Trade Practices Commission v J.J. & Y.K. Russell Pty Ltd

[1991] FCA 442

Re: TRADE PRACTICES COMMISSION
And: J.J. and Y.K. RUSSELL PTY. LIMITED; C.A. PAPAS AND SONS PTY. LIMITED
WEST STAR (AUSTRALIA) PTY. LIMITED; JEFFREY JAMES RUSSELL; NICHOLAS PAUL PAPAS
and OWEN RICHARD SAYER
No. S G104 of 1990
FED No. 442
Trade Practices - Evidence
(1991) 13 ATPR 41-132

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
O'Loughlin J.(1)

CATCHWORDS

Trade Practices - Sections 45 and 45A of the Trade Practices Act - fixing the price of petrol - inadequacy of evidence - proceedings dismissed.

Evidence - The rule in Jones v Dunkel - application of same to the detriment of the applicant.

HEARING

ADELAIDE

#DATE 24:7:1991

Counsel for the Applicant : Mr R.A. Cameron

Solicitor for the Applicant : Australian Government Solicitor

Counsel for the Respondents : Mr N.W. Morcombe

Solicitors for the Respondents: Morcombe Townsend

ORDER

That the proceedings against the respondent J.J. and Y.K. Russell Pty. Limited ("the Company") and Jeffrey James Russell be dismissed.

That judgment be entered in favour of the above named respondents.

That the Commissioner pay the costs of the above named respondents which are to be taxed in default of agreememt.

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

JUDGE1

On Thursday 25 May 1989, several service stations in the outer northern suburbs of metropolitan Adelaide substantially increased their price of petrol to 64.9 cents per litre. Subsequently, the applicant, the Trade Practices Commission, instituted proceedings, pursuant to the provisions of s.76 of the Trade Practices Act (1974) ("the Act"), against the corporate proprietors of three of those service stations and their respective principal executive officers.

1. The case for the Commission was two-fold; first it was said that interested retailers had attended a meeting two days earlier at a local hotel and had there decided, in breach of the provisions of ss.45 and 45A of the Act, that they would increase their prices of petrol on the following Thursday. The fifth and sixth respondents, Nicholas Paul Papas ("Mr. Papas") and Owen Richard Sayer ("Mr. Sayer") and their respective companies C.A. Papas and Sons Pty. Limited ("Papas Co") and West Star (Australia) Pty. Limited ("West Star") have, on an earlier occasion, admitted these allegations of impropriety. Proceedings against those four respondents were concluded with the entry of judgment and the imposition of pecuniary penalties on 8 February 1991. However the first respondent, J.J. and Y.K. Russell Pty. Limited ("the Company") and the fourth respondent, Jeffrey James Russell ("Mr. Russell") denied all allegations of improper behaviour.

2. Secondly, the Commission alleged that there was an arrangement or understanding involving Mr Russell and his company, Mr Sayer and his company and a Mr Stone, a Caltex dealer at Ingle Farm. The effect of this arrangement or understanding was, so it was claimed, that Mr Stone would increase the price of petrol at his service station to 64.9 cents per litre. This arrangement or understanding was said to have been manifested primarily as a result of the actions of Mr Russell and Mr Sayer on Friday 26 May. Mr Sayer and his company also admitted this allegation. Mr Russell admitted that he drove Mr Sayer to Mr Stone's service station on that Friday and further admitted that Mr Sayer changed the displayed price of petrol at Mr Stone's premises to 64.9 cents per litre; save for this admission however, he denied that he and his company were parties to any improper arrangement or understanding involving Mr Stone or Mr Sayer.

3. These reasons are therefore directed towards the Commission's case against the company and Mr Russell. Even so, it will be necessary to make some reference to Mr Papas and Mr Sayer because the two men figure prominently in the history of the events.

4. Each of the three respondent companies carried on, at all material times, the business of a service station proprietor and petrol retailer at Pooraka and Salisbury, outer northern suburbs of metropolitan Adelaide. These suburbs and the suburbs of Para Hills and Ingle Farm can, as a matter of convenience, be referred to as "the Northern suburbs" so as to distinguish them from "the North-Eastern suburbs" to which reference will be made later. Each company sold and supplied petrol by retail to the general public from their respective service station premises.

