officers of the Commission having the conduct of the matter;
(iii) the solicitor acting for the Commission in the matter; had decided that proceedings should be instituted against the addressees of the Notices, or alternatively the first applicants.
17. The Second Notices and the Third Notice were issued and the examinations have been conducted for the purpose, alternatively for purposes that include the purpose of:-
(i) providing the Commission with admissible evidence intended to be tendered in the envisaged proceedings for contravention;
(ii) relieving the Commission from the effects of its inability to obtain discovery or to interrogate in penalty proceedings;
(iii) depriving the proposed defendants of the effective benefits of their immunity from discovery and interrogation;
(iv) effectively removing from the jurisdiction of the Court the power to restrict discovery and interrogation;
(v) obtaining evidence to be used in penalty proceedings on the question of quantum of any penalty.
18. The First and Second Examinations hitherto conducted under the Second Notices have been conducted by Mr Owen-Conway for the purposes aforesaid. ...
22. In the premises:
(i) the conduct of the Examinations constituted an abuse of a statutory power;
..."
The primary Judge identified the central issue in the case as being whether or not the Trade Practices Commission ("the Commission"):
"having allegedly decided that proceedings should be instituted against the addressees of the notices, it was proper for it to proceed to exercise its power under s. 155(1)(c) for the purpose, inter alia, of providing it with admissible evidence in such proceedings."
His Honour said that, for the purpose of deciding the motion to strike out, it was of course assumed that the allegations of fact made in the statement of claim could be made out. His Honour noted that counsel for the appellants did not contend before him that:
"if for example, the Chairman of the Commission were convinced that a contravention had occurred, he could not use s. 155 to determine whether he had evidence sufficient to support penalty proceedings. But he could not, it was said, use the power to gather evidence and deliver the companies and individuals concerned into penalty proceedings in the Court 'on a slab as though it were a mortuary, all trussed up, no loose ends anywhere, absolutely nothing to be said about it'. There was no clear line drawn here between what was a permissible use of the power and what was not in those cases in which the Commission had formed the view that proceedings should be instituted. It seems rather to be accepted, as a matter of degree, that a certain amount of evidence gathering might be permissible as a benefit of the inquiry to determine whether there was sufficient evidence to warrant the institution of proceedings. This is of course not a case in which the Commission has commenced penalty proceedings and seeks to use its investigative power to extract evidence from a defendant for use in those proceedings."
His Honour found that there was nothing in the context, policy or purpose of s. 155 to indicate that the power conferred by it is in any way compromised by the Commission having decided to undertake proceedings. His Honour said:
"The improper purposes imputed to the Commission in the statement of claim go beyond the mere collection of admissible evidence to allegedly relieving the Commission from the effects of its inability to obtain discovery or to interrogate in penalty proceedings. This latter purpose is expressed also in terms of depriving 'the proposed defendants' of their immunity from discovery and interrogatories. Yet that is precisely what s. 155 does. It overrides the privilege against self-incrimination and allows incriminating evidence so gathered to be used in penalty proceedings. In my opinion there is no more merit in the plea now than there was when substantially the same contentions were put before me on 26 March
1991. I am satisfied that on the question of improper purposes there is no reasonable cause of action."
Counsel for the appellants submitted before us that the statement of claim discloses a cause of action that the Commission abused its power under s. 155 of the Act in that the section may not be resorted to by the Commission to aid it in the discharge of its role as a litigant before the courts and that the question of the validity of any s. 155 notice must be answered by determining the purpose for which it was issued by the Commission. If issued for the purpose of investigating whether a contravention has occurred or whether proceedings should be commenced, it was not suggested that the notice would be invalid. But if issued for the purpose of obtaining "all possible evidence in advance, or for 'trussing up' intended Defendants or to overcome the Commission's inability to obtain discovery" it was said to be invalid.
Counsel for the Commission submitted that the Commission may validly issue notices under s. 155(1) directed to the appellants for the purposes specified in paragraph 17 of the statement of claim.
The case raises the question whether the issue of the s. 155 notices and the conduct of examinations pursuant thereto is, in the circumstances of the case as pleaded in the statement of claim, an abuse of the power conferred on the Commission by the section.
Paragraphs 16 and 17 of the statement of claim are central to this question. It was not argued below or before us that the mere making of a decision by the Commission to institute proceedings against persons thereafter barred the Commission from issuing notices directed to them under s. 155. Nor would such an argument be tenable. Although no reported case deals directly with the point, some guidance is given in the cases. It has been held that the power conferred by s. 155 does not come to an end once proceedings have been commenced by some person unconnected with the Commission even if in those proceedings the plaintiff seeks relief in relation to conduct which is said to constitute the contravention in relation to which the notice is sought to be given. See Trade Practices Commission v Pioneer Concrete (Vic) Pty Limited (1981) 55 FLR 77 in the Federal Court per Deane J. at 96 and in the High Court reported in (1982) 152 CLR 460 per Gibbs C.J. at 465 and per Mason J. at 472-3. Nor is the exercise of the section 155 power by the Commission after the commencement of such proceedings necessarily a contempt of the Court in which the proceedings are pending. Whether it does constitute contempt depends on the circumstances of the case. The mere exercise of the s. 155 power is not necessarily an interference which the judicial proceedings that precede it. As Bowen C.J. observed in the Pioneer Concrete Case at 85:
"Speaking generally, administrative investigation of a matter which is before a court will not constitute a contempt, though it may do so if the results are published (Johns and Waygood Limited v Utah Australia Limited (1963) VR at 79-80) or if the investigation is conducted in such a way as to interfere with the court itself or the conduct of the proceedings."
