MHG Plastic Industries Pty Limited v Australian Competition and Consumer Commission

[2000] FCA 1419

FEDERAL COURT OF AUSTRALIA

MHG Plastic Industries Pty Limited v Australian Competition and Consumer Commission [2000] FCA 1419

Trade Practices Act 1974 (Cth) s 65C

MHG PLASTIC INDUSTRIES PTY LIMITED v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
N 689 OF 1999

DRUMMOND, MATHEWS AND MANSFIELD JJ
12 OCTOBER 2000
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 689 OF 1999

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	MHG PLASTIC INDUSTRIES PTY LIMITED APPELLANT
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION RESPONDENT

JUDGES:	DRUMMOND, MATHEWS AND MANSFIELD JJ
DATE OF ORDER:	12 OCTOBER 2000
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The respondent pay the appellant’s costs of and incidental to the proceedings at first instance, including reserved costs (if any).

2.The respondent pay to the appellant its costs of and incidental to the proceedings on appeal, including reserved costs (if any), except for the appellant’s costs of and incidental to the hearing on 18 August 1999 at which date the appeal was first appointed to be heard.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 689 OF 1999

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	MHG PLASTIC INDUSTRIES PTY LIMITED APPELLANT
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION RESPONDENT

JUDGES:	DRUMMOND, MATHEWS AND MANSFIELD JJ
DATE:	12 OCTOBER 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT:

1. On 9 August 2000, we ordered that the appeal be allowed, the orders of the learned primary judge be set aside and the respondent’s originating application be dismissed.  The appellant now seeks the costs of the appeal and the costs of the proceedings below.

2. We think the appellant should have all of its costs of the trial. The respondent’s case was that the appellant had contravened s 65C the Trade Practices Act 1974 (Cth) because the helmets sold by it did not comply with AS1698-1988 in respect of “resistance to penetration” and “strength of retention system”. The learned primary judge found for the respondent, but only on the first of these bases. The appellant has now succeeded in showing that the respondent was not entitled to judgment on that basis.

3. The appellant at trial unsuccessfully challenged the respondent’s entitlement to judgment in respect of the “resistance to penetration” issue on the ground that the Crashlab test rig was not “rigid”.  That was a substantial issue at the trial.  But, although we have held that the basis on which the appellant formulated its case on this issue at trial, put again on appeal, is unsustainable, it was nevertheless reasonable for the appellant to pursue this issue.  As we said in par [44] of our reasons, the extensive technical evidence led at trial does suggest that the Crashlab rig may not have been “rigid” in the relevant sense.

4. Moreover, the case was heard and determined in a highly compressed time frame.  Proceedings were commenced on 11 May 1999 and an order for an expedited hearing was made on 14 May 1999; the trial started on 31 May and concluded two days later.  Judgment was given two weeks later again.  The Commission produced technical evidence during the trial which the appellant had to deal with as best it could, on the spot.  The case is not one in which the appellant had the luxury of extended time for mature evaluation of just how it could best present its answer to the respondent’s case which was likely to (and, once accepted by the learned primary judge, did) have draconic consequences for the appellant.

5. We also think that, with one qualification, the appellant should have all its costs of the appeal.  The appellant abandoned a number of grounds of appeal, but succeeded on one of the two grounds that were of major importance.  For the reasons already given, it was reasonable for the appellant to pursue its challenge to the correctness of the learned primary judge’s finding that the Crashlab rig was relevantly “rigid”.  Failure on appeal on this issue does not, in the circumstances, of this case, require that the appellant be denied part of its costs of the appeal.

6. The respondent’s submission that the one ground upon which the appellant was successful on appeal was a ground not argued below is not correct.  Whether the Crashlab tests relied on by the respondent to make out its case were properly performed, ie, whether they were performed with the correct size headform, was a major issue at the trial.  On appeal, the appellant succeeded because it demonstrated that the tests of critical importance to the respondent’s case were not properly performed because the wrong size headform was used.  It is true that the appellant developed, on appeal, a more sophisticated argument that the tests, for this reason, could not be relied on, than that which it put at trial.  But that is not, we think, sufficient to justify depriving the appellant of any of its costs of the appeal.

7. The one qualification relates to the costs of the hearing on 18 August 1999.  That was the date on which the appeal was first set down for hearing.  When the matter was called on, the appellant applied for and was granted an adjournment on the ground that it was not ready to proceed.  The appellant was ordered to pay the respondent’s costs of the day thrown away by the adjournment.  Other than the costs of that day, the appellant should have its costs of the appeal.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated:             12 October 2000

Counsel for the Appellant:	DEJ Ryan SC with C Champion
Solicitor for the Appellant:	Peter Kemp
Counsel for the Respondent:	SJ Gageler with JR Clarke
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	25 November 1999
Date of Judgment:	12 October 2000