5. The relevant provisions of the legislation, so far as these proceedings are concerned are sub-paras. 45(2)(a)(ii) and (b)(ii) and sub-s. 45A(1) of the Act; they provide:-
   

"A corporation shall not -

(a) make a contract or arrangement, or arrive at an understanding, if -

(i) ...

(ii) a provision of the proposed

contract, arrangement or

understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; or

(b) give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision-

(i) ...

(ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition."

1. Sub-section 45A(1) of the Act specifies that the requisite purpose or effect of substantially lessening competition shall be deemed to be present if:-
   

"... the provision has the purpose, or has or is likely to have the effect, as the case may be, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, the price for... goods or services supplied or acquired or to be supplied or acquired by the parties to the contract, arrangement or understanding..."

1. Sections 45 and 45A both form part of Part IV of the Act; and sub- s.76(1) provides (inter alia) as follows:-
   

"(1) If the Court is satisfied that a person -

(a) has contravened a provision of Part IV;

(b) - (d) ...

(e) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

(f) ...

the Court may order the person to pay to the Commonwealth such pecuniary penalty (not exceeding $50,000 in the case of a person not being a body corporate, or $250,000 in the case of a body corporate, in respect of each act or omission by the person to which this section applies) as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part to have engaged in a similar conduct."

1. Having regard to the relevant provisions of the legislation, it is now necessary to turn to the facts.
   The Meeting on Tuesday 23 May 1989

2. In paragraph 15 of the statement of claim it was alleged that Mr. Russell invited, or caused to be invited, certain persons to attend a meeting of petrol retailers at the Somerset Hotel, Bridge Road, Para Hills. This was admitted in the defence. The meeting was held at about 8.00 p.m. on Tuesday 23 May 1989 and it is common ground that Messrs Russell, Papas, and Sayer were present. Other parties who attended the meeting included Mr. Barltrop, an Ampol dealer from Para Hills, the only witness for the Commission in these proceedings, and Mr. Said Mokdassi and Mr. Andrew Price. Mr. Mokdassi and his brother operated a Mobil station at Para Hills West and Mr. Price was their manager.

3. There is no doubt, and I find as a fact, that Mr. Russell played an integral part in organising the meeting of 23 May - it was his idea and he arranged it with the assistance of Mr. Barltrop. He admitted that he acted as chairman or convenor of the meeting, that he asked Mr. Barltrop to book the venue for the meeting and that he also asked Mr. Barltrop to invite other retailers to the meeting. Mr. Russell had heard of the action that had been taken by dealers in the North-Eastern suburbs; they had formed an association and, although the evidence about its aims and objectives was scanty, one can assume that it was intended to act for, and promote the interests of, its members. There was a suggestion that those dealers might have already agreed between themselves to increase the price of petrol and that such an agreement inspired Mr. Russell to try and motivate the dealers in his area (i.e. the Northern suburbs) to do the same thing. However the evidence does not permit any finding to be made on these subjects.

4. The matters that are in issue in relation to this aspect of the proceedings are first, Mr. Russell's motive in convening the meeting and secondly, what he said and did at the meeting. It was the case for the Commission that, at that meeting, or arising out of that meeting, various retailers, including Mr. Russell's company, Papas Co and West Star, became parties to an arrangement or understanding (in respect of which a number of other petrol retailers were also parties). The Commission further claimed that the effect of that arrangement or understanding was that, as from about 12 noon on the following Thursday, 25 May 1989, the price at which petrol would be offered for sale by the participating parties would increase from 59.9 cents per litre (and in some cases, from 57.9 cents per litre) to 64.9 cents per litre. Messrs Papas and Sayer admitted that their companies increased their prices on that day in accordance with such an arrangement or understanding. Mr. Russell denied that he or his company was a party to any such arrangement or understanding, claiming that an upward change in his company's price of petrol on Thursday 25 May was merely the result of market forces - in particular, the prices that were displayed at nearby service stations.

