Trade Practices Commission v Allied Mills Industies Pty Ltd

IN THE FEDERAL COURT

OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V. G. No.29 of 1979

GEN8R:RAL DIVISION

In the matter of

THE TRADE PRACTICES ACT

1974

Between

I	TRADE PRACTICES COMMISSION

Applicant

and

ALLIED MILLS INDUSTRIES PTY.

LIMITED and OTHERS

Respondents

C O W :

SHEPPARD, J.

REASONS FOR

JUDGTENT

The respondents

in this matter, which was commenced by

application filed on

1st August, 1979, seek the production

a number of documents said by the applicant to be relevant to

the issues to be determined but privileged from inspection by the respondents upon grounds stated in affidavits to which

shall in

a moment refer. The applicant is not entitled to

discovery from the respondents because the action is an action

for penalties; The King

v. The Associated Northern Colleries

11 C.L.R.

738 at pp.741-748.

I raised with counsel the

question of whether in those circumstances there was any basis

for saying that the respondents were not entitled to

discovery from the applicant. Counsel for the applicant

said that he conceded that the respondents were entitled

to discovery with the result that the provisions	of Order 15
of the rules applied.

!	The proceedings are proceedings instituted pursuant

to ss.77 and 80 of the Act. In those circumstances the provisions

of s.157 are applicable. It has occurred to

me that the

provisions of that section may

be such as to limit the

discovery which the applicant may otherwise have been obliged

to make.

No submission to this effect was made and

I have

put that matter aside.

Although the respondents are not obliged to give dis-

covery, they are bound by the provisions of

s.155 of the

Trade Practices Act

1974, which provides that where the

Commission 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

contravention of the Act, it may, by notice in writing served

on that person, require that person to furnish information,

produce documents or give evidence. A number of such

notices have been served. In consequence a number of

documents have been produced to the applicant

and number of

other documents have come into existence as the result of

interviews which officers of the applicant have had with

various people. These documents comprise statements, notes

of interview and in at least one case formal evidence taken

from a person upon whom

a notice was served, The notices

have

been

produced

for

the

respondents '

inspec t ion .

claim

f o r p r i v i l e g e

from

inspect ion of the not ices

was

made;

but such

a claim has been

made in r e spec t o f

some

( n o t a l l )

documents which

came

i n t o e x i s t e n c e i n

consequence

the

service of

the not ices .

n o t p o s s i b l e

t o

determine from

a perusal of

the documents produced

f o r my

inspec t ion which

documents

f a l l i n t o t h i s category.

There

was

no submission by

the respondents that

document coming

in to ex i s t ence

by reason only

of the operat ion of

s.155

could

no t be

the subjec t of

claim

f o r p r i v i l e g e

from inspection.

That is no t a matter with

which I have

therefore dealt. If

the

matter

were

t o be considered ful ly , the provis ions of

s.157

of t he Act might have

a bearing upon t h e outcome of

t h e problem.

On 14 th December, 1979, Mr. L. S. Conlan on behalf of

t he app l i can t

swore what

ent i t l ed an a f f idavi t o f d i scovery .

The schedule to i n numbered paragraphs.

the a f f i d a v i t l ists a

l a rge number

of documents

Privilege

from

inspection

t h e

respondents is claimed i n r e s p e c t

t h e documents l i s t e d

i n paragraph 6.

It is t h a t claim which is challenged by t h e

respondents.

The respondents

also

challenge

the claim f o r

p r iv i l ege made

i n respect of

some

documents i n other paragraphs

of the schedule,

but I was informed by counsel that i f I were

to decide whether the respondents were entitled to see the

documents l i s t e d i n paragraph 6 it would probably not

necessary to dea l wi th the

claim

f o r p r i v i l e g e

made

i n respec t

documents

l i s t e d i n o t h e r p a r a g r a p h s

the

schedule.

Once

my decision

on the documents specified

in paragraph 6 was

made, the balance

of the matters

in question between the

parties would probably be resolved by agreement.

