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FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd (No 2) [2007] FCA 444
LEGAL PROFESSIONAL PRIVILEGE – allegations of price fixing and market sharing – information concerning allegations came to knowledge of applicant on 22 November 2004 – in principle decision to commence proceedings on 28 November 2005 – claim for privilege for documents created after 15 December 2004
Held:
1. Litigation reasonably anticipated by applicant by 15 December 2004.
2. Document created for dominant purpose of use in litigation.
3. Documents concerning grant of immunity not discoverable.
WORDS AND PHRASES – “Clayton’s”
Trade Practices Act 1974 (Cth) ss 2, 4, 18, 19, 25, 26, 155
Evidence Act 1995 (Cth) s 135(c)
Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd [2005] 225 ALR 266 at [30] applied
Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 discussed
Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 cited
Microsoft Corporation v Ben Zhong Fan [2003] FCA 1026 cited
Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2005] FCA 503 cited
Australian Competition and Consumer Commission v Rural Press Ltd (2000) 96 FCR 389 cited
Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 applied
Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 cited
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 applied
Australian Flight Test Services Pty Ltd v The Minister for Industry, Science and Technology [1996] FCA 1031 applied
Grant v Downs (1976) 135 CLR 674 cited
Palmer v The Queen (1988) 193 CLR 1 cited
Reading Entertainment Australia Pty Ltd v Birch Carroll & Coyle Ltd [2002] FCAFC 109 followed
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v VISY INDUSTRIES HOLDINGS PTY LTD & ORS (NO 2)
VID 1650 OF 2005
HEEREY J
29 MARCH 2007
MELBOURNE
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IN THE FEDERAL COURT OF AUSTRALIAVICTORIA DISTRICT REGISTRY / VID 1650 OF 2005
BETWEEN: / AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: / VISY INDUSTRIES HOLDINGS PTY LTD
First Respondent
VISY INDUSTRIES AUSTRALIA PTY LTD
Second Respondent
VISY BOARD PTY LIMITED
Third Respondent
RICHARD PRATT
Fourth Respondent
HARRY DEBNEY
Fifth Respondent
ROD CARROLL
Sixth Respondent
JUDGE: / HEEREY J
DATE OF ORDER: / 29 MARCH 2007
WHERE MADE: / MELBOURNE
THE COURT ORDERS THAT:
1. The first to fifth respondents’ motions dated 5 December 2006 and 1 February 2007 are dismissed with costs.
2. Subparagraphs (aa) to (ad) of par 222 of the first to fifth respondents’ amended defence filed 8 January 2007 are struck out.
3. The first to fifth respondents file and serve further and better particulars of the allegations in par 222 (ae) and (af) of their amended defence by 27 April 2007.
4. The first to fifth respondents pay the applicant’s costs of the motion dated 21 February 2007.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIAVICTORIA DISTRICT REGISTRY / VID 1650 OF 2005
BETWEEN: / AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: / VISY INDUSTRIES HOLDINGS PTY LTD
First Respondent
VISY INDUSTRIES AUSTRALIA PTY LTD
Second Respondent
VISY BOARD PTY LIMITED
Third Respondent
RICHARD PRATT
Fourth Respondent
HARRY DEBNEY
Fifth Respondent
ROD CARROLL
Sixth Respondent
JUDGE: / HEEREY J
DATE: / 29 MARCH 2007
PLACE: / MELBOURNE
REASONS FOR JUDGMENT
1 The applicant Australian Competition and Consumer Commission alleges that companies in the Visy Group and certain officers of those companies have engaged in price fixing and market sharing with companies in the Amcor Group contrary to s 45 of the Trade Practices Act 1974 (Cth).