There is a question as to whether the Commission may exercise its powers under s. 155 after it has commenced proceedings in a court against the addressees to the notices which relate to the same subject matter as the proceedings (see Brambles Holdings Limited v Trade Practices Commission (No. 2) (1980) 44 FLR 182 at 185-189; the Pioneer Case in the High Court at 472-473). Whatever be the answer to this question it is a quite different proposition that the mere making by the Commission of a decision to institute proceedings against persons bars the Commission from thereafter issuing section 155 notices against them or constitutes an abuse of the power. A decision of the Commission to institute proceedings is revocable and may be made for a variety of reasons. As at present advised I incline to the view that the Commission's power to issue notices under s. 155 does not end and is not abused merely because the Commission has made a decision to institute proceedings in a court against the addressees of the proposed notices. Whether in fact there could be an abuse of power by the issue of the notices is a matter that would depend upon the circumstances.
Paragraph 16 of the statement of claim suffers from some deficiencies. First it asserts that the decision to institute the proceedings was made by:
"(i) the Commission;
(ii) the officers of the Commission having the conduct of the matter;
(iii) the solicitor acting for the Commission in the matter;"
Although not specifically stated it seems to me that each of the three assertions must be read disjunctively. The only relevant decision could be that of the Commission itself, so the allegations in (ii) and (iii) cannot remain. Also there is uncertainty about the use in paragraph 16 of the words "should be instituted". It is not clear if it means shall be instituted or should be in the sense of ought to be. However, it is not necessary for the Court to finally decide whether the mere making of a decision to institute proceedings against the addressees of s. 155 notices which precedes the actual commencement of the proceedings is beyond power or an abuse of power because counsel's argument was directed essentially to the abuse of the power in the circumstances pleaded in paragraph 17 of the statement of claim.
Paragraphs 16 and 17 must in my view be read together, not separately. It is plain that paragraph 17 assumes that the Commission has made the decision to institute the proceedings against the addressees of the notices pleaded in paragraph 16. This appears sufficiently from the use of the words "envisaged proceedings" and "proposed defendants" in sub-paragraphs (i) and (iii) respectively of paragraph 17.
Paragraph 17 refers to "the purpose" particularised in sub-paragraphs (i) to (v). It is open to debate whether the sub-paragraphs are to be read cumulatively or distributively. Read in isolation from other paragraphs in the pleading I incline to the view that the sub-paragraphs of paragraph 17 are to be read cumulatively; but if one examines paragraph 18 which refers to "the purposes aforesaid" it lends support to the distributive construction. The pleadings should be construed in my opinion against the pleader in a case of ambiguity or uncertainty so I propose to construe the sub-paragraphs cumulatively. It follows that if any one of the five sub-paragraphs are incapable of sustaining the applicants' case then the whole paragraph is likely to be struck out because an essential integer in the one purpose will have gone.
The first assertion in sub-paragraph (i) is that the second notices and the third notice were issued and the examinations conducted for the purpose of "providing the Commission with admissible evidence intended to be tendered in the envisaged proceedings for contravention". It is clear that this is a permissible use of the s. 155 power: see Pyneboard Proprietary Ltd v Trade Practices Commission (1983) 152 CLR 328 per Mason ACJ, Wilson and Dawson JJ. at 343 and Pioneer Concrete per Mason J. at 472.
Likewise the use of s. 155 for the purpose of "obtaining evidence to be used in penalty proceedings on the question of quantum of any penalty" (sub-paragraph (v) of paragraph 17) is a legitimate use of the power.
The removal of these elements of the pleaded purpose correctly in my opinion leads to the striking out of paragraph 17. I express no view on the question of whether it would be an improper use of the s. 155 power for the Commission to issue notices based on any one or more of the considerations pleaded in sub-paragraphs (ii), (iii) and (iv) of paragraph 17. In Pyneboard Mason ACJ, Wilson and Dawson JJ. said at 335-6:
"Indeed, in a civil action brought merely to establish a forfeiture or enforce a penalty the rule is that neither discovery nor interrogatories will be allowed ... See generally the discussion by Deane J. in Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Livestock Corporation
((1979) 42 FLR 204). There his Honour drew a distinction between discovery in a mere action for a penalty and discovery in an action which was not for a penalty the result of which might be used to establish a party's liability to a penalty in other proceedings (at 207-8). In the first situation, the court should, in the absence of statutory provision to the contrary, refuse to make any order for discovery, production of documents or the provision of information for the reason that an intended consequence of the discovery, production of documents or provision of information is the imposition of the penalty, this being the object of the action. His Honour described this as 'a broad and unqualified rule whose origins are apparently to be found in a reluctance on the part of the Court of Chancery to lend the aid of its discovery proceedings to the common informer (see (Earl of Mexborough v Whitwood Urban District Council (1897) 2 QB 111 at 115 and Heimann v Commonwealth (1935) 54 CLR 126 at 130))."
It is thus seriously arguable that, if the Commission issued notices under s. 155 directed to certain of the applicants for any of the purposes (if they were to be construed distributively) mentioned in sub-paragraphs (ii), (iii) or (iv) of paragraph 17, it may in some circumstances be an improper exercise of the power. I have expressed the matter in this way because I have no firm view on it other than to say that for the purposes of an application to strike out a statement of claim any such assertions would not be so manifestly untenable that they should not proceed to trial. But this necessarily presupposes that the relevant matters would be pleaded afresh in a new statement of claim.
I would therefore dismiss the appeal with costs.