Paragraph 6 is headed, tfRecords of communications

between the staff

of the Applicant,

or its legal representatives,

persons other than the Respondents, and witness statements

and related documentstt.

In paragraph 4 of the affidavit

itself Mr. Conlan said that the applicant would produce for

inspection the documents listed

in paragraphs 1, 2, 3, 4 and

7 of the schedule.

It objected to the production

of the

documents listed in paragraphs 6 and 8 thereof. Paragraph

of the affidavit said that portions of documents asterisked

in paragraph

5 of the schedule repeated material contained

in documents referred to

in paragraphs 6 and 8 thereof.

Objectior, was made to producing those portions

f the documents

listed in paragraph 5 of the schedule which repeated material

contained in documents referred to in paragraphs

6 and 8 of

the schedule. Paragraphs 7 and 8 of the affidavit are as

follovis:

"7. The documents referred to in the paragraph

numbered 6 of the

Schedule are documents relating

to anticipated litigation passing between the

Applicant and third persons and made at either the

request of the Applicant's legal representatives

made for the purpose of being put before the Applicant's

legal representatives with the object

of obtaining

advice or enabling the Applicant's legal represen-

tatives to prosecute the action.

8. Additionally, as to the documents referred to

in the paragraphs numbered

6 of the Schedule, such

documents were prepared or obtained by the Applicant

for the sole or dominant purpose

of ubmission to

legal representatives

or for use

in legal

proceedings.

On 5th March,

1980, Mr.

Conlan swore

a supplementary

affidavit in which he referred to paragraphs

7 and 8 of his

affidavit of 14th December,	1979.	In paragraph 3 of that
affidavit he said:

l ! . . . .

subject to the matters hereinafter referred

to, the documents referred to in paragraph

6 of

the Schedule to that Affidavit are documents pre-

pared by me

o r at my request for the purpose of

recording the evidence available to the Applicant

so that it could be placed before the Applicant's

legal advisers to enable them to advise as to

whether or not there was sufficient evidence avail-

able to the Applicant for the institution of

contravention proceedings under the Trade Practices

Act 1974.

Paragraph 4 of M r . Conlan's supplementary affidavit @as as follows:

It is my belief that the practice of the Applicant

is not to commence contravention proceedings under

the Trade Practices Act

1974 without taking legal

advice as to the sufficiency

of evidence."

The principles which guide

me in determining the outcome

of this application have been recently stated by the High

Court in Grant

v. Downs 135 C.L.R.

674 and National Employers

Mutual & General Insurance Association

v. Waind 53 A.L.J.R.

355.

These authorities establish that

a party claiming that he is not

bound to produce documents because they are the subject

legal professional privilege will not

be entitled to maintain

the claim unless he establishes that the sole purpose for

which the documents came into existence was in connection with

the prosecution

or defence of legal proceedings or for the

purpose of obtaining legal advice.

It is to

be observed that paragraph

8 of Mr. Conlan's

first affidavit earlier set out says that the documents in

paragraph 6 of the schedule were prepared

o r obtained by the

applicant for the

sole or dominant purpose

of submission

to legal representatives or for use in legal proceedings.

In my opinion it would not be sufficient

or the applicant

to establish that the documents came into existence for the

dominant purpose of obtaining legal advice or for use in

legal proceedings. That would presuppose that there was

secondary, if subsidiary, purpose for which the documents

were to be used. The paragraph of the affidavit would

suggest that some

of the documents came into existence for

the sole purpose of obtaining advice or for use in legal

proceedings and others for

a plurality of purposes the

dominant one

of which was for the purpose of obtaining

advice or for use in legal proceedings. One is unable to

ascertain from

a reading of the paragraph and the schedule

into which category the various documents

in paragraph 6 of

the schedule fall. The view could be taken that the

applicant's evidence is accordingly unsatisfactory and that

its claim for privilege from inspection

in relation to all

the documents in paragraph

6 is not made out. That was not,

however, the view which any counsel asked

me to adopt. The

documents themselves were made available for my inspection

and it was agreed by all counsel that

I should reach

conclusion, having regard to the terms

of Mr. Conlan's

affidavits, to other evidence to which

I s all in

a moment

refer and to the terms of the documents themselves, as to

whether the applicant's claim for privilege from inspection

had been made out as to all or some

of the documents

paragraph 6 of the schedule. That is the course which

have taken.