2 Interlocutory disputes have arisen, primarily in relation to claims for legal professional privilege by the ACCC. There also are some questions in relation to pleadings and particulars. The principal issue, which has occupied the bulk of this four day hearing, is when litigation in respect of the alleged contraventions of the Act was reasonably anticipated by the ACCC. The ACCC first became aware of the allegations on 22 November 2004 when senior officers of the Amcor Group, accompanied by solicitors, approached the Commission. The ACCC says that by 15 December 2004 litigation was reasonably anticipated by it. However, the Commissioners of the ACCC did not formally resolve in principle to commence proceedings until almost a year later, on 28 November 2005. The respondents say that the relevant date was 28 November 2005. The application and statement of claim were filed on 21 December 2005.
3 In addition, on the subject of legal professional privilege there is a dispute as to whether the dominant purpose for the creation of the documents was use in litigation as distinct from investigation of possible litigation. Also, there is a question as to documents related to the grant of immunity to Amcor and some of its former officers and whether those documents are discoverable at all, or only relevant as to credit.
4 The relevant legal principles on legal professional privilege have recently been the subject of a comprehensive summary by Kenny J in Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at [30]. There is no dispute as to the correctness of this statement and I incorporate it by reference in these reasons.
5 The sixth respondent Mr Rod Carroll is separately represented and did not participate in these interlocutory applications. The term respondent in these reasons does not include him.
The documents in question
6 The documents in question total 216 and can be summarised as follows. The officers referred to are the ACCC’s General Counsel Mr Robert Alexander, Mr Geoffrey Williams, a Director of its Enforcement Division, and Ms Susan Pryde of the Australian Government Solicitor’s office.
Category of documents / Number of documents / Date range / Basis of privilege claimedA / 4 / 17 Jun 2005 – 21 Oct 2005 / Confidential communications to Mr Alexander from legal representatives of proposed witnesses. The dominant purpose of Mr Alexander’s communication with those persons was to obtain information for use in, or in relation to, the proceeding and to use that information to obtain legal advice in relation to the proceeding.
B / 4 / 15 Mar 2005 – 16 Mar 2005 / Documents created by Mr Alexander for the dominant purpose of being used in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding. The documents consist of:
1. notes made by Mr Alexander as to evidentiary matters to be discussed with witnesses (nos 36 and 37);
2. note of a confidential communication between Mr Alexander and solicitors for a witness (no 38);
3. Mr Alexander’s note of a confidential communication between himself and a witness (no 41).
C / 2 / 17 Jun 2005 – 24 Jun 2005 / Documents containing information in respect of proposed witnesses collated at Mr Alexander’s request by the solicitor for the employer of the proposed witnesses and provided to Mr Alexander. His dominant purpose in requesting the information in respect of the proposed witnesses was to obtain information for use in, or in relation to, the proceeding and to use that information to obtain legal advice in relation to the proceeding.
D / No longer in dispute / -
E / 77 / 1 Jan 2005 – 16 Dec 2005 / 1. Documents recording confidential communications between, on the one hand, Mr Williams and other officers of the ACCC or AGS and, on the other hand, a proposed witness or a representative of a proposed witness.
2. In some cases, the documents also record internal communications of officers of the ACCC related to the communications referred to in 1.
3. In each instance, the communications recorded in the documents were made by Mr Williams or at his request.
The dominant purpose of Mr Williams in making those communications, or requesting those communications to be made, was to obtain information for use in, or in relation to the proceeding and to use that information to obtain legal advice in relation to the proceeding.
F / 4 / 1 Jul 2005 – 1 Nov 2005 / Internal ACCC working documents prepared by officers of the ACCC at Mr Williams’ direction. His dominant purpose in directing that those documents be created was to record information for use in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding.
G / 95 / 22 Dec 2004 – 27 Nov 2005 / Witness statements or draft witness statements prepared by Mr Williams, other officers of the ACCC at his direction, and officers of the AGS or counsel at Mr Williams’ request. In some cases the draft witness statements contain suggested amendments made by Mr Williams, other officers of the ACCC or AGS, or counsel. Mr Williams’ dominant purpose in preparing or requesting those documents was to use them in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding. In some cases Mr Alexander was the officer who amended the draft witness statements and he did so with the same dominant purpose.
