Norcast S.ár.L v Bradken Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA

Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235

Citation: Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235
Parties: NORCAST S.ÁR.L v BRADKEN LIMITED, NICHOLAS FRANK HUGO GREINER and BRIAN HODGES
File number: VID 356 of 2012
Judge: GORDON J
Date of judgment: 19 March 2013
Catchwords:

TRADE PRACTICES – cartel conduct – bid rigging – requirement of a request for bids – requirement of a provision with the purpose of ensuring that one party bids but another party does not – requirement of a contract, arrangement of understanding – requirement that parties to bid rigging arrangement be in competition with one another – exception where arrangement concerns the acquisition of shares in a body corporate – conduct engaged in outside of Australia – accessorial liability – Competition and Consumer Act 2010 (Cth), Pt IV, Div 4

TRADE PRACTICES – misleading or deceptive conduct – misleading or deceptive conduct by silence – whether necessary to adduce evidence of reliance upon representations – conduct engaged in outside of Australia – accessorial liability – proportionate liability – Competition and Consumer Act 2010 (Cth), Sch 2, Pt 2-1

Legislation: Acts Interpretation Act 1901 (Cth)
Competition and Consumer Act 2010 (Cth)
Corporations Act 2001 (Cth)
Evidence Act 1995 (Cth)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)
Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth)
Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 (Cth)
Cases cited:

Application of Campbell; Gebo Investments (Labuan) Ltd v Signatory Investments Pty Ltd: Re (2005) 54 ACSR 111
Adams v Cape Industries Plc [1990] Ch 433
Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452
ASX Operations Pty Ltd v Pont Data Australia Pty Limited (No 2) (1991) 27 FCR 492
Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (No 5) [2009] FCA 1464
Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344
Australian Competition and Consumer Commission v Australian Medical Association Western Australia Branch Inc (2003) 199 ALR 423
Australian Competition and Consumer Commission v Black on White Pty Limited (2001) 110 FCR 1
Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2008] FCA 678
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2004) 141 FCR 183
Australian Competition and Consumer Commission v Pauls Ltd (2003) ATPR 41-911
Australian Competition and Consumer Commission v TF Woolam & Son Pty Ltd (2011) 196 FCR 212
Bray v F Hoffman-La RocheLtd (2002) 118 FCR 1
CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd (2005) ATPR 42-042
Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84
Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
ECH Incorporated v Halliday (2011) 192 FCR 281
Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167
Federal Commissioner of Taxation v Lutovi…

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Details
Case
[2013] FCA 235
Decision Date

CaseChat Overview and Summary

The case of Norcast S.ár.L v Bradken Ltd (No 2) involved a dispute between Norcast, a Luxembourg-based holding company, and Bradken, an Australian company, over allegations of misleading or deceptive conduct. The case was heard in the Federal Court of Australia. The primary legal issue was whether Bradken engaged in misleading or deceptive conduct by its silence and if Castle Harlan, another party involved in the transaction, also engaged in such conduct. Additionally, the court had to determine if Norcast relied on the representations made by Bradken and Castle Harlan, and whether Bradken and Castle Harlan were persons involved in the contraventions under the Australian Consumer Law. The court also examined if the representations were conduct "in trade or commerce" and if the Fair Trading Act 1987 (NSW) extended its operation to "persons otherwise connected with this jurisdiction". The court had to assess Norcast's loss and damage, and if Bradken, Greiner, and/or Hodges were liable as persons involved in Castle Harlan's contraventions, if there should be an apportionment of liability between them and Castle Harlan, and if so, in what proportions.

The court found that Bradken initiated the process and its principals were the authors of the conduct in question. It was Bradken and Castle Harlan's actions that caused the damage or loss. Given the extent of the Respondents' responsibility for the damage or loss, it was deemed just that there be no reduction in their liability. The court rejected Bradken's contentions and concluded that the orders proposed by the parties should be given effect by a specified date. If the parties could not reach an agreement, each party was required to file and serve a copy of the proposed orders supported by a two-page written submission.

