Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission

[1980] FCA 160

Re: PIONEER CONCRETE (VIC.) PTY. LTD., APEX QUARRIES LIMITED, BARRY
MONTGOMERY, WILLIAM RODERICK PARR, ALAN GEORGE RASMUSSEN
And: TRADE PRACTICES COMMISSION and RONALD SOLLEY GILBERT (1980) 44 FLR 197
No. G55 of 1980
Trade Practices - Contempt

COURT

IN THE FEDERAL COURT OF AUSTRALIA

PRINCIPAL REGISTRY
GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Trade Practices - proceedings pending between recipients of s. 155 notice and third party - matters in s. 155 notice cover the same ground as issues in pending proceedings - notice issued after commencement of pending proceedings - person issuing s. 155 notice aware of other proceedings - whether issue of s. 155 notice is valid - whether service of s. 155 notice constitutes a contempt of Court.

Trade Practices Act 1974 (Cth.), s. 155

Trade Practices - Statutory notice by Acting Chairman of Commission - Action by private litigant pending - Notice relating to issues in action - Whether power to give notice - Whether notice contempt of court - Trade Practices Act 1974 (Cth), s. 155.

Contempt - Statutory notice by Acting Chairman of Commission - Action by private litigant pending - Notice relating to issues in action - Whether power to give notice - Whether notice contempt of court - Trade Practice Act 1974 (Cth), s. 155.

HEADNOTE

Held, that the service of notices in purported pursuance of s. 155 of the Trade Practices Act 1974 by the Acting Chairman of the Trade Practices Commission upon a respondent to proceedings pending at the suit of a private litigant and upon persons related to such respondent which notices related to the issues raised in the action was (i) beyond the power vested by s. 155; (ii) constituted a contempt of court.

Brambles Holdings Ltd. v. Trade Practices Commission (No. 2) (1980), 44 FLR 182; Huddart, Parker & Co. Pty. Ltd. v. Moorehead (1909), 8 CLR 330; Melbourne Steamship Co. Ltd. v. Moorehead (1912), 15 CLR 333, followed.

HEARING

Sydney, 1980, October 2-3; November 14. #DATE 14:11:1980

APPLICATION.

Application by Pioneer Concrete (Vic.) Pty. Ltd. and three individuals for declarations that notices issued to them by the Acting Chairman of the Trade Practices Commission in purported pursuance of s. 155 of the Trade Practices Act 1974 were void and ineffective.

A. M. Gleeson Q.C. and C. A. Sweeney, for the applicants.

L. J. Priestley Q.C. and J. Campbell, for the respondents.

Cur. adv. vult.

Solicitors for the applicants: Allen, Allen and Hemsley.

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

GERALDINE VANDELEUR

ORDER

The respondents pay to the applicants their costs of the proceedings as between solicitor and client.

JUDGE1

Pioneer Concrete (Vic.) Pty. Limited, Apex Quarries Limited, Barry Montgomery, William Roderick Parr and Alan George Rasmussen ("the applicants") challenge the validity of documents purporting to be notices under s. 155 of the Trade Practices Act 1974 ("the Act") dated 3 June 1980 signed by Ronald Solley Gilbert, ("the second respondent") and served upon each of the applicants. The second respondent is, and at all material times has been, Acting Chairman of the Trade Practices Commission ("the Commission"). Each of the notices is, so far as material to these proceedings, in the same form and terms. The second respondent purported to vary the notices by signing and serving upon the applicants documents described variously as "Variation to Notice Under S. 155" or "Further Variation To Notice Under S. 155" and dated 1, 4, 25 and 31 July and 28 August 1980 respectively.

The validity of the notices is attacked on two separate grounds, one going to the power of the second respondent to issue them and the other to their form.

The argument as to power arises this way. In each of the notices the second respondent asserts that he has reason to believe that the applicants are capable of furnishing information and producing documents relating to matters that constitute, or may constitute, contraventions of s. 45 of the Act namely: -
"that during and since 1978 PIONEER CONCRETE (VIC) PTY LTD., THE READYMIX GROUP LIMITED, APEX QUARRIES LIMITED, BARRO GROUP PTY. LIMITED and BORAL RESOURCES (VIC) PTY. LTD. have -
(a) made contracts or arrangements or arrived at understandings, provisions of which had the purpose, or would have had or be likely to have had the effect of substantially lessening competition; and
(b) given effect to the provisions referred to in (a) above,
in that those provisions had the purpose, or would have had or be likely to have had the effect of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of - (i) the price for pre-mixed concrete supplied and delivered in Melbourne; or

(ii) the shares of the market in Melbourne for the supply and delivery of pre-mixed concrete held,

by the corporations named above, (or by bodies corporate related to them), in competition with each other."

On 13 December 1978 Ro-Mix Concrete Pty. Limited ("Ro-Mix") commenced proceedings in this Court (V.G. No. 68 of 1978) ("the Ro-Mix proceedings") against five respondents, being the five companies referred to in each of the notices. Ro-Mix alleges that the five companies (which include the first and second applicants in these proceedings) have contravened s. 45 of the Act in terms which are identical in substance to those portions of the notices which I have set out above. Issue has been joined in the Ro-Mix proceedings which are still pending, but have not yet been heard.