Before re fer r ing to the

documents

themselves I should

say something about the relevant paragraphs of

Mr.

Conlan's

second a f f i d a v i t and mention

some

fur ther evidence

which

there is.

Objection was taken

to paragraph

4 of

Mr.Conlan's

a f f i d a v i t upon

t h e

basis

t h a t h i s b e l i e f

t o the

appl icant ' s

p rac t i ce no t be ing t o

commence

proceedings without taking

lega l advice

to the suff ic iency of evidence

was

i r r e l evan t .

The only relevant

fact was whether the documents

were pre-

pared or

d i d come

i n t o e x i s t e n c e s o l e l y f o r

the

purpose

e i the r o f ob ta in ing l ega l adv ice o r fo r

the

purpose of the

proceedings.

I agree with the submission

and

consider

that paragraph 4

the a f f idav i t

shou ld

be re jec ted .

have taken into account the provisions of paragraph

Mr.

Conlan3s second aff idavi t but

do not th ink

it takes the

ma t t e r fu r the r

than paragraph 8 of

h i s e a r l i e r affidavit,

p a r t i c u l a r l y

did-

no t

i n h i s

second aff idavi t seek to

co r rec t o r qua l i fy what he had

e a r l i e r said.

Produced

for the respondents ' inspect ion

was

copy

a report prepared

by Mr.

Conlan for the Regional Director of

t h e a p p l i c a n t

i n

Melbourne.

It is dated 11th April , 1978.

is amongst

t h e documents

l i s t e d i n p a r a g r a p h

of the

schedule.

Some of its contents are omitted

because it

apparent ly contained extracts or

summaries of

some

of the

documents

l i s t e d i n p a r a g r a p h

of the schedule for

which

p r iv i l ege is claimed.

The document was

tendered by the

respondents because,

i n t h e i r submission, it tended t o show

tha t

many

of the

documents which

a re the subjec t of conten t ion

could not have come into existence for any purpose

connected with the obtaining of legal advice or

of the

proceedings now pending. What it showed,

so it was

submitted, was that there had been

a lengthy investigation

by the Commission for the purpose of coming to

a conclusion

as to whether there had been on the part of the respondents

a contravention of the Act. Up to the time that

it was

written no question of obtaining legal advice had arisen.

Also produced for the respondents' inspection were

minutes of meetings of the applicant held on 21st June,1978,

and 22nd March,

1979.

Before the first of those meetings

was a recommendation that the matter

b referred to

counsel to consider whether proceedings should

be instituted.

It was resolved that the matter be referred to counsel.

The matter was not again the subject of discussion at any

meeting of the applicant until 22nd March,

1979 the second

of the meetings referred to. By that time counsel's

advice had been received

and the decision was

made to

proceed. Despite the unsatisfactory form of the applicant's

affidavits of discovery

I think that this evidence establishes

that statements taken and records

f interviews had after

21st June,

1978, were for the sole purpose either of

obtaining advice or of the proceedings which were to

instituted.

I am reinforced in that conclusion by the

increasing part which the applicant's solicitor, Mr.Alexander,

began to play in the taking of statements and the conduct	-
of interviews.

On the other hand, the report dated 11th April,

1978,

would tend to establish that none

of the documents which

came into existence up to that time were produced solely

for the purpose of obtaining advice let. alone for the

purpose of the proceedings themselves. That view of the

matter is, in my opinion, confirmed by the terms of the

minute of 21st June, 1978.

Accordingly, I have reached

the conclusion that the respondents are entitled to

inspection of all documents which came into existence

before 2lst June,	1978, and to none coming into existence
thereafter.

It is now appropriate to go to the various documents

listed in paragraph

6 of the schedule to Mr. Conlan's

first affidavit.

I have inspected each of the documents.