The final orders of the court were that Bradken and Castle Harlan were liable for their misleading or deceptive conduct, and there was no reduction in their liability due to the extent of their responsibility for the damage or loss. The court gave the parties a deadline to bring in orders to give effect to these reasons for judgment. If the parties could not reach an agreement, they were required to file and serve a copy of the proposed orders supported by a two-page written submission.

Orders

Orders of the court

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Background

Background to the litigation

In determining the Misleading or Deceptive Conduct claim, there are also eight issues:1.Did Bradken engage in misleading or deceptive conduct by its silence?2.Did Castle Harlan engage in misleading or deceptive conduct?3.Did Norcast rely upon Bradken and/or Castle Harlan’s representations?4.Was Bradken a person involved in Castle Harlan’s contraventions within the meaning of s 2(1) of the ACL? Were Greiner and/or Hodges involved in either or both of Bradken and/or Castle Harlan’s contraventions?5.Were either or both of Bradken’s and/or Castle Harlan’s representations conduct “in trade or commerce” either within Australia or between Australia and places outside Australia?6.Does s 32(1)(d) of the Fair Trading Act 1987 (NSW), which extends the operation of that Act to “persons otherwise connected with this jurisdiction”, assist Norcast?7.What was Norcast’s loss and damage?8.If Bradken, Greiner and/or Hodges are liable as persons involved in Castle Harlan’s contraventions, should there be an apportionment of liability between them and Castle Harlan and, if so, in what proportions?C THE FACTS1. Introduction The relevant events took place around the world and across numerous time zones. Where relevant, the time zone in which a particular event took place is identified in brackets as Australian Eastern Standard Time (EST), Australian Eastern Daylight Savings Time (EDT), New York Time (NYT) or New York Daylight Savings Time (NDT). The only way to understand this case is to track the events, step by step. First, the players and then the events.2. The PlayersNorcast, NWS and Pala Norcast has no premises, employees or Board of directors. It was incorporated in Luxembourg as a holding company for NWS and other related entities. Pala Investments Limited (Pala) is its ultimate holding company. Pala, like Castle Harlan, is a private equity fund. Mr Michael Barton, a senior Vice President of Pala, gave evidence (Barton). Mr Richard Wilson, the former Chief Operating Officer of NWS (Wilson), and Mr Alan Bulckaert, the former President of NWS, also gave evidence (Bulckaert). There was evidence about two other key decision-makers within NWS and Pala: Mr Rick LaBelle, the former Chief Executive Officer of NWS (LaBelle), and Mr Jan Castro, the Chief Executive Officer of Pala (Castro). LaBelle and Castro did not give evidence. Contrary to Bradken’s contention, there is no relevant adverse inference to be drawn against Norcast arising from its failure to call Castro. Barton gave evidence about decision-making within NWS, Norcast and Pala. Barton’s evidence was that, within Pala, there was a “manager” who was responsible for each investment. Prior to the sale of NWS, the manager responsible for Norcast (and NWS) was Mr Martyn Buttenshaw. Buttenshaw reported to Barton. Buttenshaw did not give evidence. The decision to sell NWS was made following a recommendation from the management of NWS to the Board of NWS that they believed that it was an appropriate time to seek a disposal. That recommendation was referred to the ultimate shareholder, Pala. Once the decision had been made to sell NWS, Barton’s evidence was that he was responsible for instructing NWS’ advisers and conducting the sale, but that Castro was also involved and, on occasions when Barton was unavailable, Castro made decisions in his absence. Bradken

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Those contentions are rejected. First, Bradken started the process: see [79] and [82]-[91] above. The principals of Bradken (Hodges and Greiner) were the authors of it: see [84], [86], [89] and [90] above. It was the Respondents whose actions caused the damage or loss that is the subject of the apportionable claim: s 87CB. Having regard to the extent of the Respondents’ responsibility for the damage or loss, it is just that there be no reduction in their liability: cf s 87CD(1)(a). F. CONCLUSION Given the complexity of the issues, the parties bring in orders to give effect to these reasons for judgment by 4:00pm on 26 March 2013. If the parties are unable to reach agreement, each should file and serve a copy of the proposed orders supported by a two page written submission.

Ratio Decidendi

Legal Principle Established

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