In the Ro-Mix proceedings Ro-Mix seeks injunctions restraining the respondents from giving effect to the contract, arrangement or understanding which is said to contravene s. 45. It is common ground that the Commission and the second respondent were, on and prior to 3 June 1980 when the notices were signed by the second respondent, aware of the proceedings and of the allegations made therein. The third, fourth and fifth applicants are, and at all material times have been officers or employees of the first or second applicants.

Counsel for the applicants contended that s. 155 did not empower the second respondent to issue and serve the notices upon the applicants because the Ro-Mix proceedings had already been commenced in this Court; and were pending when the notices were issued and served and that in the result each respondent committed contempt of this Court.

In the Ro-Mix proceedings it is alleged that certain suppliers of pre-mixed concrete, including the two corporate applicants in the present proceedings, in contravention of Part IV of the Act, entered into and gave effect to certain anti-competitive agreements; and Ro-Mix, pursuant to ss. 80 and 82, sought injunctive relief and damages.

The contentions of the applicants may be summarised thus. In the Ro-Mix proceedings the Court is seized of a "matter" (see s. 155 (1) ) and has embarked upon the determination of that matter. For a statutory authority to exercise a power of compulsory interrogation in relation to the same matter constitutes an exercise of judicial power and an interference with the processes of the Court. The Ro-Mix proceedings have been instituted under ss. 80 and 82 of the Act and it is essential to their success that Ro-Mix establishes a contravention of Part IV. The conduct which Ro-Mix alleges is a contravention of Part IV is the very conduct which the second respondent, in the notices, says he has reason to believe contravenes Part IV. The matter that is before the Court in the Ro-Mix proceedings is the whole complex of facts alleged to constitute a contravention of the Act (see W.A. Pines Pty. Limited v. Bannerman (1980) ATPR 40-163 at p. 42,290). The Court is seized of the matter; it is subject to the judicial process. If s. 155 were to be construed as entitling the respondents to investigate that matter by exercising compulsory powers of interrogation, whilst the Ro-Mix proceedings were pending, that would constitute an exercise of judicial power and invalidate the section. Ro-Mix in bringing the Ro-Mix proceedings is vindicating public as well as private rights; and the fact that the matter is brought before the Court for determination by Ro-Mix rather than the Commission, is immaterial.

As to contempt, the applicants did not contend that this was a contumacious contempt or that the conduct of the respondents involved bad faith on their part; but that the issue and service of the notices constitutes an interference with the Ro-Mix proceedings, whether deliberate or otherwise.

Counsel for the applicants contended that, if the respondents were entitled to serve the notices upon the applicants, a consequence would be that the applicants would be obliged to answer the questions asked in the notices; yet the two corporate applicants could refuse to answer the same questions if Ro-Mix sought to interrogate them in the Ro-Mix proceedings on the ground that the answers would tend to expose them to a penalty. Under s. 155 it is no ground of refusal to answer questions that the answers might tend to expose the recipient of the notice to a penalty; the only limitation upon the use that can be made of the answers is that they cannot be tendered in criminal proceedings except proceedings for false swearing. Proceedings under Part IV are not criminal proceedings. Hence the answers to the notices in the present case could be used in the Ro-Mix proceedings by Ro-Mix notwithstanding that the defendants in those proceedings could refuse to give those answers if interrogated by Ro-Mix.

Reliance was placed upon the decision of Deane J. in Refrigerated Express Lines Pty. Limited v. Australian Meat and Livestock Corporation (1979) ATPR 40-137. Counsel contended that there would be nothing to prevent Ro-Mix subpoenaing the respondents to produce the answers to those questions and the documents produced pursuant to the notices, and using them in the Ro-Mix proceedings.

Counsel for the applicants relied on two decisions of the High Court as authority supporting his contentions and as conclusively determining both that the respondents have no power to issue the notices under s. 155 whilst the Ro-Mix proceedings are pending and that by issuing and serving the notices, they are in contempt of Court.

The two decisions are Huddart Parker & Co. Pty. Limited v. Moorehead (1908) 8 C.L.R. 330 and The Melbourne Steamship Co. Limited v. Moorehead (1912) 15 C.L.R. 333 where the High Court considered s. 15 B (1) and (2) of the Australian Industries Preservation Act 1906 ("the 1906 Act"), the forerunner of s. 155 of the Act.

The present proceedings were heard by me after similar proceedings had been heard by another Judge of this Court (Franki J.) and his Honour had reserved, but not then given, his decision. I reserved my decision and, since then, Franki J. has delivered his judgment.