5. I have no difficulty in concluding that the price of petrol was discussed at this meeting. In making this finding I rely on the evidence of Mr. Armstrong, a witness for the respondents. Initially he denied that the topic was discussed (pp 330 and 339); but eventually, he broke down in cross-examination and admitted that about half of the time of the meeting was devoted to the subject of prices (p 345). There is a further reason for concluding that prices were discussed; it centres upon the conduct of Mr. Mokdassi and his manager Mr. Price. Although neither of these men gave evidence it is apparent that, at an early stage of the meeting, they stood up, made some remarks to the meeting and left. Mr. Barltrop's evidence was that Mr. Price said something like "this is collusion" (p 79); ultimately Mr. Armstrong (after first denying it - p 340) agreed that Mr. Price said that "what was going on" was "illegal and collusion and that he was not prepared to stay and be a part of it" (p 342). Finally, there was the evidence of Mr. Russell; he agreed that the subject of the price of petrol was raised by someone he could not identify. His evidence was:-
   

"I was sitting talking to Mr. Tucker and I heard somebody say that they would like to get the price of petrol up. Whether they actually mentioned a price, I could not swear to that. I did not hear that. And I stood up at that point and said, 'I'm sorry, you can't discuss the price of petrol. It's illegal and I won't have any of it.' or words to that effect. At that point in time while I was trying to talk, Mr. Price said, 'This is collusion,' and he also said something else and he stormed out fairly quickly." (p 254)

1. However the finding that price was discussed merely leads to the larger and more difficult question of identifying the parties to those discussions. It was the Commission's case that Mr. Russell addressed the meeting on the subject and encouraged those attending to follow the example of the North-Eastern suburbs "by getting their prices up". This was the intended effect of Mr. Barltrop's evidence in chief. However, under cross-examination, it became apparent that it would be impossible to rely upon his evidence. I do not attack his integrity; on the contrary, I believe that he was one of those witnesses who suffered an extremely bad case of stage fright. But whatever the cause, his evidence was uncertain, at times contradictory and quite frequently incoherent. In five pages of his evidence-in-chief (pp 62-66) there were five examples of his failure to come up to his proof. The nature of the questions were, as can be the case, indicative of the expected answer. Instead Mr. Barltrop fell back on desperate pleas such as "it has gone out of my mind", "it has just slipped me at the moment", "I have just got a block" and so on: the list, unfortunately, is not exhaustive. And that was during his examination-in-chief.

2. This is a matter of regret in the sense that I am quite prepared to accept that Mr. Barltrop had a story to tell and, no doubt, came to Court expecting to tell that story. But his failure is not to be visited upon the respondents. The allegations against Mr. Russell and his company are quite serious; if proved they could lead to the imposition of heavy fines and other sanctions. Hence, it is most important to evaluate the case for the Commission with care. It is no great task to identify what the Commission had to prove and hence the nature of the evidence that should have come from Mr. Barltrop. One would have expected him, as the sole witness for the Commission, to give clear evidence of Mr. Russell's conduct at the meeting on the Tuesday night; that conduct would need to have been of such a nature as to amount to a price-fixing arrangement or some understanding to a similar effect. Instead the relevant first passage from the evidence-in-chief of Mr. Barltrop was as follows:-
   

"And can you describe to the Court in your own words what happened at the start of the meeting?... To the best of my ability it was opened by Mr. Russell and he used the words to the effect, 'we all know why we are here, to get a bit of stability in the area', and then he handed it over to Mr Lou Falco." (p 78)

(It would seem that Mr. Falco was one of several representatives from the North-Eastern suburbs who attended and addressed the meeting).

1. Four questions later the examiner came back to the same topic. This time the answer was (from the Commission's point of view) a little more encouraging:-
   

"Now, can you give his Honour as best you can everything he said when he started the meeting off?... I can recall, 'to get a bit of stability in the area and get the prices up in the Pooraka, Para Hills area'.