Sub-paragraphs 6.1 to 6.29 inclusive and 6-31, 6.32 and

6.33 refer to a number of statements, records of interview,

notes of telephone conversations, notes of interview and

letters. Many

of these are dated in

1977.

Some are dated

in 1976, 1978 and 1979.

In broad terms each of the

documents deals with the price which was being charged by

one of the corporate respondents for glucose in

and about

the years 1976 and 1977.

The persons interviewed or from

whom statements were taken were employees of companies, usually engaged in the manufacture of confectionary, who regularly purchased glucose for their manufacturing process.

I have decided that all the documents referred to

paragraphs 6.7, 6.16, 6.23, 6.28 and 6.31 are to

be made

available for the respondents' inspection. That is because

each of the documents came into existence prior to 21st June,

1978. I have decided that none of the documents referred

to in paragraphs

6.4, 6.5, 6.10, 6.11, 6.14, 6.20, 6.21, 6.22

and 6.24 are to be made available for inspection because all

such documents came into existence after 21st June,

1978.

The documents referred to in paragraphs

6.1, 6.2, 6.8, 6.9,

6.15, 6.17, 6.18, 6.25, 6.26, 6.27, 6.29, 6.32 and 6.33 are

dated as

to some of the documents prior to 21st June,

1978,

and as to the remainder after that date. Those dated prior

to 21st June,

1978, will be made available for inspection.

The others will not. The documents are in folders which

bear the numbers of the paragraphs.

I have not taken the

documents from the folders but the applicant is ordered to

produce to the respondents those documents which are dated

prior to 21st June,

1978.

The documents which are referred

to in paragraphs

6.3, 6.6, 6.12, 6.13 and 6.19 are undated,

and are said to be undated in the schedule. If the applicant

is unable to specify

a date for these documents it is ordered

to produce them to the respondents. If it is able to

specify the dates of the documents it is directed to inform

the respondents of those dates and to produce such of the

documents as came into existence prior to 21st June,

1978.

If there is any dispute about the matter it is to

be referred

back to me.

The schedule says that the documents included

in 6.19 include documents provided by

a Mr. Moschner.

cannot identify any such documents. The applicant is

10.

directed to identify such documents and to produce them

to the respondents. I should add to what

I have said

that the documents referred to

in paragraph 6.23 do not

appear to

me to bear any date, but

I have included them

amongst those to be produced because, according to the

affidavit, they relate

to an interview which took place

on 25th November,

1976.

I should also mention that there

are amongst the documents the production

of which has been

ordered, documents which various persons have produced to

the applicant.

I do not understand how

a claim for

privilege from inspection could possibly have been made in respect of those documents. I gather that that has since become the view of the applicant's advisers at least in

some cases. Inspection of some of the documents to which

I have referred has been offeree in paragraph	7 of Mr.
Conlan's second affidavit.

That concludes what

I need to say about the documents

referred to

in sub-paragraphs 6.1 to 6.29 inclusive and

6.31, 6.32 and 6.33.

I would add, however, that the

documents relate for the most part to prices being charged

various users of glucose during the years

1976 and 1977.

It may be necessary ultimately

for the applicant to attempt

to prove those prices. I would be disturbed if this task

were attempted by the calling

of large numbers of witnesses

to give oral evidence about facts which

could scarcely be

in issue. This matter was discussed during the argument.

In due course

I would expect agreement to be reached,

subject to questions of relevance,”upon the prices which

were being charged during the relevant time. Failing

agreement I would propose to make

a direction that the

applicant as to this part of its case have leave to prove

it by affidavit evidence subject to necessary cross-

examination.

As I szy this matter was discussed during

the argument.

No party dissented from the course which

I propose.

The documents

so far dealt with would not seem to me

to be of critical importance. Even if I had decided that

none ought to

be made available for inspection

by the

respondents, the respondents would have had the information

they contain well before the hearing either in affidavits

o r in the terms of admissions which

I intend to direct the

applicant to seek.

In a different category are documents

referred to in paragraphs

6.30, 6.34, 6.35 and 6.36 of the

schedule to the first affidavit of Mr.