In the case before Franki J. (Brambles Holdings Limited v. T.P.C. and Bannerman, judgment delivered 27 October 1980) the Commission commenced proceedings pursuant to ss. 77 and 80 of the Act for the recovery of penalties and for injunctions arising out of alleged contraventions of s. 45. The proceedings were brought against Brambles Holdings Limited ("Brambles") and others. While the proceedings were pending, the Commission served notices under s. 155 of the Act upon the respondents. The notices asked questions plainly relevant to the proceedings. His Honour held that s. 155 did not empower the Commission to serve notices upon respondents in proceedings which had already been commenced by it for penalties under s. 77 of the Act; that service of the notices constituted contempt of Court and ordered the Commission and the Commissioner of Trade Practices, to pay to Brambles its costs of the motion as between solicitor and client. His Honour discussed the two earlier decisions of the High court to which I have referred and said: -
"I do not consider it is necessary in this case to examine what the position would be were I not to have the benefit of the decisions of the High Court to which I have been referred. I consider those decisions are conclusive and so I am satisfied that s. 155 of the Act does not vest power in a member of the Commission to serve notice under it after proceedings have been commenced in a Court for a penalty, where that notice is directed to obtaining answers from a defendant which are relevant to the Court proceedings against it."

Counsel for the respondents in Brambles sought to distinguish Melbourne Steamships on the ground that s. 155 of the Act was considerably wider in its area of operation that s. 15 B of the 1966 Act in three main ways: -
(a) that the person giving the notice did not need to have any belief that an offence had been committed;

(b) s. 155 relates to both criminal and non-criminal contraventions of the Act;

(c) under the Act both the power to issue the s. 155 notice and the power to prosecute are vested in the Commission.

His Honour held that no significant difference in any relevant sense exists between the two sections. His Honour said: -
". . . it is perfectly clear that the service of the notice was for the purpose of obtaining information from the applicant which could not be obtained by a process in the Court because discovery and interrogatories were denied to the Commission.

The function of the Court is to determine issues according to law and the evidence presented to it and not to proceed in an inquisitorial manner to endeavour itself to ascertain the truth. It is clear therefore that the giving of the notice, which referred to the penalty provided by s. 155 (5), was an attempt to achieve by threats an advantage in proceedings already before the Court which could not otherwise have been obtained and therefore, in my opinion, was a clear interference with the Court."

I propose to follow the decision of my brother Franki. I agree with his conclusions and in substance with the reasons he gave to support them. I see no good purpose in recapitulating them.

Brambles and this case are not identical. In Brambles the Commission purported to issue and serve a s. 155 notice after it had commenced proceedings against Brambles. In this case the Commission purported to issue and serve s. 155 notices after another person (Ro-Mix) had commenced proceedings. A further point of distinction is that in Brambles the proceedings were for the recovery of penalties and for injunctions, whereas in the Ro-Mix proceedings, Ro-Mix seeks damages and injunctions.

Counsel for the respondents sought to distinguish Brambles from this case upon the ground that the power conferred by s. 155 is investigatory in character; and that, once the Commission has determined that a contravention of the Act has occurred, the power to issue and serve the notice is spent. He submitted that the position is different where a person, not being the Commission, commences proceedings against the recipient of the s. 155 notice in that those proceedings are beyond the control of the Commission. He submitted that on the facts of this case, there is nothing to suggest that the Commission has determined that the applicants have contravened Part IV of the Act; hence the notices are in aid of the Commission's investigatory powers. Were it otherwise, the Commission's statutory duty of enforcing the Act could be rendered futile merely because other persons instituted proceedings under the Act in which the Commission was in no way involved.

In my opinion this is not a valid ground of distinction between Brambles and this case; but more to the point, it is impossible to say, consistently with Melbourne Steamships, that the only relevant limit of the exercise of the power conferred by s. 155 (and no relevant distinction was said to exist between s. 15 B and s. 155 in this respect) is that contended for by the respondents. It is true that Isaacs J. held in Melbourne Steamships that the only relevant limitation on the power of s. 15B was that it could not be exercised against a person charged; but Isaacs J. dissented and the very point of departure between him and the majority of the Court (Griffiths C.J. and Barton J.) was that the majority did not accept that this was the only relevant limit on the power to issue a s. 15B notice. If that were the only relevant limit on the power, the result of Melbourne Steamships would have been the opposite. See in particular the judgments of Griffiths C.J. at p. 341 and Barton J. at p. 346.

I see no relevant distinction between proceedings commenced by the Commission and proceedings commenced by another person, because the basis of the reasoning of the majority in Melbourne Steamships was that, once the "matter" is within the cognizance of the Court, it becomes subject to judicial power, it becomes transit in litem pendentem. The exercise of the compulsory power of interrogation under s. 15B (hence s.155) in relation to that "matter" necessarily involves an exercise of judicial power and an interference with judicial proceedings. The "matter" referred to in the s. 155 notices and the "matter" involved in the Ro-Mix proceedings are the same in all relevant respects.

In the result, the notices are void and service of them upon the appellants constituted a contempt of Court by the respondents.

As I am satisfied that the respondents acted throughout in good faith and without any intent to commit a contempt of Court, I consider that I should do no more than order the respondents to pay the costs of the applicants of these proceedings as between solicitor and client.

In view of my findings it is not necessary to consider the alternative contentions of the applicants that the notices suffered from material defects as to form and were therefore void.

The order of the Court is that the respondents pay to the applicants their costs of the proceedings as between solicitor and client.