Now, was any mention made of the north-eastern suburbs?... The north-eastern suburbs have got their act together and their prices - their prices up, already up. Who said that?... To the best of my knowledge it was Mr Russell." (p 78)

1. However the case against Mr. Russell and his company was irretrievably lost in Mr. Barltrop's cross-examination. The relevant passage is lengthy but it is important because it so clearly demonstrates how dangerous it would be to rely on his evidence.
   

"So start again. Your recollection was that?... That we were welcomed by Jeff Russell.

You were welcomed by Jeff Russell, and then what?... And then to the best of my knowledge, Lou Falco spoke, and that is when it was mentioned to the best of my knowledge about price, and that is when Andrew spoke in a loud distinguished voice, 'we are not here to talk about prices,' and left. And that is when I left with them. And that is when we went and sat in the lounge bar.

Mr. Morcombe: Can we just go back a little, Mr Barltrop. Jeff Russell stood up and welcomed you, I suggest introduced some people?... Well that I can't confirm because I have not got that in my mind.

The part you can't confirm is his introduction of people?... That is correct.

And he then handed over to someone at the head table?... That is correct.

And Russell said nothing else prior to handing over to someone at the head table?... To the best of my knowledge he welcomed.

And in effect said nothing else?... Well I don't - at the moment in my mind that is all I can remember. And Russell at that point did not discuss or say anything about the purpose of the meeting?... That like I said I just can't - my mind - I just can't explain that truthfully at the moment.

Well?... To me he - I remember being welcomed and after that he - I can remember him handing it over to someone but what he exactly said.

Well he certainly did not say we are here to try and get the prices up, did he?... Like I said I can't - I don't know what he said. He said... inaudible...

Well...?... I can't recall what he has actually said after the welcome." (pp 133-134)

1. A few questions later, Mr. Morcombe, counsel for Mr. Russell and his company, very fairly reminded Mr. Barltrop of his evidence in chief and thereby gave him the opportunity to clarify the issues:-
   

"You said to his Honour yesterday that Russell when he stood up at the beginning of the meeting said 'The North-Eastern suburbs have got their act together and their prices - their price is up, already up.' That evidence is not correct, is it?... If I said it yesterday it was correct but like today I am just getting a little bit more confused. If I said it yesterday it was correct."

1. With the best will in the world, no one could rely on such evidence.

2. Without credible evidence of what Mr. Russell said and did at the meeting, that part of the case for the Commission collapses. Attempts to impute guilt by inference can not, in the circumstances of this case, succeed. There are occasions when a Court may be prepared to draw an inference that certain identified retailers have entered into an arrangement or arrived at an understanding, notwithstanding the absence of admissions or direct evidence: Trade Practices Commission v Nicholas Enterprises Pty. Ltd. (1979) 26 A.L.R. 609; Trade Practices Commission v Allied Mills Industries Pty. Ltd. (1980) 32 A.L.R. at 570. Circumstantial evidence can, at times, be so strong as to be overwhelming. But such is not the case in these proceedings. Obviously prices were discussed at the meeting in circumstances that led to Messrs Papas and Sayer admitting that they and their companies were parties to some arrangement or understanding. But that is not enough. The presence of Mr. Russell at a meeting of service station proprietors that he had convened and at which some identified and some unidentified persons came to an understanding that the price of petrol would be increased on the following Thursday to 64.9 cents per litre does not prove that Mr. Russell or his company was a party to any arrangement or understanding - and that is so notwithstanding that his company increased its price to the proposed figure at the proposed time. It would have been legitimate for a person to attend such a meeting and to increase his price lawfully on the following Thursday - if the reason for the increase was because of market forces and not because of his involvement in some understanding or arrangement.

3. It was part of the case for the Commission that Mr. Russell discussed with Mr. Barltrop the subject of "getting the price of petrol up" before the meeting and there was some evidence to that effect from Mr. Barltrop (p 69). But ultimately I found myself unable to place any reliance on that evidence also. This conclusion is best explained by summarising Mr. Barltrop's evidence about his efforts to get Mr. Price and Mr. Mokdassi to attend the meeting.