H / 11 / 17 Dec 2004 – 6 May 2005 / Records of interviews of potential witnesses conducted by Mr Alexander and Mr Williams. Their dominant purpose in conducting the interviews was to obtain information for use in, or in relation to, the proceeding and to use that information to obtain legal advice in relation to the proceeding. The interviews were not conducted under the powers conferred by s 155 of the Act.
I / 19 / 11 Oct 2005 – 25 Nov 2005 / Witness statements or draft witness statements prepared by Ms Pryde or other officers of AGS at the direction of Mr Williams or Ms Pryde. In some cases the draft witness statements contain suggested amendments made by Ms Pryde, Mr Williams or other officers. Ms Pryde’s dominant purpose in preparing or requesting those witness statements was to use the documents in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding. In some cases Mr Alexander was the officer who amended the witness statements and he did so with the same dominant purpose.
Events up until 15 December 2004
7 On 10 November 2004 Amcor commenced proceeding VID 1383 of 2004 in the Federal Court against, amongst others, certain of its former executives alleging breaches of their employment contracts and fiduciary duties. Amcor obtained an Anton Piller order and as a result of the subsequent search certain material came into the possession of Amcor’s solicitors Allens Arthur Robinson. On 15 November James Hodgson, another former Amcor executive, was joined as a respondent. I will refer to this action as the Hodgson Proceeding.
8 On 22 November, Mr Pat Ryan of Allens approached Mr Graeme Samuel, the Chairman of the ACCC, in connection with a proposed leniency application concerning serious cartel misconduct.
9 In June 2003 the ACCC had published a Leniency Policy for Cartel Conduct. In the policy the ACCC stated:
“Detecting, stopping and deterring significant domestic or international hard core cartels operating in Australian markets is a high priority for the ACCC. In these circumstances the harm caused to Australian consumers, businesses and the economy is likely to be substantial.
…
Cartel behaviour is inherently anti-competitive and considered by the ACCC as some of the most damaging conduct prohibited by the TPA.”
10 In essence, the Policy provides that the Commission will grant a corporation immunity from ACCC-initiated proceedings where the Commission is unaware of the alleged cartel and the corporation is the first person to disclose its existence. The corporation must meet a number of requirements, including full and frank disclosure and continuing cooperation. It must not have coerced other corporations to participate in the cartel and must not have been the “clear leader” (i.e. ringleader). Similar provisions apply to individuals.
11 A video conference was arranged for later that day. Those present on behalf of the ACCC were Mr Samuel, Mr David Smith, a Commissioner and Chairman of the Commission’s Enforcement Committee, Mr Brian Cassidy, the Commission’s Chief Executive Officer, Ms Cherie Noy, Assistant Director of the Commission’s Enforcement Division and Mr Alexander. Present on behalf of Amcor were Mr Chris Roberts its Chairman, Mr Russell Jones, its then Managing Director, and three partners from Allens, Mr Ryan, Mr Paul Meadows and Mr Bob Santamaria.
12 At the meeting the Amcor representatives foreshadowed a formal application for leniency for cartel conduct in relation to corrugated fibre board packaging (CFP) between approximately 2002 and 2004. One of the Amcor representatives said that Amcor had received certain audio recordings (the Hodgson Recordings) of discussions between Mr Hodgson and other Amcor executives. Allens had advised Amcor that the Hodgson Recordings evidenced cartel conduct. Mr Ryan said that the Hodgson Recordings had been obtained by Amcor following a court order permitting a search of the home of one of Mr Hodgson’s colleagues. Mr Ryan also said that the Hodgson Recordings included discussions between Mr Hodgson and Mr Peter Brown, who was until his retirement in October 2003 Amcor Australasia’s Managing Director, and Mr Peter Sutton, who replaced Mr Brown.