Conlan. The

descriptions of the documents which have been produced for

my inspection and which fall within these paragraphs reveal

that the documents referred to in each are not fully

described. Documents have been produced in folders each

bearing the number of the paragraph in the schedule to

Mr. Conlan’s affidavit where they are generally described.

The most critical folder contains statements of and

records of interview with Mr.

A H. Matthews who was formerly

an executive of one of the respondents, Allied

Mi s

Industries Pty. Limited. It appears plain,

and the

12.

respondents know this all too well, that it was

Mr. Matthews

who complained to the applicant about what he believed to be conduct on the part of his employer and other flour milling companies which was in contravention of the Act.

He made a statement to officers

of the applicant. They

put it in

an appropriate form

and he signed it

on 30th

November, 1976.

The folder contains the original of that

statement, two copies

and a draft of it.

It is not necessary

to develop detailed reasons why those documents could not

be made the subject of

a successful claim for privilege

from inspection.

All I say is that

I am not at all satis-

fied that they came into existence solely for the purpose

enabling the applicant to obtain legal advice. Indeed I

doubt whether they came into existence at all for any

purpose associated with the obtaining of legal advice. They

represent the commencement of the investigation which the

applicant was thereafter

to carry out. Accordingly the

statement, the two copies

and the draft will

be made available

for inspection by the respondents.

Before signing the statement Mr. Natthews had written

a letter to the applicant dated 4th November,

1976. The

folder contains the letter, the envelope in which it was

contained, a copy of the letter and

a copy of a card which

was enclosed with the letter. Those documents also will

be made available for inspection by the respondents. In

the same category are notes of an interview dated 2nd

November, 1976.

These are stapled to some other handwritten

, ’

, .

I .

documents

which

a r e undated.

There

a r e

t h r e e

documents

i n a l l .

They w i l l be

made

ava i lab le

for

inspec t ion .

There are then

two documents dated respectively 24th

June

and 14th

September,

1976.

They are in te r -of f ice

memoranda

s e n t o r

handed

t o t h e a p p l i c a n t

M r .

Matthews

o r

about 17th May, 1979.

To each

has appended a note

bea r ing

tha t

date.

The notes w i l l no t be made

ava i lab le

f o r i n s p e c t i o n b u t

the

respondents

are

e n t i t l e d t o see

the

two

in t e r -o f f i ce

memoranda.

There are

a number of sheets of paper containing

handwritten notes and bearing dates 24th November, 1976,

23rd

January,

1977,

20th

June, 1977,

1st Ju ly ,

1977,

16th

January, 1978, 3lst March, 1978 and 7 th Apri l , 1978.

These

a r e t o be produced

t o the respondents as is a l so a l e t t e r

wr i t t en by Mr.

Matthews t o Mr.- Conlan on 2nd Ju ly , 1977.

I n e x t r e f e r

t o l 9 shee ts of

paper containing

the

handwriting

various

persons.

i s

no t poss ib l e

a s c e r t a i n t h e d a t e

upon

which each

came

in to ex is tence ,

I have said enough t o i n d i c a t e what my

view would be i f the

da te were known.

It may

be p o s s i b l e f o r

t h e p a r t i e s

t o

agree upon

which

the

19 sheets

paper

(if

any)

should

made

a v a i l a b l e

f o r

i n s p e c t i o n

by the respondents.

not , the matter can be put back i n t h e list.

If the

matter is l e f t as it i s t h e sheets o f paper will

be made

a v a i l a b l e f o r

the

respondents‘

inspection

because,

the

date	not being known, I could not be sa t i s f ied tha t they
came	in to ex i s t ence so l e ly fo r t he pu rpose o f ob ta in ing

legal advice

or of the proceedings to

be instituted.

r e f e r r e d t o	i n paragraphs 6.40	and 6.41	w i l l no t be made
ava i lab le .

1970, and 20th February,	1976, together with the notes
attached to them.

re la t ion to o ther paragraphs of the schedule to	Mr.
a f f idav i t .

[1980] FCA 59

7 May 1980