1. On several occasions during the course of his evidence Mr. Barltrop referred to the Mokdassi brothers as key competitors; he explained that they were strong discounters and regularly offered petrol at two decimal points below their competitors. Mr. Russell had given to Mr. Barltrop the task of inducing the Mokdassis to come to the meeting. Mr. Barltrop said that he rang and spoke to Mr. Price; as a result Mr. Price and Mr. Said Mokdassi attended the meeting. In cross-examination Mr. Barltrop was asked whether he mentioned the subject of the price of petrol when he telephoned Mr. Price:-
   

"You did not tell Price that the meeting was being held to discuss prices, did you?... No.

Because you did not believe that was why the meeting was being held?... That is correct." (p 121)

1. At a later stage of his cross-examination, at the same page, Mr. Barltrop affirmed that his state of mind, prior to the meeting, was that prices would not be discussed because, as he said:-
   

"Well I knew that you are not allowed to discuss prices."

1. But then came a passage of cross-examination which, would appear to contradict the evidence that had earlier been given about the subject of petrol prices:-
   

"I suggest that on the afternoon of 23rd, you rang Mr. Russell?... Correct.

And said that Andrew Price has told me that he will not go to the meeting because the meeting is about getting the price of petrol up?... That sounds right, yes. Why did you say that to Mr. Russell?... Why? Mm?... No, I do not think - well, I am not quite sure but it was - that is what he said to me. I said - well, there... Sorry, that is what Price said to you?... Yes. If I can remember rightly. I vaguely remember that Mr. Russell rang Andrew and Andrew said that he would not come and then I said that I will ring him but I can't actually recall. When I said, 'Yes, I vaguely remember it,' I can't really recall that conversation now." (p 123) (Emphasis added)

1. Mr. Barltrop became more confused. The cross-examiner put to him, once more, that he (Mr. Barltrop) told Mr. Russell that Andrew Price would not attend the meeting "because the meeting was about getting the price of petrol up" (emphasis added). This time his reply was "I can't recall that" (p 124). It is possible that his confusion was caused by his inability to absorb the detail of the language used in the cross-examiner's questions. I offer that salve (even though I am satisfied that the questions were quite fair) because of something Mr. Barltrop later said:-
   

"Well, as far as you are concerned you would not have any idea how Price could have got the idea that the meeting might talk about prices?... That is correct. I think you worded that he said he would not attend if prices were going to be mentioned." (p 125) (Emphasis added)

1. It might be that the original proposition that Andrew Price would not attend the meeting "because" prices would be discussed was not disputed by Mr. Barltrop because he treated the question as if it had been couched in terms that Mr. Price would not attend "if" prices would be discussed. But that is speculative on my part: it is only advanced in fairness to Mr. Barltrop who, despite his confusion, gave me the impression that he was an honest man; nevertheless he was hopelessly out of his depth. At the end of the day it would be impossible for me to be satisfied - even at the lowest level of proof - about the content of any discussions between Mr. Barltrop and Mr. Russell before the meeting. Likewise I am unable to find any state of satisfaction about Mr. Russell's conduct at the meeting, save to say that he made some opening remarks which were either innocent or are not now capable of specification. If Mr. Russell made any statements to the meeting which were capable of attracting the provisions of the Act I am unable to identify them.
   Mr. Stone and the events of Friday 26 May 1989

2. Mr. Stone, who gave evidence for the respondents, conducted a Caltex service station at Ingle Farm. His evidence was that he had not attended the meeting of retailers on the preceding Tuesday night. He said that on his way to work on the Friday,he had noted that other competitors had increased their price of petrol to 64.9 cents per litre and that he therefore decided, prior to his arrival at his service station, that he would likewise increase his price. However, so he claimed, upon opening his service station for business, he was inundated with customers and, as a consequence, was unable to attend to the changes of the price on the pumps and the advertising boards. His was a self service station and, as he explained, he was the only person who was working on the premises that morning - hence he was unable to leave the console and make the price changes.

3. It is clear from the evidence of Mr. Stone, Mr. Barltrop and Mr. Russell that there were telephone conversations passing between these three men on that Friday morning. The order of events, the issue of who telephoned whom, and the number of phone calls were matters of dispute. But I have reached the conclusion that it is not necessary to resolve much of the contentious evidence in respect of the events of that morning. The findings that I make are that at some stage during the morning there was a telephone conversation involving Messrs Stone and Barltrop during which conversation Mr. Stone made it known to Mr. Barltrop that he (Stone) wished to increase the price of petrol at his service station but needed assistance to change the price on the pumps and the boards. Mr. Barltrop passed on this information to Mr. Russell who rang and obtained Mr. Stone's verification. I reject Mr. Russell's evidence to the effect that he did not know the nature of the assistance that Mr. Stone required.

4. I further find that Mr. Russell went to the assistance of Mr. Stone and that he did so by calling on the services of Mr. Sayer. Messrs Russell and Sayer drove to the premises of Mr. Stone in Mr. Russell's vehicle; when they arrived I am satisfied that Mr. Russell stayed in his vehicle and that Mr. Sayer proceeded to change the price on the pumps and the boards. The explanation for this conduct was that Mr. Russell was wearing his Mobil uniform and it would be more appropriate for Mr. Sayer, a Caltex operator, to be seen altering the prices at Mr. Stone's Caltex service station. I accept this explanation but it was not a factor that played any part in my final determination for such conduct would have also been consistent with an attendance at Mr. Stone's premises for an improper purpose.

5. That is the limit of the findings of fact that I can make. Mr. Cameron, counsel for the Commission, argued that it could be in inferred from those findings that the three men, that is, Messrs Russell, Sayer and Stone were party to some arrangement or some understanding about increasing the price of petrol at Mr. Stone's service station. The difficulty with that argument - despite my reservations about aspects of the evidence of both Mr. Stone and Mr. Russell - is that the facts, as found by me, are equally open to support Mr. Stone's claim that he had made a unilateral decision to increase his price because of what he observed about his competitors' prices earlier that morning. One is, of course, left to speculate about Mr. Sayer's admission of improper conduct. But this can only be a matter of speculation because Mr. Sayer did not give evidence and his admission is not evidence in these proceedings against Mr. Russell and his company.

6. In addition to the conduct of Messrs Russell and Sayer on that Friday, the Commission also relied on Mr. Barltrop's evidence concerning some telephone conversations that he had with Mr. Russell during that morning. It is therefore necessary to review the appropriate passages of that evidence. In the course of his examination-in-chief on this subject, Mr. Barltrop gave evidence which could have been quite harmful to the case for the respondents. For example, he explained that because three or four nearby service stations had failed to increase their price to 64.9 cents per litre he had, at some stage during the Friday morning, dropped his price back to its original level. He said that Mr. Russell had rung him saying that:-
   

"He was very disappointed and wanted to know why I had gone down. I explained why and he said all the hard work he had done getting everybody up he was very disappointed in me." (p 88)

1. His evidence continued that as a result of being so chastised by Mr. Russell he changed his prices back to 64.9 cents. According to Mr. Barltrop, Mr. Russell also referred to Mrs. Whitwell, a Mobil dealer who had not raised her price, saying to Mr. Barltrop that he would speak to her about "getting the price to 64.9." (p 89).

2. Left unchallenged, these passages from Mr. Barltrop's evidence were probative of Mr. Russell urging Mr. Barltrop to help in the pursuit of Mr. Russell's primary objective of increasing the price of petrol in the Northern suburbs. But once more Mr. Barltrop's evidence must be weighed against his answers in cross-examination and in that exercise I am compelled to conclude, once again, that I can not rely on Mr. Barltrop's evidence. For example at page 158:-
   

"I put it to you, Mr. Barltrop, that at no time in 1989 or any other time has Mr. Russell suggested to you that you and he should be involved in trying to get the prices of retail petrol up?... That is correct."

1. That answer is to be compared with the answer to a similar question at p 161:-
   

"What I am putting to you is that on no occasion has Mr. Russell ever suggested to you or encouraged you to ring any other service station proprietor in order to get them to increase their price?... No.

You agree with that proposition?... No, can I retract that, your Honour. Yes, he has.

He has?... Yes."

1. Mr. Barltrop explained that there was such an occasion when Mr. Russell asked him on that Friday morning to ring Mr. Doug Stone. In his examination-in-chief he said that he had spoken with Mr. Russell before speaking with Mr. Stone. However, he twice agreed in cross-examination (pp 165) that he rang Mr. Stone prior to speaking with Mr. Russell on the Friday morning, asking Mr. Stone whether he (Stone) wanted to increase his price. And when pressed to state what it was that Mr. Russell said to him with respect to ringing Mr. Stone (and other service station proprietors who had not raised their prices) he said, after two false starts to his answer "no, I cannot answer that". (p 163).
   The application of the rule in Jones v Dunkel

2. In Cross on Evidence (4th Aust. Ed.) para.1215 the rule is stated in these terms:-
   

"First, the unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence may, not must, in appropriate circumstances lead to an inference that the uncalled evidence would not have assisted that party's case. The appropriate circumstances exist where it was within the power of the party to tender the evidence which was not tendered: the details of this condition, so far as elucidated by the cases, are considered below. Hence the rule has no application if the failure is explained, for example by the absence of the witness coupled with a reasonable explanation for not compelling his attendance by subpoena, or by his illness or other unavailability, or by his loss of memory or refusal to waive privilege. But the explanation must be established by evidence and is not merely to be presumed from the passage of time. The significance of the inference depends on the closeness of the relationship of the absent witness with the party who did not call him."

1. The case for the Commission was not assisted by its unexplained failure to call Messrs Price and Mokdassi and Messrs Sayer and Papas. No attempt was made to explain the absence of any one of these four men, each of whom would, so it would seem, have been able materially to assist in the resolution of the issues in this matter.

2. The evidence to which I have already referred suggests that Messrs Price and Mokdassi were outraged by the remarks of some unidentified person relating to a proposal to increase the price of petrol. One would have thought that their evidence about the identity of that person would have been of overwhelming importance. Why were they not called to identify that person? Why was their absence left unexplained? As to Messrs Papas and Sayer, one can not overlook that, in these same proceedings, they had earlier admitted to participating in an improper understanding or arrangement. Who better than they to give evidence about the identity of the other parties to that understanding or arrangement? Why were they not called to identify those persons? Why was their absence left unexplained? As to Mr. Papas, those remarks must be limited to the events that occurred during the course of the meeting on the Tuesday evening; but Mr. Sayer also admitted participating in the second arrangement - the arrangement that was said to include Mr. Stone. Although both Messrs Papas and Sayer were originally co-respondents in these proceedings, they had already been dealt with; their penalties had been imposed; they had nothing further to lose by giving evidence about these matters.

3. It should never be left to the Court to assume that identified parties may be unwilling witnesses or that they are otherwise unavailable. In the particular circumstances of this case, the identities of the four men and the evidence of the parts that they allegedly played in the history of this matter established each of them as a witness with the potential to be one of great importance in proving the allegations that had been made by the Commission against Mr. Russell and his company. There was a clear duty on the Commission to explain the absence of each or to suffer the consequence. Each absence, coupled with the failure to account for that absence leads me to conclude that the proper inference in respect of each of these four potential witnesses is that their evidence "would not have helped" the Commission's case (c.f. Brandi v Mingot (1976) 12 A.L.R. 551 at 559).

4. For the reasons set out above I am of the opinion that the proceedings against the respondents J.J. and Y.K. Russell Pty. Limited ("the Company") and Jeffrey James Russell should be dismissed and that judgment should be entered in their favour. I order that the Commission pay the costs of the two respondents which are to be taxed in default of agreement.